Morning Wire


Highlights

 

  • China announced they will grant tariff exemptions on 696 American products including soybeans, pork, beef, corn, wheat, crude oil and liquefied natural gas. This announcement comes after Phase 1 trade deal came into effect on February 15th.   

  • Brazilian truck drivers began protesting early Monday at Latin America’s largest port in Santos. Truckers are demanding a reduction on value-added taxes on gasoline and diesel. The protests are disrupting some port unloading activities.

  • Trade talk over the weekend focused on a massive swarm of locusts that had moved through India and into SW portions of China. Stay tuned.

  • March options go off the board at the close of trading this Friday February 21st.  

  • Outside markets as of 7:40am CT: Dollar Index up .2920 @ 99.295, Crude Oil down .96 at 51.09, Dow futures down 138 at 29,256.

     

Corn

  • In his weekly update, Dr. Cordonnier left his estimate of 19/20 Brazilian corn production unchanged @ 100.0 million tons. On the other hand, Argentina’s 19/20 corn production estimate was raised by 1.5 million tons to 49.0 million tons.

  • South Korea’s NOFI bot 66,000 tons of optional-origin corn in a private deal late last week. Cargill is believed to be the seller @ $ 212.30/ton c&f for arrival in South Korea around May 20th.

  • South Korea’s Major Feedmill Group bought 135,000 tons of optional-origin corn in two consignments. The first consignment was sold by Cofco @ $211.79/ton c&f for arrival around June 11th. The second consignment was sold by Pan Ocean @ $211.79/ton for arrival around June 18th.

  • COT report Friday afternoon showed funds sold about 14,800 contracts last week to place their short position @ 117,200 contracts as of 2-11-20.        

 

Outlook: Overnight trade is higher with China’s announcement of tariff exemptions. Technically resistance stands @ 382 ¼, 385 then 394.   

 

Oilseeds

  • COT supplemental report on Friday showed funds sold approximately 6,300 contracts of soybeans last week and stood with a short position of 102,000 contracts as of 2-11.20. funds sold about 1,800 contracts of soymeal last week to place their short position at about 65,100 contracts as of 2-11-20. Funds reduced their long position in soybean oil by selling about 12,100 contracts to now show a long of approximately 29,400 contracts as of 2-11-20.     

  • Dr. Cordonnier raised his estimate of 19/20 Brazilian soybean production by 1.0 million tons to 125.0 million tons. Argentina’s 19/20 soybean production was also raised by 1.0 million tons to 54.0 million tons.

  • Ag Rural raised its estimate for Brazil’s 19/20 soybean production to 125.6 million tons from their estimate of 123.9 million tons in January. More than a fifth of the crop has now been harvested according to the report from Agrural.

  • EU soybean imports as of February 16th stand at 8.74 million tons compared to 9.20 million tons at the same time last year.

  • Egypt’s GASC is seeking 30,000 tons of soybean oil and 10,000 tons of sunflower oil in a tender that will close this Thursday February 20th.

  • Malaysian palm oil fell overnight on weaker Chinese demand and ideas that February outputs will be higher than expected. The benchmark may contract closed down 7 ringgits to 2,642.             

 

Outlook: Overnight trade has not been overwhelming, higher until just before the break, now about a penny lower, despite China’s announcement of tariff waivers. The trade waits for and wants to see Chinese purchases of U. S. soybeans. Bigger crop estimates for South American production offer overhead resistance.    

 

Wheat

  • Australia says it’s 19/20 wheat harvest was the lowest in 12 years due to severe drought. ABARES says with harvesting now complete, wheat production total was 15.17 million tons.   

  • Turkey’s state grain board TMO has provisionally purchased 50,000 tons of optional- origin durum wheat from Glencore for shipment between March 1-20. Prices were $325.75/ton c&f for 25,000 tons and $314.00/ton c&f for the second 25,000 tons. Turkey is also working to purchase 250,000 tons of red milling wheat with the lowest offer coming from Dreyfus for 25,000 tons.         

  • Japan’s Ministry of Agriculture will tender this week for a total of 93,100 tons of food-quality wheat from the U. S. and Canada.

  • Morocco’s state grains agency ONICL has tendered to import 354,000 tons of U. S. durum wheat under a preferential tariff import quota. The tender will close on march 5th.

  • Taiwan has tendered to purchase 102.525 tons of various classes of U. S. wheat off the PNW. The tender closes February 21st.

  • Bangladesh has tendered to purchase 50,000 tons of optional origin milling wheat. Tender will close February 27th.      

     

Outlook: Wheat prices are making a run after Australia’s 12-year low wheat production total was announced and possible locust problems in India and moving into Asia. New tenders dot the landscape to give underlying support.