Morning Grain Comments, 01/06/2016

Wednesday, January 06, 2016


It’s interesting to note that El Nino has produced crop concerns in one corner of the globe, but the trade is taking South African concerns pretty lightly; any deficits there are seen easily made up by what is becoming an increasingly well-oiled South American output/export machine.

Egypt’s GASC said letters of credit for the three delayed French wheat shipments will be issued today, held up due to administrative issues only.

Brazilian cereal exporters association Anec said yesterday that the country will likely export a record 57 million tonnes of soybeans in 2016, up 4 MMT from last year thanks to increased shipments from northern ports. The country exported only 466k tonnes of beans in December thanks to 5.8 MMT of corn shipped last month, as part of a record 30.7 MMT of corn exports in 2015.

The lowest offer in Ethiopia’s tender for 70k tonnes of wheat came in at $217.50/tonne C&F, as no purchase was made and negotiations continue; the country has issued a series of tenders in recent months including a 1 MMT purchase in Oct, due to drought conditions in the 2015 growing season.

Meanwhile, the CEO of producer group Grain South Africa said today that the country may need to import up to 5 million tonnes of corn this year due to the drought, calling their corn belt “a disaster”; they are concerned about having the necessary facilities to import that much corn as well…

Zimbabwe looks like they will join the group of African countries needing to import more grain this year as well, as they plan to import up to 700k tonnes of corn this year; they bought only 100k tonnes through Nov last season.

Jan CBOT deliveries: soybean oil 327 contracts, next trade date 12/31/15.

 

Today’s chart shows fund positions for corn since January 2010, including the managed money and swap dealer positions from the Disaggregated Report, the spec fund positions from the traditional report, and the index fund positions from the Supplemental Report (along with the spot corn price on the right axis). Friday’s Disaggregated Report is expected to show an official corn net managed money short at or below the prior record –158k (set back in May).

 

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