Written Commentary
TODAY—EXPORT INSPECTIONS—USDA OILSEED/GRAIN CRUSHINGS—COMMITS REPORT—
Overnight trade has SRW Wheat up roughly 8 cents, HRW up 7; HRS Wheat up 6, Corn is up 11 cents; Soybeans up 34; Soymeal up $8.00, and Soyoil up 140 points.
For the week, SRW Wheat prices were up roughly 14 cents; HRW up 14; HRS up 17; Corn was up 33 cents; Soybeans up 47 cents; Soymeal up $15.00, and; Soyoil up 125 points. Crushing margins were up $0.02 at $1.00 (March); Oil share up 1% at 33%.
For the month, SRW Wheat prices were up roughly 51 cents; HRW up 53; HRS up 46; Corn was up 58 cents; Soybeans up $1.42; Soymeal up $40.00, and; Soyoil up 515 points. Crushing margins were $1.00; Oil share was at 33%.
MOST-ACTIVE CBOT SOYBEANS ENDS 2020 UP 37.1%, STEEPEST ANNUAL RISE SINCE 2007
MOST-ACTIVE CBOT CORN ENDS 2020 UP 25.3%, BIGGEST ANNUAL JUMP SINCE 2010
MOST-ACTIVE CBOT WHEAT ENDS 2020 UP 14.9%, FOURTH STRAIGHT ANNUAL GAIN
Chinese Ag futures (May) settled down 13 yuan in soybeans, up 24 in Corn, up 74 in Soymeal, up 120 in Soyoil, and up 112 in Palm Oil.
Malaysian palm oil prices were up 124 ringgit at 3,724 (basis March) the highest levels since 2014 following rival veg oils and Argentine supply concerns.
Brazil should remain mostly favorable for its reproducing and filling soybean and corn crops. Sugarcane, citrus and coffee will also experience improving conditions as will cotton and rice. The environment will be good for production, but some of the dryness from earlier this year already hurt production and some of that loss cannot be made up by improved weather in January.
Argentina will remain one of concern for central and eastern crop areas in the nation where rainfall will be quite limited over the next two weeks and temperatures will continue warm. A front may be coming through with moderate rainfall with 85% coverage early next week.
The player sheet had funds net even in SRW Wheat; bought 10,000 Corn; net bought 10,000 Soybeans; bought 2,000 lots of Soymeal, and; bought 4,000 lots of Soyoil.
We estimate Managed Money net long 30,000 contracts of SRW Wheat; long 375,000 Corn; net long 239,000 Soybeans; net long 102,000 lots of Soymeal, and; long 121,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 595 contracts; HRW Wheat up 930; Corn up 14,200; Soybeans down 1,700 contracts; Soymeal up 305 lots, and; Soyoil up 1,200.
Deliveries were ZERO Soymeal; ZERO Soyoil; Rice 113; and 5 Soybeans.
There were no changes in registrations—Registrations total 49 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 76; Soyoil 1,313 lots; Soymeal 175; Rice 451; HRW Wheat 113, and; HRS 1,023.
The U.S. soybean crush in November likely totaled 5.765 million short tons, or 192.1 million bushels; estimates ranged from 191.0 million bushels to 193.0 million bushels; the crush would be down from a record 196.5 million bushels in October but well above the 174.6 million bushels crushed in November last year. It would also be the largest November crush on record and the third-largest crush for any month, behind only October and March 2020.
U.S. soyoil stocks at the end of November were seen swelling to 2.023 billion lbs; up from 1.964 billion lbs at the end of October and 1.880 billion lbs at the end of November last year; soyoil stocks estimates ranged from 1.926 billion to 2.086 billion lbs
The USDA is scheduled to release its monthly fats and oils report at 2 p.m. CST.
