Protein Markets
- Chinese analyst Cofeed called last week’s crush in China 1.98 mln tons.
- The Chinese National Bureau of Statistics called the pig herd in China at the end of December 407 mln head, up from 370 mln head at the end of September. This is now over 80% of pre swine fever levels.
- Argentina has good rains forecast across much of the Soybean crop regions later this week and early next.
- Trump has proposed an EPA waiver for oil refineries as one of his last acts of power. If passed, the expectation would be that Biden would revoke.
- Argentina truck union has now issued a strike notice for this week.
- Sun pellet complex remains under pressure due to last season’s shortfall in Black sea regions increasing price relativity vs other protein sources.
PKE Markets
- BMD CPO futures (3rd month) have dropped from a high of around RM 3,870 at the end of the first week of Jan, to around RM 3,350 today.
- Market analysts are now saying that while poor export data corresponds with a steep drop in January futures, this factor is now already priced in, and buyers may be attracted back in after recent steep price corrections.
- Malaysia filed a WTO complaint against the EU for restricting palm oil based biofuels.
Grains Markets
- Australian grain export capacity remains well booked out to the middle of the year, as demand remains high from all regions.
- China imported 2.25 mln tons of corn in December, making a record 11.3 mln tons imported for 2020, while also importing 8.08 mln tons of barley, 8.38mln of wheat and 4.81 mln tons of sorghum, making total cereals imports in 2020 32.6 mln tons.
- Ukraine plans to resume target setting for corn exports to ease fears among domestic buyers that strong overseas demand will fuel shortages in the world’s fourth-biggest shipper. Expectations are a decision will be made on 21 Jan and see the implementation of a voluntary quota.
- Russian wheat areas experienced sub-zeroF temperatures (-17C) during midweek, decent snow cover should protect wheat crops in most regions.
- Large global crops over the last 12years has seen a gradual reduction in food security programmes. Reduced crops and soaring demand has seen mean countries implementing programmes including quoatas / tariffs and stockpiling.
- NZ harvest progress continues to accelerate despite recent rainfall. The storm battering the west coast this week is expected to cause strong winds, scattered rain and risk of thunderstorms across much of Canterbury.
Currency / Political
- NZD/USD off recent highs currently trading at 0.711.
- Bunker prices seem to be rounding off its top on its recent 3-month run-up, but availability of vessels remain tight.
- Mini-bulker freight prices have gone up by 20-25% due to supply of vessels, and container cargoes switching to mini bulker freight due to Covid-related delays on the container shipments.
- Joe Biden inauguration will be on Jan 21, Trump will be the first departing President not to attend in over 100 years.
Dairy Markets
- NZ MKP for 20/21 season currently $7.10/kg/ms
- GDT result up 4.8% overnight, led by gains in Fat complex up 17.2% and Skim at 7%. WMP the main driver for NZ farm gate price climbed 2.2%.i
- WMP price now at the highest level since late 2016.
