-Global market rebound continues on optimism for coronavirus vaccine
-China to sell corn reserves to ease local feed supply tightness
-Canadian Dec 31 wheat stocks slightly above expectations
-Palm oil rallies sharply on ideas Malaysian January stocks lowest since June 2017
-China domestic ag guidelines push higher soybean/pig production in 2020
-Coronavirus may negatively impact Chinese trade deal implementation
Energy/ag/financial markets generally have a solid tone this morning as global markets continue to rebound amid optimism progress is being made towards controlling the Chinese coronavirus outbreak.
ï‚· Chinese news sources reported a drug being tested appears to be effective against the coronavirus, prompting a favorable overnight response in global equity markets. Energy/ag/financial markets generally have a solid tone this morning as global markets continue to rebound amid optimism progress is being made towards controlling the Chinese coronavirus outbreak.
ï‚· Chinese news sources reported a drug being tested appears to be effective against the coronavirus, prompting a favorable overnight response in global equity markets.
ï‚· White house economic advisor Larry Kudrow said yesterday “it is true the trade deal, the Phase 1 trade deal, the export boom from that trade deal will take longer because of the Chinese virus,†as attempts to control/constrain the spread of coronavirus continue. Widespread factory/business shutdowns continue, negatively impact demand across many sectors of the economy, while consumer demand for meat is hit by reduced tourism, travel restrictions, less social interaction/public gatherings, etc. The trade deal includes the clause, which allows for consultations on various aspects of promises in the deal, “in the event that a natural disaster or other unforeseeable event outside the control of the parities delays a Party from timely complying with its obligations.â€
ï‚· China’s annual agricultural policy document included broad-stroke plans to diversify import sources and increase ag product imports to meet domestic demand, while pushing for further expansion of domestic soybean production. They also plan to “adjust and improve†the minimum purchase price system for wheat and rice. Considerable efforts will be made to increase pig production as “various measures shall be taken to restore the productions to normal rates by the end of 2020.â€
ï‚· China announced they will sell a total of 2.96 MMT of state corn reserves beginning February 7 to aid feed shortages in the south. Feed producers outside of the northeastern corn belt provinces of Heilongjiang, Jilin and Liaoning, as well as the Inner Mongolia region, are eligible to bid.
 Statistics Canada reported December 31, 2019 all wheat stocks at 24.982 MMT, slightly above the average trade estimate of 24.6 MMT (23.8-25.4 MMT range of ideas) and essentially unchanged from last year’s 25.109 MMT (revised up from 24.541 MMT previously). Durum stocks at the end of December were reported at 4.516 MMT, also modestly above average expectations of 4.2 MMT, but below last year’s 5.478 MMT (revised from 5.358 MMT). This put wheat stocks excluding durum at 20.467 MMT, in line with implied expectations of 20.4 MMT and up from last year’s 19.631 MMT (revised from 19.2 MMT previously). Dec 31 canola stocks were reported at 14.271 MMT vs the average estimate of 14.4 MMT (13.7-15.2 MMT range) vs and 14.618 MMT last year (revised from 14.588 MMT), while Dec 31 oat stocks of 2.671 MMT were in line with average expectations of 2.7 MMT (2.5-2.8 MMT range) and up from vs 2.406 MMT last year (unchanged). Dec 31 barley stocks of 5.959 MMT were below average expectations of 6.3 MMT (5.8-7.5 MMT range), but still up from 4.943 MMT last year (unchanged).
ï‚· Malaysian palm oil futures were sharply higher (+5%) overnight, in part due to average market expectations for end January Malaysian palm oil stocks to decline to 1.760 MMT (1.610-1.840 MMT range of ideas) from 2.007 MMT in December (3.005 MMT last year) and would be the lowest since June 2017. The Malaysian Palm Oil Board will release their monthly report February 10. January palm oil production is estimated at just 1.213 MMT (1.125-1.267 MMT range), down from 1.334 MMT in December (1.737 MMT last year) and would be the lowest monthly production since March 2016. January Malaysian palm oil exports are estimated at 1.282 MMT (1.220-1.410 MMT range) vs 1.396 MMT in Dec (1.681 MMT last year).
ï‚· Brazilian domestic ethanol consumption reached 8.6 billion gallons in 2019, easily a new record and up 10.5% from 2018.