FI Morning Grain Comments 03/15/22

PDF attached

 

Good
morning.

 

Day
20.  Surging coronavirus cases in China and expectation for a US interest rate hike sent WTI April crude oil below $94/barrel earlier today, in turn pressuring the US soybean complex and corn market. Palm oil futures were down for the 4^th consecutive
day. Wheat did trade higher on deteriorating US winter wheat crop conditions, strong global wheat demand and Black Sea supply concerns. Canadian Pacific Railway workers threatened to strike as early as today, over wages, benefits, and pensions. This could
threaten fertilizer and grain movement for the US, Canada and overseas buyers. USDA reported 23% of the Kansas winter wheat crop in good to excellent condition, down from 24% a week earlier. Texas winter wheat ratings for the G/E were only 6%, down from 7%
the previous week. Oklahoma’s rating increased to 24% of, up from 15% a week earlier.  Colorado was rated 18%, down from 21% from previous.  NOPA due out at 11 am CT. 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MARCH 15, 2022

• U.S.
  hard red winter wheat areas will get some needed moisture again Thursday into Friday and one more time Monday and Tuesday of next week
  
• In
  both cases, though, the southwestern Plains will not get much moisture
• Some
  benefit will occur to wheat in Nebraska, eastern Colorado, northern, west central and eastern Kansas as well as central Oklahoma
• Frequent
  rain in the U.S. Delta and southeastern states will either maintain abundant soil moisture or increase it
• California
  will get some weekend rain and snowfall, but no drought busting precipitation is expected
• U.S.
  northwestern Plains and southwestern Canada’s Prairies will stay dry for the next ten days
• Argentina
  will see rain Thursday into Friday of this week and again during mid-week next week
  
• The
  precipitation will slow the decline in soil moisture, although southwestern areas in the nation will not likely get very much moisture and will have need for more
• All
  of Brazil’s crop country will get rain at one time or another during the next ten days maintaining an excellent outlook for Safrinha corn and cotton as well as other late full-season crops
• Russia
  will remain cold for a while, but there will be no threat of winterkill due to adequate snow cover
• Limited
  precipitation in Europe will continue for ten days except in the southwest where more rain is likely in Spain and immediate neighboring areas
• Northwestern
  Africa will get waves of rain to benefit wheat and barley development for a while
• China
  will become very wet in the east-central and southeastern provinces in the next ten days
• Eastern
  Australia crops will receive restricted rainfall favoring some summer crop maturation and harvest progress

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
282,344                 versus   300000-550000  range

Corn                     
1,144,850             versus   1000000-1650000             range

Soybeans           
772,719                 versus   600000-875000  range

 

 

Macros

US
PPI Final Demand (M/M) Feb: 0.8% (est 0.9%; prev 1.0%; prevR 1.2%)

US
PPI Final Demand (Y/Y) Feb: 10.0% (est 10.0%; prev 9.7%; prevR 10.0%)

US
PPI Ex Food And Energy (M/M) Feb: 0.2% (est 0.6%; prev 0.8%; prevR 1.0%)

US
Empire Manufacturing Mar: -11.8 (est 6.1; prev 3.1)

Canadian
Manufacturing Sales (M/M) Jan: 0.6% (est 1.2%; prev 0.7%)

Canadian
Housing Starts Feb: 247.3K (est 240.0K; prev 230.8K)

 

Corn

·        
CBOT corn traded
lower following weakness in WTI crude oil and demand destruction over rising US bird flu cases resulting in a smaller animal unit population.

·        
2.75 million chickens will be culled after USDA reported highly lethal bird flu at a commercial flock of egg-laying chickens in Jefferson County, Wisconsin. 

·        
Canadian Pacific Railway workers threatened to strike as early as today, over wages, benefits, and pensions. This could threaten fertilizer and grain movement for the US, Canada, and overseas buyers.

·        
US corn planting were 11% complete in Louisiana and 1% complete in Mississippi.

·        
We heard Argentina rumors of tax increases on corn and wheat will probably persist. 

·        
China plans to buy a third round of pork for reserves.

·        
USDA US corn export inspections as of March 10, 2022 were 1,144,850 tons, within a range of trade expectations, below 1,582,167 tons previous week and compares to 2,274,441 tons year ago. Major countries included China for 335,921
tons, Mexico for 307,958 tons, and Colombia for 110,106 tons.

