FI Evening Grain Comments 03/22/22

PDF Attached

 

I
will be out part of Wednesday attending a personal matter.

 

USDA
reported under their 24-hour reporting system 240,000 tons of soybeans for delivery to unknown for 2021-22 delivery.

 

Weather

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• U.S.
  hard red winter wheat areas received rain and snow Monday and early today
• The
  precipitation was a little lighter than expected in a part of the west-central high Plains region while significant in the east
• Rain
  totals were less than 0.50 inch in western Kansas and some immediate neighboring areas as well as areas southwest into the northwestern Texas Panhandle
• Moisture
  totals of 1.00 to more than 2.00 inches occurred from south-central Oklahoma into southeastern wheat areas of Kansas
•  East-central
  and southeastern parts of the  Texas Panhandle received more than 1.00 inch of moisture
• The
  bottom line for hard red winter wheat areas after recent waves of rain and snow is one of improved soil moisture which will result in better greening conditions and a great opportunity for crop repair to begin. Root and leaf mass repair is already beginning,
  and new tillers will likely be set in areas that have had the biggest boost in soil moisture recently. The  more favorable weather of late must continue through the next few weeks to restore production potential and World Weather, Inc. believes a turn back
  to drier and warmer biased conditions will likely occur in the  second half of April – if not a little sooner. Short term improvements in crop conditions are certainly expected.  More moisture is needed, but the environment has certainly improved for the near
  term.
• Not
  much rain is expected in West or South Texas and the lower Texas Coastal Bend area will also receive restricted moisture
• U.S.
  Delta, Tennessee River Basin and a few neighboring areas will be too wet for a while the remainder of this week
• Saturated
  soil and some flooding is already underway and additional  rainfall today and early Wednesday is likely to have some impact on worsening the flood situation for a little while
• Better
  weather should evolve later this week into the  weekend
• U.S.
  southeastern states will get a good mix of rain and sunshine during the next ten days defying a more traditional dry biased pattern that is normally associated with spring La Nina events
• California
  has potential to receive some much needed moisture during the late weekend  and  early part of next week
• The
  moisture will be welcome, but not nearly enough to change water supply or the status of drought
• Frequent
  follow  up rain is needed and  not likely
• U.S.
  northwestern Plains and southwestern Canada’s Prairies are unlikely to receive significant moisture through the  coming week, but parts of the  region may get a little moisture in the following week
• U.S.
  Midwest crop areas will get sufficient rain and snow to maintain moisture abundance in the east and to lift topsoil moisture in the west
• Some
  of the improving soil moisture trend has already begun in the western Corn Belt with the latest rain and snow event
  
• Argentina
  will experience rain in the northeast today and Wednesday and over a larger part of eastern Argentina late Wednesday into Thursday before occurring in La Pampa and Buenos Aires Thursday into Friday
• Significant
  relief to dryness is  expected in southwestern parts  of Argentina where little precipitation has fallen recently
  
• Rain
  in northeastern and east-central Argentina will maintain moisture abundance for future crop use
  
• Argentina’s
  weather this weekend and next week should trend drier, although some rain may fall briefly early next week and east-central parts of the nation once again
• Most
  of Brazil will receive significant rain during the next ten days
• All
  areas will benefit except from central and northern  Minas Gerais into central Bahia where little rain is likely
• Some
  of this region is already quite dry and minor grain, oilseeds, coffee and sugarcane are being stressed by the drier weather
• This
  trend will continue for the next ten days to possibly two weeks
• Europe
  rainfall this week is expected mostly in Rain Spain and Portugal while any showers that occur elsewhere (and there will be some) are expected to be too light and brief to have much impact on soil moisture which should slowly decline
• A
  few east-central Spain coastal areas may get more than 5.00 inches of rain resulting in some flooding
• Temperatures
  will be near to above normal this week and probably next week as well
• Much
  of Russia, Ukraine, northern Kazakhstan, Belarus and the Baltic States were dry again Monday as they were during the weekend while a little rain fell in southern parts of Russia’s Southern Region and areas east into southeastern Kazakhstan
• Temperatures
  have been warming sufficiently to melt snow in western Russia where highest temperatures were in the 40s and 50s Fahrenheit.
  
