FI Morning Grain Comments 03/02/22

PDF attached

 

Good
morning.

 

Day
7

 

CBOT
May soybeans are lower in the front months in a risk off session. Products also fell.  While no Ukraine/Russia cease fire in sight, look for the soybean complex to see a choppy trade for the remainder of this week.  USDA NASS reported the January US soybean
crush at 194.3 million bushels, 0.6 above a Bloomberg trade guess and below 198.2 million for December.  Soybean oil stocks came in at 2.500 billion pounds, 51 million pounds above a trade guess and highest since April 20th.  CBOT corn futures are mixed from
lower soybeans and sharply higher May Chicago wheat (up 75 cents) Some risk off was noted overnight. May futures rallied above $7.45 overnight. Traders will be watching out for China grain import announcements.  China was rumored yesterday to be looking around
for US corn.  Russia and Ukraine provide about a fifth of the world’s corn supplies for the export market.  WTI over $110/barrel early Wednesday.  A Bloomberg poll looks for weekly US ethanol production to be up 18,000 barrels to 1.027 million (1010-1041 range)
from the previous week and stocks up 61,000 barrels to 25.544 million. Chicago wheat futures rose above $10 a bushel for the first time since March 2008, extending a rally as Russia’s invasion continues.  May Chicago wheat was up limit. More and more countries
are taking steps to ensure food security. Around 5 am CT, that contract saw a wild swing, a reminder how volatile and easy one could get blown out of a position. SK’s KFA bought 134,000 tons of corn at around $413.23/ton c&f.  Tunisia’s state grains agency
bought about 100,000 tons of durum wheat.  Japan started buying milling wheat from the US. Turkey started buying wheat for their import tender for up to 435,000 tons of soft wheat. 

 

 

Wheat,
butter & milk limits expand

https://www.cmegroup.com/trading/price-limits.html

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MARCH 2, 2022

• U.S.
  central and southern Plains will continue dry and very warm or hot for this time of year today and Thursday, but cooling is expected gradually during the latter part of this week into the weekend from northwest to southeast across the region.
  
• The
  cool down will help prevent crops from developing too much too soon.
• The
  heat, though, will accelerate drying across the central and southwestern Plains increasing the need for significant precipitation later this month and next. 
  
• The
  southeastern United States will also dry out over the next week, but most computer forecast model runs are suggesting rain in the second half of next week to offer some relief.
  
• World
  Weather, Inc. believes some of the advertised rain will be removed from the outlook a few days from now. 
  
• West
  Texas cotton areas will continue to miss significant precipitation
• California
  will get one rain and mountain snow event Thursday into Saturday and then dry weather will resume. 
  
• Snow
  will fall in a part of Canada’s southwestern and south-central Prairies later this week and that will help improve runoff when the snow melts, but with frost in the soil the moisture it is not likely to get into the ground very deep.
  
• South
  America’s weather has not changed much today relative to that of Tuesday with all of Argentina and most of Brazil getting rain at one time or another supporting crop needs.
  
• Spain
  and a part of northern Africa will see additional rainfall during the coming week to ten days, although there may be a short-term break in the precipitation.
  
• There
  is still no threatening cold weather expected in Europe or the CIS.
• South
  Africa, China and India weather will remain good and the same is true for much of interior Australia, but some east coastal areas will continue to get too much rain. 
• Coffee
  and cocoa areas of west-central Africa are still expecting periodic rain in this coming week

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
Department Of Energy: Announces An Emergency Sale Of 30Mln Barrels Of Crude Oil From Strategic Petroleum Reserve

US
ADP Employment Change Feb: 475K (est 375K; prev -301K; prevR 509K)

US
Industrial Production (Y/Y) Jan: 2.9% (prev -1.0%)

US
Industrial Production (M/M) Jan: -13.0% (prev 1.1%)

 

 

Corn

·        
CBOT corn futures
are mixed from lower soybeans and sharply higher May Chicago wheat (up 75 cents) Some risk off was noted overnight. May futures rallied above $7.45 overnight.

·        
Traders will be watching out for China grain import announcements.  China was rumored yesterday to be looking around for US corn.  Bloomberg noted “China’s top government officials have issued orders to prioritize commodities
supply security, sparked by concerns over disruptions stemming from the Ukraine-Russia war.”

·        
Russia and Ukraine provide about a fifth of the world’s corn supplies for the export market.

