FI Evening Grain Comments 03/04/22

PDF Attached

 

Source:
Reuters and FI

 

Private
exporters report the following activity:

-106,000
metric tons of soybeans for delivery to China during the 2021/2022 marketing year

-108,860
metric tons of soybeans for delivery to Mexico during the 2021/2022 marketing year

-125,000
metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year

 

Day
9 of the invasion.  USD and WTI crude rallied.  US equities were lower.
Demand for EU wheat is very strong with Black Sea ports closed. Today we saw profit taking in many markets. May Chicago wheat was up limit. The US is reviewing biofuel waivers. Malaysian palm
oil futures rolled over on profit taking Friday.  Next week USDA will update their S&D’s.

 

75
cent Chicago and KC wheat limit for Monday https://www.cmegroup.com/trading/price-limits.html

 

 

Weather

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• Greater
  rain is advertised for Spain and Portugal during the coming ten days
• The
  moisture will be well timed for spring planting and the resumption of winter crop development
• Northwestern
  Africa also gets some rain in the coming week to ten days improving topsoil moisture for better wheat and barley development
• There
  continues to be no threatening cold weather slated for Europe or Asia
• Cold
  weather will be returning to central North America next week
• Stronger
  energy demand may occur for little while in the U.S. Plains and western Midwest in the middle to latter part of next week and into the following weekend, but the cold never gets the eastern Midwest or Atlantic Coast states in a significant manner
• No
  risk of winterkill or wheat damage is perceived at this time
• Storm
  system in upper U.S. Midwest this weekend will produce rain, freezing rain, sleet and snow
  
• Travel
  will be slowed
• Additional
  snow will add to the spring snow melt potential in Minnesota and the eastern Dakotas
• A
  narrow band of 4 to 10 inches of snow may occur from southeastern South Dakota to northeastern Minnesota and western Wisconsin
• U.S.
  hard red winter wheat areas will continue dry biased from West Texas and the Texas Panhandle to central and western Kansas
• West
  Texas cotton areas will continue missing significant precipitation events for a while
• South
  Texas and the Texas Coastal Bend will also be left with restricted amounts of precipitation for a while
• California
  will get some welcome mountain snow this weekend, but it will not be greater than usual, and the mountain snowpack deficits will remain
• Canada’s
  southern Prairies received some snow Thursday, and it will continue today which may improve topsoil moisture in the spring, but frost in the ground will limit the potential for moisture penetration into the soil
  
• U.S.
  southeastern states will get some much needed moisture late next week and into the following weekend
• The
  region has been drying out recently and the moisture will be extremely well timed for winter crop development and the planting of spring crops
• Corn
  planting is already beginning in some areas
• Concern
  remains over the lower eastern U.S. Midwest soil moisture surplus and the same for the northern Delta and Tennessee River Basin areas
• These
  areas will see frequent precipitation events maintaining wet field conditions and possibly delaying early spring planting
• South
  America’s weather changed little overnight
• Argentina
  is still expecting moderate to heavy rainfall from central through north-central parts of the nation into early next week
• Some
  of that heavier rainfall already began overnight
• Multiple
  inches of rain will result causing some flooding
• Chaco,
  Santa Fe, Entre Rios and immediate surrounding areas will be wettest
• Brazil’s
  southern crop areas from Mato Grosso do Sul to Parana and southward to Rio Grande do Sul will get rain over the next week to ten days improving soil moisture for late season crop development
• Safrinha
  crop development will improve as rainfall increases
• Mato
  Grosso Brazil will continue plenty wet for Safrinha corn and cotton
• Minas
  Gerais will dry down in this coming week
• Paraguay
  will see some relief from dryness also in this next ten days
• Colombia,
  Ecuador, western Venezuela and parts of Peru will remain plenty wet during the next ten days
• Some
  local flooding will be possible
• 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 be 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 today
• Landfall
  is possible in Tamil Nadu this weekend and the storm will produce some heavy rainfall and local flooding
• The
  system is advertised to be weaker in today’s forecasts relative to that of Thursday
• Northeastern
  parts Tamil Nadu will receive 3.00 to more than 8.00 inches of rain
• 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 in the coming 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 +7.76 
• The
  index will slowly rise in this coming week
• 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

