-China says corn, wheat, rice TRQs will not be raised for trade deal
-Indian government requests boycott of Malaysian palm oil imports
-Trade estimate summary for Fridays’ USDA reports
-Funds back to nearly net even in soybeans
Grain markets continue to chop around ahead of Friday massive set of USDA data with the release of the Annual Crop Production report, quarterly Grain Stocks report, monthly WASDE report and Winter Wheat Seedings report all at 11:00 AM CT. Our pre-report commentary/analysis can be found on Market Insights at https://portal.rjobrien.com/MarketInsights/Blog/Read/38543. A summary of the trade estimates is on the following page.
 A high level Chinese ag official was quoted as saying they will not raise the annual low-tariff import quotas for corn, wheat and rice to accommodate higher imports of U.S. products as a result of the Phase One trade deal. Much speculation continues as to how/if Chinese imports would essentially double from previous record levels as U.S. negotiators state will occur, with some feeling the low-tariff quotas would be raised. Apparently, though, that is not going to happen according to Han Jun, a vice ag minister and part of China’s trade negotiating team. China currently allows 9.64 MMT of wheat, 7.2 MMT of corn and 5.32 MMT of rice to be imported at a minimal 1% tariff rate (65% rate above TRQ allowance), but with set amounts for private vs government-led imports, and also does not take into account the current 25% supplemental tariffs on corn and wheat as a result of the trade war.
 The Indian government, at a meeting with roughly two dozen vegetable oil industry officials, asked domestic refiners to stop buying Malaysian palm oil in protest of Malaysia’s criticism of Indian actions in the Kashmir region, as well as a newly enacted citizenship law. Previously in October, Indian veg oil importers temporarily stopped buying Malaysian palm oil on fears the government may raise import taxes, but this essentially represents a de facto ban on palm oil imports from Malaysia. With purchases already booked for Jan-Feb, the impact is expected to be felt March forward with a switch to Indonesian supplies likely. Palm oil accounts for roughly 2/3 of all Indian veg oil imports annually, with total purchases typically being more than 9 MMT.
 Yesterday afternoon’s delayed CFTC COT data, for the week ended 12/31/19, showed funds continuing to heavily liquidate their short position in soybeans, being net buyers of 30k contacts for the week reducing their net short to just 3.2k contracts. Funds were also net buyers of 8.1k contracts in CBOT wheat (net long 27.3k), 6.4k KCBT wheat (net long 1.3k), 6.5k MPLS wheat (net short 8.4k) and 2.5k corn (net short 82.5k). Funds were net sellers in SBO on the week of 7.2k contracts (net long 112.2k) and 1.1k SBM (net short 25.4k).
ï‚· A Malaysian official said they will launch the B20 biodiesel blending mandate for the transportation sector next month with a planned February 20 signing ceremony. The current mandate is for a 10% blend.
Weather Argentina saw rains of .40-1†finish up across eastern Buenos Aries, as well as most of Santa Fe and Entre Rios yesterday. Things look to be mainly dry through tomorrow, with another front to bring totals of .35-1†to the northern ½ of Santa Fe, Entre Rios and most of Corrientes Thursday. Dry weather then looks to return for Friday and through the weekend with the next round of rains of .50-1â€+ expected for most areas early next week. Rains of .35-1â€, isolated to 1â€+, fell across around 70% of the Brazilian growing regions yesterday, with no strong bias to the rainfall outlay. Tropical, hit and miss showers and thunderstorms will bring rains of .50-1.5+ to most of the Brazilian growing regions north of Parana today/tomorrow, with totals to the south of Parana in the .35-1â€+ range. Rains of .50-1.5â€+ are expected for most areas in the 6-10 day period.