FI Morning Grain Comments 03/01/21

PDF attached

 

Morning.

 

USD
is higher.  Corn
futures are higher on higher WTI crude oil and renewed optimism the United States in on track for economic recovery during 2021.  The United States FDA approved the use of the J&J single-dose Covid-19 vaccine shot.  US equity futures are higher.  Argentina
saw lack of rain with hot temperatures over the weekend and the forecast calls for net drying over the next 10 days. China statistics office reported 2020 pork production declined 3.3 percent to 41.14 million tons.
CBOT
soybeans are higher in part to a rally in soybean meal while soybean oil was slightly higher in the front non-expiring months.  China soybean meal was down 1.5% on Monday. Note China soybean futures hit a record.
Malaysian palm oil closed down 68 ringgit, or 1.82%, at 3,674 ringgit (settle at 3684) or $906.04 a ton on slowing palm oil exports and expectations for palm production to increase.
Wheat
futures are higher, but gains are limited on a higher USD, large KC & MN deliveries, and a limited upside in corn futures.  China sold 1,681,496 tons of wheat at auction. 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER AREAS OF INTEREST

• Argentina
  crop areas are facing another ten days of net drying
• Weekend
  weather was dry except for a few locations in La Pampa, San Luis and west-central Cordoba where rainfall of 0.25 to 1.18 inches resulted
• One
  location in northern San Luis reported 1.77 inches
• Net
  drying will occur over the next ten days from Santa Fe and southern Corrientes as well as Uruguay into La Pampa and Buenos Aires
• Very
  little rainfall of significance and temperatures near to above average will occur daily throughout the period
• Subsoil
  moisture this morning was still rated favorably while the topsoil was short to very short from parts of La Pampa and western Buenos Aires through most of Santa Fe and Entre Rios
• Chaco
  was still critically dry along with central and northwestern Formosa
• Weekend
  temperatures were in the 90s Fahrenheit and similar readings were expected this week with a few extremes over 100
• Crop
  stress will intensify this week as the ground continues to firm
• Subsoil
  moisture will begin decreasing in the driest areas and that will raise the potential for yield declines as early as the end of this week and especially next week if dryness prevails as advertised
• Rain
  potentials are advertised to increase after March 12 in portions of the nation – confidence is low, though
• Southern
  Brazil dryness will be eased this week with timely rain for the next ten days
• Mostly
  dry and warm weather occurred in southern Brazil Friday through Sunday morning
• The
  region included most of Mato Grosso do Sul, southwestern Sao Paul and areas west and south into Paraguay and western Rio Grande do Sul
• Topsoil
  moisture was rated marginally adequate to very short this morning
• Subsoil
  moisture was still rated adequately throughout the region keeping crops in good shape while the topsoil firmed
  
• Crop
  development advanced swiftly because of dying conditions
• Temperatures
  were in the 80s and lower 90s Fahrenheit Friday and Saturday afternoon
• Rain
  is expected periodically over the next ten days to prevent the region from experiencing moisture stress or any threat to production
  
• Total
  rain amounts will vary from 2.00 to more than 6.00 inches by mid-week next week with some potential for amounts over 8.00 inches in a few areas by Wednesday, March 10
• The
  recent dry weather was very good for advancing soybean maturation and harvest progress as well as the planting of Safrinha crops, but rain coming up will slow farming activity and raise some concern over the speed in which harvesting and planting advance
• Brazil
  rainfall during the weekend was greatest in northern and eastern Mato Grosso where totals of 1.00 to 2.39 inches occurred with local totals to 3.27 inches
  
• The
  rain delayed fieldwork in some areas raising concern over the condition of unharvested soybeans and further delaying some of the Safrinha corn planting
• Rain
  also fell significantly in northern and eastern Sao Paulo helping to ease long term dryness that had been threatening some grain and oilseed areas, but probably sugarcane and citrus crops a little more significantly
• Relief
  from dryness improved some crops and additional rain coming up soon will perpetuate the improving trend
• Scattered
  showers and thunderstorms elsewhere in Brazil were sporadic and light failing to counter evaporation in many areas
• Rainfall
  of 0.92 to 1.42 inches occurred in western and southern Minas Gerais while varying up to 0.50 inch elsewhere
  
• Net
  drying occurred in Goias, Bahia, northern and eastern Minas Gerais and southwestern Mato Grosso as well as most of southwestern Brazil as noted in the above bullets
• Most
  of Brazil will experience periods of rain through the next ten days to two weeks sufficing the needs of developing crops, but some of the moisture will interfere with crop maturation and harvest progress
• Net
  drying is expected in the northeast part of the nation from northern Minas Gerais to Bahia and in southern Rio Grande do Sul
• U.S.
  weekend rainfall was abundant from the lower Midwest into the northern Delta and east to the Middle Atlantic Coast states
• Rain
  totals since last Thursday morning have varied from 1 to 3.00 inches with local totals of 4.00 to 5.00 inches
  
