Written Commentary
TODAY—WEEKLY EXPORT SALES—
Overnight trade has SRW Wheat up roughly 2 cents, HRW up 2; HRS Wheat down 1, Corn is down 2 cents; Soybeans up 4; Soymeal up $0.50, and Soyoil up 15 points.
Chinese Ag futures on holiday from Feb. 11 to 17 (Thursday to Wednesday) for the celebration of Chinese Spring Festival. Resumes on Feb. 18 (Thursday).
Malaysian palm oil prices were down 71 ringgit at 3,558 (basis April) snapping a 5 day rally ahead of tomorrow’s Lunar New Year holiday.
Conditions across much of Brazil’s key production region will continue to be favorable. Net drying is expected through next Wednesday from La Pampa into Santa Fe, Argentina. There will be some erratic rain which will at least slow the drying a little; however, some crop stress may increase, especially in La Pampa where conditions have been drier. Critically dry conditions are still not expected though. Last evening’s GFS model run continued to show greater rainfall for Argentina in the second week of the outlook compared to the first week.
The player sheet had funds net sellers of 13,000 SRW Wheat; sold 55,000 Corn; net sold 30,000 Soybeans; sold 12,000 lots of Soymeal, and; net sold 6,000 Soyoil.
We estimate Managed Money net long 8,000 contracts of SRW Wheat; long 317,000 Corn; net long 166,000 Soybeans; net long 65,000 lots of Soymeal, and; long 120,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 2,400 contracts; HRW Wheat down 3,200; Corn down 3,900; Soybeans up 12,700 contracts; Soymeal up 5,100 lots, and; Soyoil up 1,600.
There were no changes in registrations—Registrations total 49 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 169; Soyoil 1,286 lots; Soymeal 175; Rice 732; HRW Wheat 91, and; HRS 1,023.
Tender Activity—Jordan bought 60,000t optional-origin wheat—Turkey seeks 25,000t optional sunoil—
U.S. Ethanol production for the week ended Feb 5 totaled 937,000 bls per day (up 0.1% vs a week ago, down 9.3% vs a year ago); Stocks were 23.8 mil bls (down 2.1% vs a week ago, down 2.3% vs a year ago); Corn use 94.7 mil bu vs 94.6 mil last week and 94.6 mil needed to meet USDA projections.
US ethanol inventories fell this week. This reduction was largely unexpected who expected inventories to rise to as high as 25.3M barrels. Meanwhile, daily ethanol production inched up. Even so, the surprise seen in the EIA’s report isn’t providing much in the way of reversing the negative trend seen in corn futures yesterday. The most-active corn contract is down in reaction to the Wasde report from the USDA showing higher-than-expected ending inventories for row crops.
U.S. President Joe Biden’s pick to lead the Environmental Protection Agency said he will confer with legal and policy teams to understand the options available for setting mandates to blend biofuels into the nation’s fuel mix beyond 2022. Michael Regan also said he has had conversations with other members of the Biden administration, including Biden’s pick for the Agriculture Department, to discuss the role biofuels can play in combating climate change, according to written responses from Regan to questions submitted to him by Republican Senator Joni Ernst of Iowa.
U.S. winter wheat production unchanged, but potential winterkill risks are ahead – Refinitiv Commodities Research
Brazil’s third-largest meat processor, Cooperativa Central Aurora Alimentos, plans to expand chicken processing and maintain the size of pork operations as it seeks to boost sales to markets such as China and tackle rivals in Brazil, its chief executive said. A privately held company competing with Brazil-based heavyweights JBS SA and BRF SA, wants to expand its poultry capacity by 20% in two years and will invest 500 million reais ($93 million) in 2021 to achieve that goal. The strategy underscores Aurora’s resilience amid rising feed costs, disruption of meat plants in Brazil by the COVID-19 pandemic and occasional export bans imposed by China after outbreaks. Aurora, which is headquartered in southern Brazil, uses 160,000 tonnes of corn to feed hogs and chickens each month. Right now, it is facing a grain price rally that rendered domestic corn prices “absurd” and shows no sign of abating.
Argentina’s government agreed to not hike taxes on farm exports or limit how much grain can be shipped abroad to curb rising food prices, a group representing farmers said on Wednesday. Argentine farmers had earlier warned they would protest if the government implemented a plan to hike export taxes or impose export quotas to hold down inflation.
Argentina corn production remains steady but warmer/drier days are ahead – Refinitiv Commodities Research
Ukraine’s grain exports have reached 29.8 million tonnes so far this season, which runs from July 2020 to June 2021, down 20% from the same period of the previous season, economy ministry data showed. Traders have sold 13.16 million tonnes of wheat, 12.21 million tonnes of corn and 3.96 million tonnes of barley.
Ukrainian barley export prices have risen to an all-time high supported by demand from China and expected export restrictions in Russia, APK-Inform agriculture consultancy said. Barley bid export prices rose to $243-$249 per tonne CPT (carriage paid for) Black Sea. Strong demand from China continues to play a key role. In July-January 2020-2021 season, China has already imported more than 3 times more Ukrainian barley than in the entire previous season.
European wheat fell to a one-week low on Wednesday, extending losses in the previous session after the release of a U.S. government report that forecast higher-than-expected grain stocks, but a firm export outlook limited the fall. Benchmark March milling wheat was down 0.8% to 222.00 euros a tonne.
Exports of Malaysian palm oil products for Feb. 1-10 rose 47.2 percent to 409,817 tonnes from 278,450 tonnes shipped during Jan. 1-10, cargo surveyor Societe Generale de Surveillance said.
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