Ami Heesch

Jan 20, 2021

Steven Hyde

Highlights

  • The London Metal Exchange is proposing to close Europe’s last open outcry trading floor and moving to a permanent electronic system. The Exchange closed the LME floor for the first time since World War II due to Covid-19 restrictions in March of last year.  
  • Tyson Foods Inc. has agreed to settle price fixing litigation with “end users” after it was accused of illegally conspiring to inflate prices in the $65 billion chicken industry. Eight days ago, Tyson agreed to settle antitrust claims by those who bought chickens directly from the Arkansas based company. Claims are still outstanding with companies such as Chick-fil-a, Kroger and Walmart.    
  • Inauguration Day in Washington D. C. After taking the oath President Biden is said to be signing 15 executive actions , undoing many policies put in place by outgoing President Trump and making his first moves on the pandemic and climate change.
  • Outside markets as of 7:00 A. M., Dollar Index up 102 ticks @ 90.600, Crude Oil up 41 @ 53.39, Dow Futures up 50 @ 30,878. 

 

Corn

  • Brazilian consultancy ANEC estimates Brazil’s corn exports in January will reach 2.398 million tons vs last week’s estimate of 2.121 million tons.
  • Taiwan’s MFIG purchased about 65,000 tons of feed corn from the U.S. for March 24-April 12 shipment. ADM was presumed to be the seller @ +201.71 CN21 C&F. 
  • The EPA granted three waivers late Tuesday to oil refiners that exempt them from U. S. biofuel blending rules. Two waivers were granted for 2019 and one waiver for 2018. No information was given as to which refiners received the blending waivers.
  • Japan’s use of corn in animal feed during the month of November 2020 was 48.9 %, down from 49.1 % in October, but above the November 2019 figure of 48.6 %.           

 

Outlook:  Profit taking continues to be the fare as prices are down 11 plus cents in overnight trade. Question is, will we see more correction or is this just a pull back to allow for the next leg up?    

 

Oilseeds

  • ANEC estimates Brazilian soybean exports for the month of January will reach 1.027 million tons vs their estimate last week of 1.052 million tons.
  • China’s soybean imports in from the U. S. rose by 52.8 % from last year according to the latest release of customs data. China imported 25.89 million tons of beans from the U. S. in 2020 compared to 16.94 million tons in 2019. Even with the sharp increase in U. S. purchases, it is likely China still fell short of the Phase 1 agreement signed with the U. S. Chinese imports of soybeans from Brazil in 2020 were 64.28 million tons, up 11.5 % from the 2019 total of 57.67 million tons. 
  • Malaysian palm oil futures fell to their lowest level in more than 2 months as export data showed dismal results. The benchmark April contract fell 46 ringgits to a close of 3,221.       

 

Outlook: Another smackdown for the soybean complex overnight. Beans started down and dirty right off the early overnight trade, accelerated by intermittent stops below 1380 in both SH and SK contracts. Timely rains in South America have been the trigger for the sell off along with an overdue technical correction.       

 

Wheat

  • A United Nations aid agency purchased 120,000 tons of Black-Sea origin wheat for donation to Ethiopia. Shipment is slated between February and FH March 2021. 
  • Japan’s Ministry of Agriculture will hold a simultaneous buy and sell auction on January 27 seeking 80,000 tons of feed wheat and 100,000 tons of feed barley. Shipment is slated for February 15 with arrival in Japan by March 18.        
  • Jordan’s tender for 120,000 tons of wheat closed today and three companies, CHS, Cerealcom Dolj and Ameropa are believed to be taking part in the tender. Results are not yet known but are expected later this morning.
  • Russia’s Deputy Prime Minister Victoria Abramchenko sees the Russian 2021 grain crop at 131 million tons, down from 133 million tons in 2020. An estimate of the wheat portion of the total was not given.                

 

Outlook: Lack of new bullish inputs and the sell off in corn and beans continued  the pressure on wheat prices overnight. KC wheat down 9, Chicago down 15 and Minneapolis down 8 as we move towards sun rise.