FI Evening Grain Comments 04/14/21

PDF Attached

 

Grains
and oilseeds were higher again on fund buying amid weather and inflation concerns. WTI crude that was up around $2.75 as of 2:30 pm CT. 
USD was down 18 points. 

 

 

Weather

 

 

 

 

 

 

 

 

 

 

Next
7 days

 

6-10
& 11-14 temps

 

World
Weather Inc. 

MOST
IMPORTANT WEATHER ISSUES OF THE DAY

• Tropical
  Storm Surigae was located 55 miles southwest of Yap Island in the western Pacific Ocean
• The
  storm was expected to become a typhoon as moves over open water east of the Philippines in the coming week
• The
  system will become quite intense, but its predicted movement should keep the center of the system east of the Philippines
• Some
  outer bands of precipitation may impact the eastern islands this weekend into next week
  
• A
  close watch on the storm is warranted since its path has been drifting a little more to the west in recent forecast model runs
• Negative
  Phase of Pacific Decadal Oscillation (PDO) continues to evolve in the eastern Pacific Ocean with cooling ocean surface water temperatures occurring most significantly in the eastern Gulf of Alaska most recently
• Cooler
  than usual water is becoming more common in the eastern North Pacific and could influence North America weather this late spring and summer
• Interior
  southern Brazil Safrinha corn production areas are still advertised to receive only light scattered showers and thunderstorms during the next ten days
• Totally
  dry weather is not likely and the precipitation that does occur will be welcome to the crop, but more moisture will be needed especially prior to the arrival of the dry season
• 45%
  of the Safrinha crop is produced in Mato Grosso do Sul, Parana and Sao Paulo and conditions are becoming a little dry in the region
• Mato
  Grosso, Goias, Tocantins, Maranhao and Piaui, Brazil will experience routinely occurring showers and thunderstorms intermixing with periods of sunshine and warm weather during the next ten days maintaining a very good outlook for late season crops
• Argentina
  harvest progress has slipped behind normal in nearly all of the nation
• Net
  drying is expected during the coming week to help firm the soil and support some resuming fieldwork
• Rain
  expected mid- to late-week next week will disrupt farming activity for a while and set back the drying trend
• The
  rain will only last a couple of days and net drying will then resume
• Snowstorm
  in eastern Canada’s Prairies and the far northern U.S. Plains is winding down
  
• Snowfall
  of 4 to 12 inches was common in the southeastern half of Saskatchewan and Manitoba with local totals over 20 inches northwest of Yorkton, SK
• Snowfall
  in the northern Plains reached 9.5 inches in northwestern North Dakota, 7 inches in northeastern Montana and 6 inches in far northwestern Minnesota while 2 to 5 inches occurred elsewhere in North Dakota and norther and central Minnesota
• Moisture
  content in the storm will help lift topsoil moisture for spring planting and early season crop development later this month when warming returns
• U.S.
  Pacific Northwest unirrigated small grains still need significant moisture to improve soil conditions and early season crop development
• Net
  drying will continue over the coming seven days, but “some” rain may evolve in the April 22-28 period
• U.S.
  hard red winter wheat production areas will experience significant snow and rain tonight into Friday with a few lingering showers Saturday
• Moisture
  totals of 0.40 to 1.50 inches is expected from northeastern Colorado and southwestern Nebraska through the heart of Kansas with lighter rain in Texas and Oklahoma
• Snow
  accumulations will vary from 4 to 10 inches with northeastern Colorado and southwestern Nebraska getting 10-16 inches
  
• The
  moisture will be ideal in raising topsoil moisture after recent drying conditions.
  
