GAP State-of-Play for Week Ending Jan. 29, 2021

GAP State-of-Play — Week Ending Jan. 29, 2021


Welcome to this week’s snapshot of the global grains and oilseeds industry. For the full report, click link at the end.

  • One month down…11 to go…
  • Brazil truck strike — this will likely be the principal headline to start February. Slow start to harvest will lessen the impact as negotiations continue. A solution is expected.
  • For the month — corn was the upside price leader and gained 13.1% to start the year. New highs for corn’s move. New highs in CU-CN inverse. Gap filled (and failed twice last week) vs 550.
  • Argentina corn + SM premiums — seem to weaken nearly every day as confidence on the rise for corn + soy production. Farmer selling has been much better vs December. Argentina crush margins v. good and January 2021 SM exports will exceed both 2019 and 2020.
  • Extreme weather noted in areas of Argentina with intense rains noted in Cordoba. January has been all about the rains for SOAM — esp. very good for Argentina given its later planting windows for soy and corn (vs Brazil). Brazil putting corn right into the ground — following combines around the field. Peak planting safrinha crop in February. Recent moisture — while slowing soy harvest/possible increase in damage — is viewed as net positive for the safrinha corn crop.
  • Fund position — long, long and more length. KW, MW and soy oil and even corn — closer to record length than not.
  • China scored nearly 6MMT of U.S. corn that were flashed this past week — takes estimated ownership (known + % of unknown) to 20MMT for the year.
  • U.S. corn exports finally hit that “need” rate — China will need to pick up its exports by at least 25% per week if it’s to load out all its ownership by 31 August (end MY on paper).
  • February — monthly price average will set the U.S. crop insurance rates: no change to view — the U.S. will bring as much land as possible into play. Likewise/same for Brazil — one look at its surge in fertilizer input use vs this time LY as more fields are prepped is a clear indication.
  • World soymeal off-take demand — remains a principal challenge that the market has long overlooked (and continues to do so).
  • World freight took it on the chin this week as Q1 2021 global cargo demand simply has not picked up as vessel owners had hoped. Baltic index down 19% vs LW.
  • USD surged late last week to close out the month — USD is now +0.7% and was the best month for its performance since Sept 2020.

To read the full GAP State-of-Play for the week ending Jan. 29, 2021, click here.


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