Ami Heesch

Jan 19, 2021

Highlights

  • Global statistics regarding Covid-19 continue to add to their grim numbers. Over the weekend, Johns Hopkins University data confirmed that 95.6 million cases have been confirmed. The death toll now stands above 2 million. U.S. cases stand at 24 million with the death toll approaching 400,000.   
  • Russia has detained opposition political leader Alexei Navalny after he flew back into the country. This was the first time he had flown back to the country after being poisoned with a military- grade nerve agent last summer. Some Western countries are calling for sanctions against Russia because of the detention.     
  • The outgoing Trump administration is said to be mulling over a last day industry wide waiver for oil refiners to exempt them from their obligations to blend biofuels.
  • Outside markets as of 7:00 A. M., Dollar Index down 247 ticks @ 90.518, Crude Oil up 8 @ 52.44, Dow Futures up 207 @ 30.927.

 

Corn

  • COT Supplemental report on Friday afternoon showed specs added about 39,700 contracts to their record long position which now stands at approximately 435,400 contracts.
  • Taiwan’s MFIG issued a tender to purchase up to 65,000 tons of animal feed corn from the U. S., Brazil, Argentina of South Africa. The tender closes January 20 with shipment slated between March 24 and April 12.
  • China’s corn imports in 2020 reached a record high of 11.3 million tons, exceeding the annual quota set at 7.2 million tons.   
  • Brazil’s harvesting of their first corn crop in the Center-South of the country has reached 3.4 % complete vs 2.5 % last year.
  • Ukraine’s economy ministry and ag unions will decide on Jan 25. whether or not to limit corn exports in the 20/21 marketing year. Last week, animal feed and meat producers called on the government to limit corn exports. An increase in demand, Russia’s decision to impose export duties on grains have combined to increase Ukrainian corn export prices by $23.00-$26.00/ton to a record $256.00-264.00/ton FOB Black Sea so far in January.  
  • Ukrainian analyst APK-Inform cuts it’s estimate of 20/21 corn exports for that country to 22 million tons from their earlier estimate of 23 million tons. Overall grain exports were cut to 44.38 million tons from 45.44 million forecast in December.
  • Argentina corn crop is rated @ 19 % G/E vs 55 % at the same time last year. 31 % of the crop is pollinating vs 46 % a year ago.
  • Dr. Cordonnier left his estimates of corn production unchanged for Brazil and Argentina @ 102.0 million tons and 44.5 tons respectively.    

 

Outlook:  Marginally higher this morning but overnight ranges were about 9 cents. Look for choppy trade to continue with lots of questions worldwide about higher tariffs and uncertain production totals.

 

Oilseeds

  • Commitment of Traders Report on Friday afternoon showed specs sold about 6,700 last week to trim their long position to about 158,500 contracts. Funds added about 3,000 contracts to their soymeal positions and now are long approximately 70,300 contracts. Soybean oil specs sold almost 23,000 contracts last week and are now long about 69,000 contracts.
  • Brazil’s soybean farmers have harvested only 0.4 % of this year’s crop vs 1.8 % harvested at the same time last year, according to consultancy AgRural. Dry weather hampered planting and some areas are still plagued by the lack of moisture. AgRural estimated Brazil’s soybean production @ 131.7 million tons in December and is scheduled to release a new estimate later this week. 
  • Soybean imports by the EU’s 27 countries stood @ 8.04 million tons at the end of last week. That import figure compared to 7.66 million tons at the same time last year. Beginning January 1, 2021, Britain’s numbers are no longer included in the EU reports.
  • Dr. Cordonnier left his estimates for soybean production unchanged for Brazil and Argentina @ 128.0 million tons and 46.0 million tons respectively.

      

 

Outlook: Rains over the weekend in South America have continue to allow soybeans to ease overnight but it has been a wild ride. Price range overnight has been 36 ¼ cents, with trade now approaching mid-price levels this morning, but still down 12 cents.       

 

Wheat

  • COT report showed funds sold about 4,800 contracts in Chicago and are now short approximately 6,500 contracts. In KC, specs added a modest 1,700 contracts last week and are now long 34,500 contracts. In Minneapolis, the futures only spec position is long 16,300 contracts, up about 4,800 contracts from last week. Fund length in Minneapolis adding futures and options together was also up about 4,800 contracts to a long of 16,400 contracts.
  • Algeria state grains agency OAIC issued a tender on Monday to purchase a nominal 50,000 tons of optional origin milling wheat for February shipment.. Tender deadline is Wed. January 20.        
  • Turkey postponed their tender to buy 400,000 tons of milling wheat. The tender was to have close today, Jan. 19 but will now close January 22. The shipment period was also changed by 4 days and is now slated between Jan. 26 and Feb. 26. Poor weather in Turkey prevented participants from attending the tender meeting.
  • Bangladesh received only one offer @ $352.89/ton liner out in their tender to purchase 50,000 tons of wheat.
  • China sold 3,939,732 tons of wheat, 99.74 % of the total offer at auction from state owned reserves last week. The average price was $3865.27/ton, up 7 % from two weeks ago. Much higher corn prices led feed makers to pay whatever they needed to pay to secure wheat as an alternative to corn. Increased concerns over new Covid-19 cases in the country also contributed to the higher prices.
  • Ukrainian wheat export prices rose $3.00/ton late last week and stand @ $284.00-$293.00/ton FOB Black Sea. Meanwhile, Russian wheat export prices for 12.5 %protein, at the end of last week stood at $298.00/ton FOB Black Sea, up a staggering $23.00/ton from the previous week. Russia’s decision to impose an export tariff on wheat is the main reason behind the sharp increases in export prices.         
  • IKAR consultancy has lowered its peg for 20/21 Russian wheat exports to 37.5 million tons from their previous estimate of 38.5 million tons.
  • Philippine importers tendered for 100,000 tons of animal feed wheat and 80,000 tons of feed barley. However, overnight all offers were rejected as too high and no purchases were made.
  • Japan’s Ministry of Agriculture will tender this week to purchase 72,653 tons of food-.quality wheat from the U.S. and Canada. The tender will be made up of 14,885 tons of U. S. Western White, 11,970 tons U.S. HRW, 24,698 tons U.S. DNS and 21,100 tons of Canadian Western Red Spring.       

 

Outlook: Export tariffs being imposed by Russia, along with some talk of tariffs on Argentine shipments continue to buoy wheat prices. Ongoing dryness in western portions of the U. S. HRW belt along high winds, leading to dust storms last week in Western Kansas have left a few wheat areas in dire straits.