#Grain #Futures Comments

-US winter wheat conditions decline since Nov, but remain well above year ago
-Additional Chinese soybean purchases expected to be old crop
-Ukraine again sees higher grain exports

 

 President Trump said he is expecting to sign a trade agreement with Chinese President Xi “fairly soon,†leaving most anticipating that to occur at a likely March summit between the two in Florida next month. USDA Ag Secretary Sonny Perdue said corn, ethanol, DDGS, beef and poultry have been part of the talks with China regarding purchases, along with the additional 10 MMT in which China is reported to have committed to buy. Perdue said he expects the 10 MMT in additional soybean purchases “to be done expeditiously,†and consist of old crop supplies.

 Major winter wheat producing states provided updated winter wheat crop conditions yesterday afternoon in the monthly updates that typically run during the winter months. However, these were the first updates since the final nationwide condition report in late November as the government shutdown prevented updates in December and January. As is typically the case during the winter months, conditions have declined overall since late November, but remain solidly above year ago levels in most cases. The exception to the decline in conditions, though, came in Kansas where 51% of the crop is rated good/excellent vs 46% in late Nov and is sharply better than last year’s 12% g/e at this time. OK is 38% g/e vs 56% in late Nov and just 4% last year, while TX is 38% g/e vs 48% in late Nov and 4% last year. We would note, though, TX is providing weekly conditions already and this week’s were up 8% g/e from a week earlier. NE is 60% g/e vs 66% late Nov and 43% last year, while SD is 46% g/e vs 57% late Nov and 19% last year and CO 50% vs 54% late Nov and 31% last year. For SRW states, IL is 46% g/e vs 54% late Nov and 45% last year, while KY is 62% vs 81% late Nov and 62% last year.

ï‚· Ukraine now sees 2018/19 total grain exports at 49.0 MMT from 47.2 MMT previously according to Deputy Minister comments.

 Indian oilseed association SEA sees the potential for the country’s rapeseed crop to jump by 19% this year to a record 8.5 MMT on a combination of higher planted area and strong yields amid favorable growing conditions. Roughly 25% of the crop has already been harvested, with the remainder of the crop nearing maturity so risks to production at this point are minimal. The sharp increase in rapeseed production could help limit imports of other vegoils over the coming year.

 South Africa is expected to issue its first estimate of the new corn crop tomorrow. A wire service survey of market participants indicated average expectations for the crop to decline solidly to 9.962 MMT from last year’s 12.51 MMT following dry conditions limiting planting area.

ï‚· Taiwan bought 110k tonnes of U.S. wheat for April-May shipment, consisting of HRW, DNS and white wheat. South Korea bought 68k tonnes of optional origin corn for May/June shipment at $203.85/tonne c&f and is likely to be Argentine origin with their prices currently running around $10/tonne below US on a fob basis.

ï‚· USDA reported the sale of 120k tonnes of corn to Mexico this morning with 72k tonnes for new crop, 2019/20, delivery and 48k tonnes for 2018/19 delivery.