Feb 02, 2021

CBOT Prices Retreat on Lackluster Volume

USDA offers oilseed and grain crushing reports

USDA Oilseed and Grain Crushing Reports

  • USDA Grain Crush reported corn used for ethanol in December at 430 million bushels, down from 432 million last month and 479 million last year.
  • The corn usage implied ethanol yield at 2.89 gallons/bushel, down from 2.91 last month, but above 2.88 average for the marketing year to date.
  • Sorghum usage was not reported due to insignificant volume.
  • December soy crush was a new monthly record at 193.8 million bushels, higher than the previous record last year of 184.7 million.
  • Crush for the first four months of the season is a record 752.4 million bushels, up from 708.9 million last year.
  • Meal production for December was 4.6 million tons, the second largest meal production for any month and is 231,000 more than last year.
  • December’s ending soyoil stocks were 2,219 million pounds, up from 2,118 million last month and 2,134 million last year

FBN’s Take On What It Means: It’s a little surprising that the corn crush has been fairly stable with corn prices rising sharply above $5 in mid-winter. The weekly EIA reports have not been too awful, and reports of increased Chinese ethanol imports are supportive to prices. Healthy soy crush margins and strong product demand for processors have resulted in a record crush rate, and higher prices are likely needed to curb usage.

FBN-advisor


Weekly EU Oilseed & Grain Import/Export

  • Soybean imports are at 8.8 million tonnes versus 8.2 million the same week last year with the US holding 47% share and Canada at 15%.
  • Corn imports for the week were 207,000 tonnes, down from 217,000 last week and 266,000 last year.
  • Soft wheat exports total 15 million tonnes versus 18 million this time last year with Algeria and China the top two destinations.
  • Soft wheat exports to China are 1.6 million tonnes versus 900,000 tonnes last year with Algeria’s total at 3.2 million tonnes, in line with last year.
  • China is the top destination for barley exports, taking 1.4 million tonnes versus 771,000 last year. Saudi Arabia typically is the top taker but is in second place given China’s need to source grain.
  • Weekly rapeseed imports were 65,000 tonnes, up from the previous week.
  • Cumulative rapeseed imports are nearly four million tonnes, trailing last year’s cumulative total by 260,000 tonnes for the same week.
  • Australia’s share stands at 5%, up from 3.4% last week.

FBN’s Take On What It Means: EU corn imports have been down and will likely continue to struggle at these levels, which may offset some of China’s increased demand. Notice that China is taking a lot of EU grain (as well as other origins). China’s new-crop harvest is months away and the EU had a short wheat crop this year. We expect wheat futures to gain in value in the coming months.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)

The risk of trading futures and options can be substantial and may not be suitable for all investors. Past performance is not necessarily indicative of future results.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to, persons residing in Australia and Canada.


Kevin McNew

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Magazine

Marketwatch: Jan, 23

US Corn Price Idx: ZCPAUS.CM

open: 5.9581
high: 6.0469
low: 5.9312
close: 6.024

US Soybean Price Idx: ZSPAUS.CM

open: 13.7453
high: 13.8187
low: 13.6381
close: 13.7007

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.7319
high: 7.8293
low: 7.6894
close: 7.7295

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.428
high: 7.503
low: 7.373
close: 7.3929