-Chinese buying of U.S. ethanol to provide corn demand boost
-Attache maintains China corn import ideas above USDA
-U.S. crushers extending soybean coverage
-Heavy rains continue across parts of Brazil, rains added to Argentine forecast
-Brazilian trucker strike gaining steam
-Correction of USDA daily sales announcements
 During a quarterly earnings conference call, ADM’s CEO said China has bought “roughly 200 million gallons†of U.S. ethanol for shipment in the first half of 2021 after importing virtually no ethanol from the U.S. over the last two years. Moreover, if accurate, their estimated purchases so far would match all-time record annual U.S. ethanol exports to China of 198.1 million gallons in 2016. Amid the weak domestic ethanol demand picture, China’s purchases would provide a nice boost for the industry and corn demand, amounting to around 70 million bushels of corn usage. Through official November data, U.S. ethanol exports in 2020 totaled 1.230 billion gallons vs 1.320 billion during Jan-Nov 2019 and 1.576 billion in 2018.
ï‚· Attention on expected strong soybean demand rationing needs towards the back end of the 2020/21 is increasing with ideas U.S. crushers are considerably expanding soybean purchases/coverage well beyond typical levels amid the concern of limited availability down the road. There are ideas eastern corn belt crushers have bought soybeans as far out as May vs the typical 30-40 day coverage, while western belt crusher purchases have pushed out to 90 days in some cases. With demand remaining strong, the balance between available supplies and late season export/crush needs is most likely going to be rather precarious.
 The USDA ag attaché in China maintained their estimate of 20/21 corn imports at 22.0 MMT in their latest update, holding well above USDA’s current official estimate of 17.5 MMT and massively above last year’s 7.6 MMT. The attaché estimates Chinese feed/residual usage this year at 194.0 MMT vs USDA at 200.0 MMT and 193.0 MMT last year as high domestic prices are expected to limit demand. The attaché sees China’s 2020/21 corn ending stocks at 202.2 MMT vs USDA’s official 191.7 MMT estimate and last year’s 200.5 MMT. The attaché sees 2020/21 Chinese sorghum imports at 6.5 MMT vs USDA’s 7.4 MMT estimate (3.7 MMT last year) and barley imports of 7.0 MMT, in line with USDA, and up from 6.0 MMT last year. Wheat imports are estimated at 8.5 MMT, modestly below USDA’s 9.0 MMT estimate, but still a record and up from last year’s 5.4 MMT.
 The potential/likelihood of a major truckers’ strike in Brazil beginning Feb 1 appears to be gaining steam after a major oil worker union backed the action. This would come just as Brazil’s soybean harvest gets underway, with the vast majority of supplies making their way to port via truck. Truckers are arguing the allowed increase in freight rates this year will not keep up with rising costs.
ï‚· CORRECTION: A slightly delayed reporting of daily sales activity occurred after the initial posting of these comments. USDA reported the sales of 680k tonnes of corn to China, 132k tonnes of soybeans to China and 127k tonnes of soybeans to unknown, all for 2020/21 delivery.
Weather
Yesterday saw dry conditions in Minas Gerais, rains of 1-2†in northern RGDS and western Santa Catarina, with .25-.75†across the rest of the Brazilian growing regions. Over the next five days, 2-4â€+ is expected across RGDS, Santa Catarina and Parana, with totals of 1-2â€+ elsewhere, except for Minas Gerais which looks mainly dry. Rains continue in the 6-10 day period with another 2-4â€+ for RGDS, Santa Catarina and possibly into Parana, with 1-2†expected elsewhere. Argentina was dry yesterday across La Pampa, Buenos Aries and southern Cordoba, while .50-1.25â€+ rains occurred in the rest of their growing regions. Changes in the 1-5 day forecast considerably added rains, with 2-3†now expected for northern Buenos Aries and La
Pampa, as well as southern sections of Entre Rios, Santa Fe and Cordoba. Totals elsewhere look to be in the .60-1.25†range. Additional rains are expected in the 6-10 day period, as well, with 1-3†in most of Buenos Aries, with totals of .50-1â€+ elsewhere. This would provide a much-needed boost to many areas.