FI Morning Grain Comments 03/14/22

PDF attached

 

Good
morning.

 

Day
19.  WTI crude oil was more than $6.00/barrel lower, USD down 9, US equities higher and Euro slightly higher. 

 

The
soybean complex is mixed. Soybean meal hit a 7-year high overnight on expectations SA product demand will shift to the US. A sharply lower trade in WTI crude oil and dive in palm oil futures are weighing on soybean oil. China is releasing vegetable oils out
of reserves. Soybeans are mostly lower from weakness in outside related commodity markets and lower trade on corn & wheat. Argentina suspended new registrations for soybean meal and soybean oil for export. CBOT corn traded two-sided overnight and is down hard
early this morning on sharply lower WTI crude oil and speculation there might be a breakthrough with Ukraine/Russia peace talks.  US wheat futures dropped on hopes talks between Russia and Ukraine could bring a ceasefire, allowing for grain exports to resume.
Forecast for rainfall across the US HRW wheat country is also weighing on prices. 

 

 

 

Weather

 

World
Weather Inc.

 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Monday,
March 14:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Ivory
  Coast cocoa arrivals

Tuesday,
March 15:

• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  March 1-15 palm oil export data

Wednesday,
March 16:

• EIA
  weekly U.S. ethanol inventories, production, 11am

Thursday,
March 17:

• International
  Grains Council’s monthly market report
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• HOLIDAY:
  Bangladesh

Friday,
March 18:

• 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
• China’s
  second-batch of Feb. imports for corn, pork and wheat
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  India

Source:
Bloomberg and FI

 

 

 

 

CFTC
Commitment of Traders

Index
funds for the major commodity markets are at record net long.

 

 

 

 

 

Macros

Russian
Stock Market Trading Halt Extended to March 18

 

Corn

·        
CBOT corn traded
two-sided overnight and is down hard on sharply lower WTI crude oil and speculation there might be a breakthrough with Ukraine/Russia peace talks. 

·        
China plans to start releasing more than 3 million tons of fertilizer reserves in March.

·        
Brazil’s weather pattern will be mixed over the next two weeks and with abundant rain occurring over the past few weeks, the second corn crop should be fine when entering the dry season that starts around now. 

·        
Egypt on Saturday banned corn and wheat exports along with commodities for three months to combat rising food prices.  They have enough wheat to last through the end of the year after buying domestic supplies. 

·        
Ukraine banned exports of fertilizers amid Russian/Ukraine situation.  This adds to a growing list that already includes wheat, corn and sunflower oil.

·        
Ukraine has made several announcements they intend to ensure domestic food security.  Spring plantings normally begin in late February and early March.  Mid-March is a new target the AgMin projected. We are unsure what “safe”
areas will look like for sowings, but it appears the far east and far west will see fieldwork progress. Ukraine’s agriculture producers’ union earned producers will likely reduce corn and oilseed area and plant more cereals such as buckwheat, oats and millet.

·        
Ukraine stockpiles of corn sit at 15 million tons and 6 million for wheat. 

·        
Spain may soon approve emergency US and Argentina corn buying.

·        
Look out for E15 US blending talk as the spread between RBOB and ethanol widened out to over 70 cents last week. 

 

Export
developments.

• Egypt’s
  GASC seeks a minimum 1000 tons of frozen whole chicken and minimum 500 tons of chicken thighs on March 17 for arrival during the April 1-15, 16-30, May 1-15, 16-31 periods.  
  
• Results
  awaited: Iran’s SLAL seeks up to 60,000 tons of feed barley, 60,000 tons of feed corn and 60,000 tons of soymeal for March and April shipment.

 

Soybeans

·        
The soybean complex is mixed. Soybean meal hit a 7-year high overnight on expectations SA product demand will shift to the US. A sharply lower trade in WTI crude oil and dive in palm oil futures are weighing on soybean oil. China
is releasing vegetable oils out of reserves. Soybeans are mixed/lower from weakness in outside related commodity markets and lower trade on corn & wheat.

·        
Argentina suspended new registrations for soybean meal and soybean oil for export. This might be a sign they intend to increase taxes. Speculation is that soybean meal and oil will increase from current 31 percent to 33 percent.
Argentina harvests their soybeans during the April and May period. New-crop producer sales amount to 2.17 million tons through March 2.

·        
Reuters: The country (Argentina) is forecast to account for 41% of global soymeal exports and 48% of world soy oil exports in the 2021-22 crop year, according to the U.S. Department of Agriculture.

·        
Argentina will see net drying over the next ten days. Brazil will see a mixed pattern over the next two weeks.

·        
Egypt on Saturday banned vegetable oil exports along with other food staples including corn, wheat, flour, past, lentils and fava beans, for three months to combat rising food prices. 

·        
Late last week several US eastern and southeastern crush locations posted higher soybean meal offers.  Export demand is strong, and a Georgia processing plant is having some issues.  The ask for Gulf meal was last 80 over the
May per Reuters. 

