Morning Grain Comments, 01/26/2016

Tuesday, January 26, 2016

Good news: China is still hungry for grains, oilseeds, biofuels, etc. Bad news: most of that new business isn't coming from us. The country largely has cheaper alternatives in S.A. soybeans and Black Sea corn & wheat, while their demand for our DDG’s and milo are lagging as well...

Chinese customs data showed calendar 2015 ethanol imports at a record 687k cubic meters, 25 times larger than the previous year’s 27k total, after December ethanol imports hit a monthly record 181k cubic meters. Total 2015 DDG imports hit a record 6.82 million tonnes, up over a quarter on the year, as December DDG imports came in at 420k tonnes, down from 465k tonnes in November. Analysts are expecting DDG imports to drop by more than 50% this year, though, due to scrutiny over U.S. DDG’s and limited Chinese buying— very few imports are reportedly on the books through April. Reuters pegged total imports of “corn and corn substitutes” into China in 2015 at a record 42.35 MMT, up from 57.7 MMT in 2014, with barley and milo imports each topping 10 MMT. Corn imports in 2015 came in at 4.7 MMT, up 82% vs LY. Meanwhile, December soybean imports rose 7% year-over-year to 9.12 MMT, with 6.65 MMT coming from the U.S. (-15% vs LY), while BRZ supplied 1.02 MMT and Argentina 865k tonnes (both well above last December).
Total Jan-Dec bean imports hit 81.7 MMT, up 14% from 2014, with imports from the U.S. down over 5% to 28.4 MMT, while BRZ shipments rose 25% to 40.1 MMT and imports from Argentina rose 57% to 9.4 million tonnes.

Ukraine’s state statistics service reported the country’s final 2015 grain harvest number at 59.96 MMT, down 6.1% from 2014, with wheat at 26.5 MMT (up 10% on the year) and corn at 23.2 MMT (down 18.5% from 2014).

South Africa reported corn exports at 572k tonnes at the end of Dec, with ending stocks at 3.925 MMT as of 12/31, down from 4.701 MMT a month prior. The country will release initial 2016 production estimates tomorrow.


Soybean export inspections fell to their lowest weekly total since late Sept/early Oct at under 44 million bushels, compared to 51.4 mbu the previous week and 56.8 mbu on the same week last year. Cumulative inspections since 9/1 stand at 1162 mbu, more than 150 mbu behind last year’s pace and now less than 50 mbu ahead of the 2013/14 pace—final marketing year inspections two years ago wound up at just 1595 mbu, with official exports at 1638 mbu that season.


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