Tuesday, January 21, 2020

Morning Markets: Corn -4. Beans -10. Wheat +1.
Want instant access to your Topflight tickets, contracts, grain balances, bids and more? Download the new Topflight Grain App from the App or Google Play store.
Having trouble connecting or seeing all your account details – contact your local TFG office.

MARKET SUMMARY:
The market is once again in a period where little fresh news is available. We are past the January USDA reports, and aside from the February WASDE report, the next batch of news will come from the USDA Outlook Forum at the end of February. The real attention will be placed on the March quarterly stocks and planting intentions reports though. While these are several weeks away, we will start to see estimates released soon. Ahead of that, most attention will be on the start of the South American harvest. Private analysts continue to raise their Brazilian soybean crop estimates, with some now approaching 125 million metric tons. While this is only a slight increase from the current USDA estimate it would be a large 10mmt increase on the year. Some analysts are skeptic of this number given the adverse weather that has impacted parts of Brazil this growing season. This is the same debate that took place in the United States last year though and production was well above expectations as well. The real interest in Brazil will be what we see for double cropping as that will greatly affect what the country can export on corn. Even with a large corn crop Brazil may not export as much as last year given the shortage it created domestically. For the immediate market, trade will continue to monitor the developments with Chinese trade and if demand starts to increase as hoped. Doubt over the benefit of the Phase 1 agreement working is growing, with some economists calling the projected Chinese import levels unrealistic. The reality is if we could simply see trade volumes get back to pre-trade war levels it would be a win for the US. The next trade issue that needs to be resolved is with the EU and that is where attention will start to shift.

Crude Oil is down $0.73 at $57.81.
US Dollar is down $0.113 at $97.493.
Global Equities: Japan -0.5%, China -2.8%, and Europe -0.9%.
Dow futures up 50 points at 29,348.
EU MATIF Exchange: Corn +0.1% and Wheat +0.6%.
Malaysian Palm Oil: -0.5%.
Dalian: Corn -0.7%, Soybeans +0.8%, Meal +1.2%.

WEATHER:
• The Plains and Midwest are starting off the week dry but more snow and rain is on the way tomorrow through Friday, heavy for all but the far northwest; chances continue to favor the Plains in both the 6-10 and 11-15 day time frames, with temps rising this week and holding above normal throughout.

OTHER HEADLINES:
• U.S. Treasury Secretary Steven Mnuchin told The Wall Street Journal, “The phase-two trade deal with China would not necessarily be a "big bang" that removes all existing tariffs, U.S. Treasury Secretary Steven Mnuchin said; we may do 2A and some of the tariffs come off; we can do this sequentially along the way.” Mnuchin also warned that Italy and Britain will face U.S. tariffs if they proceed with a tax on digital companies like Alphabet’s Google and Facebook. Mnuchin’s warning to Italy and Britain comes after France backed out and pledged with the U.S. to avoid a trade war until at least the end of this year.
• Skepticism is continuing to mount as to whether China will fulfil its side of an agreement to buying an additional US$200 billion of US goods over two years, including a clause that would bring its imports of US farm goods to more than US$40 billion a year. More analyst continues to believe that if China continues to insist it will buy US goods according to market conditions, it cannot meet the U.S. demands.
• Ag Secretary Perdue has indicated that there will be no need for another round of trade related bailout for US farmers due to the completion of the Phase 1 trade deal. The remarks came one day after President Trump addressed the American Farm Bureau Federation’s annual convention.
• Brazil's soybean farmers have harvested only 1.8% of the soybean area so far this season, reducing the ideal window for planting of the country's second corn that is sowed after soybeans are harvested. Last year Brazil was 6% harvested by this date. For a strong second corn crop, rains need to be maintained through April and into May. The slow pace of soybean harvest may lead some producers to plant milo, sunflowers or pulses instead of corn.
• Pakistan on Monday approved the import of 300,000 tons of wheat to relieve a shortage of flour supplies that has created a crisis for the government. Prices of flour and bread shot up last week as the ingredient disappeared from shops and wholesale markets, while bread makers shut in protest at what they called government pressure to sell the staple at controlled prices.
• Export prices of Russian wheat reached their highest-level last week since the season began in July due to demand from major customer Egypt and risks related to Russian proposals to introduce an export quota.
• Ukraine increased its grain exports by about 29% to 33.9 million tons in the 2019/20 July-June season, helped by higher wheat and corn exports. Ukraine harvested a record 75 million tons of grain in 2019, compared with 70 million tons in 2018.
• Argentine wheat shipments to Asia are poised to climb to a record high over the next two months as a drought curbed Australian production and Black Sea inventories tightening.
• Thousands of tons of refined palm oil are delayed or stuck at various Indian ports after the world's biggest edible oil buyer placed restrictions on imports amid a diplomatic row with key supplier Malaysia.

