Morning Grain Comments, 11/23/2015

Monday, November 23, 2015

There was never going to be anything bullish about the Argentine election results yesterday either way, but new President-elect Macri in particular seems to have some aggressive goals in eliminating corn and wheat
export taxes and quotas, reducing soybean export tariffs, and fixing the country’s exchange rate. The country is a sleeping giant in regards to potential productivity and global export markets in all three of those major crops...

Chinese DDG imports fell to 660k tonnes in October, down 29% from September but still nearly five-fold above October 2014; Nov DDG imports are seen down even futher, according to trade sources. Cumulative Jan-Oct imports of 5.9 MMT are still up 14% from last year’s pace. Oct corn imports totaled only 43k tonnes, though cumulative Jan-Oct corn imports are up 164% from last year’s pace to 4.57 MMT. October soybean imports of 5.53 MMT were up 35% from last month, including shipments from BRZ (3.88 MMT), ARG (919k tonnes), and the U.S. (512k tonnes) all up sharply from Sept; total year-to-date bean imports of 65.2 MMT are up nearly 15% from last year, though the U.S. share of that is down slightly to 17.5 MMT.

Friday afternoon’s USDA Cattle on Feed Report showed all U.S. cattle on feed as of November 1 at 102.1% of last year, near the average 102.2% trade estimate; October placements came in at 96.3% and marketings at 96.7%, both only slightly above average 96% trade guess in each category. 

Friday afternoon’s Disaggregated CFTC Report showed managed money funds dropping another 26.7k net corn contracts on the week ending last Tuesday (11/17), compared to daily trade estimates for an unchanged week in that category. The rest of the grains came in a bit below expectations there as well, with minor moves except for wheat’s –21.5k net loss on the week (also versus estimates for a steady five sessions. Producers and merchants added 17.4k net corn on the week, along with +14.8k meal and 14.2k Chi wheat.




Today’s chart shows each of the major producers’ (and China’s) share of the world 2015/16 soybean carryout. Despite only producing around half the soybeans of the U.S. and Brazil, Argentina is on track (according to the USDA) to hold 37% of the world’s bean ending stocks this season, at over 30 MMT; they held over 40% of the global stockpile in each of the two prior marketing seasons, and have held the largest global share in all but one of the last ten years.

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