• U.S.
  west-central high Plains livestock stress is expected because of heavy snow, cold rain and colder temperatures Thursday into Saturday morning
• West
  and South Texas have potential for a little rain over the next couple of weeks infrequently
• The
  moisture will be welcome, but not nearly enough for a lasting improvement in soil moisture in the areas that need it most
• Today
  and Thursday will bring 0.05 to 0.50 inch to both regions
• Additional
  rain showers are possible April 21-22 in West Texas with similar rainfall expected
• U.S.
  Midwest will experience brief periods of rain and longer periods of drier weather during the coming ten days
• Temperatures
  will be cool
• Decreases
  in soil moisture may occur gradually from the upper Midwest through Iowa to northern Illinois
• Greater
  precipitation will occur in the lower Midwest
• Field
  progress will be slow due to cool temperatures and some periodic precipitation
• Drier
  and warmer weather will be needed in the south while the north will need rain and some warmer weather
• U.S.
  Delta and southeastern states will experience a mix of rain and sunshine during the next two weeks favoring some fieldwork
• Interior
  parts of the southeast; including central and northern Georgia, interior South Carolina and parts of North Carolina will experience net drying for a while
• Some
  heavy rain will occur near the Gulf of Mexico coast from Louisiana into northern Florida and southern Georgia delaying farming activity
• California
  and the southwestern states will be left mostly dry for a while
• China
  crop weather will remain very good over the next two weeks, although net drying is expected in the North China Plain for a while
• India’s
  weather will be mostly good, although scattered showers will occur periodically to slow some of the winter harvest progress
• Australia
  will continue in a net drying mode for the next ten days supporting good harvest progress in the east while raising the need for moisture in most of the south for future winter wheat, barley and canola planting
• Western
  Europe will be drying down again for a while, but recent rain fell in France and Spain to induce a short term improvement in soil moisture
• Additional
  rain will be needed in the west and north parts of the continent when seasonal warming finally kicks in more significantly
• Temperatures
  will be cool for most of this coming week and April 21-27 will trend warmer
• Warming
  in the western CIS earlier this week helped to melt more snow in Russia and accelerated drying rates
• A
  change back to wetter and cooler conditions is expected over the coming week
• Some
  improved greening conditions have occurred in Ukraine and Russia’s Southern Region

• Mainland
  areas of Southeast Asia will experience a net boost in precipitation over the next few weeks that will improve corn planting conditions and maintain an improving trend in sugarcane, rice and coffee production areas
• Some
  beneficial rain fell across parts of this region recently, but southern areas are still dry
• Philippines
  weather is good for most crops, but a boost in rainfall would be welcome
• Indonesia
  and Malaysia crop weather is expected to be mostly good for the next ten days to two weeks with most areas getting rain
• North
  Africa will experience a favorable mix of weather over the next ten days
• All
  of the moisture will be welcome, but resulting amounts may be a little erratic and light leaving need for more moisture in some areas
• Northwestern
  Algeria and southwestern Morocco need rain most
• Temperatures
  will be near to above average
• 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
• Rainfall
  will be a little lighter and less frequent than usual over for a while longer, but improved rainfall should occur later this week and into the coming weekend
  
• Temperatures
  have been and will continue to be warmer than usual keeping evaporation rates very strong until greater rain evolves
• East-central
  Africa rainfall has been erratic recently and a boost in precipitation should come to Ethiopia this month while Tanzania slowly begins to dry down
• South
  Africa weather will continue favorably for early maturing summer crops and the development of late season crops
• Net
  drying is expected for except in the southeast where some periodic showers will occur
• Good
  field progress is expected for early maturing crops
• Temperatures
  will be warmer than usual and that will dry out the soil relatively quickly
• New
  Zealand rainfall will be a little lighter than usual during the coming ten days, but still beneficial
• Many
  areas are still drier biased and need the increased rainfall
• Temperatures
  will be seasonable
• Southeastern
  Canada will see below average precipitation and warmer than usual temperatures over the next ten days
  
• Mexico
  precipitation will continue limited to a few eastern and far southern locations during the next week to ten days
• Rain
  is needed in many areas
• Drought
  is prevailing across most of the nation
• Southern
  Oscillation Index this morning was +0.22 and the index will move lower over the next several days

Source:
World Weather Inc. & FI

 

Bloomberg
Ag Calendar

Wednesday,
April 14:

• EIA
  weekly U.S. ethanol inventories, production
• Unica’s
  data on cane crush and sugar production in Brazil’s center-south region (tentative)
• FranceAgriMer
  monthly grains report
• European
  Cocoa Association’s quarterly grind data (tentative)
• HOLIDAY:
  India, Bangladesh, Thailand

Thursday,
April 15:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Malaysia’s
  April 1-15 palm oil export data
• The
  U.S. National Confectionery Association releases first quarter cocoa grinding data for North America
• USDA
  updates monthly North American sugar and sweeteners outlook
• White
  sugar May contract expires
• New
  Zealand food prices
• HOLIDAY:
  Thailand

Friday,
April 16:

• 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
• Cocoa
  Association of Asia releases 1Q 2021 cocoa grinding data
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

Macro

US
Import Price Index (M/M) Mar: 1.2% (exp 0.9%; prev 1.3%)