EXPORT NEWS:

• N/A

Have a great day!!!!

Chelsey White
Emery Branch Manager/Originator || Topflight Grain Coop
593 Emery Rd.
Maroa, Il 61756
217-794-2240
E-Mail: cwhite@topflightgrain.com

This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by Topflight Grain Cooperative, Inc. Topflight Grain is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable but is not guaranteed as to its accuracy. Contact Topflight Grains designated personnel for specific trading advice to meet your trading preferences. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Topflight Grain Cooperative, Inc. ... See MoreSee Less

3 hours ago

Friday, January 17, 2020

Closing Markets: Corn +14. Beans +6. Wheat +5.

Topflight Grain will be closed on Monday, January 20th for the holiday. We will reopen on Tuesday, January 21st. Thanks!

Want instant access to your Topflight tickets, contracts, grain balances, bids and more? Download the new Topflight Grain App from the App or Google Play store.
Having trouble connecting or seeing all your account details – contact your local TFG office.

Market Recap:

Corn closed 12-14 cents higher in the nearby contracts and 8-9 cents higher in the deferred contracts. For the week CH gained 3 cents. Funds were probably as heavy buyers today as they were sellers yesterday and held an estimated short position of 116,000 contracts as the day started. Funds holding short positions are balanced between ample world stocks, a large S. American crop on the way, and what happens if China does indeed become an active buyer of U.S. corn? It was an interesting week as the trade tries to decipher expectations now that the U.S. and China have signed Phase 1. It wasn’t expected that they’d buy corn but somehow a surprise yesterday that they didn’t. Today, 2-4 cargoes of corn were reportedly sold off the PNW to China but there is also talk that they are destined for S. Korea or Japan. Also, the EU is questioning the U.S./China trade deal and WTO trade rules. On and on it goes.

Soybeans closed 6 cents firmer today on a rebound from yesterday. Funds were on the sidelines for the most part today and held an estimated short position of 19,000 contracts this morning. SH lost 16 cents this week. No big Chinese purchases and no large weather concerns in S. America weigh on futures. China must balance buying U.S. beans to honor trade agreements with buying S. American beans at cheaper values in the soon to ramp up harvest. China starts their Lunar New Year celebration on the 25th, so if they don’t buy U.S. beans next week, we may not see much activity until that ends. (You’ve probably noticed various market articles over the past few weeks regarding China releasing frozen pork reserves for the holiday period.) Generally, over the next two weeks, northern Brazil expecting above normal precipitation, southern Brazil a bit dry as is southern Argentina, with northern Argentina expecting above normal precipitation.

Wheat able to rebound today, mostly as a correction from yesterday. WH Chicago gained 6 cents this week. Funds are long an estimated 40,000 contracts.

Have a great evening!!!!

Chelsey White
Emery Branch Manager/Originator || Topflight Grain Coop
593 Emery Rd.
Maroa, Il 61756
217-794-2240
E-Mail: cwhite@topflightgrain.com

This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by Topflight Grain Cooperative, Inc. Topflight Grain is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable but is not guaranteed as to its accuracy. Contact Topflight Grains designated personnel for specific trading advice to meet your trading preferences. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Topflight Grain Cooperative, Inc. ... See MoreSee Less

4 days ago