FI Evening Grain Comments 03/24/21

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Higher
trade in CBOT soybean complex and nearby corn.  Wheat trended lower on improving US weather. 

 

Weather

Brazil
will see a drier bias over the next several days.  Monsoon rains are expected to withdraw later in April.  Argentina will see additional rains Wednesday into Friday.  South Cordoba and southeast BA will miss on some of the rains.  The US southern and central
Great Plains (HRW) bias eastern areas will see additional rain this week. Northern Plains & Canadian Prairies will be in focus this week as it remains too dry but the second week of the forecast calls for precipitation for the dry areas of Alberta.  Rest of
the US will be ok with exception of too much precipitation for the Delta that will slow fieldwork activity.  Midwest will not start planting for a week or two so there is no concern there except for the Ten River Basin where too much rain will occur.  Eastern
Australia will dry down this week.

 

 

World
Weather Inc.

MOST
IMPORTANT WEATHER AROUND THE WORLD

• Argentina
  will receive significant rain in the south, east and north-central parts of the nation today into Friday

o  
Sufficient rain will fall over some of the wettest areas of the northeast to induce flooding

o  
Some new flooding might evolve in local areas in northeastern Buenos Aires

o  
Southern Cordoba to southern Santa Fe may not get nearly as much rain as other areas in the nation

o  
Net drying will occur for at least a full week following the rain event

o  
Late season summer crops will finish out their development in a favorable environment because of good soil moisture and no excessive heat

• Brazil
  will experience net drying from the southeastern half of Mato Grosso,  Mato Grosso do Sul and western and northern Parana to Bahia, Minas Gerais and Sao Paulo during the coming week; this will be ideal for getting late season soybean harvesting and Safrinha
  corn planting completed
• Rain
  in Brazil during the last days of March and early April will be erratic and a close watch on soil moisture will be warranted; the monsoon season is not ending early, but the drier biased conditions will raise some market and producer worry in early April

o  
Greater rain will be needed in April to maintain the best soil conditions for late season corn and cotton

• Rio
  Grande do Sul, Brazil and neighboring areas of Brazil and Paraguay will get timely rainfall during the coming week to support ongoing development for late season crops

o  
Net drying will occur for nearly a week after rain ends Monday

 

• U.S.
  Midwest will be a little wet in the coming ten days, but the outlook for spring planting is favorable; planting will begin next month and it will have to advance around periods of rain

o  
The lower Ohio River Valley area may be a little wet at the beginning of the planting period

• U.S.
  hard red winter wheat production areas received some welcome rain Monday and Tuesday and more would be welcome especially in the west and south, but crop conditions are improving after recent bouts of rain

o  
Additional precipitation is expected periodically, but west-central areas may be driest for a while

• U.S.
  northern Plains and Canada’s Prairies need significant rain and it will not likely come in great enough quantities anytime soon to make much difference

o  
Today’s GFS model run suggested greater precipitation Sunday and Monday in the southern and eastern Prairies, but World Weather, Inc. believes this event was overdone and will only verify as a weaker event

• U.S.
  West and South Texas and the Texas Coastal Bend need significant rain from unirrigated areas, but precipitation in the coming week will be restricted leaving dryness an ongoing concern

o  
There is “some” potential for a more active weather pattern to evolve in West Texas during the first week of April, though confidence is a little low

• U.S.
  Delta and Tennessee River Basin will likely be too wet for much field progress in the next ten days; drying and warming is needed

o  
Multiple inches of rain will fall across these areas in the coming week inducing new flooding and causing more planting delays

