Written Commentary
TODAY—ETHANOL STATS–
Overnight trade has SRW Wheat up roughly 1 cent, HRW up 1; HRS Wheat up 2, Corn is up 3 cents; Soybeans up 8; Soymeal up $0.50, and Soyoil up 65 points.
Chinese Ag futures (May) settled up 18 yuan in soybeans, down 1 in Corn, up 51 in Soymeal, up 136 in Soyoil, and up 118 in Palm Oil. Malaysian palm oil prices were up 119 ringgit at 3,385 (basis April) following rival vegoils.
South America Weather Forecast: In Brazil, conditions will still be good for most key production areas with a few exceptions. The northeast will need more rain. In Argentina, conditions are still expected to be mostly good for crops with a favorable mix of rain and sunshine in most areas.
The player sheet had funds net buyers of 14,000 SRW Wheat; bought 47,000 Corn; net bought 21,000 Soybeans; bought 6,000 lots of Soymeal, and; net bought 6,000 Soyoil.
We estimate Managed Money net long 1,000 contracts of SRW Wheat; long 388,000 Corn; net long 152,000 Soybeans; net long 71,000 lots of Soymeal, and; long 102,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 6,600 contracts; HRW Wheat up 1,600; Corn up 12,900; Soybeans up 6,200 contracts; Soymeal up 1,600 lots, and; Soyoil down 855.
There were no changes in registrations–Registrations total 49 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 169; Soyoil 1,289 lots; Soymeal 175; Rice 732; HRW Wheat 91, and; HRS 1,023.
USDA attache keeps estimate of 2020/21 China corn imports at 22 mln T – Reuters News
“China’s MY2020/21 feed and residual use for all coarse grains and feed-quality wheat and rice are estimated to increase to 249.9 million metric tons (MMT), up 15.6 MMT from the previous marketing year due to forecast recovery of swine production and an overall growth in feed demand. Corn production is down slightly by 100,000 metric tons from MY2019/20. China’s import demand for corn is forecast to remain strong in the coming months, though some of the demand will be mitigated by an increased use of sorghum, barley, and old rice and wheat stocks in feed rations.”
China has bought “roughly 200 million gallons” of U.S. ethanol for the first half of 2021, matching its previous record for annual imports of the corn-based biofuel, Archer Daniels Midland Co. Chief Financial Officer Ray Young said. The accelerated imports are among several positive signs for the ethanol sector which has been hard hit by years of oversupply and, more recently, a sharp drop in demand as the coronavirus pandemic slashed fuel use.
Imports of 200 million gallons would eclipse China’s previous annual record of 198.1 million gallons in 2016, according to U.S. Census Bureau trade data.
Sinclair Oil Corporation confirmed on Tuesday it secured biofuel blending waivers for its refineries from the U.S. Environmental Protection Agency shortly before the departure of the administration of President Donald Trump last week. The company made the statement in a court filing defending the waivers against a challenge from the biofuel industry, which wants to prevent the EPA from processing them. The company said the administration granted the waivers on Jan. 14.
Wire story reports China is paying a heavy toll for its efforts to punish Australia by banning or restricting certain commodity imports, while conversely Australia seems to have avoided any serious financial ramifications so far. It is perhaps surprising that the authorities in Beijing, having witnessed how the trade war launched by former U.S. President Donald Trump backfired on his own country, would be keen to try the same thing on Australia. Trump tweeted in March 2018, as his administration was ramping up its tariffs against Chinese goods that “trade wars are good, and easy to win”. It turns out that he was somewhat right, but only in the reverse of what he expected, insofar as the country that launches the trade war tends to be the loser, and the country that is the intended target seems to prosper. Coal is the highest-profile Chinese target in the Australia row.
Despite warnings that Chinese authorities might block Australian wheat amid an escalating political row, wheat exports to China surged last month, underscoring a year in which overall trade between the countries approached a record high. After three months in which there had been no wheat trade between the two countries, hundreds of thousands of tonnes changed hands in December, valued at A$248 million (US$191.2 million), according to preliminary trade data from the Australian Bureau of Statistics (ABS).
The return of rains over Brazilian soybean-growing areas is disrupting harvesters, slowing down field work in the world’s largest soy producer and potentially delaying planting of the country’s second corn crop. Agribusiness research firm AgRural estimated Brazilian soy farmers had harvested just 0.7% of the planted area through Jan. 21, a 0.3 percentage point rise from the previous week, limited by heavy rainfall. Last year, farmers nationwide had harvested an estimated 4.2% of the soybean area, AgRural said. Agroconsult, another agribusiness consultancy, estimates no more than 5 million tonnes of the new soy crop will be harvested in January, less than half the volume for the month last year. The delayed harvest means the country is poised to export less in the first weeks of 2021 than last year, according shipping data. Planting and now harvesting delays may also push back sowing of Brazil’s second corn crop, which is planted after soybeans are removed from fields.
Rains in Argentina have improved prospects for recently planted soy and corn, but worries about potential crop yields persisted ahead of February, usually one of the driest months of the year, analysts said on Tuesday. Within the next week, up to 75 millimeters of rain is expected to hit most of the country’s crop producing regions, according to forecasts, with the February-March outlook favoring near-normal rainfall and cooler temperatures.
Euronext wheat rose for a second session on Tuesday, in step with a rebound on grain markets supported by a big sale of U.S. corn to China and the prospect of fresh demand for European wheat in an Algerian tender this week. March milling wheat settled up 3.25 euros, or 1.4%, at 229.75 euros ($279.24) a tonne.
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