–        
Import Price Index (M/M) Mar: 0.9% (exp 0.5%; prev 0.5%)

–        
Import Price Index (Y/Y) Mar: 6.9% (exp 6.4%; prev 3.0%)

–        
Export Price Index (M/M) Mar: 2.1% (exp 1.0%; prev 1.6%)

–        
Export Price Index (Y/Y) Mar: 9.1% (prev 5.2%)

 

U.S.
Crude Oil Futures Settle At $63.15/BBL, Up $2.97, 4.94 PCT

Brent
Crude Futures Settle At $66.58/BBL, Up $2.91, 4.57 PCT

 

US
DoE Crude Oil Inventories (W/W) 09-Apr: -5890K (est -2700K; prev -3522K)

–
Distillate Inventories: -2083K (est 1000K; prev 1452K)

–
Cushing OK Crude Inventories: 346K (prev -735K)

–
Gasoline Inventories: 309K (est 900K; prev 4044K)

–
Refinery Utilization: 1.00% (est 0.20%; prev 0.10%)

 

Fed’s
Williams: Inflation Is Going To Be Volatile But Expects It To Stay Relatively Subdued Near 2% Goal

 

Corn

• CBOT
  corn
  ended sharply higher led by the front thee contract on weather concerns.  Dryness is spreading in the Northern spring areas, western corn belt, and across Brazil’s Safrinha corn area and cold temps prevail in western Europe through the end of this week. Below
  normal temps are also forecast for the Midwest over the next 15 days, but that may not slow plantings. Today was the last day of the Goldman Roll. 
  
• US
  ethanol production came in well below expectations (941,000 vs. 980,000 Bloomberg estimate).  It is maintenance season for ethanol plants. 
  
• Funds
  on Wednesday bought an estimated net 17,000 corn contracts.
• US
  corn basis was steady to mixed from yesterday at river and terminal locations but firm at selected ethanol plants.  Linden, IN was up 15 cents to 35 over the May. 
  
• We
  are hearing Delta corn plantings are off to a good start.  Some areas are already done planting the crop, such as northeast Louisiana.  Some commercials noted they have seen some of the best soil conditions in the past 10 to 15 years.  With rain in the forecast
  today, followed by a stretch of 7-8 days of mostly dry weather for the northern Delta, we think the Delta could be near complete by early May.  We just need to see if the cold weather this week and next week will impact planting progress. 
  
• The
  USDA Broiler Report showed eggs set in the US up 7 percent and chicks placed up slightly.  Cumulative placements from the week ending January 9, 2021 through April 10, 2021 for the United States were 2.61 billion. Cumulative placements were down 2 percent
  from the same period a year earlier.

 

US
weekly ethanol production
declined an unexpected 34,000 barrels to 941,000 barrels and stocks declined 124,000 barrels to 20.518 million.  Stocks are lowest since November 13, 2020.  The production figure had little impact on US corn futures.  We still believe USDA is overestimating
2020-21 US corn for ethanol usage by at least 30 million bushels.  

 

 

 

 

Export
developments.

• None
  reported

 

Brazil
corn prices
are firm in part to increasing use in the ethanol sector.  High Brazilian corn prices have led some end users to source corn from Argentina and Paraguay. 

 

Source:
Reuters and FI

 

Updated
4/13/21

May
corn is seen in a $5.60 and $5.95 range

July
is seen in a $5.25 and $5.90 range

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

 

Soybeans

• CBOT
  soybeans,
  meal and nearby soybean oil contracts were sharply higher (not so much for meal) on weather issues, follow through buying amid US inflation fears and higher WTI crude (up more than $3.00 during the session). 
  Soybean oil has been the leader over the past couple of days.  July soybeans are about 38 cents away from its contract high made on April 1.  Thursday we will see a little guidance from the USDA export sales reported followed by NOPA
  crush.  The report is expected to show a crush of 179.2 for March with oil stocks of 1822, using Reuters estimates. 
  
• Nearby
  and July ICE canola posted a new contract high.
• Funds
  on Wednesday bought an estimated net 13,000 soybean contracts, bought 2,000 soybean meal and bought an estimated 6,000 soybean oil.
  