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

Monday,
March 7:

• China’s
  1st batch of Jan.-Feb. trade data, incl. soybean, edible oil, rubber and meat & offal imports
• USDA
  export inspections – corn, soybeans, wheat, 11am
• Bursa
  Malaysia Palm Oil Conference, day 1
• Vietnam’s
  customs to publish Feb. coffee, rice and rubber export data
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Russia

Tuesday,
March 8:

• EU
  weekly grain, oilseed import and export data
• U.S.
  National Coffee Association Virtual Convention, day 1
• Bursa
  Malaysia Palm Oil Conference, day 2
• HOLIDAY:
  Russia, Ukraine

Wednesday,
March 9:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• U.S.
  National Coffee Association Virtual Convention, day 2
• FranceAgriMer
  monthly French grains outlook
• EIA
  weekly U.S. ethanol inventories, production, 11am
• Bursa
  Malaysia Palm Oil Conference, day 3
• HOLIDAY:
  South Korea

Thursday,
March 10:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Malaysian
  Palm Oil Board’s monthly data for output, exports and stockpiles
• U.S.
  National Coffee Association Virtual Convention, day 3
• Malaysia’s
  March 1-10 palm oil export data
• Brazil’s
  Unica may release cane crush and sugar output data (tentative)

Friday,
March 11:

• 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
• New
  Zealand Food Prices

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

 

CFTC
Commitment of Traders

No
major records stand out this week. Note the positions below are from last Tuesday and don’t reflect the ongoing fireworks we saw over the past three trading days. However, as of March 1, the net fund positions were much less long than expected for all five
commodities we monitor on a daily basis, especially for Chicago wheat and soybean oil. 

 

 

 

 

 

Estimates
Friday afternoon

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
293,763      7,070    444,009     -1,026   -715,256    -12,428

Soybeans          
139,999     -4,863    189,461     -3,202   -297,577      8,831

Soyoil             
46,586      5,541    125,138      1,780   -186,629     -7,777

CBOT
wheat         -31,298      9,028    149,824      4,140   -111,237    -12,662

KCBT
wheat          21,161      4,164     57,669       -689    -80,028     -4,108

=================================================================================

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
349,222     -5,213    301,888      4,507   -717,411    -14,783

Soybeans          
175,721     -4,614    133,869      1,732   -305,293      9,861

Soymeal            
94,829      4,412     94,834        130   -230,729      1,864

Soyoil             
81,431      2,231     90,765       -469   -189,506     -6,329

CBOT
wheat          -7,036     11,017     88,718     -3,245    -90,463     -8,838

KCBT
wheat          45,481      4,702     25,173       -372    -69,066     -4,296

MGEX
wheat          10,602      3,619      1,639       -833    -20,632     -1,795

                
———- ———- ———- ———- ———- ———-

Total
wheat         49,047     19,338    115,530     -4,450   -180,161    -14,929

Live
cattle         60,152    -25,281     81,898     -2,260   -145,363     23,322

Feeder
cattle       -3,875     -6,542      6,994        151      3,124      4,010

Lean
hogs           74,506     -2,455     61,626     -2,377   -130,978      5,916

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
88,816      9,106    -22,515      6,383  1,977,728     30,408

Soybeans           
27,585     -6,213    -31,882       -767  1,007,315    -29,625

Soymeal            
12,278     -5,902     28,788       -504    452,265    -36,903

Soyoil              
2,404      4,111     14,906        456    439,766    -17,674

CBOT
wheat          16,071      1,572     -7,289       -506    508,287     36,374

KCBT
wheat          -2,786       -668      1,198        634    234,174        208

MGEX
wheat           4,961        100      3,430     -1,091     71,037        104

                
———- ———- ———- ———- ———- ———-

Total
wheat         18,246      1,004     -2,661       -963    813,498     36,686

Live
cattle         17,592     -3,438    -14,279      7,657    416,307      1,813

Feeder
cattle          649     -1,038     -6,892      3,419     63,109      5,681

