FI Evening Grain Comments 03/15/21

PDF attached

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER TO WATCH DURING THE WEEKEND

• Central
  and portions of the southwestern US. Plains received significant rain and some snow favoring a boost in soil moisture and relief from drought conditions during the weekend

o  
Rainfall from northeastern Colorado and northwestern Kansas through most of Nebraska ranged from 1.50 to more than 3.00 inches with many south-central counties in Nebraska getting 3.00 to 5.31 inches of rain

• Doppler
  radar suggested greater rainfall in a couple of counties

o  
Moisture totals from eastern portions of West Texas through portions of the Texas Panhandle and western Oklahoma varied from 0.50 to 2.30 inches

o  
Snowfall through Sunday in wheat areas of eastern Colorado ranged from a trace to 7 inches

• Front
  Range accumulations in Colorado and southeastern Wyoming ranged from 12 to 26 inches with areas near Cheyenne, Wyo. getting upwards to 36 inches
• Western
  Nebraska Panhandle snowfall varied from 4 to 12 inches with one report of 19 inches in the southwest
• South
  Dakota received up to 5 inches along with southwestern Minnesota and parts of northwestern Iowa
• Significant
  rain also occurred from southeastern Kansas and far northeastern Oklahoma across northern Arkansas and much of southern Missouri to western Kentucky and northwestern Tennessee

o  
Some of these areas reported 2.00 to more than 5.00 inches of rain

• Western
  counties of West Texas did not report much rain, but the eastern High Plains and most of the Low Plains cotton, corn and sorghum areas reported 0.50 to more than 2.00 inches

o  
There were some southern parts of West Texas that were as dry as the far west

• U.S.
  Delta and southeastern states experienced excellent early season planting weather Friday through Sunday with little to no rain and warm temperatures

o  
The exception was in the northern Delta where rain amounts varied from 0.13 to 1.58 inches with the Missouri Bootheel wettest

o  
Highest afternoon temperatures were in the upper 70s and lower to a few middle 80s except in the northern Delta where 50s and 60s were noted

• Net
  drying occurred elsewhere in the United States

o  
Temperatures were seasonably mild to warm in the northern and interior western parts of the nation and warm in the south

• Central
  U.S. rain event will move east southeast across the Midwest and into the southeastern states today and Tuesday

o  
Additional moisture totals of 0.30 to 1.50 inches will occur in most of these areas with a few amounts of more than 2.00 inches in eastern Nebraska, western Iowa and along the Kansas/Missouri border as well as in a few interior
southeastern states’ locations

• A
  follow up storm system in the central Plains Tuesday will move to the middle and lower Atlantic Coast states Wednesday into Thursday
  

o  
Additional moisture totals will vary from 0.50 to 1.50 inches with a few totals to 2.00 inches

• By
  the end of this workweek, most of the U.S. central Plains, lower Midwest, northern Delta, Tennessee River Basin and southeastern states will have seen a notable increase in soil moisture

o  
For the central Plains that means moisture abundance in Nebraska, parts of Kansas and neighboring Missouri will have excessive topsoil moisture may have some areas of flooding

• U.S.
  southwestern Plains will not get much more precipitation this week – at least not in West Texas

o  
South Texas rainfall will be restricted as well

o  
These areas may not get much moisture through March 24

• Northwest
  U.S. Plains and much of Canada’s Prairies will be left mostly dry through March 24
• Far
  southeastern Canada Prairies and eastern Dakotas into Minnesota will get some rain and snow early next week

o  
Relief in the Prairies will be disappointing and more significant precipitation will be needed which is expected in April