• U.S.
  southeastern states will see a good mix of weather, especially in southern Georgia, northern Florida and southeastern Alabama to support early season planting and crop development
• Southwestern
  U.S. weather will remain dry biased and mild through the next ten days supporting some fieldwork
• U.S.
  Pacific Northwest needs greater precipitation in the valleys especially the Yakima Valley into central Oregon where the ground is too dry for unirrigated winter crops
• Mexico
  drought remains serious and unlikely to change prior to the arrival of seasonal rainfall this summer
• India
  weather will be almost ideal for crop maturation and harvesting in the next few weeks’ the nation may have lost a little production this year because of dryness during reproduction, but another big crop is expected
• China
  weather remains almost ideal for early season fieldwork and winter crop development in the Yellow River Basin, North China Plain and northeastern provinces, although warming is needed
• China’s
  Yangtze River Basin has been a little wet this month and drier and warmer weather is needed to induce better rapeseed and southern wheat conditions, but no significant loss in production potential has occurred
• Yunnan,
  China is still too dry and needs significant rain for its rice, corn and sugarcane
• Australia’s
  Queensland and New South Wales crop areas are moving into a drier biased weather pattern for the next ten days improving crop and field conditions after recent abundant rainfall
• Severe
  flooding in coastal areas of New South Wales, Australia should be abating and the cleanup efforts are getting under way
• Indonesia
  and Malaysia weather has been and will continue to be good for all crops, although there is need for rain in northern parts of Peninsular Malaysia
• Philippines
  weather has been and will continue to be good for most of its crops
• Mainland
  Southeast Asia crop areas need a boost in precipitation to induce better early season planting conditions for corn and sugarcane development as well
• Eastern
  Ukraine into Kazakhstan will receive rain over the next few days and the moisture boost will be very good for future crop development
  
• Much
  of western and northern Russia is still snow bound and needs to experience additional melting and a bout of dry and warm weather to get the remaining snow to melt
• Europe
  weather is rated mostly very good, although cool conditions have delayed the greening of some crops
• Soil
  moisture in Europe is rated favorably with some drying in Spain that will need to be eased in April to ensure the best dryland crop conditions

o  
additional drying is expected in much of the continent during the coming week to ten days – especially in the west

• North
  Africa will be drying down in the coming week to ten days; recent rain has been good for early season wheat and barley development
• West-central
  Africa coffee and cocoa weather has been very good recently and that is not likely to change much for a while; some rice and sugarcane has benefited from the pattern as well
• East-central
  Africa rainfall has been erratic recently and a boost in precipitation should come to Ethiopia in April while Tanzania begins to dry down
• South
  Africa weather will continue favorably mixed for early maturing summer crops and the development of late season crops
  
• New
  Zealand weather is expected to turn a little wetter in the coming week, but rain amounts will still be lighter than usual except along the west coast of Southern Island
• Southern
  Oscillation Index this morning was -2.15 ending a notable fall in the index from +15.24 on Feb. 24; the fall is indicative of the decaying La Nina event

o  
The index will level off the remainder of this week and into the weekend

Source:
World Weather inc.

 

Bloomberg
Ag Calendar

Wednesday,
March 24:

• EIA
  weekly U.S. ethanol inventories, production
• Bursa
  Malaysia Derivatives virtual palm oil conference 2021, day 2
• U.S.
  poultry slaughter
• EARNINGS:
  JBS
• HOLIDAY:
  Argentina

Thursday,
March 25:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Seminar
  on sustainable palm oil in India by the Solvent Extractors’ Association and the Malaysian Palm Oil Board
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports
• Malaysia’s
  March 1-25 palm oil export data
• USDA
  hogs & pigs Inventory, red meat production

Friday,
March 26:

• 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

Source:
Bloomberg and FI

 

 

Macro

US
Durable Goods Orders (FebP): – 1.1% (est 0.5%, prev 3.4%)

US
Durable Ex Transportation (FebP): -0.9% (est 0.5%, prev 1.3%)

US
Cap Goods Orders Nondef Ex Air (FebP): -0.8% (est 0.5%, prev 0.4%)

US
Cap Goods Ship Nondef Ex Air (FebP): -1.0% (est -1.0%, prev 1.8%)

 

Markit
US Manufacturing PMI (MarP): 59 (est 59.5, prev 58.6)

Markit
US Services PMI (MarP): 60 (est 60.1, prev 59.8)

Markit
US Composite PMI (MarP): 59.1 (prev 59.5)

