Trilateral Weekly Bakery Update 10-19-2020

Wheat

  • Basis should be covered through Q4 and Q1. Futures through mid-Q2
  • Ukraine and Russia drought garnering increasing concern
  • Some showers occurred in Russia this weekend, but hardly enough to break the drought and the next two weeks looks drier.
  • Russia forecast mostly devoid of rain; planted area expected to drop 10% – 15%
  • Drought in SW Plains expanding; La Nina conditions could extend drought
  • Still have record global stocks going into next year

Oils

  • Coverage should be through Q3. .
  • Palm and SBO have resumed upward price action
  • US SBO stocks at bottom of five-year range
  • La Nina could hurt palm production
  • SBO demand for biodiesel remains strong
  • World edible oil usage ratio at 20+ year low

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