FI Morning Grain Comments 02/17/21

PDF attached

 

Morning.

 

CBOT
soybean futures are mixed, supported earlier from higher soybean oil following a good rally in palm on supply concerns, but since then soybean oil sold off.  Meal traded mixed late in the overnight session.  Palm futures were up 97MRY and cash was up $20.00/ton
for RBD.  Offshore
values are leading soybean oil 37 points lower and soybean meal $0.90 higher.  Yesterday’s NOPA report was seen supportive for the CBOT soybean complex.  Brazil will continue to see harvest delays across the central growing regions and Argentina will remain
dry this week.  Grain futures were giving up some of yesterday’s gains led by wheat on technical selling and easing concerns over cold weather for the US.  However, the aftermath is resulting in livestock loss, transportation problems from icy rivers and snowy
roads, higher energy prices slowing grain and soybean crush, power outages and a general sentiment commodity inputs for food companies will rise. 
Note
eastern
Texas and parts of the Delta saw an ice storm overnight.  Cotton yesterday hit a 32-month high. 
The
Indian Institute of Wheat and Barley Research (IIWBR) estimated India’s wheat production at a record 115 million tons this year, up 7 percent from last year. South Korea bought US corn and Algeria bought a small amount of wheat. 

 

Export
developments:

·       
South Korea’s MFG bought about 69,000 tons of corn, thought to be from the US, at an estimated $295.40 a ton c&f for June 21 arrival.

• Algeria
  bought 30-60k of optional origin wheat for February 21 onward shipment.  Initial estimates of purchase price were around $320 to $321 a ton c&f.  They are expected to buy more in coming days. 
  
• Results
  awaited: The Philippines seek 145,000 tons of milling wheat and animal feed wheat on Wednesday.  They are in for 75,000 tons of feed wheat in two consignments for delivery between April and June. Another 70,000 tons of milling wheat is sought in two consignments
  for delivery in June. (Reuters)
• Results
  awaited: Algeria also seeks 50,000 tons of feed barley for LH March shipment. 
  
• Results
  awaited: 5 participants…Jordan seeks 120,000 tons of wheat on February 17. Syria seeks 200,000 tons of wheat for shipment within 60 days of contract signing. 
  

 

 

 

Weather

 

 

 

 

Net
drying is expected across a majority of Argentina through next Tuesday. Rain that occurs will be erratic and there will be localized areas of meaningful moisture; however, there will also be pockets that get very little. Crop stress is unlikely to become very
serious in the first week of the outlook; however, greater rain will be needed in the second week. Rain in the second week is likely to be erratic as well. The increase of erratic rain in this evening’s GFS model run in northern Argentina Mar. 1 – 3 fit the
likely pattern and was needed.

           
Conditions in much of Brazil will continue to be favorable. Some pockets in the south may become a little drier than preferred in the next seven days and some pockets in the north a little wetter than preferred. Drying in the south over the next 5 to 7 days
will be beneficial though for soybean maturation and harvesting, and the planting of second season crops.

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

Wednesday,
Feb 17:

• KL
  Kepong earnings
• HOLIDAY:
  China

Thursday,
Feb 18:

• EIA
  weekly U.S. ethanol inventories, production
• USDA
  Net Export Sales, 8:30am
• USDA
  Corn, Cotton, Soybean, Wheat Acreage Outlook, 8:30am
• Sime
  Darby Plantation earnings
• Port
  of Rouen data on French grain exports

Friday,
Feb 19:

• ICE
  Futures Europe weekly commitments of traders report, 1:30pm (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgiMer
  crop conditions report
• USDA
  Corn, Cotton Soybean, Wheat End Stock Outlook, 7am
• U.S.
  Cattle on Feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat         
392,555         versus   300000-600000  range

Corn             
1,322,412     versus   1000000-1400000             range

Soybeans   
809,574         versus   950000-1800000                range

 

 

Macros

U.S.
Oil Production Has Plunged by a Third Amid Deep Freeze

Houston
Power Outages Could Last Several Days, CenterPoint Says

 

Corn.

• Corn
  futures are lower following weakness in wheat and technical selling.  South Korea bought US corn, but the amount was about half of what they were seeking.  Slowing grain crush at ethanol and other industrial plants across the US should yield a dent in the
  February US domestic corn use.  In addition, icy rivers are slowing grain flow to ports for export. 
  
