-Grain markets turn lower on disappointing Export Sales data
-China plans increased corn area
-Brazilian shipping delays may prompt reduced Chinese crush activity
-Another strong South African corn crop expected
-Favorable rains forecast for Australian wheat planting
-EU raises wheat export/corn import projections
After trading higher in the overnight session, grain markets turned on a dime this morning at the 7:30 AM CT release of Export Sales data, which was widely disappointing. Tomorrow is first notice day for March deliveries.
 Some Chinese crushers have said they may need to slow or halt operations for several weeks to possibly even a month given the delays in expected shipments from Brazil. Around 5.5 MMT of Brazilian soybeans are expected to arrive in China in March, which would actually be above last year’s 4.3 MMT, but still short of average monthly consumption of 8-9 MMT. However, the impact on soybean meal availability may not be too great as stocks have been built in recent months in
anticipation of the delays with the heavy imports of U.S. soybeans of late.
ï‚· China said they plan to increase corn planted area by more than 667k hectares (1.6 million acres) in key growing areas this year and would reflect a turnaround from recent years in which declining corn area was the norm. In fact, Chinese corn area declined for five consecutive years, with a total reduction of more than 8% (9.2 million acres) over the period. If put in place, policy changes to begin increasing area again, returning to purchases of domestic production for reserves
and the possible/likely adoption of GMO technology would likely dramatically lower import needs, as had been the case for decades, following this year’s surge in imports.
 A wire service poll of market participants showed average expectations of the Brazilian soybean crop at 132.9 MMT, in line with the USDA’s 133.0 MMT and up from last year’s 126.0 MMT. Despite the harvest delays, widespread expectations are for another record crop to be realized.
 South Africa issued their first official estimate of the 2021 corn crop at 15.849 MMT, reflecting a modest increase from last year’s 15.300 MMT, but below stronger market participant expectations for a crop around 16.9 MMT. For reference, their record corn production was 17.55 MMT in 2016/17. South Africa returned to a modest exporter of corn in recent years to 2.5-3.0 MMT, with the potential to boost exports even further if production proves closer to market expectations.
 Australia’s weather bureau expects an above normal precip regime in the country’s eastern growing areas this fall (Feb-Apr), which would be beneficial for the wheat crop once again. Australian wheat planting gets underway in April. A more neutral precip outlook is expected for other areas of the country.
 The EU Commission raised their estimate of 2020/21 EU soft wheat exports to 27.0 MMT from 26.0 MMT, but obviously remains well below last year’s 36.9 MMT following the sharply-reduced crop this year. They lowered their estimate of 2020/21 EU corn imports to 16.5 MMT from 18.5 MMT previously following a solid increase in last year’s EU corn crop to 64.8 MMT from 62.6 MMT previously. EU rapeseed imports were ticked higher to 6.0 MMT from 5.5 MMT previously (6.2
MMT last year USDA).
ï‚· The Philippines passed on their tender for 145k tonnes of wheat for April-June delivery citing prices being too high.
 Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/43065 for details on today’s USDA Export Sales report.
ï‚· U.S. soybean sales were only 168k tonnes (6.2 million bushels), below market expectations of 200-800k tonnes, down from the previous week’s 14.0 million bushels and the 2nd lowest of the 2020/21 marketing year. This week’s activity included reported net cancellations by China of 46k tonnes.
ï‚· U.S. corn sales last week of 453k tonnes (17.8 million bushels) were also below market expectations of 500k-1.3 MMT, were down from the previous week’s 39.3 million bushels and were easily a marketing year low in “beating” the previous weakest sales of 24.8 million bushels in mid-November. his week’s activity also included net reductions in Chinese commitments 46k tonnes.
ï‚· U.S. wheat sales of 168k tonnes (6.2 mil bu) were below expectations of 250-700k tonnes, as well, completing the trifecta, while also reflecting marketing year low sales and a notable slowdown from the 18.5 million bushel/week average sales over the previous four weeks.
ï‚· Soybean meal sales of 160k tonnes were in the lower portion of market expectations of 75-450k tonnes and reflected a notable slowdown in activity from the 296k tonnes/week average over the previous three weeks, but still met the roughly 139k tonnes/week average needed to reach the USDA’s export projection. Soybean oil sales were minimal again at 4.4k tonnes (5-30k expected), as combined sales over the last three weeks of 8.4k tonnes were less the average weekly sales “needed†of nearly 19k tonnes.
Weather
Conditions were mainly dry across most of RGDS and the southern ½ of Goias and Minas Gerais yesterday, with totals of .20-.80†for 85% of the rest of the Brazilian growing regions. The forecast remains mostly unchanged with 1-2â€+ expected in areas north of Parana over the next 5 days, while .25-.85â€+ amounts with 50% coverage are expected in areas south. The 6-10 day period continues to show expectations 2-4†in Mato Grosso, Goias, MGDS, Sao Paulo and most of Parana, while
Santa Catarina and RGDS see .25-.75†range and little to no rains in Minas Gerais. Argentina was dry yesterday and expected to remain so over the next 5 days with the exception of western La Pampa which will see .30-1â€. Rains were added in the
6-10 day outlook as all growing areas are expected to receive .50-1â€+ with the exception of Buenos Aries and southern sections of Santa Fe and Entre Rios which will miss out