FI Evening Grain Comments 03/18/22

PDF Attached

 

Day
23. USD was higher and WTI higher. Grains were mixed with spot positions mainly lower with exception of meal up on a reversal in product spreading.

 

 

Weather

 

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• Rain
  and snow fell in U.S. hard red winter wheat production areas Thursday and early today with moisture totals of 0.20 to 0.60 inch in the heart of the production region
• Local
  totals reached 0.88 inch southwest of Wichita, KS and 0.85 inch in north-central Kansas while a few locations between Oklahoma City and Wichita, KS reporting 1.00 to 2.00 inches
• Much
  less rain fell in the high Plains region
• U.S.
  hard red winter wheat areas will experience another storm system Sunday night through Tuesday with more rain and snowfall
• Moisture
  totals will vary from 0.50 to 1.50 inches and a few areas might get more
• Southwestern
  portions of the region (Texas Panhandle into far southwestern Kansas) will be driest
  
• Significant
  snow will fall from eastern Colorado to South Dakota
• U.S.
  hard red winter wheat areas will experience a general improvement in soil moisture with drought status to be reduced in some areas.  The change will bring a very good opportunity for much improved greening conditions and crops will take the moisture and put
  it toward improvements in root, tillers and leaves after much damage occurred over the past few months. Follow up precipitation will be imperative if production potential is going to improve significantly. The coming ten days that follow the early week storm
  are expected to be drier biased once again.
• West
  and South Texas and the coastal bend area of Texas will experience very little precipitation for a while
• Concern
  over early spring planting, emergence and establishment for corn, sorghum and cotton is rising
• U.S.
  Delta and southeastern states will experience waves of rain during the next ten days favoring spring planting moisture
• A
  few areas will become a little too wet, especially in the Delta and a part of the Tennessee River Basin
• Flooding
  is possible in this region early to mid-week next week because of rainfall varying from 1.50 to more than 5.00 inches
  
• Good
  planting moisture is expected in the southeastern states, although fieldwork might be disrupted periodically
• Waves
  of rain are still expected in the U.S. Midwest over the next ten days maintaining moisture abundance for some areas and improving soil moisture in some western Corn Belt crop areas
• Iowa
  and Missouri will benefit most from the  precipitation, although portions of eastern Nebraska and Kansas will also benefit
• Northern
  U.S. Plains will experience limited precipitation through  the  weekend
• Brief
  periods of snow and rain will develop early next week and again March 26-28 in portions of the region
• The
  precipitation events will attempt to improve topsoil moisture in a few western areas, but the greatest precipitation is expected in the east
• California
  is still not likely to get much needed moisture for the next ten days
• Concern
  remains over 2022 water supply
• Portions
  of Canada’s Prairies will continue to miss significant precipitation events for at least the coming week
• Temperatures
  will be a little warmer than usual in the coming week which may help to stimulate a little snow melt
• Argentina
  weather has not changed much today
• Precipitation
  is expected in central parts of the nation today after developing Thursday and overnight
  
• The
  precipitation was helpful in maintaining good soil moisture in central parts of the nation
• Additional
  precipitation is expected in east-central and northeastern parts of the nation early next week
• The
  moisture Thursday, today and early next week will be good in maintaining favorable soil  moisture in those areas, but net drying will continue in the southwest half of Buenos Aires, La Pampa, San Luis and far southern Cordoba through the next ten days
• Subsoil
  moisture in these areas should carry crop development relatively well, but the  need for rain will steadily rise
• Most
  of Brazil will get rain during the next ten days and sufficient amounts will occur to support Safrinha corn and cotton
• However,
  net drying is expected in central and northern Minas Gerais and southern Bahia resulting in some crop stress for some late season crops; including sugarcane and some minor coffee production areas
• A
  few coffee and sugarcane areas are expected to become a little too dry as time moves along and greater moisture will soon be needed
• Southwestern
  Europe, northwestern Africa and a part of the southern Balkan Countries in Europe will receive periodic rainfall over the next two weeks resulting in a good environment for winter crop development and spring planting
• Central,
  northeastern and east-central Europe will experience net drying conditions for an extended period of time
• Crops
  are still dormant or semi-dormant and the need for moisture will remain low for a little while longer, but rain will be needed later this month and in April to prevent some areas from getting too dry
• A
  good distribution of rain is expected from eastern Turkey and some immediate neighboring areas through Turkmenistan, Uzbekistan, southern Kazakhstan and Tajikistan as well as in the  mountains of western Xinjiang, China during the coming week
• Some
  rain and snow has already impacted the area and the precipitation has improved topsoil moisture
• Better
  wheat development and improved outlooks for the planting  of cotton and corn will result from this pattern
• East-central
  China will get a little too  much rain in the coming week to ten days as frequent rain and some thunderstorms evolve
• The
  Yangtze River Basin will be wettest resulting in some local flooding
• Planting
  delays for rice and corn might occur if the wet weather lasts too long
• Wheat
  and rapeseed will need drier and warmer weather soon
• Crop
  and field conditions in the North China Plain and northeastern provinces of China are suspected of being good for this time of year
• Mild
  to cool and drier biased weather in western Russia and Ukraine has not had any adverse weather on  the  region
• Snow
  cover remains significant and there has been no winterkill of significance this year
• Soil
  moisture in western Russia beneath the snow is abundant which might lead to some flooding in the spring if precipitation resumes during  the snow melt season
• Ukraine
  is snow free except in the northeast
• India’s 
  weather remains mostly tranquil with little change likely
• Not
  much precipitation and near to above normal temperatures are expected for the next ten days
• Eastern
  Australia soil moisture is decreasing, but irrigated crops are developing well
• Dryness
  in some sorghum and cotton fields will promote crop maturation and could lead to faster than usual harvest progress
• Late
  season crop yields from unirrigated fields may be lower than expected, especially in parts of Queensland
  
