FI Evening Grain Comments 04/01/22

PDF Attached

 

Private
exporters reported sales of 136,000 metric tons of corn for delivery to unknown destinations during the 2021/2022 marketing year.

 

Soybeans
ended sharply lower, meal lower, and soybean oil higher as traders continue to piece together data from the USDA reports. Corn ended mixed with nearby lower and back months higher. Wheat finished the week lower, and nearby Chicago was down nearly 11 percent.

 

 

 

Weather

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• Not
  many changes were noted overnight around the world
• Additional
  heavy rain fell in along the central Vietnam coast Wednesday as Tropical Depression 01W moved up the coast and enhanced the northeast monsoon flow.
  
• Another
  7.00 inches of rain fell after a previous day of excessive moisture occurred Wednesday
  
• Two
  days of precipitation along the coast may have caused some flooding
• The
  disturbance left over from the now dissipated tropical system could produce some additional rain Vietnam this weekend
• No
  serious changes occurred to the U.S. outlook overnight
• The 
  Midwest, Delta and Tennessee River Basin will have a tough time getting significant drying time over the next ten days
• Light
  rain events will continue to come and go, but temperatures may not be very conducive of quick drying which may delay fieldwork for a while longer
• Temperatures
  will  be warm enough in the lower Delta to induce some faster drying, but the northern Delta, Tennessee River Basin and lower Midwest will stay wet for a while
• Western
  parts of the  U.S. hard red winter wheat production region will receive limited precipitation over the next ten days
• West 
  and South Texas will also continue dry for the next ten days
• California
  will get limited precipitation over the next week to ten days
• Canada’s
  southwestern Prairies and a part of the northwestern U.S. Plains will have a chance to get “some” precipitation in the second week of the forecast, but until then precipitation prospects of significance are not very good
• U.S.
  Southeastern States will see a good mix of precipitation and sunshine over the next two weeks.
  
• Frost
  and freezes are still possible the U.S. Mid-South and southeastern states at the end of next week or into the following weekend
• This
  might raise the potential for some crop damage to winter wheat and any early planted and emerged corn, but it is too soon to determine how cold it will be and how far to the south
• Conditions
  are not ideal for a notable freeze, but temperatures will be well below average for a few days
• The
  situation should be closely monitored, though
• Southwestern
  and west-central Argentina will received restricted rainfall during the next ten days, although not  necessarily completely dry
• The
  environment is not likely to be a  problem since soil moisture will be conserved by mild to cool temperatures
• Northeastern
  Argentina, southern Brazil  and southern Paraguay will get frequent waves of rain this weekend through April 12 resulting in too much moisture for some crop areas
• River
  and stream flows have already increased; including the Parana river where barge traffic has been increasing with the recent harvest
• Local
  flooding is possible next week, but the  rain should be spaced out enough to prevent a serious flood from  occurring
• Brazil
  coffee, sugarcane and minor grain and oilseed production areas form central Minas Gerais to Bahia continues to dry out, but the impact should be low
• Coffee
  quality might decrease in some minor unirrigated production areas
• Sugarcane
  sucrose will increase and there may be some stunting of late season cane development, but the sucrose changes should leave production unimpacted
• Most
  other crop  areas in Brazil will experience timely rainfall to support Safrinha crops and late full season crops develop well
• Soil
  moisture is abundant outside of the northeast corner of the nation leaving crops to develop well
• Central 
  Europe to west-central Russia will be wetter biased for a while during the coming week
• Some
  heavy snow is expected from southern Germany through northwestern Ukraine and southeastern Belarus to the Ural Mountains
• The
  snow might contribute to spring flooding since the moisture content will be high in the snow and the ground is suspected of being wet beneath the  snow
• Europe
  and northwestern Russia temperatures will be cooler than usual over the  coming week with some warming expected in western Europe during the second week of the  outlook
• Northwestern
  Africa and  southwestern parts of Europe will continue to receive periodic precipitation that will serve winter wheat, barley and some spring crops well
• Additional
  precipitation is predicted for the Russian New Lands during the weekend and especially next week
• The 
  moisture will be  ideal for spring planting
• Most
  of the precipitation is now advertised to stay north of the Kazakhstan border
• India’s
  harvest weather will be very good over the next couple of weeks
• Precipitation
  will be limited to sporadic showers in the far south and more generalized rain in the Eastern States
  
