-Brazil discusses temporary import tariff elimination for soybeans/corn
-Argentine wheat crop ideas lowered
-Sizable increase in EU wheat area expected
-Soybean export sales massive again – corn disappointing
-Good rains in Argentine forecast
A meeting today in Brazil’s Economy Ministry reportedly was set to discuss the temporary elimination of corn and soybean import tariffs from nonMercosur countries as domestic prices for both commodities are record high. Imports of corn and soybeans from any country other than Argentina, Paraguay, Uruguay and Venezuela are subject to an 8% import tariff.
The Rosario Grains Exchange lowered their estimate of the Argentine wheat crop to 17 MMT from 18 MMT previously due to dryness and occasional frosts during the growing season. USDA, though, is still at 19.0 MMT vs last year’s 19.8 MMT crop. The Buenos Aires exchange currently has the crop at 17.5 MMT. Rosario held steady on their estimates of the Argentine corn crop at 48.0 MMT (USDA 50.0 MMT/51.0 MMT last year) and soybeans at 50.0 MMT (USDA 53.5 MMT/49.0 MMT last year) for the time being.
Strategie Grains expects EU soft wheat planted area will increase 9% for the 2021/22 crop (currently being planted) from last year amid better conditions than a year ago when excessive rains notably impacted the ability to get the crop in the ground. Specifically, French soft wheat area is expected to increase strongly by 17% from last year to 5.0 million hectares (12.4 mil acres), while Britain is estimated to rise 27% to 1.8 mil hectares (4.4 mil acres). Without specifics being provided, sources in Germany and Poland expressed expectations for slight increases in winter wheat area this year, as well.
USDA reported 175k tonnes of soybeans sold to unknown and 128k tonnes of corn to Mexico this morning. There were also 216k tonnes in soybean sales to unknown in a late reporting of an earlier sale.
Argentina’s Ag Secretariat puts corn planting at 29% complete vs 28% last year and 25% average.
France’s winter wheat planting is 12% complete, up from 6% last week and compares to 16% last year. Corn harvest is now 64% complete vs 49% last week and 26% last year.
South Korea bought 65k tonnes of corn for Feb shipment at $246.83/tonne c&f following a tender for South American supplies only. They also bought 65k tonnes of U.S. feed wheat at $268.40/tonne c&f for Feb-Mar shipment.
Pakistan is thought to have purchased around 340k tonnes of optional-origin wheat following their recent tender, all priced around $284/tonne c&f and for arrival by Jan 31. Their last purchase on October 7 was 330k tonnes at $278.50/tonne c&f.
Indian palm oil imports in September declined to 644k tonnes from 734k in August, were a 3-month low and were 27% below year ago Sept imports of 880k. Overall palm oil demand remains weak given the detrimental impact on restaurants and hotels from COVID. Soybean oil imports in September of 316k tonnes were also down from 395k tonnes in August but were above last year’s 247k tonnes.
Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/41801 for details on today’s USDA Export Sales report.
Soybeans saw another exceptionally strong week of export sales at 2.631 MMT (96.7 million bushels), solidly above market expectations of 1.5-2.2 MMT and up from the previous week’s 90.9 million bushels. Incredibly, each of the first six weeks’ soybean sales of the 2020/21 marketing year have been above 90 million bushels (2.45 MMT).
U.S. corn export sales last week were disappointing at 655k tonnes (25.8 million bushels), coming in at the bottom of market expectations of 600k-1.2 MMT, declining notably from the previous week’s 48.3 million bushels and were easily the lowest of the 2020/21 marketing year so far.
U.S. wheat sales last week of 528k tonnes (19.4 mil bu) were near the top end of market expectations of 200-60k tonnes, were nearly unchanged from the previous week’s 19.5 million and were well above last year’s same-week sales of 14.6 mil bu.
Soybean product sales were disappointing this week with soybean meal’s 152k tonnes near the bottom of expectations of 100-350k and soybean oil’s mere 1.4k tonnes vs expectations of 0-30k.
In Brazil, rains of .30-.85” fell across most of Parana, MGDS and Sao Paulo yesterday, with little in the way elsewhere. In Argentina, rains of .20-.65” fell in Santa Fe, Cordoba, Entre Rios and Corrientes. Brazilian growing regions look to see tropical, hit and miss, rains occur over the next five days, resulting in totals of .40-1”+, with coverage of around 85% in areas north of Parana. Things will be mainly dry from Parana south. The 6-10 day sees fairly widespread rains of .35-1” to fall with some areas of 1”+ in all of their growing areas. A solid improvement in Argentine rainfall remains in the forecast with 85-90%
coverage of .40-1” expected over the next 5 days, with the 6-10 day period showing an additional .50-1”+ with coverage of around 85-90%, as well.