• Good
  moisture early in the season has still provided a very good production year for most  crops
  
• South
  Africa rainfall will be favorably distributed and intermixed with periods of sunshine during the next ten days
  
• The
  environment should prove to be favorable for most of the summer crops and early maturing  crops will experience favorable conditions for harvesting
• Indonesia
  and Malaysia rainfall will be abundant during the next ten days with rain falling every day in portions of the region
  
• Some
  local flooding will be possible
• Philippines
  rainfall is expected to be periodic and mostly beneficial during the next ten days; wettest in the south next week
  
• Mainland
  areas of Southeast Asia will also experience a near-daily occurrence of showers starting today and lasting through the next ten days
• The
  environment will be very good for crop development and helpful in raising topsoil moisture for corn and rice planting
• A
  tropical disturbance will move into southwestern Myanmar early next week resulting in some heavy rain and flooding
• Colombia,
  Ecuador, western Venezuela and parts of Peru will remain plenty wet during the next ten days
• Frequent
  rain is expected
• The
  moisture will be great for coffee and cocoa flowering and well as support of all crops
• Ghana
  and Ivory Coast will receive periodic over the next week easing recent dryness and improving the soil for coffee, and cocoa flowering
• The
  precipitation may be a little more erratic than desired outside of Ivory Coast and Ghana in the remainder of west-central Africa.
  
• Greater
  rain will still be needed in interior Nigeria and interior Cameroon as well as some Benin locations, despite a little rain this week
• The
  greatest and most widespread precipitation is expected next week
• 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 parts of southwestern Kenya
• Some
  rain will develop in Ethiopia, Kenya and Uganda in the coming week and especially next week
• The
  moisture boost will be welcome.
• Today’s
  Southern Oscillation Index is +12.16 
• The
  index will slowly level off this weekend into early next week and may then move a little more erratically for a while
• Mexico
  will experience seasonable temperatures and a limited amount of rainfall during the coming week; eastern areas will be wettest
• 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 18:

• 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
• China’s
  second-batch of Feb. imports for corn, pork and wheat
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  India

Monday,
March 21:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Ivory
  Coast cocoa arrivals
• Malaysia’s
  March 1-20 palm oil export data
• USDA
  total milk production, 3pm
• HOLIDAY:
  Japan

Tuesday,
March 22:

• EU
  weekly grain, oilseed import and export data

Wednesday,
March 23:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• U.S.
  cold storage data for beef, pork and poultry, 3pm
• HOLIDAY:
  Pakistan

Thursday,
March 24:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef
• Brazil’s
  Unica may release cane crush, sugar output data
• USDA
  red meat production, 3pm
• HOLIDAY:
  Argentina

Friday,
March 25:

• ICE
  Futures Europe weekly commitments of traders report, ~2:30pm
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Malaysia’s
  March 1-25 palm oil export data
• U.S.
  cattle on feed, poultry slaughter

Source:
Bloomberg and FI

 

 

 

 

CFTC
Commitment of Traders

Combined
soybeans, meal, oil, corn, Chicago wheat and KC wheat managed money futures and options net long positions were a record at 803,110 net long contracts.

Combined
soybeans, meal, oil, corn, Chicago wheat and KC wheat net long Index Fund positions were a record at 1,155,009 net long contracts.

Index
funds bought a large amount of corn.