• March
  support over the short term is seen at $5.47, then $5.38. 
• Bloomberg 
  – Feb. 1 herd seen rising y/y to 12.038m, seventh straight y/y expansion since June of last year.  January placements seen down 0.2% …

 

Corn
Export Developments

·        
South Korea’s MFG bought about 69,000 tons of corn, thought to be from the US, at an estimated $295.40 a ton c&f for June 21 arrival.

 

 

Soybean
complex.  

• CBOT
  soybean futures are mixed, supported earlier from higher soybean oil following a good rally in palm on supply concerns, but since then soybean oil sold off.  Meal traded mixed late in the overnight session.  Palm futures were up 97MRY.  Offshore values are
  leading products higher.  Logistical problems across the US are limiting rallies.  Yesterday’s NOPA report was seen supportive for the CBOT soybean complex.  Brazil will continue to see harvest delays across the central growing regions and Argentina will remain
  dry this week. 
• ICE
  canola nearby futures were up $2.00 early this morning at 740.  
• (Bloomberg)
  — Heavy rain and thunderstorms are forecast over parts of Indonesia’s Sumatra, Kalimantan, Java and Sulawesi on Wednesday. 
  
• Offshore
  values are leading soybean oil 37 points lower and soybean meal $0.90 higher. 
  
• China
  is on holiday and will be back Thursday. 
• Malaysian
  palm oil:

 

Yesterday
NOPA reported the January crush at 184.7 million bushels, 1.5 million above a Reuters trade guess.  Soybean oil stocks at the end of January stood at 1.799 billion pounds, 36 million above an average trade estimate, up from 1.699 billion at the end of December
and compares to 2.013 billion at the end of January 2020.  Note SBO stocks are highest since May 2020.  Exports for soybean meal fell to 969,000 short tons from 1.037 million during December and are above 931,000 exported year earlier.  The NOPA crush was
seen friendly for the three crush components. 

 

 

Soybean
Export Developments

• Egypt
  seeks at least 30,000 tons of soybean oil and 10,000 tons of sunflower oil on Thursday for April 1-15 arrival. 
  
• Turkey
  seeks 25,000 tons of sunflower oil on Feb 18.  Shipment is sought between Feb. 26 and March 20.
  

 

Wheat

• March
  wheat futures dipped below its 20-day moving average overnight on technical selling but remains well above were it settled on Friday ($6.3750). 
  

• Tender
  results awaited: Philippines, Jordan and Algeria for barley.  Algeria did buy some wheat. 
  

• Eastern
  Texas and parts of the Delta saw an ice storm overnight. 
• Eastern
  Europe will continue to see cold temperatures this week with Bulgaria and Romania in focus. 
  
• EU
  March milling wheat was down 0.50 at 230.00 euros. 
• The
  Indian Institute of Wheat and Barley Research (IIWBR) estimated India’s wheat production at a record 115 million tons this year, up 7 percent from last year.
  

 

Export
Developments.

• Algeria
  bought 30-60k of optional origin wheat for February 21 onward shipment.  Initial estimates of purchase price were around $320 to $321 a ton c&f.  They are expected to buy more in coming days. 
  
• Results
  awaited: The Philippines seek 145,000 tons of milling wheat and animal feed wheat on Wednesday.  They are in for 75,000 tons of feed wheat in two consignments for delivery between April and June. Another 70,000 tons of milling wheat is sought in two consignments
  for delivery in June. (Reuters)
• Results
  awaited: Algeria also seeks 50,000 tons of feed barley for LH March shipment.  
• Results
  awaited: 5 participants…Jordan seeks 120,000 tons of wheat on February 17. Syria seeks 200,000 tons of wheat for shipment within 60 days of contract signing. 
  
• Japan
  seeks 82,393 tons of food wheat from the US later this week. 

• Jordan
  seeks 120,000 tons of barley on February 23.

 

Rice/Other

·        
Cotton yesterday hit a 32-month high. 

·        
Mauritius seeks 4,000 tons of long grain white rice, optional origin, on March 2, for delivery between April 15 and June 15.