Morning Grain Comments, 12/17/2015

Thursday, December 17, 2015

The grains are in a tough spot today, swimming upstream against currency action following the Fed rate hike yesterday and Argentina removing the reigns from (among other things) its own peso post-election.

South Korea¡¦s NOFI bought up to 195k tonnes of optional-origin corn today, for May-June arrival, priced at around $183-184/tonne C&F.

Japan bought 123k tonnes of milling wheat in their regularly scheduled weekly tender, including 84k tonnes from the U.S. and 29k from Canada.

Japan imported 1.77 MMT of grain in November, down 8% from last year, with grain imports from the U.S. down 39% YoY to 807k tonnes; Nov soybean imports were up sharply at 247k tonnes total and 194k from the U.S.

Russia and China signed agreements on grain quality control today, which Russia has said could open up the Chinese market for Russian wheat¡Xand potentially other crops, including corn, soybeans, rapeseed, and rise, which were all included in the food safety documents.

Strategie Grains increased their 2015/16 E.U. soft wheat export forecast, up 800k tonnes from last month to 27.6 MMT, on increased shipment paces from France and better chances for the U.K. to export some in the near future; that remains below 32.5 MMT exported last season. Strategie also cut their ¡¥15/16 E.U. ending wheat stocks estimate, from 19.8 to 18.4 million tonnes. Meanwhile, 2016 E.U. wheat production was pegged at 143.6 MMT in their first forecast for the crop, down from 150.0 MMT in 2015; corn output of 64.9 MMT in 2016 would represent a 13% rise from 2015¡¦s drought-hit harvest.


Britain¡¦s Farm Ministry raised their 2015 wheat production estimate from 16.17 to 16.44 MMT this month, still 1% below last season¡¦s 16.61 MMT but the second-largest crop since 2008 thanks to record yields.

Tomorrow afternoon¡¦s USDA Cattle on Feed Report is expected to show all U.S. cattle on feed as of December 1 at 101.0% of last year, with November placements at 95.8% of last year and Nov marketings at 102.7% of LY.

Total weekly DOE fuel ethanol production rebounded to an even million barrels per day on the week ending Dec 11, up from 993k bpd the previous week and the second-highest number on record, behind 1.008 mln bpd three weeks ago. That takes cumulative output since September 1 to 965k bpd, 31k bpd ahead of last year’s pace through 15 weeks, with the USDA still looking for a slight decline in ‘15/16 corn use for ethanol despite this month’s S&D increase.



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