Morning Grain Comments, 01/19/2016

Tuesday, January 19, 2016


Corn gapped higher and maintained its strength through the overnight session, both uncommon developments in the current market; “daily trade estimates” have vastly underestimated the extent of the managed money funds’ net short position in corn for four straight weekly reports...

South Korea’s MFG bought 55k tonnes of feed wheat from Argentina today, for mid-March through mid-April shipment, at $181/tonne C&F.

Shipping data showed two cargoes of Argentine wheat that are scheduled to arrive in Wilmington, North Carolina in the first half of February.

Argentina also lowered soybean import barriers this week, in order in increase exports of meal and oil during a time of scarce local supplies...

South Africa’s Ag Minister said that the country would likely need to import 5-6 MMT of corn, with supplies likely to run out by Sept. The country’s Crop Estimates Committee will release their first 2016 crop production forecast on Jan 27, a month earlier than originally planned due to the drought situation.

French traders are estimating that the bird flu (suspending duck and geese output) will cut the country’s corn consumption by “at least” 100k tonnes.

Private analysts Safras & Mercado on Friday cut their 2015/16 Brazilian soybean estimate by just over half a million tonnes, to 99.8 MMT.

The Baltic Dry Freight Index hit yet another record low Friday at 373 points, compared to 429 points the previous week, and 500+ points in mid-Dec

Friday afternoon’s Disaggregated CFTC Report showed daily estimates once again greatly underestimating fund selling in corn, with managed money traders down 26.6k net on the week ending Tuesday (1/12), compared to guesses for a 17k net gain; bean oil lost nearly 15k vs a –5k net estimate, though beans added 24.6k net there compared to a +14k estimate, and Chi wheat added 24.5k net vs a +14 est as well. Producers and merchants added 31.5k net corn and 20.7k net oil, while cutting 26.4k net beans and 18.4k net Chi wheat.

December NOPA soybean crush came in at 157.7 million bushels Friday morning, near the average 157.8 mbu trade guess and up from 156.1 mbu in Nov, but below 165.4 mbu LY. Estimates ranged from 153.7-161.0 mbu.

 

Today’s chart shows world corn exports since 1990, according to the USDA; the government is interestingly predicting more than a 20-million-tonne decline in global corn shipments in the 2015/16 marketing year, from a record high near 138 MMT in ‘14/15. At any rate, the United States’ share of that export business is seen stabilizing in the 34- 37% range in the last three marketing years, compared to anywhere from 50-70% in the 15 years ending in 2010/11...

 

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