 

 

 

 

 

Reuters
table via CFTC

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
296,044    -28,054    467,032     24,499   -735,800     -1,925

Soybeans          
106,044    -23,177    208,025     13,651   -288,292      5,804

Soyoil             
59,260      1,760    118,873        -97   -192,759        293

CBOT
wheat         -37,473    -10,113    165,449      6,853   -121,513      1,242

KCBT
wheat          15,558     -9,728     65,314      5,816    -81,202      3,114

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

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                  
     Net        Chg        Net        Chg        Net        Chg

Corn              
372,909      4,125    275,400    -20,782   -726,318      5,670

Soybeans          
170,690     -1,024    129,002     -8,076   -295,542      6,625

Soymeal           
103,159      6,532     92,404     -1,388   -247,633     -7,679

Soyoil             
89,171      3,502     88,204     -3,679   -197,486      1,633

CBOT
wheat          22,945      2,736     81,275     -3,322    -97,143      2,000

KCBT
wheat          44,236       -470     24,679     -1,417    -72,332        453

MGEX
wheat          14,387      1,473        781       -146    -27,343     -2,479

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

Total
wheat         81,568      3,739    106,735     -4,885   -196,818        -26

 

Live
cattle         40,144      1,593     77,612     -4,074   -125,921        696

Feeder
cattle       -3,065      1,067      6,912        -92      2,196       -342

Lean
hogs           63,345     -2,674     58,479     -2,897   -116,474      4,583

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn              
105,284      5,506    -27,276      5,481  2,083,011     28,416

Soybeans           
21,627     -1,246    -25,777      3,721    999,098     -3,956

Soymeal            
19,101      2,042     32,968        492    447,497      8,171

Soyoil              
5,485        502     14,626     -1,957    414,017     -4,214

CBOT
wheat            -615     -3,433     -6,462      2,018    513,596     -5,262

KCBT
wheat           3,087        636        330        799    209,692     -4,688

MGEX
wheat           7,575      1,515      4,601       -362     67,915     -1,784

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

Total
wheat         10,047     -1,282     -1,531      2,455    791,203    -11,734

 

Live
cattle         22,169      3,534    -14,004     -1,748    369,096    -17,176

Feeder
cattle        1,361        321     -7,405       -953     59,682     -2,805

Lean
hogs            4,405        522     -9,755        466    322,624     -1,624

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

 

Macros

Canadian
Retail Sales (M/M) Jan: 3.2% (est 2.4%; prev -1.8%)

Canadian
Retail Sales Ex Auto (M/M) Jan: 2.5% (est 2.2%; prev -2.5%)

Canada
Feb Retail Sales Most Likely Fell 0.5% – StatsCan Flash Estimate

Canada
Feb New Housing Prices +1.1Pct Vs +0.9Pct In Jan; +10.9Pct On Year

 

US
Existing Home Sales Feb: 6.02Mln (est 6.10Mln; prev 6.50Mln; prevR 6.49Mln)

US
Existing Homes Sales (M/M) Feb: -7.2% (est -6.2%; prev 6.7%; prevR 6.6%)

US
Lending Index Feb: 0.3% (est 0.3%; prev -0.3%; prevR -0.5%)

 

Corn

·        
CBOT corn ended
lower Friday led by bear spreading following weakness in wheat and higher USD.

·        
US Crude Oil Futures Settle At $104.70/Bbl, Up $1.72 Or 1.67%. – ICE Chat

·        
China corn imports during the month of February were 1.93 million tons, up 8.4% from year ago and Jan-Feb stand at 4.68 million tons, down 2.3 percent form year earlier.

·        
China is restarting fertilizer plants that have been previously shut down to ensure domestic consumption requirements.  

·        
A Ukraine official mentioned corn stocks are large enough to cover 1.5 years of consumption.  

·        
A trucker strike in Spain is disrupting food distribution. 

 

War
in Ukraine and its Effect on Fertilizer Exports to Brazil and the U.S.

Colussi,
J., G. Schnitkey and C. Zulauf. “War in Ukraine and its Effect on Fertilizer Exports to Brazil and the U.S..”
farmdoc
daily
(12):34, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 17, 2022.

https://farmdocdaily.illinois.edu/2022/03/war-in-ukraine-and-its-effect-on-fertilizer-exports-to-brazil-and-the-us.html

 

Export
developments.

• No
  fresh business we see on Friday.
• Results
  awaited: On
  Wednesday Iran opened a new import tender for corn, barley and soybean meal that was set to close March 16.
  
• Results
  awaited: Iran’s SLAL seeks up to 60,000 tons of feed barley, 60,000 tons of feed corn and 60,000 tons of soymeal for March and April shipment.
• Results
  awaited: Egypt’s GASC seeks a minimum 1,000 tons of frozen whole chicken and minimum 500 tons of chicken thighs on March 17 for arrival during the April 1-15, 16-30, May 1-15, 16-31 periods.

 

Updated 3/14/22

May
corn is seen in a $6.75 and $8.40 range

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

 

Soybeans

·        
CBOT soybeans were higher to start but settled lower bias bull spreading. Soybean meal (product reversal) was higher on concerns over Argentina meal and soybean oil export taxes that may shift business to north America. SA production
woes may continue into 2022-23. Soybean oil posted a big loss for the front month in part to weakness in palm oil and lacking US export developments.

