-China suspends planned 10% nationwide ethanol blending mandate in major blow to corn/ethanol import potential
-Brazil tweaks soybean/corn crop estimates higher
-India officially bans refined palm oil imports in blow to Malaysia
-Egypt tenders for wheat – Russia lowest offer
-Major USDA reports Friday – trade estimate summary included
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.
 China announced they are officially suspending the September 2017-announced plan to implement a 10% ethanol blending mandate by 2020 citing food security concerns. Upon announcement of the plan and ever since, market bulls cited the potential need for massive corn imports, with a 10% blend estimated to require roughly 45 MMT of corn annually, 16% of the country’s current total annual corn usage and doubling the amount of corn currently used for industrial purposes. Not likely to be met solely by domestic ethanol production, market bulls also pointed to likely large ethanol imports to help attain the 10% blend mandate, as well. China’s National Development and Reform Commission said there will be no further roll-out of ethanol-blended gasoline beyond the current small handful of provinces that already instituted such moves, essentially halting any/all further expansion of ethanol demand. Large-scale ethanol imports from the U.S. have been discussed as a likelihood with the Phase One trade deal, but likely no more apparently. At the time of the announcement, multiple new ethanol plants were being planned, but development/production has been very slow to occur. Initial goals were to use ethanol as a way to reduce the country’s massive domestic reserves, estimated to have been well over 200 MMT, but several months ago, a government expert eluded to ideas stocks were down to around 56 MMT. Such a drop in corn stocks makes a 10% nationwide ethanol blend an unviable plan.
 CONAB raised their estimate of the Brazilian soybean crop to 122.2 MMT from 121.1 MMT previously (115.0 MMT last year), but remains a bit below the USDA’s 123.0 MMT estimate. The total corn crop estimate was bumped up to 98.7 MMT from 98.4 MMT previously (100.0 MMT last year/USDA 101.0 MMT), with the 1st crop now estimated at 26.6 MMT vs 26.3 MMT previously and 25.6 MMT, and the 2nd crop (safrinha) left unchanged for now at 70.9 MMT vs 73.2 MMT last year. Soybean planted area is estimated up 2.6% from last year, while 1st and 2nd corn crop areas essentially unchanged year-over-year. CONAB’s crop estimate revisions typically are slow to materialize and run behind other private/public ideas, but the direction of the revisions is what’s important.
ï‚· India has officially banned the import of refined palm oil, which typically comes from Malaysia, while crude palm oil imports are still allowed and are mostly sourced from Indonesia. India continues to make moves to limit imports from Malaysia as a result of their criticisms of Indian actions in the Kashmir region and a newly implemented citizenship law.
ï‚· Following exports of 1.0 MMT in November, French soft wheat shipments outside the EU reached an estimated 4.0 MMT for the 2019/20 marketing year so far (July-Nov), up 14% from last year. FranceAgriMer sees 2019/20 non-EU total soft wheat exports rising roughly 25% from last year to 12.2 MMT.
 Malaysia’s Primary Industries Minister said the expansion of the biodiesel blending mandate to B20 for the transportation sector is expected to consume an additional 500k tonnes of palm oil in 2020. Malaysia used 2.7 MMT of palm oil in 2018/19 for industrial purposes, accounting for 77% of total domestic palm oil usage of 3.5 MMT.
ï‚· After the close yesterday, Egypt tendered for an unspecified amount of wheat for Feb 18-29 shipment. The lowest offer was Russian wheat at $245.50/tonne c&f ($231.95 fob), followed by Romanian at $245.59/tonne c&f ($232.79 fob), with Ukrainian at $246.59 c&f ($231.77 fob) and French at $249.48 c&f ($233.28 fob). No U.S. or South American wheat was offered.
Weather Argentine corn/soybean areas were mostly dry yesterday with .10-.25†rains with less than 10% total coverage. The 5-day outlook shows .50-1.25†(2.5†locally) with around 55% coverage. Brazil saw .50-2†rains (locally 4â€+) with 30-35% total coverage yesterday. The 5-day outlook shows .50-1.75†(4†locally) with around 75% coverage.