FI Morning Grain Comments 03/04/22

PDF attached

 

Good
morning.

 

Private
exporters report the following activity:

-106,000
metric tons of soybeans for delivery to China during the 2021/2022 marketing year

-108,860
metric tons of soybeans for delivery to Mexico during the 2021/2022 marketing year

-125,000
metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year

 

Day
9 of the invasion.  USD was up 99 points by 8:03 am CT and WTI crude up $3.57 to about $111/barrel.  US equities were lower.
Demand
for EU wheat is very strong with Black Sea ports closed and this is sending EU and US futures sharply higher. All three US wheat markets are up limit for the May, July & September contracts.  Yesterday there was chatter the EU may limit wheat exports and set
aside land for crop use.  If true, this could be a blow to Algeria, Egypt and other countries looking for alternative suppliers. Iraq seeks two million tons of wheat to provide a strategic reserve.  Corn is about 30.50 cents higher. Soybeans are higher led
by strength in soybean meal. Soybean oil was lower in the nearby contracts from product spreading and lower palm amid demand destruction.  The US is reviewing biofuel waivers. Malaysian palm oil futures rolled over on profit taking Friday.  USDA S&D estimates
below. 

 

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

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MARCH 4, 2022

• Greater
  moisture is slated for Spain, Portugal and a part of northwestern Africa.
• This
  precipitation will help to slowly heal dryness that prevailed during the winter.
  
• For
  the Iberian Peninsula the moisture will be great for spring planting and winter crop development.
  
• Wheat
  and barley improvement is also  expected in northern Morocco and Algeria.
• Rain
  will also impact the eastern Mediterranean region and parts of the Middle East over the next ten days.
  
• Turkey
  is already a little too wet and some concern over possible flooding may evolve.
  
• South
  America’s weather outlook did not change greatly overnight with all of Argentina and southern Brazil getting rain at one time or another in the next ten days.
  
• Some
  of the rain is still expected to be heavy in central and north-central Argentina. 
  
• Mato
  Grosso do Sul, Brazil may not see much generous rainfall for another week, but rainfall should improve thereafter. 
  
• In
  the U.S., West Texas and areas northeast into the southwestern and central hard red winter wheat region will not be getting much moisture of significance during the next couple of weeks.
  
• The
  upper Midwest and a part of the western Corn Belt may get some precipitation periodically this spring to provide a good planting season.
  
• Portions
  of the lower and eastern U.S. Midwest will likely be a little too wet for a while this spring and planting may occur sluggishly, although there is still plenty of time for improved weather.
  
• The
  Delta and Tennessee River Valley areas may experience planting delays because of frequent precipitation as well. 
  
• California
  will get a little snow and rain in the Sierra Nevada this weekend into early next week, but moisture totals will not be greater than usual. 
  
• Colder
  air returning to central parts of North America next week will raise energy demand and bring some stress to livestock and wheat. 
  
• The
  southeastern U.S. will experience rain late next week and into the following weekend improving soil moisture after recent drying, but that is a week away.

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

Monday,
March 7:

• China’s
  1st batch of Jan.-Feb. trade data, incl. soybean, edible oil, rubber and meat & offal imports
• USDA
  export inspections – corn, soybeans, wheat, 11am
• Bursa
  Malaysia Palm Oil Conference, day 1
• Vietnam’s
  customs to publish Feb. coffee, rice and rubber export data
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Russia

Tuesday,
March 8:

• EU
  weekly grain, oilseed import and export data
• U.S.
  National Coffee Association Virtual Convention, day 1
• Bursa
  Malaysia Palm Oil Conference, day 2
• HOLIDAY:
  Russia, Ukraine

Wednesday,
March 9:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• U.S.
  National Coffee Association Virtual Convention, day 2
• FranceAgriMer
  monthly French grains outlook
• EIA
  weekly U.S. ethanol inventories, production, 11am
• Bursa
  Malaysia Palm Oil Conference, day 3
• HOLIDAY:
  South Korea

Thursday,
March 10:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Malaysian
  Palm Oil Board’s monthly data for output, exports and stockpiles
• U.S.
  National Coffee Association Virtual Convention, day 3
• Malaysia’s
  March 1-10 palm oil export data
• Brazil’s
  Unica may release cane crush and sugar output data (tentative)

Friday,
March 11:

• 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
• New
  Zealand Food Prices

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

Brazil
selected export data for the month of February.