·        
CBOT crush margins fell again on Friday with May down a large 20.25 cents to $1.7525.

·        
The Rosario grains exchange warned Argentina producers could be hit by a third straight La Nina event that could impact production next season. It has been 20 years since the last time Argentina faced three straight La Nina’s,
according to the exchange.

·        
We agree, the latest IRI report showed a 44 percent change of La Nina conditions during the OND period.  They increased La Nina probability to 100 percent for the FMA 2022 period.  See weather section.

·        
China is urging local governments to minimize the impact of Covid-19 to ensure spring plantings don’t get disrupted.

·        
Malaysian palm oil futures on Friday dropped more than 5%. Palm fell 16% for the week, mainly on demand destruction from high global vegetable oil prices and Indonesia reversing their stance to restrict exports over the short
term.

·        
USDA’s Attaché sees China 2022-23 soybean imports at 100 million tons, a record if realized.

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Annual_Beijing_China%20-%20People%27s%20Republic%20of_CH2022-0033.pdf

 

Export
Developments

• Egypt’s
  GASC seeks an unspecified amount of vegetable oils on March 22 for arrival May 5-25 for payment at sight and 180-day letters of credit. They are also seeking local vegetable oils.
  
• Results
  awaited: Iran’s GTC issued a tender (3/15) to buy about 30,000 tons of soyoil, set to close March 16. They are also seeking offers for sunflower oil and palm olein oil.
  
• Results
  awaited: Iran’s SLAL issued a tender (3/15) to buy about 60,000 tons of barley, 60,000 tons of corn and 60,000 tons of soybean meal, set to close March 16.
• Qatar
  seeks to buy 960k cartons of corn oil in a tender closing April 4.

 

Updated
3/14/22

Soybeans
– May $16.00-$18.00

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

Soybean
meal – May $430-$520

Soybean
oil – May 72.00-79.00

 

Wheat

·        
Another wild week in US wheat futures trading, with all three US nearby positions ending lower Friday on Black Sea shipping uncertainty, technical selling ahead of the weekend, and geopolitical headline trading.  Spring plantings
for the Black Sea region are concerning as the conflict drags on.  We wonder how long it will take Ukraine to rebound back to pre-crises levels for shipping given the unknown amount of damage to elevators and port facilities.

·        
US wheat futures also traded lower from improving US Great Plains weather with a current event providing some rain followed by a heavier event starting Sunday.

·        
French soft wheat ratings for the good and excellent categories were steady at 92 percent as of March 14 from the previous week (87% year ago). Spring barley was 90 percent planted.

·        
May Paris wheat futures were down 5.75 euros or 1.6% to 361.75 euros.

·        
Effective March 29, Russia’s export duty will increase to $86.40 from $86.30 per ton. Barley will rise to $79.60 from $77.40 per ton and corn to $53.20 from $54.10 per ton.

·        
Algeria’s wheat supply is large enough to last until August.

·        
Germany’s association of farm cooperatives estimated the 2022 wheat crop up 5.8% on the year to 22.61 million tons.

 

Export
Developments.

·        
Turkey’s TMO provisionally bought 260,000 tons of wheat, above 150,000 tons sought. Delivery is between March 28 and April 22. Prices for the 12.5% and 13.5% protein content varied from $410 to $

·        
Results awaited: South Korean flour mills seek 45,000 tons of US milling wheat for shipment between May 16 and June 15.

·        
Results awaited: Iran’s GTC seeks 60,000 tons of milling wheat for shipment in April and May.

·        
Jordan seeks 120,000 tons of barley on March 23. Possible shipment combinations are between July 16-31, Aug. 1-15, Aug. 16-31 and Sept. 1-15. 

·        
Jordan seeks 120,000 tons of milling wheat on March 24. Possible shipment combinations are May 16-31, June 16-30, July 1-15 and July 16-31.

·        
Qatar seeks 105,000 tons of optional origin animal feed barley on March 27 shipment in April, May and June. 
Two
Philippine groups are in for a combined 270,000 tons of feed wheat. One tender seeks 215,000 tons in four consignments for shipment between May 3 and Aug. 20.  The second tender seeks at least 55,000 tons for July/October shipment.

 

Rice/Other

·        
(Bloomberg) — Qatar is seeking to buy 1.2m bags of rice in a tender that closes April 4, according to the Ministry of Commerce and Industry’s website.  Qatar also seeks to buy 960k cartons of corn oil in a tender closing April
4

 

Updated 3/14/22

Chicago May $9.35 to $12.50 range

KC May $9.25 to $12.50 range

MN May $10.00‐$13.00