• Southeastern
  China will be dry biased for much of the coming week to ten days
• The
  break from rainy weather will be ideal for rapeseed development and early season corn and rice planting throughout the  south
• Improvements
  to many crops and field working conditions are likely
• Temperatures
  will trend warmer, as well
• Northern
  wheat areas of China will experience some warmer weather next week that may stimulate some greater crop development potential
• Mexico’s
  dryness and drought have been expanding this winter due to poor precipitation resulting from persistent La Nina
• The
  region will continue lacking precipitation for an expected period of time
• Eastern
  and southern Mexico will remain seasonably dry this week and will only receive light rainfall next week
• Southeast
  Asia rainfall will continue frequent and abundant
• No
  area in the  mainland areas, Philippines, Indonesia or Malaysia are expected to be too dry
• Too
  much rain may impact northeastern Philippines next week
• East-central
  Africa rainfall will continue greatest in Tanzania, although parts of Uganda and Kenya will get rain periodically as well.
  
• Ethiopia
  rainfall should be most sporadic and light
• West-central
  Africa rainfall will continue periodically and sufficient to support coffee and cocoa development
• Rainfall
  so far this month has been a little sporadic, but no area has been seriously dry biased
• Pockets
  in Ivory Coast and western Ghana have received less than usual rain, but crop development has advanced well
  
• North
  Africa rainfall will be greatest today and Thursday with some follow up showers early to mid-week next week in Morocco and northern Algeria
• Crop
  conditions will improve as a result of the rain
• Western
  Australia will continue to receive brief periods of rain through the weekend, although much of it be light and sporadic
• The
  additional moisture will further boaster topsoil moisture for use in the autumn wheat, barley and canola planting season that begins in late April
• Eastern
  Australia precipitation is expected to be limited the remainder of this week bringing on a better environment for cotton in the open boll stage of development
• The
  drier weather will also be good for early season planting which begins soon
• Irrigated
  late season sorghum and other crops will continue to develop favorably
• Some
  of the dryland crop that is still immature still needs greater moisture
• Rain
  is expected briefly during the weekend and early part of next week, but it should not seriously harm fiber quality, although any rain is not welcome at this time of year
• South
  Africa rainfall over the next couple of weeks will periodic and sufficient enough to support late season crop development while the impact on mature crops should be low outside of some brief harvest delays
• 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
• Today’s
  Southern Oscillation Index is +11.96 
• The
  index will move erratically over the next ten days
• 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,
April 1:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Australia
  Commodity Index
• USDA
  soybean crush, DDGS output, corn for ethanol, 3pm
• FranceAgriMer
  weekly update on crop conditions

Sunday,
April 3:

• Egypt’s
  government this month started a local procurement program to buy wheat from its domestic harvest to counter expected shortages of supply from Ukraine

Monday,
April 4:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Responsible
  Sourcing and Ethical Trade Forum, April 4-5, London
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  China

Tuesday,
April 5:

• U.S.
  crop progress and planting data for corn and cotton; winter wheat condition, 4pm
• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  April 1-5 palm oil export data
• Purdue
  Agriculture Sentiment, 9:30am
• New
  Zealand global dairy trade auction
• HOLIDAY:
  China, Hong Kong

Wednesday,
April 6:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• New
  Zealand Commodity Price
• HOLIDAY:
  Thailand

Thursday,
April 7:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Vietnam’s
  customs department releases coffee, rice and rubber export data for March
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans

Friday,
April 8:

• FAO
  World Food Price Index
• 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
• ICE
  Futures Europe weekly commitments of traders report
• 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

 

 

Selected
Brazil commodity exports

Commodity                     
March 2022            March 2021

CRUDE
OIL (TNS)                5,457,667             6,425,257

IRON
ORE (TNS)                 28,782,651            28,331,899

SOYBEANS
(TNS)                 12,308,982            12,693,892

CORN
(TNS)                     14,278                292,013

GREEN
COFFEE(TNS)              203,112               241,605

SUGAR
(TNS)                    1,443,921             1,970,225

BEEF
(TNS)                     169,406               133,821

POULTRY
(TNS)                  384,969               366,505

PULP
(TNS)                     1,574,748             1,448,271

 

 

CFTC
Commitment of Traders

The
net long index fund position for the combined Chicago wheat, KC wheat, corn, oats, soybeans, meal and soybean oil were again a record, at 1.175 million contracts, up from 1.171 million previous week. Traditional funds reduced long positions as of last Tuesday.
They were less long than expected for corn and meal and much more long than expected for Chicago wheat.