 

More
Than 70 US House Democrats Press Biden To Take Tougher Line On Boosting Vehicle Emissions Standards – RTRS Cites Letter

 

Corn

• CBOT
  corn traded two-sided on lower wheat and higher soybeans. The market ended mixed with May up 2.0 cents and December down 0.75.  Higher USD limited rallies. We see corn trading in a narrow two-sided trading range for the rest of the week unless we see a surprise
  in USDA export sales due out Tuesday morning.  US corn acreage estimates are likely to be in focus for the balance of the week.  Farm Futures pegged the US corn area at 93.6 million acres, up from 90.8 million a year ago.  Analysts deadline to submit their
  findings to reporters for polls is today for the March 31 USDA intentions report. There were no global export developments overnight but there were rumors China seeks corn for June shipment.  There were no 24-hour announcements this morning. 
  
• May
  corn support is seen at $5.46, then $5.40.75.  Low
  today was $5.4825. 
• WTI
  crude rallied after a container ship that ran aground in the Suez Canal, blocking up around 100 ships.  It was up about $3.00 at the grain close and this supported nearby corn spreads. 
  
• The
  weekly USDA Broiler report showed US eggs set down 2 percent and chicks placed 2 percent from this time a year ago.  Cumulative placements from the week ending January 9, 2021 through March 20, 2021 for the United States were  2.05 billion. Cumulative placements
  were down 2 percent from the same period a year earlier.
• Weekly
  US ethanol production fell a large 49,000 barrels to 922,000 (trade was looking for 3,000-barrel increase) and stocks increased 469,000 barrels to 21.809 million (trade was looking for 12,000 increase).  The unexpected drop in production is slightly bearish
  for CBOT corn futures. 

 

 

 

 

Export
developments.

• There
  were no USDA 24-hour sales. 

 

 

 

Fuente:
FOB Bolsa de Cereales

 

Updated
3/24/21

May
corn is seen in a $5.35 and $5.55 range. (unchanged, down 20)

July
is seen in a $5.10 and $5.75 range.

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

 

Soybeans

• CBOT
  soybeans ended 9.50 cents higher in May (up 4 sessions) in part to a rebound in WTI crude oil (up about $3.00 at the grain close) despite a higher USD (up 17 points).  Crush margins rebounded with May up 1.50 cents. CBOT soybean meal was higher for 2020-21
  crop and $0.10 lowed for December, and SBO started lower but caught a bid to end 46-61 points higher.  May SBO failed to fill the gap of 56.37.  Overnight it hit an 8-year high.  China cash crush margins deteriorated.  Canola futures were up $13.30 or nearly
  2 percent basis May to $796.10/ton. 
• Some
  traders monitoring an Asian vegetable oil conference suggest overall comments/forecasts are slightly bearish for palm oil. 
  Some notes via Reuters for the Virtual Palm and Lauric Oils Price Outlook Conference:
• Oil
  World:
• Global
  palm oil production is estimated to grow by 3.2 million tons through the 12 months to Sep. 30
• Indonesian
  output is estimated to grow by 3.3 million tons
• Malaysia
  will experience a drop of half a million ton
• World
  palm oil consumption may rise by less than one million ton this year
• Edible
  oil prices to peak in the next four weeks
• James
  Fry
• Malaysia’s
  crude palm oil prices forecast to fall to near 3,300 ringgit by end-2021 if crude oil is at $65 a barrel.
• Malaysia’s
  2021 crude palm oil production below 19.5 million ton
• Indonesia’s
  output is seen growing over 3.5 million tons
• Indonesian
  Palm Oil Association (GAPKI)
• Indonesia
  palm oil inventories shrink by almost half to 2.67 million tons by the end of 2021
• Production
  in the Southeast Asian nation seen rising 4% from 2020 to 49 million tons
• Exports
  seen rising to 37.6 million tons in 2021 from 34 million tons last year
• Indonesian
  crude palm oil to trade at $1,000-$1,150 per ton during the first half of this year.
• Dorab
  Mistry
• Malaysia’s
  crude palm oil futures hold at 3,300 ringgit ($799.22) a ton up to June, before bottoming out at 2,700 ringgit in the second half of the year, likely around September
• 2021
  palm oil production in Malaysia 19.6 million tons and 48 million tons for Indonesia
• World
  palm oil supply will expand by 3 million tons in 2021
• Anec:
  Brazil soybean exports 16.1 million tons.
• The
  U.S. EPA is finalizing a proposal to extend the deadlines for oil refiners to prove their compliance with RFS standards for 2019 and 2020. Refiners now have until Jan. 31, 2022, to submit compliance documentation for the 2020 year, and until Nov. 30, 2021,
  to submit for 2019.

