FI Evening Grain Comments 03/02/22

PDF Attached

 

Private
exporters reported the following activity:

-264,000
metric tons of soybeans for delivery to unknown destinations. Of the total, 198,000 metric tons is for delivery during the 2021/2022 marketing year and 66,000 metric tons is for delivery during the 2022/2023 marketing year

-266,000
metric tons of soybeans for delivery to China. Of the total, 198,000 metric tons is for delivery during the 2021/2022 marketing year and 68,000 metric tons is for delivery during the 2022/2023 marketing year

 

Attached
are updated US soybean complex S&D’s. Day 7 of conflict. Anther headline trading day. CBOT May soybeans traded lower in a risk off session. Products also fell.  Corn was lower but bull spreading limited losses in the May position. Wheat saw considerable bull
spreading with May wheat up limit.

 

CBOT
limits – wheat stays at 75 cents

https://www.cmegroup.com/trading/price-limits.html

 

Weather

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• U.S.
  hard red winter wheat areas will continue to heat up for another couple of days
• High
  temperatures in the 70s and lower 80s Fahrenheit will accelerate drying across the region
• Winter
  wheat hardiness will be lost, although cooling this weekend into next week will slowly bring enough cool air back to restrict crop greening
• Livestock
  stress will rise because of the heat, although temperatures will only be warmest for a brief couple of hours and some wind is expected to keep animals cool
• Very
  little rain will occur in the central or southwestern U.S. hard red winter wheat areas for the coming week
• Any
  showers that occur will fail to change soil moisture or drought status
• A
  more generalized rain event is needed to bolster soil moisture and improve crop and field conditions
• Damaged
  crops from drought, extreme cold without snow cover and heaving topsoil will require a cool and wet spring for new tillers to be set and root system repair to take place
  
• Such
  an event seem unlikely in the High Plains region
• West
  Texas cotton areas will continue dry biased for the next ten days, despite a few spits and spats of moisture
• South
  Texas and the Texas Coastal Bend will continue dry biased in this coming week and “may” receive some rain next week – mostly in the Coastal Bend region
  
• California
  will get some rain and mountain snow briefly Thursday into Friday, but resulting precipitation will not fix the region’s moisture deficits and mountain snowpack will remain 53-58% of normal
• Next
  week will be dry again
• South-central
  and southwestern Canada’s Prairies will get some needed snowfall Thursday and Friday with 2 to 8 inches of snowfall and moisture totals to 0.40 inch resulting
• Frost
  in the ground will restrict the moisture from getting into the ground when the snow melts, but any moisture in the region will be good for add to on-farm water storage
• U.S.
  southeastern states will experience warm and dry biased weather for the coming week
• Today’s
  forecast models have suggested rain will fall in the second half of next week
• Confidence
  is low and future model runs may remove some of the advertised rainfall
• U.S.
  lower eastern Midwest, northern Delta and Tennessee River Basin are too wet today, but will dry down briefly before a new period of unsettled weather evolves this weekend and next week
• Concern
  will rise over planting delays this spring if the wet bias prevails too long
• A
  new storm or two will impact the northeastern U.S. Plains and upper Midwest during the next ten days
• The
  first event will occur this weekend and a second system is expected near March 10
• The
  weekend storm will bring snow and some rain to the region
• Argentina
  is still expecting rain in most of its crop areas through the next ten days
• Moderate
  to heavy rain may impact a part of central and north-central Argentina where a minor amount of local flooding will be possible
  
• Saturday
  into Monday will be wettest, but another round of rain is possible during mid-week next week
• Rain
  totals may range from 2.00 to 6.00 inches and locally more
• The
  rain will fall over the previously driest areas in the nation and should bring all concerns over dryness to an end – at least for a while
  
• The
  moisture comes a little too late for bolstering late season crop production potentials very much, but some improvement is expected
• Most
  of Brazil will get rain over the next ten days, as well.
• Sufficient
  amounts will occur in the south to bolster topsoil moisture and improve late full season and Safrinha crop development potentials
• Northern
  Brazil will continue a little too wet – especially from northern Mato Grosso to Tocantins and Maranhao
• Cold
  air will be returning to Canada’s Prairies and could impact a part of the northern and central U.S. Plains and northwestern states next week
• Temperatures
  in the southeastern one-third of the United States will be warmer than usual at the same time
• There
  is still no threatening cold expected in any winter crop area in Europe or Asia through the next ten days to two weeks.
  