All Wheat sales are running 9% ahead of a year ago; shipments down 1% with USDA forecasting a 2% increase
By class, HRS sales up 3%, shipments up 1% with a 5% increase forecasted
SRW sales down 25%, shipments down 31% (down 18%)
HRS Wheat sales up 9%; shipments up 5% (up 1%)
Corn up 135%, shipments up 70% (up 49%)
Soybeans up 87%, shipments up 79% (up 31%)
Soymeal up 5%, shipments up 13% (unchanged)
Soyoil sales up 15%, shipments, down 28% with a 3% decrease forecasted
China will advance technological innovation in the seed industry and improve farmland conservation in 2021 to ensure grain security, the country’s agriculture minister said; calling seeds the “chip” of agriculture, the Minister of Agriculture and Rural Affairs, vowed to make the development of seed industry a major task of the country’s agricultural and rural modernization; urged technological breakthroughs in seeds, calling for efforts to strengthen the establishment of seed banks, the foundation of innovation in the seed industry.
China’s energy watchdog on Thursday said oil and gas companies should restore supply of ethanol-blended gasoline as soon as possible, after learning some had stopped selling the fuel in parts of the country. The National Energy Administration (NEA) said it had dispatched investigators and issued rectification orders after hearing in October of the ethanol issue in cities in Jiangsu, Anhui, Shandong and Hubei provinces. The cut in supply has coincided with a near 34% surge in Chinese corn prices on the Dalian Commodity Exchange in 2020, making corn-based ethanol more expensive.
China will increase the area sown with corn in its main grain regions this year, the agriculture minister has said, reversing several years of declining acreage in response to a growing shortfall. The expansion is part of a comprehensive plan to ensure food security; Authorities will focus on expanding corn acreage in the northeast as well as areas around the Yellow, Huai and Hai rivers; The pledge comes after China’s corn prices soared to record levels after authorities nearly emptied once-mammoth temporary reserves at auctions. Importers have brought in record volumes of grain to plug the shortage. Corn acreage and output is expected to recover and increase, while corn prices will probably fall in the next few years; China had been cutting down on corn acreage in the past few years to whittle down the state stockpiles and to boost output of other crops like soybeans. Farmers planted 41.264 million hectares of corn in 2020, with output of the grain at 260.67 million tonnes, according to the National Bureau of Statistics.
Wheat acreage in northwestern and areas around the Yellow, Huai and Hai rivers should strive to recover. China will stabilize soybean output and secure domestic supplies of soybeans for food use.
Argentina’s grain inspectors’ union, Urgara, said on Thursday that its members will continue to strike over the weekend after failing to strike a wage deal despite two meetings with the Chamber of Private and Commercial Ports (CPPC). The strike comes after Argentina’s soy crushing companies signed a contract with oilseed workers’ unions on Tuesday night, ending a stoppage that delayed the loading of ships and stalled soy crushing since workers walked off the job on Dec. 9. Next Monday we will have a fresh meeting with the CPPC and we hope to be able to reach an agreement that meets the needs of the workers who stood by throughout the pandemic to safeguard foreign exchange income and the country’s economic growth.
European wheat ended the year near a two-year high on Thursday after EU prices were supported in 2020 by a buying spree from China at a time of lower supplies and Russia’s decision to impose a wheat export tax, traders said. Front-month March milling wheat closed 0.2% higher at 213.50 euros a tonne after a shortened session on Thursday ahead of the New Year holiday. That was slightly lower than Wednesday’s two-year high for a spot contract of 214.50 euros, when prices were also supported by a rally on U.S. grains markets after Argentinean authorities said they would limit corn exports. Over the year, spot futures showed a 13% rise from the 188.75 euro close at the end of 2019.
Vietnam, the world’s third biggest exporter of rice, has started buying the grain from rival India for the first time in decades after local prices jumped to their highest in nine years amid limited domestic supplies; te purchases underscore tightening supplies in Asia, which could lift rice prices in 2021 and even force traditional buyers of rice from Thailand and Vietnam to switch to India – the world’s biggest exporter of the grain. Indian traders have contracted to export 70,000 tonnes of 100% broken rice for January and February shipments at around $310 per tonne on a free-on-board (FOB) basis
Iran has forecast production of 13 million tonnes of wheat during the next Iranian year beginning on March 20, the Young Journalist Club.
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