• The
  greatest rainfall has been erratically distributed which has helped to reduce the potential for widespread serious flooding, but the rain is not over – more is expected
• Local
  flooding has occurred
• U.S.
  rainfall will continue abundant today from the Ohio River Valley southward into the central Delta where another 0.75 to 3.00 inches of rain is expected by dawn Monday
• More
  rain will occur Monday and Tuesday from the lower Delta into South Carolina and Georgia where rainfall of 0.50 to 2.50 inches is expected
•  Areas
  to the north into the heavier rainfall areas of the weekend will be experiencing mostly dry conditions
• Most
  of the Mid-South, southeastern states and lower Midwest will be saturated with moisture through late this week – at least – despite mid-week drying
• Net
  drying will occur in these areas late this week through mid-week next week improving field conditions
• U.S.
  southern Plains will receive rain Thursday night through Friday as a small weather system comes into the region from the southwestern states and dissipates
• Moisture
  totals of 0.20 to 0.75 inch with a few totals over 1.00 inch are possible
• The
  greatest rain is advertised in the northeastern Texas Panhandle and neighboring areas of western Oklahoma and southwestern Kansas
• This
  event may weaken in future model runs
• Limited
  moisture is expected in West Texas, although it will not be dry
• Rain
  in hard red winter wheat areas will be mostly confined to the southwest
• Localized
  areas of improved topsoil moisture will occur as a result of this week’s storm – mostly in southwestern hard red winter wheat areas
• U.S.
  Midwest weather will be void of significant storm systems for a while in the coming week to ten days, but a system expected March 10-12 will produce light to moderate rainfall and possibly a band of heavy wet snow
  
• The
  details of this event will be known later this week after some model changes take place
• Another
  large storm may impact the Midwest March 14-16 with some precipitation from the same event occurring in the Plains briefly March 13-14
• Moisture
  totals in the high Plains of hard red winter wheat country will remain light and somewhat sporadic leaving need for more moisture
• U.S.
  temperatures this week will be warmer than usual in the central and northern Plains, cooler than usual in the northeastern and middle Atlantic Coast States and in few Pacific Northwest locations
• Next
  week’s temperatures will trend a little cooler in the western states and a little warmer in the Midwest – at least until the March 14-16 storm passes and then it will trend a little cooler again
• U.S.
  weather trends in the next ten days….
• Net
  drying in West Texas – leaving need for greater precipitation
• Restricted
  rain in South Texas and the Texas Coastal Bend – leaving these areas in need of significant moisture
• Northern
  U.S. Plains precipitation will be limited leaving some dryness in place, despite a little moisture
• Southeastern
  desert region will need more moisture and what showers do occur will be limited leaving the ground drier biased
• Erratic
  precipitation will occur in the Pacific Northwest, California’s central Valleys and the Rocky Mountain region
• The
  Delta and southeastern states will remain or become quite wet this week and then begin drying down this weekend into next week
• Midwest
  soil moisture will be abundant in the Ohio River Valley and a little drier to the northwest until next week’s bigger storm system at which time sufficient relief from recent drying is expected
• NOAA’s
  updated 30-day outlook for the U.S. in March showed very little change from the previous outlook
• Cooler
  than usual temperatures were expanded southward from the Pacific Northwest through the northern and western Great Basin and much of California
  
• Warmer-than-usual
  weather is expected for most areas east of the Rocky Mountain States
• Precipitation
  is still advertised above normal in the northern Delta, Tennessee River Basin and central and eastern Midwest
• Precipitation
  is still advertised below normal in the central and southern Plains, the central and southern Rocky Mountain region, the southwestern desert region, in Florida and in the central Gulf of Mexico coastal region; including, southern Georgia and all of Texas
  
• Canada’s
  central and southwestern Prairies will remain drier than usual through the next ten days while light precipitation occurs elsewhere
• Temperatures
  will be near to above average

Source:
World Weather Inc. 

 

Source:
World Weather Inc. 

 

 

 

 

CFTC
Commitment of Traders

 

 

 

 

 

Macros

China’s
factory activity expanded a less than expected during the month of February to 50.6 from 51.3 in January. 
China’s nonmanufacturing PMI fell to 51.4 from January’s 52.4.

 

 

Corn.

• Corn
  futures are mixed to higher on higher WTI crude oil and renewed optimism the United States in on track for economic recovery during 2021, but soybean/corn spreading and China hog production concerns might be keeping nearby contracts on the defensive this morning. 
  The United States FDA approved the use of the J&J single-dose Covid-19 vaccine shot.  US equity futures and energy markets are higher.  Argentina saw lack of rain with hot temperatures over the weekend. 
  
• China
  statistics office reported 2020 pork production declined 3.3 percent to 41.14 million tons.  Beef production increased nearly 1 percent to 6.72 million tons, poultry production was up 5.5 percent to 23.6 million, and mutton was up 1 percent to 4.9 million
  tons. 
• This
  week keep an eye on US/China relation developments.  Over the weekend China arrested 47 pro-democracy activists on conspiracy charges. 
  
• CBOT
  corn open interest was down about 17,742 contracts previous session.
• We
  estimate managed money futures and options are net long 358,000 contracts. 
  