·        
Yesterday the US Grains Council noted there were ships loading 35,000 tons of US corn destined for Spain and 35,000 tons of US corn destined for Italy.
Per export sales report, Italy had 35,000 tons outstanding on the books and Spain didn’t have any commitments.  Spain is considered a renewed market.  The EU has not imported much corn from the US since 2017-18 due to GMO rules. Spain granted emergency Brazil
and Argentina corn buying approval.

·        
Brazil had planted 94 percent of its second corn crop as of Monday, according to AgRural, up 20 points from this time last year.

 

Export
developments.

• South
  Korea’s MFG bought about 201,000 tons of corn in three consignments of between 55,000 tons and 70,000 tons. Arrival in South Korea was for around June 23 ($412.50 c&f), July 3 ($412.50), and around July 14 ($413.90).
• Egypt’s
  GASC seeks a minimum 1,000 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 lower on China Covid-19 lockdown concerns and sharply lower WTI crude oil.  Palm oil futures were down for the 4th consecutive day.

·        
Traders are waiting for Argentina soybean meal and soybean oil tax increase developments.

·        
Indonesia looks to end their caps on packaged cooking oil prices and replace it with subsidies.

·        
ITS reported Malaysian palm oil products for March 1 – 15 period up 15.6% to 585,277 tons from 506,183 tons shipped during February 1 – 15.  AmSpec reported a 14.2% increase to 567,637 tons from 496,983 tons previous month. 

·        
May Malaysian palm oil settled 229 ringgit lower to 6,132 (-3.6%). Cash palm was down $32.50/ton to $1,572.50/ton (-2.0%).

·        
From this time yesterday morning Rotterdam meal from SA 8-14 euros lower and vegetable oils mixed.

·        
China May soybeans were up 1.0%, meal up 0.3%, soybean oil down 0.8% and palm 4.9% lower.

·        
Offshore values are leading SBO 110 points lower and meal $12.70 short ton lower.

·        
USDA US soybean export inspections as of March 10, 2022 were 772,719 tons, within a range of trade expectations, above 768,674 tons previous week and compares to 548,951 tons year ago. Major countries included China for 388,125
tons, Mexico for 111,575 tons, and Indonesia for 93,136 tons.

·        
Brazil 2022 soybean exports were seen by Safras at 78 million tons, down from 86.1 million in 2021. Brazil’s crush was seen at 47.5 million tons versus 46.5 million in 2021. Stocks were pegged at 2.77 million tons at the end of
2022, down 52% from end of 2021. 

·        
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 traded two-sided, finding strength late in the overnight trade from US winter wheat condition concerns, strong global import demand, lower USD, and Black Sea shipping problems.

·        
USDA reported 23% of the Kansas winter wheat crop in good to excellent condition, down from 24% a week earlier. Texas winter wheat ratings for the G/E were only 6%, down from 7% the previous week. The USDA rated 75% of the Texas
crop as poor to very poor, unchanged from the previous week. Oklahoma’s rating increased to 24% of, up from 15% a week earlier.  Colorado was rated 18%, down from 21% from previous. 

·        
May Paris wheat futures were down 1.25 euros at 377.50 euros earlier.

·        
France is loading a 30,000-ton wheat vessel destined for Egypt.

·        
Some traders look for global trade business to shift the US for high protein wheat. 

·        
Russia said there is no domestic food shortages.

·        
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.

·        
U.S. northwestern Plains and southwestern Canada’s Prairies will stay dry for the next ten days

·        
USDA US all-wheat export inspections as of March 10, 2022 were 282,344 tons, below a range of trade expectations, below 403,187 tons previous week and compares to 715,052 tons year ago. Major countries included Mexico for 95,214
tons, Burma for 57,894 tons, and Philippines for 35,189 tons.

 

Export
Developments.

·        
South Korea’s Feed Leaders Committee (FLC) bought 55,000 tons of optional origin feed wheat at an estimated $385.45 a ton c&f.  Australia origin was suspected.

·        
Qatar seeks 105,000 tons of optional origin animal feed barley on March 27 shipment in April, May and June. 

·        
Japan’s AgMin seeks 104,483 tons of food wheat from the United States, Canada and Australia on Thursday.

·        
Jordan’s state grains buyer passed on 120,000 tons of feed barley.  Shipment was for 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.

·        
Turkey’s TMO seeks 270,000 tons of milling wheat on March 17 for March 25 – April 22 shipment.

·        
Algeria seeks 50,000 tons of barley on Thursday, March 17, for April 1-15 and April 16-30 shipment.

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

 

Rice/Other

·        
None reported