Lean
hogs            5,897     -3,247    -11,051      2,164    356,855     -5,274

=================================================================================

Source:
Reuters via CFTC, and FI

 

Macros

US
Change In Nonfarm Payrolls Feb: 678K (est 423K; prev 467K; prevR 481K)

US
Unemployment Rate Feb: 3.8% (est 3.9%; prev 4.0%)

US
Average Hourly Earnings (Y/Y) Feb: 5.1% (est 5.8%; prev 5.7%; prevR 5.5%)

US
Average Hourly Earnings (M/M) Feb: 0.0% (est 0.5%; prev 0.7%; prevR 0.6%)

Canadian
Building Permits (M/M) Jan: -8.8% (est 1.2%; prev -1.9%; prevR -2.4%)

Canadian
Labour Productivity (Q/Q) Q4: -0.5% (est -0.2%; prev -1.5%)

Palladium
rose above $3,000 an ounce for the first time since May

78
Counterparties Take $1.483 Tln At Fed Reverse Repo Op (prev $1.534 Tln, 78 Bids)

 

Corn

·        
Earlier CBOT corn futures
traded sharply higher (2012 high) following limit up wheat futures and expectations for global trade flows to shift over the to the US, before pairing gains by mid-session. May ended 6.50 cents higher at $7.5425 and July up 17.75 cents at $7.2125. 

·        
Higher crude oil added to the firm undertone in corn before nearby corn futures sold off on profit taking. Nearby rolling WTI crude oil contract hit a September 2008 high. 

·        
Selected interior US corn and soybean basis location offers were sharply lower today. 
Producers
were active sellers of corn and soybeans.

·        
Gulf corn premiums were up on Thursday and Friday, an indication of possible corn sales. There were rumors China bought at least 15 US corn cargoes this week.

·        
Unshipped Ukrainian corn to China could be as high as 4 million tons for this season. One rumor was up to 6 million tons but that seems high. 

• India
  may see its ethanol blending rate reach 9.2% during first half 2022. 
• USDA
  reported a highly pathogenic bird flu outbreak in a flock of commercial broiler chickens in Stoddard County, Missouri. 
  https://www.aphis.usda.gov/aphis/ourfocus/animalhealth/animal-disease-information/avian/avian-influenza/2022-hpai
• Several
  farm and biofuel organizations are petitioning the White House to allow for the year-round sale of gasoline blended with up to 15 percent ethanol (E15), that may help ease current gas prices. 
  
• February
  average ethanol cash prices were near unchanged from January while RBOB rallied.
  

·        
Rosario grains exchange: Argentina corn production less than 48 million tons. USDA @ 54

 

Export
developments.

• None
  reported

 

China
corn futures turned sharply lower late this week.

 

Updated
3/3/22

May
corn is seen in a $6.50 and $8.50 range 

December
corn is seen in a wide $5.50-$7.50 range

 

Soybeans

·        
CBOT
soybean complex ended mixed with meal higher (Gulf basis $5.00 higher), soybeans lower (traded two-sided) and soybean oil sharply lower (some contracts traded tow-sided). Soybean oil saw pressure on concerns governments, including the US, will curtail biofuel
mandates to ensure food security. Meal was higher on thoughts of US Gulf export interest. Soybeans sold off on end of week profit taking despite additional 24-sale announcements.  Producers were actively selling old and new crop soybeans.   

·        
US Gulf soybean meal basis was up $5/short ton from Thursday to $40 over the May, an indication someone could be buying US soybean meal.

·        
Brazil soybean and soybean oil basis was up sharply from mid-week.  March SBO was last 700/900 over the May. 

·        
Argentina will see rain of 0.50-3.50 inches through Thursday across at least three thirds of the growing regions and Brazil trace amounts to 0.75, locally more across central and southern areas. 

·        
Malaysian palm oil futures rolled over Friday on profit taking and demand destruction.

·        
The Biden administration is studying whether waiving biofuel blending mandates could help cool corn and soybean oil prices that have surged since the Russian invasion of Ukraine.  Waiving RFS requirements could pressure corn and
soybean oil futures.  There are no details laid out or timing of a change, if any, planned.