 

 

 

 

 

As
of Friday afternoon:

 

Macros

European
Gas Buyers Have At Least 2 Weeks To Pay In Roubles, Says Kremlin – FT 

US
Change In Nonfarm Payrolls Mar: 431K (est 490K; prev 678K)

US
Unemployment Rate Mar: 3.6% (est 3.7%; prev 3.8%)

US
Average Hourly Earnings (Y/Y) Mar: 5.6% (est 5.5%; prev 5.1%)

US
Average Hourly Earnings (M/M) Mar: 0.4% (est 0.4%; prev 0.0%)

US
Change In Private Payrolls Mar: 426K (est 495K; prev 654K)

US
Change In Manufacturing Payrolls Mar: 38K (est 32K; prev 36K)

US
Average Weekly Hours All Employees Mar: 34.6 (est 34.7; prev 34.7)

US
Labour Force Participation Rate Mar: 62.4% (est 62.4%; prev 62.3%)

US
Underemployment Rate Mar: 6.9% (prev 7.2%)

 

US
ISM Manufacturing Mar: 57.1 (est 59.0; prev 58.6)

–
Prices Paid: 87.1 (est 80.0; prev 75.6)

–
New Orders: 53.8 (est 58.5; prev 61.7)

–
Employment: 56.3 (est 53.1; prev 52.9)

US
Construction Spending (M/M) Feb: 0.5% (est 1.0%; prev R 1.6%)

 

77
Counterparties Take $1.666 Tln At Fed Reverse Repo Op (prev $1.872 Tln, 100 Bids)

 

Corn

·        
US corn futures ended lower in the front three month contracts and higher in the back months, in part to follow through bear spreading after the USDA reported smaller than expected 2022 plantings. December corn hit a new contract
high today. May corn ended 13.75 cents lower, and December was up 4.25 cents. Positioning was noted. There was some chatter China might be in soon for spot corn, but this has been talked about for months. USDA reported an old crop corn sale to unknown destinations.

·        
We like SX over CZ over the medium term. New crop SX appears to be “cheap” relative to December corn and we think the drop in the SX/CZ ratio was overdone. The strength in corn futures late this week may have bought back some
acres across the Midwest. Southeast, where a number of corn acres were lost, are likely set. Plantings have already begun in the SE and Delta. 

·        
News is fairly light. WTI is lower in the front months, higher in the back months. USD was higher.

·        
StoneX: 118.6 million tons for Brazil’s corn crop, up from 116.1 previous.

·        
Safras: Brazil corn 118.15 MMT. Second crop 84.58 million tons.

·        
US corn planting progress if initially released on Monday could be reported at 2 percent complete. One percent is the 5-year average.

·        
The Buenos Aires grains exchange warned early frosts could further damage corn and soybeans. The exchange estimates soybean production at 42 million tons and corn at 49 million tons.

·        
EIA reported February corn for ethanol production at 405 million bushels, 10 million below a Bloomberg poll, down from 464 million from January and well above 333 million year ago (pandemic). 

 

 

Export
developments.

·        
Private exporters reported sales of 136,000 tons of corn for delivery to unknown destinations during the 2021/2022 marketing year.

 

 

 

Updated
3/31/22

May
corn is seen in a $6.75 and $8.10 range

December
corn is seen in a wide $5.50-$8.00 range

 

Soybeans

·        
The CBOT soybean complex started mixed with higher meal, lower soybeans and lower soybean oil. Then soybean oil rebounded, sending meal lower by mid-morning. Soybeans saw follow through selling (bear spreading).  May soybeans
fell below $16, first time since February 25.

·        
USDA’s February crush was seen as slightly bearish for soybeans and soybeans oil, and neutral for meal.

·        
The soybean crop in Brazil’s Rio Grande do Sul was 19% harvested at the end of last month, below 24% year ago and 40% for the 5-year average.