·        
(Bloomberg) — Turkish ships carrying sunflower oil have been permitted to exit the Azov Sea, Turkey’s Transportation Minister Adil Karaismailoglu said, after transit in the waterway linked to the Black Sea was suspended following
Russia’s attack on Ukraine.

·        
Russia will raise its export tax for sunflower oil to $313/ton for April, up from $260.10/ton in March.

·        
Palm oil futures traded sharply lower on Monday after China plans to release cooking oils out of stockpiles and demand destruction.

·        
China’s Sinograin plans to auction 4,066 tons of rapeseed oil produced in 2020 Thursday afternoon. They sold 10,778 tons of rapeseed oil, accounting for 10% of the volume it planned to sell, last Friday. 

·        
India February palm oil imports fell to a 12-month low at 454,794 tons, down from 553,084 tons month earlier and compares to 391,158 tons for February 2021. India soybean oil imports during February were 376,594 tons, down from
391,158 tons in January.  Port stocks as of end-February dipped to their lowest since May 2021. 

·        
May Malaysian palm oil settled 346 ringgit lower to 6361 (-5.2%). Cash palm was down $142.50/ton to $1,605.00/ton (-8.2%).

·        
From this time Friday morning Rotterdam meal from SA was not quoted and vegetable oils unchanged to 10 euros higher.

·        
Today China planned to sell 295,596 tons of soybeans from reserves.

·        
China May soybeans were down 1.0%, meal down 0.5%, soybean oil down 2.5% and palm 5.0% lower.

·        
Offshore values are leading SBO 331 points lower and meal $6.90 short ton higher.

·        
Late last week there was chatter Canada sold a few soybean and corn cargoes sold out of the lakes for export. High ocean rates are starting to become a problem for exporters.

·        
Last week Brazil’s Agriculture Ministry announced a fertilizer plan to reduce imports to 45% of total domestic fertilizer consumption by 2050, from 85% currently.

·        
A Reuters NOPA survey calls for the February US crush to end up near 165.0 million bushels (162.0-169.1 million range), down from 182.2 million last month, but up 6.4% percent a year earlier of 155.2 million. The record for the
month of February was 166.3 back in 2020.  If the 165.0-million-bushel trade estimate for February 2022 is realized, that would put the daily crush 0.3% above January. End of February soybean oil stocks were estimated at 1.985 billion pounds, down from 2.026
billion at the end of January and well up from 1.757 billion year earlier.  Trade range was from 1.900 to 2.036 billion pounds.  End of January stocks slightly dipped from end of December. 

 

 

Export
Developments

• Results
  awaited: Iran’s state purchasing agency GTC has issued an international tender to purchase about 30,000 tons of soyoil for March and April shipment.
  

 

Wheat

·        
US wheat futures dropped on hopes talks between Russia and Ukraine could bring a ceasefire, allowing for grain exports to resume. Forecast for rainfall across the US HRW wheat country is also weighing on prices. 

·        
May Paris wheat futures were down 6.00 euros at 364.75 euros earlier.

·        
U.S. hard red winter wheat areas will see rain Thursday in the central Plains with additional precipitation in the southern Plains during mid-week next week. Totals will vary from trace amounts to 0.6″ in the first event this
week with another 0.20 to 0.75 inch elsewhere next week. The southwestern Plains may miss out on the event.

·        
China sold 525,869 tons of wheat out of auction on March 9 at an average price of 2,991 yuan per ton ($471.16/ton).

·        
Egypt will soon unload 189,000 tons of Black Sea wheat that was previously contracted, from Russia, Romania and Ukraine, according to a Rueters article.  We are unsure if the wheat was already loaded onto vessels awaiting to leave
the ports or if the wheat was recently loaded.  On March 8 Egypt received a shipment of 63,000 tons of French wheat.  They also received a similar amount of Romanian wheat on March 5.

·        
Egypt looks to produce more than 6 million tons of wheat this season that starts April.  They produce on average a total 8.5 million tons a year.

·        
Algeria banned exporting sugar, vegetable oils, pasta, semolina and wheat derivatives.

·        
Iraq’s strategic wheat reserves are sufficient until next month, which is when the local procurement season starts.  They opened a new import tender for hard wheat and are currently reviewing American and German offers for an
import tender that was set to close last week.

 

 

 

Export
Developments.

·        
Iraq’s trade ministry seeks 50,000 tons of optional origin hard wheat on March 17, open until the 22^nd.

·        
Results awaited: 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. 

·        
Japan’s AgMin in a SBS import tender on March 16 seeks 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival by Aug. 25. 

·        
Jordan seeks 120,000 tons of wheat on March 16. Possible shipment combinations are for May 16-31, June 16-30, July 1-15 and July 16-31.

 

Rice/Other

·        
None reported