Morning Grain Comments, 01/29/2016

Friday, January 29, 2016

Grain action was very subdued overnight, mostly holding up  at yesterday’s lows, despite a U.S. dollar that has steadily rallied since last night; any lingering foreign production or export concerns have been soothed at this point, though the trade will be watching ARG forecasts closely over the weekend with heat and dryness continuing to progress in the northeast...

Taiwan’s MFIG issued a tender for 40-65k tonnes of corn from either the U.S., Argentina, Brazil, or South Africa today, closing on Feb 2; they are seeing delivery dates from April 1 through early May.

An Argentine exchange reported upcoming wheat shipments to both South  Korea and Vietnam—a combined total just shy of 50k tonnes. Argentina’s last wheat export to South Korea was in 2006, and Vietnam in 2008.

The European Commission increased their ‘15 soft wheat crop estimate from 149.2 to 149.5 MMT, but raised ‘15/16 exports from 27.1 to 27.9 MMT and cut ending stocks from 17.6 to 15.8 MMT—that’s still 4.8 MMT above LY.

Russia’s Deputy Prime Minister was quoted this morning as saying there is “no need to change” the current wheat export tax, at least for the time being; he made the statement before a meeting with grain traders regarding the current export rules and taxes...

The European Union granted export licenses for 822k tonnes of soft wheat this week, bringing the cumulative total since July 1 to 14.8 MMT, down 12% from the 2014/15 pace; corn import licenses of 209k tonnes have cumulative 2015/16 imports there at 8.3 MMT, up nearly 60% versus last season.

This afternoon’s semi-annual USDA Cattle Inventory Report is expected to\ show a total of 91.6 million head of cattle and calves on U.S. farms as of January 1, or 102.0% of the comparable figure last year.


Today’s chart paints a clear picture of the major players in the world corn export market; competition is dominated (86% of global share) by the U.S., BRZ, ARG, and Ukraine. Basically any other country’s increases or decreases (South Africa!) are a blip on the radar for the trade. The U.S. still easily holds the largest share, but that percentage has stabilized around 33% (or less, due to the 2012 drought) in the last five years, compared to 50% or greater prior to that.


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