·        
The EU vegetable association Fediol warned the EU is facing a shortfall in sunflower oil and EU refiners are diverting limited volumes of sunflower oil destined for biodiesel fuel towards the food market.  EU refineries source
35%-45% of their sunflower oil from Ukraine.

·        
Southern Brazil, Paraguay and parts of Argentina saw improving rainfall this week that could stabilize crops.

·        
Safras & Mercado: Brazil soybeans 125.08 vs. 127.17 previous. USDA @ 134

·        
Rosario grains exchange: Argentina soybean production 40.5 million tons. USDA @ 45

·        
Brazil’s agriculture research agency Embrapa warned producers may use 20 percent less fertilizer for the 2022-23 season.  Fertilizer stocks are running at about 3 months of consumption, according to another agency. 

 

 

Export
Developments

• Under
  the USDA 24-hour reporting system, private exporters reported: 

-106,000
metric tons of soybeans for delivery to China during the 2021/2022 marketing year

-108,860
metric tons of soybeans for delivery to Mexico during the 2021/2022 marketing year

-125,000
metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year

 

24-hour
soybean sales for week ending 3/3        

2021-22               
921,860

2022-23               
600,000

 

 

SX2/CZ2
ratio 2.30

There
is talk US corn acre estimates will increase and soybeans will be lower than previously projected.

 

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

·        
Another wild trade in US wheat futures with exception of May Chicago which stayed limit up. Follow through buying amid Black Sea shipping woes underpinned all three non-expiring contracts. Profit taking ahead of the weekend created
wide swings in many positions. Minneapolis lost ground to KC and Chicago by a large amount. Funds were thought to be the largest influence behind the large rally in US wheat futures this week. 

·        
Nearby expiring Chicago wheat took out its February 2008 high of $13.3450/bu.

·        
May wheat ended 75 cents higher. Estimated synthetic @ close: WK 1282.25 / 1286.25 up 150.25

·        
A major global agriculture shipping company shuttered operations in Russia after already closing Ukraine offices/port operations.

·        
We heard Canadian (milling) wheat was sold to a large commercial in Toledo, OH. We are not sure why. Could be for blending with lower quality wheat or maybe destined for re-export out of the lakes. 

·        
May Paris wheat futures were up 8.50 euros at 371.75 euros, well off its absolute contract high of 406.75 euros. 

·        
French soft wheat crop in good or excellent condition by Feb. 28 was rated at 93%, unchanged from week earlier and above a year-ago rating of 88%. Spring barley sowing was 36% complete by Monday compared with 28% a week earlier
but lagging 47% progress seen a year ago. – FranceAgriMer

·        
China May wheat futures increased to nearly 3,600 yuan per ton on Friday to a new contract high.

·        
Argentina looks to control domestic wheat prices with global markets shaking up import prices. 

·        
Brazil’s wheat industry group Abitrigo noted Brazil is covered when it comes to upcoming wheat consumption as they contracts a more than needed amount of wheat imports from Argentina. 

·        
The FAO food price index of 140.7 hit a record in February, taking out the previous record set February 2011 (137.6), primarily from an 8.5% increase in the oils price index from January and 6.4% monthly increase
in the dairy index.  

 

 

Export
Developments.

·        
Iraq seeks two million tons of wheat to provide a strategic reserve.  Iraq will accept offers from international companies for wheat from Sunday.

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

·        
Jordan’s state grains buyer seeks 120,000 tons of milling wheat on March 9.  Shipment is between LH May and LH July.

·        
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.

·        
Bangladesh seeks 50,000 tons of milling wheat on March 16 for shipment within 40 days of contract signing.

 

Rice/Other

·        
(Bloomberg) — U.S. 2021-22 cotton ending stocks seen at 3.37m bales, 127,000 bales below USDA’s previous est., according to the avg in a Bloomberg survey of seven analysts.

               
-Estimates range from 3.1m to 3.65m bales

               
-Global ending stocks seen unchanged at 84.31m bales

 

Updated
3/3/22

Chicago
May $8.50 to $13.50 range

KC
May $8.50 to $13.50 range

MN
May $9.25‐$14.00