-Wheat firms on ideas of Russian export quota
-Phase One trade deal ideas
-NOPA crush report tomorrow
-Egypt tenders for wheat
-USDA reports modest new crop soybean sale
Wheat was firm overnight on news of Russia’s ag ministry drafting a proposal to set a 20 MMT grain export quota for the first half of 2020 (Jan-June) in order to maintain a comfortable domestic supply. Russia has previously said they expect 2019/20 total grain exports to be 45 MMT, with wheat accounting for 36 MMT. Through December, wheat exports were 20.6 MMT, leaving 15.4 MMT remaining under their previously-cited annual ideas, which would actually be considerably more than last year’s 10.6 MMT during the same period, but below the 19.0 MMT exported in Jan-June 2018. Jan-June wheat exports of 15.4 MMT would also appear to largely fit within the 20 MMT total grain export quota, as well.
NOPA will release their monthly soybean crush report tomorrow at 11:00 AM CT. The average estimate of December soybean crush by NOPA members is 171.6 million bushels (168.2-174.0 million range of ideas), up from 164.9 million in November and essentially unchanged from year ago Dec NOPA crush of 171.8 million. This follows Nov crush which was down 1.2% from last year and Oct crush up 1.8%. The average estimate of end December soybean oil stocks held by NOPA members is 1.507 billion pounds (1.471-1.550 billion range), up modestly from 1.448 billion in November and mostly unchanged from last year’s Dec NOPA SBO stocks of 1.498 billion.
Ideas of the Phase One trade deal to be signed tomorrow continue to leak out from “sources,” with ideas total ag purchases would increase by $32 billion over two years ($16 billion/year increase) from the presumed 2017 baseline reference of $24 billion in total purchases. There supposedly are ideas China would buy over $50 billion more in energy supplies, as well, over two years which many are citing as a near absurd expectation given U.S. energy exports to China being around $8 billion/year in recent years. It appears the deal is being structured more in terms of broad commodity areas for import targets rather than specificallydefined products, allowing plenty of leeway in purchases, with continued ideas some amount of corn, wheat, ethanol and DDGS would be included.
After the close yesterday, Egypt tendered for an unspecified amount of wheat for March 1-10 shipment. The lowest offer was Russian wheat at $248.85/tonne c&f ($235.30 fob), with the lowest Romanian offer at $249.92 c&f ($236.97 fob) and French at $252.31 c&f ($235.86 fob). In their last purchase on January 8, GASC bought 300k tonnes for Feb 18-29 shipment priced from $245.45-245.98/tonne c&f ($231.92-$232.79 fob).
Preliminary customs data showed China imported 9.543 MMT of soybeans in December, a 19-month high, and were up from 8.280 MMT in November and well above last year’s 5.721 MMT. In 2016 and 2017, Dec imports were 9.0 and 9.5 MMT, respectively. 2019 calendar year total imports were 88.5 MMT, up marginally from 88.1 MMT in 2018, but well below 2017’s 95.5 MMT.
USDA reported the sale of 120k tonnes of 2020/21 (new crop) soybeans to unknown this morning.
Weather A front will bring rains of .50-1” to most of Argentine growing regions today and tomorrow, with things fairly quiet the rest of the week. Conditions look to be mainly dry for the weekend and Monday, with rains of .50-1”+ indicated to fall by Tuesday and Wednesday of next week. Rains of .50-1.5 are expected for most of the Brazilian growing from Parana north this week .50-1”+ to areas from Parana south on Wednesday into Thursday. Rains of .50-1” look to fall in most of the Brazilian growing regions from the northern ½ of MGDS/Sao Paulo in the 6-10 day period with some 1-2” totals across Goias and Minas Gerais. Totals in the rest of the Brazilian growing regions look to be less than .50”.