 

Export
Developments

• None
  reported.   

 

Updated
3/24/21

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

May
soymeal is seen in a $390 and $420 range. (up 5, down 5)

May
soybean oil is seen in a 55 and 58 cent range (up
100, unch)

 

Wheat

• CBOT
  Chicago wheat ended 4-10 cents lower (bias May to the downside) on a higher USD, improving US HRW wheat conditions and several countries passing on wheat imports due to high prices. 
  
• Next
  support level for May Chicago is seen at $6.1975 (corrected), then $6.16.  We look for KC to lose ground to Chicago wheat, but funds, dominant in Chicago wheat, have trumped this spread.  We like owning MN wheat due to weather problems (too dry) for the Northern
  Great Plains & Canadian Prairies. 
• EU
  May milling wheat was 2.50 lower at 218.50 euros.  Support is seen at 216.00 (up from 215 previous). 
  
• Iraq
  sees domestic wheat production is seen at 5 million tons, enough for consumption. 
  

 

Export
Developments.

• South
  Korea’s (MFG) bought 66,000 tons of animal feed wheat at an estimated $274.99 a ton c&f for arrival in South Korea around Oct. 5.  Its optional origin.  Then they bought another 66,000 tons of feed wheat at $269.65/ton for Aug/Sep shipment. 
  
• South
  Korea’s (MFG) bought 66,000 tons of animal feed wheat at an estimated $274.99 a ton c&f for arrival in South Korea around Oct. 5.  Its optional origin.
• South
  Korea’s (FLC) bought 65,000 tons of animal feed wheat at an estimated $271.99 a ton c&f for arrival in South Korea around Oct. 15.  Its optional origin except Denmark, Argentina, China and India, traders said.
• Thailand
  passed on 430,000 tons of animal feed wheat for shipment during May and December. Prices were regarded as too high.
• The
  Philippines passed on 155,000 tons of milling wheat and animal feed wheat for shipment between April and July. Prices were regarded as too high. Feed wheat offers were believed to be over $300 a ton c&f.
• Japan
  bought only 600 tons of feed barley under its SBS import system.  They were in for 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival in Japan by August 26.
• Jordan
  will be back in for feed barley on March 30.   Possible shipment combinations are Oct. 1-15, Oct. 16-31, Nov. 1-15 and Nov. 16-30, the same periods as sought in the previous two tenders.
  
• Results
  awaited: South Korean group SPC seeks 35,000 tons of milling wheat from the United States and Canada on March 23. for arrival in July.

 

Rice/Other

·        
Sinograin estimated China’s cotton crop at 5.95 million tons up from an estimated 5.8 million tons in 2019-20.

·        
Bangladesh has two separate rice tenders and lowest offer for latest 50,000 tons of rice was $416.00/ton CIF. 

·        
Bangladesh bought 50,000 tons of rice from Vietnam at $522/ton.

·        
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.

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

·        
Syria seeks 39,400 tons of white rice on April 19.  Origin and type might be White Chinese rice or Egyptian short grain rice.

 

Updated
3/18/21

May
Chicago wheat is seen in a $6.15‐$6.75 range

May
KC wheat is seen in a $5.65‐$6.60 range

May
MN wheat is seen in a $6.15‐$6.50 range