• Interior
  western U.S. will experience some periodic rain and mountain snow through the next ten days
• Florida
  and the far southwestern corner of the U.S. will be left mostly dry over the next ten days
• Temperatures
  will be warmer than usual in the far northern Plains and in a part of the west-central high Plains region this week while seasonable readings occur elsewhere with slight bout of cooler biased conditions in the middle and northern Atlantic Coast States and
  in the far west
• The
  bottom line for the United States remains one of improved soil moisture in many key winter crop areas in Nebraska, Kansas and Colorado that were very short of moisture prior to the weekend. Some of this same region was also negatively impacted by bitter cold
  in February (including parts of Oklahoma and Texas) and this rain will induce an improved environment for crop repair and at least some “potential” production potential recovery. In the meantime, good planting progress occurred in the southern states for early
  season corn, rice and sorghum (Texas mostly). Dryness worries remain in the northern Plains, southwestern Plains and far south Texas where more rain must fall soon. Midwest soil moisture will be favorably moist going into April supporting a good potential
  start to the planting season.
• Argentina
  weekend weather included scattered showers of varying intensity from western Buenos Aires and eastern La Pampa northward into Cordoba and San Luis

o  
Rain totals through dawn today varied from 0.08 to 0.50 inch with extreme amounts of 0.50 to 2.00 inches, although coverage of the amounts over 1.00 inch was very low

o  
Net drying occurred in central and eastern parts of the nation

o  
Highest afternoon temperatures were in the 80s and lower 90s Fahrenheit followed by low temperatures in the upper 40s and 50s in the south and 60s central and north

• Argentina
  rainfall will expand across much of the nation early this week resulting in temporary relief for many key crop areas

o  
Today’s forecast is not very good for northern cotton areas where rain will be too light to seriously bolster soil moisture leaving Chaco and parts of northern Santa Fe too dry

o  
Rainfall will be greatest in Cordoba, Santiago del Estero, Buenos Aires, southern Santa Fe and southern Entre Rios where 0.60 to 1.50 inches will result with local totals of upward to 2.50 inches

• The
  precipitation will be erratic benefiting some areas more than others, but most of the nation will get some temporary relief before drying resumes

o  
Another wave of welcome rain will occur in this coming weekend to further improve soil moisture and to support late season crop development

o  
Next week will trend drier biased once again

o  
Temperatures will be seasonable in this coming week and a little cooler biased in the south next week

• Argentina’s
  bottom line will reduce crop stress that has reached its most intense level since late December and early January over this past week in some areas. The relief by early next week should be sufficient to stop the decline in crop conditions. Some of that relief
  will begin with rain early this week and follow up rain will occur during the weekend followed by milder temperatures to help conserve soil moisture. The implications of this is that once dryness relief occurs early this week there is not likely to be another
  period of such significant stress on crops during the balance of this month and probably for the balance of the growing season.
  
• Brazil
  weather during the weekend brought rain to a relatively narrow region from southwestern Minas Gerais and far northern Sao Paulo into Minas Gerais, Goias and Tocantins

o  
Rainfall varied from 0.20 to 1.00 inch with a few totals of 1.00 to 1.50 inches

o  
Net drying occurred to the northwest and southeast of this region

o  
Temperatures were seasonably warm with highs in the 80s and lower 90sFahrenheit

• Brazil
  weather this week is not likely to deviate very far from that which was expected late last week

o  
Most of the nation will get rain at one time or another and precipitation will be support of most late season summer crops while there will still be enough moisture to keep soybean harvesting and corn planting a little sluggish
at times

o  
Net drying will occur in northeastern Brazil

o  
Timely precipitation is expected in far southern Brazil; including of Rio Grande de Sul keeping crop conditions

• The
  bottom line for Brazil remains mostly good for late season crops that are in the ground, but frustratingly slow field progress will continue in unharvested soybean and unplanted corn progress. Concern remains over the long term outlook for corn production
  as confidence is high that monsoonal rainfall will end normally this year which could harm yields in the late planted crop.
• Central
  India received some light rainfall during the weekend with Madhya Pradesh most impacted by 0.08 to 0.60 inch of moisture

o  
High evaporation rates resulting from very warmer temperatures limited the impact on crops which are mostly filling

• India
  will be dry through Wednesday, but another round of light showers and thunderstorms will impact the middle three-fourths of the nation with light rainfall Thursday through the middle part of next week

o  
No significant changes to crop conditions or production potential will result

o  
India’s winter crops will yield well this year, but more restricted precipitation in some areas will cut into production slightly relative to that of last year