·        
WTI over $110/barrel early Wednesday. Three major oil companies ceased operations in Russia this week.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 18,000 barrels to 1.027 million (1010-1041 range) from the previous week and stocks up 61,000 barrels to 25.544 million.

·        
USDA NASS corn for ethanol use during the month of January was near expectations. 

 

 

 

Export
developments.

• South
  Korea’s KFA bought around 134,000 tons of feed corn in two consignments. One was bought at an estimated $413.23 a ton c&f for arrival around May 5. The other was bought at an estimated premium of 294 cents a bushel c&f over the July, or about $408.34 a ton
  c&f for arrival around round June 25.
• Taiwan
  seeks 65,000 tons of corn, optional origin, on Thursday, for shipment around May.
  

 

 

Soybeans

·        
CBOT May soybeans are
lower in a risk off session. Products also fell.  While no Ukraine/Russia cease fire in sight, look for the soybean complex to see a choppy trade for the remainder of this week.

·        
We are hearing China bought at least 5 US soybean cargoes this week for April-May shipment. 

·        
India asked Indonesia to boost palm oil shipments to make up for the loss of Black Sea sunflower oil supplies.

·        
The landed cost for India imported crude palm oil is up 38% since Jan. 27, when Indonesia announced export curbs. Soybean oil landed price is up 29% this year.  Sunflower oil landed price was not quoted. 

·        
May Malaysian palm oil settled down 102 ringgit to 6,660 ringgit.  Cash palm was up $10/ton to $1.735/ton.

·        
From this time yesterday morning Rotterdam meal was mostly 5-13 euros higher and vegetable oils 15-20 euros higher.

·        
China May soybeans were up 1.9%, meal up 0.7%, soybean oil up 3.6% and palm 5.9% higher. 

·        
Offshore values are leading SBO 293 points lower and meal $2.30 short ton lower.

·        
The European Union reported soybean import licenses since July 1 at 8.713 million tons, below 9.691 million tons a year ago. European Union soybean meal import licenses are running at 10.604 million tons so far for 2021-22, below
11.625 million tons a year ago. EU palm oil import licenses are running at 3.378 million tons, below 3.802 million tons a year ago, or down 11 percent.

·        
USDA NASS reported the January US soybean crush at 194.3 million bushels, 0.6 above a Bloomberg trade guess and below 198.2 million for December.  Soybean oil stocks came in at 2.500 billion pounds, 51 million pounds above a trade
guess and highest since April 20^th. 

 

 

Export
Developments

• None
  reported

 

Wheat

·        
Chicago wheat futures rose above $10.50 a bushel for the first time since March 2008, extending a rally as Russia’s invasion continues.

·        
Around 5 am CT, that contract saw a wild swing, a reminder how volatile and easy one could get blown out of a position.

·        
May EU wheat futures were up 17 euros at 357.50 euros at the time this was written.

·        
MGEX spring wheat stocks are down 10.4% from year ago.

·        
US hard red winter wheat areas are seeing warm temperatures this week. Little precipitation will occur in the central or southwestern Plains.

·        
More and more countries are taking steps to ensure food security. 

·        
(Bloomberg) — Turkey will apply measures to manage the possible reflection of developments between Russia and Ukraine and to ensure continuation of food and commodity supply. – Treasury and Finance Ministry

·        
Jordan saw no offers for wheat on Wednesday. Their wheat reserves are large enough to last 15 months. 

·        
The European Union granted export licenses for 82,000 tons of soft wheat exports, bringing cumulative 2021-22 soft wheat export commitments to 17.890 million tons, down from 18.242 million tons committed at this time last year,
a 2 percent decrease.  Imports are up 8% from year ago at 1.568 million tons.

 

5-Min
Chicago May wheat chart

 

 

Export
Developments.

·        
Tunisia bought about 100,000 tons of durum wheat (75k sought) at $634.89/ton c&f for April and/or March shipment.

·        
Turkey started buying soft milling wheat out of the 435,000 tons sought for March-April shipment.  About 370,000 tons traded.

·        
Results awaited: Algeria seeks 50,000 tons of durum wheat, open until Thursday, for April shipment. 

·        
Jordan passed on 120,000 tons of wheat today.

·        
Jordan’s state grains buyer seeks 120,000 tons of feed barley on March 15.  Shipment is between July 16-31, Aug. 1-15, Aug. 16-31 and Sept. 1-15.

·        
Japan started buying wheat from the US.  Japan seeks 83,136 tons of food wheat from the US this week for loading between April 21 and May 20, 2022.

 

Rice/Other

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