Trilateral Weekly Bakery Update 11-23-2020


  • Basis should be covered through Q4 and Q1. Futures through mid-Q2
  • Drought in eastern Ukraine, southern Russia and the SW Plains continues to plague the area
  • Probability increases of strong La Nina that lingers in spring of 2021 — dryness in HRW wheat region
  • Major exporter balance sheet that is tight with stocks to use expected to be the lowest since 2007-08; Exporting countries hold on 25% of stocks net of China’s 49% of all stocks
  • Exporting countries hold only 25% of stocks net of China’s 49% of all stocks


  • Coverage should be through Q3.
  • DTN:  World can ill afford a big hit to South American soybean production, with U.S. soybean ending stocks likely to reach a dangerously low pipeline supply if demand continues unabated
  • Bullish vegetable oil rally is alive and well
  • Palm & SBO futures reach multi-year highs
  • The global stocks/use ratio for soybeans is now forecast at 16.12%, the lowest percentage since the U.S. drought year of 2012-13
  • Mostly below normal precipitation pattern is expected to continue in South America–increasing concern of extended dryness for top producer province of Mato Grasso
  • Palm seeing tight stocks and lower production; usage ratio at low going back to 90s
  • World edible oil usage ratio at 20+ year low

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