-USDA attache sees prospects for significantly higher Chinese corn imports
-CONAB’s first new crop production ideas call for record soybean/corn crops
-USDA announces 658k tonnes in daily soybean sales
-La Nina seen continuing though April
-Export Sales strong for soybeans again
 The USDA ag attaché in China indicates there is potential for significantly larger corn imports in 2020/21 than currently reflected in the attaché’s own current estimate and USDA’s official estimate, both at 7.0 MMT. We assume holding the 7 MMT import estimate for now is due to China’s official 2020/21 low tariff rate quota of 7.2 MMT, but the attaché indicates this could change significantly down the road. They stated industry sources have reported an additional 5.0 MMT in TRQs have already been granted, with 2.0 MMT specifically allocated to Black Sea corn and 3.0 MMT specifically for U.S. corn. The attaché states there are also rumors State Owned Entities are drafting a report to the NDRC recommending the allocation of an additional 20 MMT of corn TRQs, as well. The attaché is holding steady on their estimate of this year’s Chinese corn crop at 250.0 MMT, which is solidly below USDA’s official 260.0 MMT and last year’s 260.8 MMT, stating that although less than originally feared, the impact of fall army worms and the late-season typhoons did detrimentally impact production prospects. The attaché sees 2020/21 Chinese corn feed usage at 190 MMT, slightly below USDA’s 192 MMT estimate, but up solidly from last year’s 187.0 MMT (USDA 192 MMT) on continued expansion/recovery of the hog industry, as well as continued growth in poultry demand. The attaché sees China’s 2020/21 corn ending stocks declining 20 MMT from last year to 193.0 MMT, but interestingly, the attaché reflects previous years’ Chinese stocks considerably higher than USDA official estimates. Specifically, the attaché estimates 2018/19 ending stocks at 217.3 MMT vs USDA’s 210.3 MMT, with 2019/20 stocks at 213.1 MMT vs USDA’s 201.1
MMT. The attaché also commented an increase in government stockpiling from the 2020/21 crop is expected following the considerable pulldown in reserve stocks in recent years. For other grains, the attaché sees China’s 2020/21 wheat imports at 7.0 MMT, in line with USDA and up from last year’s 5.4 MMT, with sorghum imports at 6.0 MMT (USDA 6.1 MMT/3.9 MMT last year) and barley imports of 5.0 MMT (USDA 5.0 MMT/5.3 MMT last year). The attaché said COFCO intends to use the full state quota this year, which if true, could push total wheat imports to 9.6 MMT. The attaché estimates 2020/21 Chinese wheat ending stocks at 164.7 MMT vs USDA last at 163.7, up solidly from last year’s 152.7 MMT (USDA 151.7 MMT).
 CONAB published their first new crop production ideas this morning, putting the coming soybean crop at 133.7 MMT vs last year’s 124.8 MMT, with planted area rising to 37.88 million hectares (93.6 mil acres) from 36.95 mil hectares (91.3 mil acres) last year. This is slightly above USDA’s early ideas on the coming crop of 133.0 MMT (126.0 MMT last year). CONAB sees the total corn crop at 105.2 MMT vs 102.5 MMT last year with total area of 18.48 mil hectares (45.7 mil acres) vs 18.53 mil hectares (45.8 mil acres) last year. Specifically, CONAB estimates the first corn crop at 26.8 MMT vs last year’s 25.7 MMT and the safrinha crop at 76.8 MMT vs 75.1 MMT last year. USDA is estimating the new crop at 110.0 MMT vs 102.0 MMT last year.
ï‚· USDA announced daily soybean sales this morning totaling 658k tonnes, with 374k to China, 152k to unknown and 132k to Mexico.
 The U.S. Climate Prediction Center’s monthly La Nina update indicated an 85% likelihood of La Nina conditions continuing through the Northern Hemisphere winter and 60% likelihood to continue through spring (Feb-Apr).
ï‚· South Korean feed mills bought 262k tonnes of optional-origin corn for Dec-Jan shipment overnight, all expected to be South American origin, with prices ranging from $237.88-$242.79/tonne c&f. They also bought 60k tonnes of optional-origin soybean meal for Nov-Dec shipment at $449.50/tonne c&f.
 Argentina became the first country to approve a strain of GMO wheat for commercial production, Bioceres’ HB4 drought-resistant wheat, although no countries currently allow imports of GMO wheat. Bioceres said they will not begin marketing HB4 until Brazil approves it for import.
 Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/41699 for details on today’s USDA Export Sales report.
ï‚· U.S. soybean sales were very strong again at 2.591 MMT (95.2 million bushels), matching the previous week’s sales and were again above last year’s same-week sales of 76.9 million bushels. This week’s activity included new net sales to China of 1.1 MMT (449k tonnes also switched from unknown to China), putting their 2020/21 total commitments at 22.1 MMT vs 4.8 MMT at this time last year.
ï‚· U.S. corn sales last week of 1.226 MMT (48.3 million bushels) were within market expectations of 700k-1.5 MMT, but were down considerably from the previous week’s 79.8 million bushels and were easily the lowest of the first five weeks of 2020/21, which had seen weekly sales range from 63.4-84.2 mil bu so far.
ï‚· Wheat sales last week of 531k tonnes (19.5 mil bu) were towards the upper end of market expectations of 250-600k tonnes and were in line with the previous week’s 18.6 million and last year’s 19.1 million.
ï‚· Soybean meal sales, for the week kicking off the 2020/21 marketing year, were 272k tonnes, in line with market expectations of 150-500k tonnes and put total commitments at 3.467 MMT, which is almost identical to year ago sales at the beginning of 2019/20 of 3.463 MMT. Soybean oil sales were disappointing at 4.6k tonnes with expectations of 0-30k. To start 2020/21, total commitments of 177k tonnes compare to 196k a year ago.
Weather
Rains of generally less than .20†fell across RGDS, with .35-1†in Parana and MGDS, while dry weather dominated the rest of Brazilian and Argentina yesterday. Brazil
is expected to see .30-.80†across most of Santa Catarina and southern Parana today and tomorrow. By the weekend, tropical activity is seen to develop across Mato
Grosso and then spread into Goias and Minas Gerais by early next week. Totals there look to be in the .20-.60†range, with some isolated heavier amounts. The 6-10
day forecast still sees widespread tropical activity to fall in areas north of Parana, with totals of .40-1â€+ and coverage of around 85%. Argentina still looks dry for
areas for the next 10 days, with some rains of .30-.80†in Buenos Aries by later in the weekend.