FI Morning Grain Comments 02/28/22

PDF attached

 

Good
morning. 

 

Private
exporters reported the following activity:

-136,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-120,000
metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year

 

Another
headline trading day with agriculture futures sharply higher, USD up 27, WTI crude up nearly $3.75, and US equities lower. The Russia ruble tumbled about 30 percent early Monday.  It’s difficult to tell where the agriculture markets are headed this week after
a turbulent trade last week but keep an eye on outside related commodity markets for guidance. Egypt is in for wheat today and French wheat was lowest offered at $389.92/ton for April 13-26 shipment.  One offer from the US was presented. 
NASS reports are due out on Tuesday for US crush and corn for ethanol. 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR February 28, 2022

• U.S.
  hard red winter wheat areas will heat up again this week after seeing low temperatures in the negative and positive single digits late last week readings Sunday were in the 50s and 60s and they will get to the 70s during mid-week this week with a few extremes
  over 80 degrees Fahrenheit
• The
  warmth will accelerate drying, pull some of the southern crop out of dormancy and reduce winter hardiness in the north so that the next bitter cold airmass might have a bigger impact on the region
• Ohio
  River Basin areas trended drier during the weekend and this will continue into the weekend before rain resumes
• Rain
  did fall in the Delta and Tennessee River Basin area Sunday maintaining excessively wet field conditions
• Drying
  is expected for a while this week, but more rain is expected in these areas next week, as well
• Southwestern
  hard red winter wheat areas of the U.S. Plains will not get much rain of significance for r a while, but a couple of storm systems expected late this week and next week will attempt to bring “some” moisture to “parts” of the region – mostly outside of the
  southwest
• West
  Texas dryness will prevail over the next ten days, although a few sporadic showers may occur with the storm systems noted above that will impact hard red winter wheat areas
• U.S.
  southeastern states will dry down during the next ten days
• Dryness
  will become a greater issue in Florida, southern Georgia, SE Alabama and South Carolina
• California
  precipitation will continue restricted in the coming week
• Some
  precipitation is possible in southwestern parts of Canada’s Prairies and the northern U.S. Plains over the next week to ten days
• The
  moisture will help improve topsoil moisture in the spring
• South
  America weather is expected to be much improved this week in Argentina with rain widespread across Argentina at one time or another
• Northern
  Argentina will need more moisture in time
• Brazil
  rainfall is expected to begin in the interior south during the middle to latter part of this week and it should bring sufficient improvement to induce a better Safrinha corn development potential
• Rio
  Grande do Sul, Paraguay, Parana and Mato Grosso do Sul will all get some needed rain in the coming week to ten days
• Mato
  Grosso will continue to get frequent rain supporting Safrinha corn and cotton
• Minas
  Gerais and Sao Paulo will be drying down for a while
• Torrential
  flooding and widespread property damage occurred in southeastern Queensland and northeastern New South Wales during the weekend with several areas getting 14 to 25 inches and one location getting 39 inches
  
• Some
  sugarcane was negatively impacted along with a small region of cotton and sorghum

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Monday,
Feb. 28:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Ivory
  Coast cocoa arrivals
• Malaysia’s
  Feb. 1-20 palm oil export data
• Vietnam
  General Statistics office releases Feb. coffee, rice, rubber export data
• U.S.
  agricultural prices paid, received, 3pm
• EARNINGS:
  Olam, FGV
• HOLIDAY:
  Brazil, Indonesia

Tuesday,
March 1:

• EU
  weekly grain, oilseed import and export data
• USDA
  soybean crush, corn for ethanol, DDGS output, 3pm
• U.S.
  Purdue Agriculture Sentiment
• Australia
  Commodity Index
• New
  Zealand dairy trade auction
• EARNINGS:
  Golden Agri Resources
• HOLIDAY:
  Brazil, Argentina, India, South Korea

Wednesday,
March 2:

• EIA
  weekly U.S. ethanol inventories, production, 11am
• Winter
  Grain conference in Siberia

Thursday,
March 3:

• FAO
  Food Price Index
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• New
  Zealand Commodity Price
• HOLIDAY:
  Indonesia

Friday,
March 4:

• ICE
  Futures Europe weekly commitments of traders report, ~1:30pm
• 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

 

 

First
Notice Day Deliveries

 

 

CFTC
Commitment of Traders

The
volatility that started last week was reflected in how analysts estimated the net fund positions.  Funds were much less long than estimated for soybeans, Chicago wheat and to lesser extent soybean meal.  One interesting thing we saw was index funds adding
to their long positions.  The index fund net long position for combined soybeans, meal, soybean oil, corn, Chicago wheat and KC wheat was a record for the week ending February 22 of 1.096 million contracts.  Managed money added 28,900 futures & options contracts
to their net long position. 