• Recent
  rain in northern Algeria and some neighboring areas was good for winter wheat and barley after being quite dry during the heart of winter
• Tuesday
  was mostly dry
• Follow
  up rain is expected infrequently over the next ten days leaving some need for additional moisture later this month
• Morocco
  will continue drier than desired and production cuts are already expected because some of the crop was never planted due to drought
• A
  part of Spain and Portugal will get some needed rain Thursday into Friday and again during the middle part of next week offering some temporary relief to dryness that has been prevailing in the south
  
• Greater
  rain may evolve near mid-month and if that occurs the situation will be almost ideal since spring planting and early season crop development will benefit greatly
• Southern
  Italy and the western and southern parts of the Balkans will be impacted with waves of rain in this coming week to ten days
• The
  moisture will ideal for winter crop use in the spring
• Romania
  is still a little dry and would benefit from greater precipitation, but that may not occur for a while
• Russia’s
  Southern region and areas northeast into northern Kazakhstan and southern Russia’s New Lands will get snow and a little rain late this week through the weekend and into Monday
• Accumulations
  will vary from 4 to 10 inches and the moisture will be extremely welcome for the region’s low soil moisture that has prevailed since last summer
• Some
  frost in the ground may limit the moisture from snow melt from reaching very far into the ground, but the event will still be welcome
• Temperatures
  will turn colder behind the storm for a little while next week
• Eastern
  Australia is recovering from the weekend flood event that impacted areas near the lower Queensland coast and along the upper New South Wales coast
• More
  rain is expected late this week into next week aggravating the cleanup efforts
• Rain
  this weekend into next week will also impact eastern cotton and sorghum areas which may result in some concern over fiber quality in early maturing cotton
• Sugarcane
  will not bode well because of all the excessive moisture
• A
  tropical disturbance moving toward Sri Lanka and far southern India will become better organized in the next couple of days
  
• Landfall
  is possible in Tamil Nadu late Thursday or Friday and the storm will produce some heavy rainfall and local flooding
• Eastern
  parts of Sri Lanka and Tamil Nadu will receive 3.00 to more than 8.00 inches of rain
• There
  is some potential for 10-15 inches of rain in coastal Tamil Nadu
• Other
  areas of India are not likely to get much precipitation in the next ten days except in the far Eastern States and in the extreme north where some significant moisture is possible
• Southeast
  Asia rainfall will occur frequently and abundantly this week
• Flooding
  may impact southern and east-central parts of the Philippines, northwestern Sumatra, parts of peninsula Malaysia and in a few western Java locations
• Mainland
  areas of Southeast Asia will see abundant showers and thunderstorms later this week and next week as pre-monsoonal moisture begins early and aggressively
• The
  moisture will be good for immature winter crops and for prepping the soil for spring planting of corn, rice and other crops
• There
  is going to be a rising risk of flooding rain during the next ten days
• Ghana
  and Ivory Coast will receive greater amounts of rain this week easing recent dryness and improving the soil for coffee, and cocoa flowering
• Greater
  rain will still be needed in interior Nigeria and interior Cameroon as well as some Benin locations
• A
  big part of Europe will not be bothered by significant precipitation this week
• Rain
  is expected from northern and eastern Spain through western and far southern France to the U.S. and in a few southern Balkan country locations
• Central
  and eastern Turkey will be wettest this week with additional rain and mountain snow expected
  
