Morning Grain Comments, 12/03/2015

Thursday, December 3, 2015

The U.S. dollar continues to dominate the commodity space, rallying again following 12 1/2-year highs for the index yesterday; however, the grains remain resolutely lower this morning despite EUR/USD volatility...

Japan’s Ag Ministry bought 126k tonnes of milling wheat as planned in their regular weekly tender, including 69k from the U.S. and 57k from Canada.

The United Nations FAO reported its world food price index in November at 156.7 points, down 1.6% from 159.3 points in October, and the first decline in three months. The index remains less than two points above August’s six-year low, and the organization’s senior economist expects the strengthening dollar to further pressure global food prices in coming months. The FAO also cut their 2015/16 world cereals output from 2.530 to 2.527 billion tonnes, with global wheat production this year down from 736.2 to 734.5 million tonnes.

A Chinese Ag Ministry official said today that a grain structural adjustment will lead to reduced planted corn area in coming seasons, with the acreage dropping coming in low-productivity corn regions, and stable elsewhere.

Brazilian analysts Safras & Mercado yesterday pegged the country’s 2015/16 soybean crop at 46% sold as of the first of the month, up from 41% on November 1, 24% at this point last year, and 35% on average. Safras expects the soybean crop to reach a record 100.5 million tonnes this season.

The European Commission yesterday pegged E.U. soft wheat exports at 27.9 million tonnes in the current 2015/16 season, then 26.8 MMT in ‘16/17, before stabilizing in the 26.5 MMT range by 2025.


Total weekly fuel ethanol production fell off sharply on the holiday week last week, from a record number of 1.008 million barrels per day on the week ending 11/20, to 956k bpd on the seven days to 11/27. That was behind Thanksgiving week last year (962k bpd), the first time this marketing season that output has failed to set a weekly record for that date. Cumulative production since Sept 1 remains well ahead of last year’s pace and final numbers at 960k bpd.


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