·        
StoneX: 122.06 million tons for Brazil soybeans, up from 121.17 previous. 127.17

·        
Cargo surveyor SGS reported March Malaysian palm exports at 1,331,400 tons, 89,113 tons above the same period a month ago or up 7.2%, and 85,833 tons above the same period a year ago or up 6.9%.

·        
USDA NASS reported February soybean crush at 174.4 million bushels, 1 million below a Bloomberg poll, below 194.3 million for January and 10.1 million above 164.3 million crushed year earlier. The February crush came out to 6.23
million bushels per day, down from 6.27 million during January and the record 6.39 million per day posted for December 2021. Soybean oil stocks at the end of February were 2.566 billion pounds, highest level since April 2020, 48 million above an average trade
guess, 66 million above end of January and 260 million above end of February 2021. Part of the reason for larger than expected stocks was the yield. The soybean oil yield increased to 11.84 pounds per bushel from 11.72 pounds during January and was highest
since July 2021. Soybean meal stocks slipped to 386,000 short tons from 431,000 short tons during January and compares to 584,000 short tons for February 2021. The February soybean meal yield was 46.90 versus 46.67 previous month and 47.69 year ago.

 

 

Export
Developments

·        
China sold 248,330 tons of 2019 soybeans from reserves out of 501k offered, at an average price of $791/ton, 49 percent of the planned sales.

·        
China will auction another 500,000 tons of imported soybeans from its reserves on April 7.

• Qatar
  seeks to buy 960k cartons of corn oil in a tender closing April 4.
• USDA
  seeks 2,710 tons of packaged oil on April 7 for May shipment (May 23-June 13 for plants at posts).
  

 

Updated
3/31/22

Soybeans
– May $15.50-$17.50

Soybeans
– November is seen in a wide $12.75-$15.50 range

Soybean
meal – May $430-$500

Soybean
oil – May 68.50-74.00

 

Wheat

·        
US wheat futures started higher on technical buying and concerns over dryness across the US Great Plains but turned lower late during the day session on positioning. SovEcon increased their estimate for 2021-22 Russia wheat exports
by 400,000 tons to 33.9 million tons. Just a month ago the trade was uncertain any wheat exports would be shipped out of Russia via Black Sea. Bloomberg noted Russia is working on resolving problems to get vessels moving. Some of the wheat is headed to countries
that normally Ukraine would supply. 

·        
On Monday we look for the initial US winter wheat rating to be reported below its respected five-year average.  Combined G/E could end up below 47 percent.  55 percent is 5-year average.

·        
A couple US Senators are calling on the USDA to allow producers to plant on roughly 4 million acres CRP acres out of the 22.1 million acres currently enrolled. The USDA and various environmental groups oppose the program. Even
if they are released, we highly doubt it would boost planted acres for the summer 2022 growing season. Many CRP acres that come out of the program usually take a full year to cultivate before row crops can go in. In addition, some producers may not want to
take additional acres to lack of fertilizer supplies and high input costs. 

·        
Kazakhstan will limit milling wheat and wheat flour exports from April 15 through June 1 by imposing a 300,000 ton quota on flour and 1 million tons for wheat.

·        
Russia will increase its wheat export tax to $96.10/ton for the April 6-12 period, up from $87 from the previous week. Carley will drop from $75.60 to $75.40 per ton and corn will increase from $58.30 to $65.80 per ton.

·        
Ukraine planted about 600,000 tons of spring crops out of the 13.4 million hectares

·        
FranceAgriMer reported the weekly soft wheat crop ratings at 92 percent, unchanged from the previous week and compares to 87% year ago.

·        
May Paris wheat futures were down 3.50 euros to 365.25 euros.

 

 

Export
Developments.

·        
Iraq bought 100,000 tons of German wheat at an average price of $570/ton. The deadline for the tender was March 24 and was initially for April through May shipment.

·        
Jordan seeks 120,000 tons of feed barley on April 5.

·        
Saudi Arabia seeks 355,000 tons of 12.5% protein wheat for Sep-Nov delivery.

·        
Bangladesh is in for 50,000 tons of wheat with a deadline of April 4.
Bangladesh
seeks 50,000 tons of wheat on April 11 for shipment within 40 days after contract signing.

 

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
3/31/22

Chicago
May $9.00 to $12.00 range, December $8.50-$11.00

KC
May $9.00 to $12.00 range, December $8.75-$11.50

MN
May $9.75‐$12.00, December $9.00-$11.75