• China
  weekend precipitation was limited to northernmost parts of the North China Plain and in a few interior southern locations of the nation

o  
Moisture totals varied up to 1.18 inches in northern Hebei and to 0.72 inch in northern Liaoning while up to 134 inches occurred from Guizhou to southern Jiangxi and northern Guangdong

o  
Net drying and warm mild to warm weather occurred elsewhere

• Freezes
  were limited to the Northeast Provinces
• Waves
  of rain will fall across China’s Yangtze River Basin over the next two weeks maintaining wet field conditions and a good long term outlook for rapeseed, southern wheat and eventually for both corn and rice

o  
Weather conditions farther to the north will be better balanced with periods of sun and rain with temperatures near to above average

o  
Warmer temperatures and a little drying would be best for southern rapeseed

o  
Yunnan needs rain – the province is too dry to support rice and corn planting and sugarcane development

• China’s
  bottom line remains very good for wheat and rapeseed especially once seasonal warming becomes a little more significant.  Yunnan is too dry, but most other areas in the south are facing a good environment for spring fieldwork and crop development. Some drying
  might be welcome for a while in the Yangtze River Basin.
• Australia
  shower activity during the weekend was limited, but enough rain fell to slow drying rates and kept stress levels relatively low, despite warm temperatures
• Eastern
  Australia’s summer crops will be treated to periodic rainfall and milder than usual temperatures during the coming week to ten days

o  
Sufficient amounts of rain will occur to bolster soil moisture for late season summer crop development, but some concern over early maturing cotton quality is expected and delays to early season harvest progress may result if
the patter prevails too long

• Middle
  East precipitation will continue greatest in Turkey and may increase in Afghanistan this week while Iraq, Iran and Syria continue in a net drying mode along with areas south into Israel and Jordan
• Europe
  precipitation in the coming ten days will be wettest in south-central parts of the continent; including areas from Italy and eastern France into the Balkan Countries

o  
Temperatures will be cooler than usual

o  
Spain is drying down and will need some moisture soon to protect long term crop development

• Western
  parts of the CIS will experience frequent bouts of light rain and snow during the coming ten days

o  
The moisture will continue to support abundant soil moisture across many areas

o  
Temperatures will be near normal allowing some warming to occur in far southern crop areas in Ukraine, Moldova and Russia’s Southern Region where soil temperatures may rise enough to induce some greening of wheat and other winter
crops in early April.

• North
  Africa weather will include a mix of rain and sunshine during the next two weeks, although precipitation totals will be lighter biased at times especially in Morocco
  
• Ivory
  Coast, Ghana, Benin and southern Nigeria will receive waves of rain in the next ten days

o  
New rain totals will vary from 0.50 to 3.00 inches and locally more will be supportive of coffee and cocoa flowering and help increase soil moisture for future rice, sugarcane and cotton production

• East-central
  Africa rainfall will be erratic and light for a while

o  
Crop conditions are best in Tanzania

o  
Rain is needed most in Ethiopia, although this is the end of their dry season

• South
  Africa will experience an erratic rainfall pattern through the next week with temperatures mostly near to above average

o  
The drying trend will encourage early season crop maturation, but subsoil moisture and irrigation will support late season crops

o  
Summer crop conditions will remain favorably rated, although there will be a growing need for showers by mid-March

• Some
  increase in precipitation is expected March 20-26 and that should prove timely for late season crops that dry out in this coming week
• Mexico
  drought conditions are still prevailing, although the impact on winter crops is low due to irrigation

o  
Water supply is low in some areas and a notable improvement in rainfall is needed, but not very likely

o  
Dryland winter crops are stressed and will yield poorly

o  
Freeze damage is common in northern parts of the nation due to a couple of cold surges this winter

o  
Rain in the coming week will be mostly confined to the east coast and temperatures will be seasonable with a slight warmer bias in the driest areas

• Central
  America precipitation will continue greatest along the Caribbean Coast and in Guatemala while the Pacific Coast receives the lightest and most erratic rainfall, but some precipitation will fall especially in Costa Rica and Panama.
• Southeast
  Asia rainfall will occur relatively normally over the next two weeks

o  
Mainland areas will experience net drying over the coming week with rain possible in the March 19-25 period

