Morning Grain Comments, 12/21/2015

Monday, December 21, 2015

BRZ rain chances still look promising for their driest crop areas this week, but the trade needs to see that precip verify over the next few days; not much else exists for grain support besides pure holiday cheer...

Russia’s Ag Ministry said the country’s government will “consider” either cutting or eliminating their grain export tax completely in January.

Chinese customs data showed November DDG imports at 465k tonnes, down 30% from October but 140% above last year’s comparable figure. Cumulative Jan-Nov imports of 6.4 MMT stand 19% above last season’s pace. China also doubled ethanol imports from Oct at 136k tonnes in Nov, up from just 26 tonnes LY. Wheat imports of 197k tonnes in Nov were sharply higher versus LY as well, though cumulative imports thru 11 months remain 6% behind last year’s pace at 2.76 MMT; corn imports halved last year at 19k tonnes, with cumulative Jan-Nov imports of 4.6 MMT still 130% higher than last year.

Friday afternoon’s Disaggregated CFTC Report showed managed money funds adding just over 26 net corn contracts on the week ending last Tuesday (12/15), compared to estimates for just a 4k net gain; meanwhile, beans lost almost 15k net there in contracts to estimates for just a 10k net loss, but gained it all back to an estimated nearly net even position following Friday’s trade. Oil added over 10k net there versus a –12k net estimate, while Chi wheat added 23.4k net against a +8k est, and KC wheat added 7.2k net. Producers and merchants dumped 18.3k net corn, 15.5k net Chi wheat, and 8.4k net KC wheat while adding 19.4k net beans and 9.4k net meal on the week.

Friday afternoon’s USDA Cattle on Feed Report showed all U.S. cattle as of December 1 at 99.8% of last year, well below the average 101.0% trade guess and below the entire 100.3-101.7% trade estimate range; November placements came in at 89.2% of LY, also way below estimates (averaging 95.9% of LY) and the lowest absolute Nov placement figure (1.601 mln head) since reporting began in ‘96. Nov marketings at 103.9% of LY beat the 103.4% est


Total production of the six largest Argentine crops is seen declining by the USDA in 2015/16, by over six million tonnes to 101.3 MMT; most of that comes in the form of a 4.4 MMT loss in soybean output, which is where most of the increase from ‘11/12 to ‘14/15 came as well (from 40.1 to 61.4 MMT). Grain production—not including oilseeds— has essentially been unchanged in the last decade, winding up in the 43-47 MMT range in eight of the last ten seasons.



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