• Some
  increase in precipitation is expected in the CIS this weekend and next week as waves of snow and rain evolve across the region
• Temperatures
  will be seasonable, although trending cooler this weekend into next week
• India
  weather will continue mostly dry and seasonably warm to hot through the next ten days
  
• There
  is some risk of showers and thunderstorms in Kerala and immediate neighboring areas of Karnataka and Tamil Nadu as well as in the far Eastern States and extreme northern most parts of the nation
• China’s
  rain Monday was greatest in the Yangtze River Basin 1.00 to  5.00 inches resulted
• The
  rainy weather started during the weekend north of the Yangtze River and it was expected to advance to the south over the next few days
• Flooding
  is expected to continue today and then begin to diminish thereafter
• Southeastern
  China will experience waves of rain  for a while and some of it will be heavy in the coastal provinces
• Flooding
  will be possible along with some delay to early rice and corn planting progress
• Less
  rain in the Yangtze River Basin will help rapeseed and minor wheat conditions improve
• Australia
  rainfall this weekend into early next week will be light and sporadic enough to limit its impact on maturing  cotton and sorghum
• Some
  temporary discoloring of cotton fiber is possible
• Tropical
  Cyclone Charlotte is still advertised to stay west of Australia over the next several days
• The
  storm should only produce light rain  in the southwestern coastal areas of the nation as it passes by late this week  and into the weekend
• Rain
  in Western Australia from the storm could boost topsoil moisture, although autumn planting of wheat and barley will not begin before late April
• South
  Africa weather will include mild to warm temperatures over the next week ten days while rainfall is sporadic and light.
  
• The
  environment should be good for late season crop development, early crop maturation and harvest progress
• 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 this week
  
• Mainland
  areas of Southeast Asia will also experience a near-daily occurrence of showers and thunderstorms during the next ten days
• The
  environment will be very good for crop development and helpful in raising topsoil moisture for corn and rice planting
• 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 most significant in Tanzania
• Ethiopia
  has been dry biased along with northern Uganda and parts of southwestern Kenya
  
• Some
  rain will develop in Ethiopia, Kenya and Uganda in the coming week easing some dryness, but more will be needed
• The
  moisture boost will be welcome.
• Today’s
  Southern Oscillation Index is +13.81 
• The
  index will slowly level off this week 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; southeastern 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

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

 

Corn

·        
CBOT corn
was higher for the back months (May 3.25 cents lower) on follow through. May traded two-sided by early morning. The bear spreading was in part to weakness in lower spot energy prices.

·        
US feed demand destruction is in play with another major bird house culling units after a bird flu outbreak.

·        
South Dakota Kills 85,000 Birds as Avian Flu Outbreak Spreads to State – Newsweek

https://www.newsweek.com/south-dakota-kills-85000-birds-avian-flu-outbreak-spreads-state-1690016

·        
Problem we see is that corn is more sensitive to the Black Sea supply crisis and energy prices rather than the underlying industrial and feed fundamentals.

·        
Traders should monitor the EU if shipments increase amid Black Sea supply constraints. We heard Spain may have bought more than expected US corn but waiting for confirmation.  The GMO issue remains in place.

·        
CP’s rail worker strike in day 2 is already getting the trade nervous over grain and fertilizer shipments. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 2,000 barrels to 1.028 million (1015-1038 range) from the previous week and stocks up 145,000 barrels to 26.090 million.

 

Export
developments.

• Turkey
  seeks 325,000 tons of corn on March 28. Optional origin for April 8 and May 5 shipment.  They also seek 175 tons of local corn.  500k total makes us wonder if they are covered for reserves.
  

 

 

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 on follow through bullish sentiment amid Argentina product shipment concerns. Nearby meal is lower on technical selling and product spreading. Egypt’s import tender for vegetable oils are fetching high
prices.

·        
Spot US corn and soybean basis was unchanged to higher on Tuesday.

·        
Argentina producers sold 18.8 million tons of corn for the 2021-22 season, wo times the volume registered in the same period a year ago. 51 million tons was estimated for total production.

 

Export
Developments

• Egypt
  bought 80,000 tons of vegetable oils for arrival May 5-25.
• USDA
  reported under their 24-hour reporting system 240,000 tons of soybeans for delivery to unknown for 2021-22 delivery.
  
• 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

·        
US wheat futures were mostly higher on follow through buying with little developments in news. Escalating Black Sea conflict is the main driver.

·        
There are concerns Ukraine’s grain harvest could be halved this year. If realized, look for a 20+ million ton trade flow shift to other countries.

·        
May Paris wheat futures were up 3.25 euros to 379 euros.

·        
Iraq may need to buy more wheat as stockpiles are apparently less than three months of consumption.

 

Export
Developments.

·        
Iraq extended their deadline to buy 50,000 tons of hard milling wheat until March 22.

·        
Lebanon is in talks with India to buy wheat, but payment arrangements need to be sorted out.

·        
Bangladesh is in for 50,000 tons of wheat with a deadline of April 4.

·        
Turkey seeks another 210,000 tons of wheat on March 23.

·        
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. 

 

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