• The
  resulting rainfall will be sporadic and light with net drying probably continuing in many areas for a while longer

o  
Philippines rainfall increased during the weekend in southern Luzon Island and the northern Visayan Islands and the greatest rain this week will occur in Luzon Island where some flooding is possible as the ground saturates and
rain totals vary from 3.00 to more than 10.00 inches by mid-week next week

o  
Indonesia and Malaysia weather improved in southern parts of Peninsular Malaysia late last week and during the weekend and more rain will fall in the next couple of weeks to further bolster soil moisture

• Other
  areas in the two nation’s will get routinely occurring rainfall to support ongoing crop development
• New
  Zealand weather will be drier and a little cooler than usual in this coming week

o  
The nation’s soil moisture will drift further below average especially in the north

• Southern
  Oscillation Index has been falling and was at +2.65 this morning. The index is expected to level off a bit this week. The index has fallen since Feb. 23 when it was +15.24
• Southeast
  Canada will experience below average precipitation and near average temperatures during the coming week to ten days
• Canada
  Prairies will continue drier and warmer than usual maintaining a great level of concern over drought since the region is already extremely short on moisture

Source:
World Weather inc.

 

Bloomberg
Ag Calendar

Monday,
March 15:

• USDA
  Export Inspections – corn, soybeans, wheat, 11am
• EU
  weekly grain, oilseed import and export data
• Malaysia
  to announce crude palm oil export tax rate for April (tentative)
• Monthly
  MARS bulletin on EU crop conditions
• Ivory
  Coast cocoa arrivals
• India
  Feb. vegetable oil imports (tentative)
• Malaysia’s
  March 1-15 palm oil export data

Tuesday,
March 16:

• New
  Zealand global dairy trade auction

Wednesday,
March 17:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Unica may release cane crush, sugar production data (tentative)

Thursday,
March 18:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• China
  customs to publish trade data, including import numbers for corn, wheat, sugar and pork
• USDA
  total milk production

Friday,
March 19:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  cattle on feed

Saturday,
March 20:

• China
  3rd batch of Jan.-Feb. trade data, including country breakdowns for energy and commodities. No timing

Source:
Bloomberg and FI

 

USDA
inspections versus Reuters trade range

Wheat      
683,492     versus  300000-500000           range

Corn         
2,203,962  versus  1200000-1900000       range

Soybeans  
518,789     versus  350000-650000           range

 

 

 

Macros

US
Empire Manufacturing Mar 17.4 (est 14.5; prev 12.1)

–
Six Month Business Conditions 36.4 (prev 34.9)

–
Employment 9.4 (prev 12.1)

–
Prices Paid 64.4 (prev 57.8)

–
New Orders 9.1 (prev 10.8)

Canadian
Manufacturing Sales (M/M) Jan 3.1% (est 2.5%; prev 0.9%)

Canadian
Existing Home Sales (M/M) Feb: 6.6% (prev 2.0%)

Canadian
Housing Starts Feb 245.9K (est 247.5K; prev 282.4K)

 

Corn

• Corn
  futures ended
  sharply higher in part to robust US export inspections and a slight correction to the CBOT soybean/corn relationship.  China is expected to auction off corn this week, giving the trade an indication of current feed demand.  Funds bought an estimated net 18,000
  corn contracts. 
• We
  do not have much to add to today’s price action as news was extremely slow.  We warn longs that if US commitments fail to keep up, a current short term downside is warranted.  Shipments are expected to remain very strong. 
  
• USDA
  US corn export inspections as of March 11, 2021 were 2,203,962 tons, above a range of trade expectations, above 1,672,691 tons previous week and compares to 985,206 tons year ago. Major countries included Japan for 516,426 tons, China for 356,855 tons, and
  Mexico for 354,953 tons.

 

Export
developments.

• Taiwan’s
  MFIG seeks up to 65,000 tons of corn, optional origin (NA or SA) on March 17 for May 27-June 15 shipment. 
  