• Some
  of the moisture will also impact northern Iraq and northern and western Iran wheat and cotton areas
• Additional
  rain in Turkey next week could raise the potential for flooding
• Xinjiang,
  China precipitation will continue restricted over the next ten days, although a few showers of rain and snow are expected
• The
  mountainous areas in the west will be wettest and a boost in snowpack is expected
• China’s
  most frequent and significant precipitation in the next ten days will be near and south of the Yangtze River where the ground will continue saturated or nearly saturated with moisture
• Waves
  of light snow will fall across China’s Northeast Provinces
• Winter
  wheat and rapeseed will remain dormant or semi-dormant and in mostly good condition
• Additional
  warming is needed in the south to improve planting conditions for rice and corn and to stimulate sugarcane development
• Not
  much moisture occurred during the weekend
• Winter
  crops are still dormant or semi-dormant and poised to perform well in the early spring
• South
  Africa will experience a good mix of rain and sunshine for late season crop development
• Summer
  crop conditions are still rated quite favorably.
• Central
  portions of the nation; including western and central summer crop areas will be wettest.
  
• East-central
  Africa precipitation has been and will continue to be most significant in Tanzania which is normal for this time of year.
  
• Ethiopia
  is dry biased along with northern Uganda and that is also normal
• Today’s
  Southern Oscillation Index is +7.83 
• The
  index will move erratically this week for a little while longer and then move higher this weekend into next week
• NOAA’s
  ENSO model is still predicting La Nina through spring and possibly all summer in the Northern Hemisphere
• Confidence
  in the longer range outlook is low except in the statistical studies showing La Nina events in other 22-year solar cycle years like this persist longer than any other time
  
• Mexico
  will experience seasonable temperatures and a limited amount of rainfall during the coming week
• Central
  America precipitation will be greatest along the Caribbean Coast during the next seven to ten days and in both Panama and Costa Rica
• Guatemala
  will also get some showers periodically

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Thursday,
March 3:

• FAO
  Food Price Index
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• New
  Zealand Commodity Price
• HOLIDAY:
  Indonesia

Friday,
March 4:

• ICE
  Futures Europe weekly commitments of traders report, ~1:30pm
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

Macros

US
Department Of Energy: Announces An Emergency Sale Of 30Mln Barrels Of Crude Oil From Strategic Petroleum Reserve

US
ADP Employment Change Feb: 475K (est 375K; prev -301K; prevR 509K)

US
Industrial Production (Y/Y) Jan: 2.9% (prev -1.0%)

US
Industrial Production (M/M) Jan: -13.0% (prev 1.1%)

80
Counterparties Take $1.526 Tln At Fed Reverse Repo Op (prev $1.553 Tln, 77 Bids)

 

Corn

·        
CBOT corn futures
were mixed to start and ended lower.  May corn saw limited losses from a limit higher move in Chicago May wheat.  May corn futures rallied above $7.45 overnight. Today it settled at $7.39/bu. 

·        
WTI was over $110/barrel by CBOT ag close. Three major oil companies ceased operations in Russia this week.

·        
Traders will be watching out for China grain import announcements.  China was rumored yesterday to be looking around for US corn.  Bloomberg noted “China’s top government officials have issued orders to prioritize commodities
supply security, sparked by concerns over disruptions stemming from the Ukraine-Russia war.”

·        
Russia and Ukraine provide about a fifth of the world’s corn supplies for the export market.

·        
Earlier today we were asked what might be the US export capacity for combined corn and soybeans? Largest monthly combined corn and soybean exports recorded was during October 2020 when 572.6 million bushels were shipped, or 15.3
million tons, so it’s safe to say the US could manage 16-17 million tons if needed for a 31-day period.

·        
Iowa reported a highly lethal form of bird flu in a backyard poultry flock in Pottawattamie County.

·        
US ethanol production fell 27,000 barrels, opposite of what the trade expected, back below 1.0 million barrels to 997,000.  Stocks declined a large 574,000 barrels to 24.933 million.  A Bloomberg poll looked for weekly US ethanol
production to be up 3,000 barrels stocks up 37,000 barrels to 25.544 million.

 

 

 

Export
developments.

• South
  Korea’s KFA bought around 134,000 tons of feed corn in two consignments. One was bought at an estimated $413.23 a ton c&f for arrival around May 5. The other was bought at an estimated premium of 294 cents a bushel c&f over the July, or about $408.34 a ton
  c&f for arrival around round June 25.
• Taiwan
  seeks 65,000 tons of corn, optional origin, on Thursday, for shipment around May.
  