• US
  soybean meal basis was up $1-$3 for selected IL & IN locations.  Claypool, IN declined $7 to 8 over.  
• Ukraine
  is considering to curb sunseed exports and adding export licenses to sunflower oil for the September through August season.  Ukraine traders union UGA is concerned with the government’s plan.  APK-Inform estimated the Ukraine 2021 sunseed crop at a record
  16.4 million tons, in part to a 6% increase in the planted area.  Ukraine produced 14.3 million tons in 2020. 
  
• 150
  soybean oil registrations were cancelled Tuesday evening out of Volga, SD.  SBO registrations stand at 968. 
  
• India
  palm oil imports during March were 526,463 tons, a 57% increase from March 2000.  Soybean oil imports were 284,200 tons, a 3 percent increase.  Sunflower imports were 146,970 tons, about half of what was imported a year earlier. 
  

 

 

Export
Developments

• Today
  the USDA seeks 35,000 tons of soybean meal for the Food for Progress export program of which 11,000 tons for Ivory Coast and 24,000 tons for Ghana. 
  
• Egypt’s
  GASC seeks 30,000 tons of soyoil and 10,000 tons of sunflower oil on April 15 for arrival June 1-20.  Payment is for at sight and 180-day letter of credit. 
  

 

USDA
Attaché – Paraguay: Oilseeds and Products Annual

2021/2022
Paraguayan soybean production is projected at 10.5 million tons as a return to normal climatic conditions allow for increased second-crop soybean planting. Exports are forecast at 6.5 million tons. 2020/2021 soybean production is lowered to 9.9 million tons
as a delayed harvest prevented farmers from planting second-crop soybeans. Crush is reduced to 3.3 million tons as plants received soybeans late and will have fewer operating days in the marketing year. Exports are forecast up at 6.75 million tons due to lowered
crush volume.

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Annual_Buenos%20Aires_Paraguay_04-01-2021 

 

 

Source:
Reuters and FI

 

Updated
4/13/21

May
soybeans are seen in a $13.65 and $14.50 range

           
July $13.00-$14.60            November $10.50-$14.50

May
soymeal is seen in a $385 and $410 range

           
July $380-$4.40      December $325-$460

May
soybean oil is seen in a 50.25 and 55 cent range

July
47.00-56.00   December 42-53 cent wide range (depends on global biodiesel and renewable fuel expansion)

 

Wheat

• US
  wheat traded higher primarily on weather concerns.  July SRW hit a one-month high, July KC near a one-month high and spring wheat a three-year high.  Global importers continue to tender for wheat.  Dry weather concerns for the US and Europe are in focus. Cold
  temperatures are expected to dominate parts of Europe through the end of this week.  Dry weather returns to the northern Great Plains for at least a week. 
  
• Funds
  on Wednesday bought an estimated net 12,000 CBOT SRW wheat contracts.
• September
  Paris wheat was up 3.00 euros to 204.75 euros. 
• FranceAgriMer
  raised its monthly forecast of French soft wheat exports outside the European Union’s 27 countries this season to 7.55 million tons from 7.45 million tons last month, 44% below a record 13.54 million tons in 2019-20.

 

Export
Developments.

• Results
  awaited: Algeria’s OAIC seeks 50,000 tons of durum wheat, valid until Thursday, April 15, for shipment between May 1-15 and May 15-31.
• The
  Philippines are in for 165,000 tons of feed wheat. 
• Jordan
  seeks 120,000 tons of feed barley on April 21. 
• Japan
  seeks 90,169 tons of food wheat this week from US and Canada. *no
  shipment period was provided. 
  

 

• Japan
  in its weekly SGS import tender seeks 80,000 tons of feed wheat and 100,000 tons of barley for arrival by September 30. 
  

• Ethiopia
  seeks 30,000 tons of wheat on April 16. 
• Ethiopia
  seeks 400,000 tons of optional origin milling wheat, on April 20, valid for 30 days.  In January Ethiopia cancelled 600,000 tons of wheat from a November import tender because of contractual disagreements. 
  

 

Rice/Other

·        
Mauritius seeks 4,000 tons of optional origin long grain white rice on April 16 for delivery between June 1 and July 31.

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

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

·        
Ethiopia seeks 170,000 tons of parboiled rice on April 20.

 

Updated
4/13/21

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

            July $6.00-$6.80

May KC wheat is seen in a $5.60‐$6.10 range  (US HRW wheat
conditions are improving)

            July $5.40-$6.25

May MN wheat is seen in a $6.30‐$6.80 range

            July $6.20-$7.00 (depends on EU crop damage
and US spring wheat seedings/development)