 

Updated
3/1/21

May
corn is seen in a $5.20 and $5.75 range.

July
is seen in a $5.00 and $6.00 range.

December
corn is seen in a $3.85-$5.50 range.

 

Soybean
Complex

• The
  soybean complex traded
  two-sided.  The higher (SB & SBM) trade was driven by soybean meal.  SBO saw a lower trade by less than expected long speculative position (CFTC COT) in soybean and soybean oil, higher USD and lower WTI crude oil.  SBO is starting to gain attention again,
  but for the downside.  Malaysian palm was up again, for the 9^th consecutive day, on tight supplies and long speculation.  Some think the CBOT products are due for a correction. 
  
• Funds
  bought an estimated 4,000 soybeans and 4,000 soybean meal.  They sold an estimated 3,000 soybean oil. 
  
• USDA
  US soybean export inspections as of March 11, 2021 were 518,789 tons, within a range of trade expectations, below 595,325 tons previous week and compares to 494,906 tons year ago. Major countries included China for 159,359 tons, Egypt for 90,202 tons, and
  Bangladesh for 57,425 tons.
• ITS
  reported March 1-15 Malaysian palm oil exports down 4.4 percent to 507,283 tons from 530,545 tons February 1 – 15, AmSpec also reported a drop in palm exports, by 4.6 percent to 517,725 tons. 
  

 

 

Export
Developments

• Iran
  seeks 30,000 tons of sunflower oil and 30,000 tons of soybean oil on March 18 for March and April shipment. 
  
• The
  USDA CCC seeks 2,030 tons of packaged oil on March 16 for shipment Apr 16 – May 15.

 

CBOT
SBO vs. palm

Source:
Reuters and FI

 

 

Updated
3/11/21

May
soybeans are seen in a $13.75 and $14.75 range.

May
soymeal is seen in a $400 and $450 range.

May
soybean oil is seen in a 52.00 and 56.00 cent range.  –
do not discount volatility to increase. 

 

Wheat

• US
  wheat futures traded higher on technical buying after US protein basis spiked.  The US saw great precipitation over the weekend excluding higher protein (MN) wheat country.  The timing of the US precipitation event was perfect as much of the Great Plains wheat
  had broken dormancy earlier this month.  But short supplies are starting to show colors as China snapped up a lot of white wheat last week.  Allendale has a bullish acreage estimate out for all US wheat.   We see US wheat acreages below 46 million given high
  soybean, corn, and canola prices. 
• Funds
  bought an estimated 5,000 SRW wheat contracts. 
• China
  sold a large 2.3 million tons of wheat from auction, representing 56 percent of what was offered. 
  
• EU
  May milling wheat was unchanged at 223.25 euros. 
• Russian
  wheat export prices, 12.5% protein, Black Sea was at $280 a ton free on board (FOB) at the end of last week, down $5 from the previous week-IKAR. 
  
• USDA
  US all-wheat export inspections as of March 11, 2021 were 683,492 tons, above a range of trade expectations, above 484,652 tons previous week and compares to 469,191 tons year ago. Major countries included Philippines for 177,995 tons, Korea Rep for 100,138
  tons, and China for 67,260 tons.

 

Export
Developments.

• Jordan
  seeks 120,000 tons of animal feed barley, on March 16 for shipment between October 1 and November 15. 
  

• Pakistan
  seeks 300,000 tons of wheat on March 16 for April-August shipment. 

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 208,217 tons of rice, on March 25 for arrival in South Korea in 2021 between May 1 and Oct. 31.  64,444 tons of non-glutinous brown rice is sought
from the United States.  Rest from Thailand, China, Australia and Vietnam.

·        
Bangladesh seeks 50,000 tons of rice on March 18.

·        
Bangladesh also seeks 50,000 tons of rice on March 28.

·        
Syria seeks 25,000 tons of white rice on March 29, from China or Egypt.

 

 

Updated
3/9/21

May
Chicago wheat is seen in a $6.25‐$6.90 range

May
KC wheat is seen in a $5.75‐$6.75 range

May
MN wheat is seen in a $6.20‐$6.65 range