 

Updated
2/28/22

May
corn is seen in a $6.50 and $7.50 range

December
corn is seen in a wide $5.50-$7.25 range

 

Soybeans

·        
CBOT May soybeans ended
lower in a risk off session. Products also fell.  While no Ukraine/Russia cease fire in sight, look for the soybean complex to see a choppy trade for the remainder of this week.

·        
We are hearing China bought at least 5 US soybean cargoes this week for April-May shipment.

·        
StoneX estimated Brazil 202122 soybean production at 121.17 million tons, down from 126.5 million previous.

·        
(Reuters) – Brazil agriculture minister Tereza Cristina Dias said on Wednesday that the country will soon launch a national fertilizer plan to stimulate investments in potash and phosphorus mines.  In an interview with CNN, Dias
said Brazil needs to have a bigger fertilizer production for a “national security matter”.

·        
India asked Indonesia to boost palm oil shipments to make up for the loss of Black Sea sunflower oil supplies.

·        
The landed cost for India imported crude palm oil is up 38% since Jan. 27, when Indonesia announced export curbs. Soybean oil landed price is up 29% this year.  Sunflower oil landed price was not quoted. 

 

Export
Developments

• Private
  exporters reported the following activity:

-264,000
metric tons of soybeans for delivery to unknown destinations. Of the total, 198,000 metric tons is for delivery during the 2021/2022 marketing year and 66,000 metric tons is for delivery during the 2022/2023 marketing year

-266,000
metric tons of soybeans for delivery to China. Of the total, 198,000 metric tons is for delivery during the 2021/2022 marketing year and 68,000 metric tons is for delivery during the 2022/2023 marketing year

 

 

Updated
3/1/22

Soybeans
– May $15.75-$18.25

Soybeans
– November is seen in a wide $12.50-$16.00 range

Soybean
meal – May $425-$520

Soybean
oil – May 72.00-80.00

 

Wheat

·        
Chicago May wheat futures rose above $10.50 a bushel for the first time since March 2008, extending a rally as Russia’s invasion continues.

·        
May wheat traded in a wide range.

·        
Paris May wheat settled up 0.1% at 340.75 euros ($377.62) a ton, after earlier climbing to a new contract high 371.25 euros. 

·        
MGEX spring wheat stocks are down 10.4% from year ago.

·        
US hard red winter wheat areas are seeing warm temperatures this week. Little precipitation will occur in the central or southwestern Plains.

·        
More and more countries are taking steps to ensure food security. 

·        
(Bloomberg) — Turkey will apply measures to manage the possible reflection of developments between Russia and Ukraine and to ensure continuation of food and commodity supply. – Treasury and Finance Ministry

·        
Jordan saw no offers for wheat on Wednesday. Their wheat reserves are large enough to last 15 months. 

·        
A trucker strike in Tunisia is disrupting grain unloading. 

 

Export
Developments.

·        
Algeria’s OAIC bought 250,000 tons of durum wheat, optional origin at around $625 a ton to $630 c&f for shipment between April 1-15 and April 16-30.

·        
Tunisia bought about 100,000 tons of durum wheat (75k sought) at $634.89/ton c&f for April and/or March shipment.

·        
Turkey started buying soft milling wheat out of the 435,000 tons sought for March-April shipment.  About 370,000 tons traded.

·        
Jordan passed on 120,000 tons of wheat today.

·        
Jordan’s state grains buyer seeks 120,000 tons of feed barley on March 15.  Shipment is between July 16-31, Aug. 1-15, Aug. 16-31 and Sept. 1-15.

·        
Japan started buying wheat from the US.  Japan seeks 83,136 tons of food wheat from the US this week for loading between April 21 and May 20, 2022.

 

Rice/Other

·        
Results awaited: South Korea seeks 72,200 tons rice from U.S. and Vietnam on Feb. 25.

 

Updated
3/2/22

Chicago
May $8.00 to $10.75 range

KC
May $8.25 to $11.25 range

MN
May $9.25‐$11.50