Commodity                     
February 2022      February 2021

CRUDE
OIL (TNS)                6,919,908             4,944,716

IRON
ORE (TNS)                 19,248,636            23,996,704

SOYBEANS
(TNS)                 6,271,920             2,645,992

CORN
(TNS)                     717,779               776,818

GREEN
COFFEE(TNS)              208,511               191,099

SUGAR
(TNS)                    1,720,513             1,824,248

BEEF
(TNS)                     159,103               102,103

POULTRY
(TNS)                  339,750               323,759

PULP
(TNS)                     1,217,672             1,149,930

 

 

Macros

US
Change In Nonfarm Payrolls Feb: 678K (est 423K; prev 467K; prevR 481K)

US
Unemployment Rate Feb: 3.8% (est 3.9%; prev 4.0%)

US
Average Hourly Earnings (Y/Y) Feb: 5.1% (est 5.8%; prev 5.7%; prevR 5.5%)

US
Average Hourly Earnings (M/M) Feb: 0.0% (est 0.5%; prev 0.7%; prevR 0.6%)

 

Canadian
Building Permits (M/M) Jan: -8.8% (est 1.2%; prev -1.9%; prevR -2.4%)

Canadian
Labour Productivity (Q/Q) Q4: -0.5% (est -0.2%; prev -1.5%)

 

Corn

·        
CBOT corn futures
are higher following limit up wheat futures and expectations for global trade flows to shift over the to the US. 

·        
There were rumors China bought at least 15 US corn cargoes this week.

·        
Mississippi River barge rates jumped yesterday. Gulf corn premiums were up on Thursday.

• India
  may see its ethanol blending rate reach 9.2% during first half 2022. 

 

Export
developments.

• None
  reported

 

China
corn futures turned sharply lower late this week.

 

Soybeans

·        
CBOT
soybean complex is mixed with meal lifting soybeans higher and soybean oil lower on concerns governments, including the US, will curtail biofuel mandates to ensure food security. 

·        
Malaysian palm oil futures rolled over on profit taking and demand destruction.

·        
The Biden administration is studying whether waiving biofuel blending mandates could help cool corn and soybean oil prices that have surged since the Russian invasion of Ukraine.  Waiving RFS requirements could pressure corn and
soybean oil futures.  There are no details laid out or timing of a change, if any, planned.

·        
The EU vegetable association Fediol warned the EU is facing a shortfall in sunflower oil and EU refiners are diverting limited volumes of sunflower oil destined for biodiesel fuel towards the food market.  EU refineries source
35%-45% of their sunflower oil from Ukraine.

·        
Southern Brazil, Paraguay and parts of Argentina saw improving rainfall this week that could stabilize crops.

·        
May Malaysian palm oil settled down 532 ringgit to 6,276 ringgit, down 7.8%.  Cash palm was down $130.00/ton to $1,640/ton.

 

 

·        
From this time yesterday morning Rotterdam meal was mostly 4-8 euros higher and vegetable oils mixed.

·        
China May soybeans were down 0.9%, meal up 0.5%, soybean oil down 2.1% and palm 3.7% lower. 

·        
Offshore values are leading SBO 84 points lower (161 higher for the week to date) and meal $0.60 short ton higher ($8.70 higher for the week).

 

Export
Developments

• Under
  the USDA 24-hour reporting system, private exporters reported: 

-106,000
metric tons of soybeans for delivery to China during the 2021/2022 marketing year

-108,860
metric tons of soybeans for delivery to Mexico during the 2021/2022 marketing year

-125,000
metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year

 

Wheat

·        
US wheat futures are limit higher for the May and July positions on follow through buying amid Black Sea shipping woes. 

·        
Higher prices are creating headaches within the agriculture industry. CME will leave its 75 cent limit in place unless executive action is taken. They could raise margins that could force some longs to liquidate.

·        
Yesterday there was chatter the EU may limit wheat exports and set aside land for crop use.  If true, this could be a blow to Algeria, Egypt and other countries looking for alternative suppliers.

·        
May Paris wheat futures were up 29.50 euros at 395.75 euros at the time this was written.

·        
French soft wheat crop in good or excellent condition by Feb. 28 was rated at 93%, unchanged from week earlier and above a year-ago rating of 88%. Spring barley sowing was 36% complete by Monday compared with 28% a week earlier
but lagging 47% progress seen a year ago. – FranceAgriMer

·        
China May wheat futures increased to nearly 3,600 yuan per ton on Friday to a new contract high.

·        
Argentina looks to control domestic wheat prices with global markets shaking up import prices. 

·        
Brazil’s wheat industry group Abitrigo noted Brazil is covered when it comes to upcoming wheat consumption as they contracts a more than needed amount of wheat imports from Argentina. 

 

Export
Developments.

·        
Iraq seeks two million tons of wheat to provide a strategic reserve.  Iraq will accept offers from international companies for wheat from Sunday.

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

·        
Jordan’s state grains buyer seeks 120,000 tons of milling wheat on March 9.  Shipment is between LH May and LH July.

·        
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.

·        
Bangladesh seeks 50,000 tons of milling wheat on March 16 for shipment within 40 days of contract signing. 

 

Rice/Other

·        
None reported