• There
  were no changes in CBOT corn registrations.  Oats were up 121. 
• US
  cash grain basis was quiet towards the end of last week, with minimal changes.  This week we should see producer movement increase as muddy and snowy road conditions improved over the weekend from mild weather.  Some elevators have rolled their basis bids
  to the CBOT May futures positions.

 

 

Corn
Export Developments

·        
None reported

 

Soybean
complex.  

• CBOT
  soybeans
  are higher in part to a rally in soybean meal while soybean oil was slightly higher in the non-expiring months.  Export news was absent. 
  Argentina
  saw minimal rain over the weekend across most of its crop areas that are experiencing crop problems from unfavorable weather over the past 1-2 weeks.  Rain was bias western areas where crop conditions are more favorable versus BA and Entre Rios.  Argentina
  will see another 10 days of net drying.  Brazil saw good rain north of the far southern growing regions.  Eastern Mato Grosso may have seen some soybean harvesting and corn planting delays over the weekend.  Southern Brazil dryness will abate this week with
  rain in the forecast.  Palm
  oil closed lower and settled down 58MYR and cash palm fell nearly 1 percent.  China soybean meal was down 1.5% on Monday, soybeans up 1.3% and soybean oil rallied 1.9%.  Rotterdam vegetable oils are sharply higher from Friday.  Note China soybean futures hit
  a record. 
• USD
  is up 14 and WTI 0.70 higher, as of 7:10.
• ICE
  canola May futures were 5.80 higher at 745.30/ton.
• APK-Inform:
  Ukrainian sunflower oil prices rose to a range of $1,480 to $1,500 per ton FOB Black Sea, up about $85 a ton previous week. 
  
• Offshore
  values are leading soybean oil 20 points higher and soybean meal $0.20 higher. 
  
• China
  cash crush margins on our analysis were 114 cents versus 112 cents last week and compares to 136 cents around this time last year. 
  
• China
  

• AmSpec
  reported February palm oil shipments from Malaysia slower during the second week of February, with all of month exports at 1.001 million tons, down 8 percent from 1.090 million tons shipped during January.  SGS reported a 4.6% decrease to 1.053 million tons. 
  ITS reported Malaysian palm oil exports for the month of February at 1.001 million tons, down 5.5 percent from January. 
  
• Swiss
  voters will decide on a free trade agreement with Indonesia March 7.  In relation to palm oil, import duties could be gradually reduced, by about 20%-40% for up to 12,500 tons per year, but only if sustainability standards are met. 
  
• Malaysian
  palm oil closed down 68 ringgit, or 1.82%, at 3,674 ringgit (settle at 3684) or $906.04 a ton on slowing palm oil exports and expectations for palm production to increase.  India February imports of palm were low. 
  

 

Soybean
Complex Export Developments

• None
  reported
• The
  USDA seeks 190 tons of vegetable oil on March 2 for shipment Apr 1-30 (Apr 16-May 15 for plants at ports.
  

 

 

Wheat

• Wheat
  futures are
  higher, but gains are limited on a higher USD, KC and MN deliveries, and a limited upside in corn futures.  Some of the buying is seen as technical after May Chicago and KC where under pressure during the last two trading sessions. 
  
• KC
  deliveries were a large 1,291 with 1,200 new receipts issued by ADM.  There were no Chicago deliveries.
  
• US
  SRW wheat country rain was good over the weekend and US wheat conditions are expected to show improvement Monday afternoon. 
  
• EU
  May milling wheat was up 2.50 euros at 232.00 euros. 
• China
  sold 1,681,496 tons of wheat, or 41.68% of total offered at auction at an average price at 2,374 yuan ($367.32) per ton.  Late June through February wheat sales total 37.1 million tons, 35% of the 106 million tons offered. 
  
• Australia’s
  chief commodity forecaster warned Australian wheat production could fall 25% to 25MMT next season on lower acreage and yield declines from fading La Nina rain conditions.  Wheat production this year is on track to reach a record 33.34 million tons.
• APK-Inform
  Ukrainian soft milling wheat export prices were up about $5 a ton from the past week to $283 to $288 per ton 12.5% FOB Black Sea.
  
• Russian
  wheat export prices, 12.5% protein, were about $287 a ton free on board at the end of last week, up $4 from the previous week, according to IKAR said.
  

 

Export
Developments.

• Jordan
  seeks 120,000 tons of animal feed barley on March 2.  Shipment is sought between Sept. 1-15, Sept. 16-30, Oct. 1-15 and Oct 16-31.
• Jordan issued a new
  import tender for 120,000 tons of wheat, set to close March 3 for October and November shipment. 
  
• Taiwan seeks 100,410
  tons of wheat form the US on March 4 for April 25-May 9 shipment, and May 12-May 26 shipment (2 consignments). 
  
• Syria
  seeks 200,000 tons of wheat for shipment within 60 days of contract signing. 
  

 

Rice/Other

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

·        
Egypt said they have enough sugar reserves for 10 months and will produce three million tons in 2021.

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

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 38,889 tons of rice from the United States and China, part arrival in South Korea around Sept. 30 from the US. Another 16,667 tons of non-glutinous short grain brown rice from
China is sought for arrival around June 30.