 

 

 

 

 

 

 

Macros

US
Wholesale Inventories (M/M) Jan P: 0.8% (est 1.2%; prev 2.2%)

US
Advance Goods Trade Balance Jan: -$107.6Bln (est -$99.3Bln; prev -$101.0Bln; prevR -$100.5Bln)

US
Retail Inventories (M/M) Jan:1.9 % (prev 4.4%)

Canadian
Industrial Product Price (M/M) Jan: 3.0% (est 1.0%; prev 0.7%)

 

 

Corn

·        
CBOT corn futures
are higher following strength in wheat and higher outside related commodity markets. WTI crude oil was nearly $3.75 / barrel higher at the time this was written.   

·        
China plans to buy 40,000 tons of pork for state reserves this week to help support falling prices. 19,400 tons will be bought Thursday and another 20,600 tons Friday.  Late last week China reported end of January sow herd fell
0.9% from the previous month to 42.9 million head and is 2% above year ago. Pigs slaughtered were 28.47 million heads, down 1.7% from the previous month and up 45.9% from year ago.

·        
USDA’s Chickens and Eggs report showed January egg production up 1 percent.  United States egg production totaled 9.59 billion during January 2022. The total number of layers during January 2022 averaged 391 million, down 1 percent
from last year. Egg-type chicks hatched were down 5 percent. Egg-type chicks hatched during January 2022 totaled 48.6 million. Eggs in incubators totaled 50.7 million on February 1, 2022, down 5 percent from a year ago.  Broiler-type chicks hatched were down
1 percent. Broiler-type chicks hatched during January 2022 totaled 840 million. Eggs in incubators totaled 716 million on February 1, 2022, up 2 percent from a year ago. 

·        
The USDA Cattle on Feed report came in near expectations and there were no surprises for placements or marketings.  Cattle on feed in the United States totaled 12.2 million head on February 1, 2022, one percent above February
1, 2021, and highest February 1 inventory since the series began in 1996. 

 

Export
developments.

• None
  reported

 

 

 

 

 

Soybeans

·        
CBOT May soybeans are
higher in part to sharply higher soybean oil. CBOT crush is moderately higher from product strength.  Offshore values are supporting CBOT ags on Black Sea shipping concerns.

·        
News is light and mush of the focus in on outside commodity markets, such as crude oil, up over $4.00 at the time this was written.  

·        
Open interest for the soybean complex was down a good amount on Friday, position day.

·        
First notice day deliveries were light. 

·        
AmSpec reported February Malaysian palm exports at 1.211 million tons.

·        
May Malaysian palm oil settled up 333 ringgit to 6,299 ringgit.  Cash palm was up $70/ton to $1.605/ton.

·        
From this time Friday morning, Rotterdam meal was mostly 10 euros lower and vegetable oils mixed. (SBO down 37/Rapeseed oil up 70-130 euros).

·        
China May soybeans were down 3.3%, meal down 3.7%, soybean oil down 2.1% and palm down 2.7%. 

·        
Offshore values are leading SBO 444 points higher and meal $1.00 short ton higher.

·        
China’s Dalian Commodity Exchange effective March 1 will raise intraday transaction fees for soybean, soyoil, palm oil, coking coal and coke futures.

·        
Egypt said they have enough reserves of vegetable oils to last about four months.  They also have about five months of sugar and four months of rice reserves. 

 

Export
Developments

• Private
  exporters reported the following activity:

-136,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-120,000
metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year

• Results
  awaited: Iran’s SLAL seeks up to 60,000 tons of soybean meal and 60,000 tons of feed barley for an unknown shipment period. 
  

 

 

 

Wheat

·        
Black Sea concerns are supporting US wheat futures, up more than 45 cents for the May Chicago and KC wheat contracts.  May Chicago is still well off its absolute contract high made during the overnight session Friday. 

·        
Egypt is in for wheat and lowest offer was for French wheat. One US offer was presented.

·        
May EU wheat futures were up 25.75 euros at 315.25 euros at the time this was written.

·        
China sold 522,037 tons of wheat out of auction at an average price of ,753 yuan per ton. 

·        
Egypt said they have enough wheat reserves for 4.5 months and after purchasing local wheat this season, reserves should be high enough last until the end of the year.

 

Export
Developments.

·        
Egypt is in for wheat today and French wheat was lowest offered at $389.92/ton for April 13-26 shipment for payment at sight.  One offer from the US was presented.  They last bought wheat mid-February at around $338.55 per ton. 

·        
Jordan seeks 120,000 tons of feed barley on March 1. 

·        
Turkey seeks 435,000 tons of milling wheat on March 2 for March-April shipment. 

·        
Jordan seeks 120,000 tons of wheat on March 2.

 

Rice/Other

·        
Results awaited: South Korea seeks 72,200 tons rice from U.S. and Vietnam on Feb. 25.