FI Morning Grain Comments 03/16/21

PDF attached

 

Morning.
 

 

Mato
Grosso will continue to see widespread rain delaying soybean harvesting and corn plantings.  Mato Grosso soybean harvest reached 80 percent complete, 8 points below average.  Argentina will see scattered showers, but the southern areas may miss out.  USD was
lower and WTI down 81 cents.  Corn
futures are higher in the front months (nearby up 4 consecutive days) and lower in the back contracts.  RBOB is lower.  The soybean complex was mostly under pressure (meal higher) from follow through selling after the poor NOPA crush (17-month low) and expectations
for the 2021 US soybean and corn area to end up above USDA’s agriculture outlook forum.  US wheat futures are lower after KS and OK winter wheat conditions improved after the US saw a great rain event late last week.  Selected US state crop ratings:

Kansas:
winter wheat condition rated 6% very poor, 16% poor, 40% fair, 35% good, and 3% excellent (38).  Previous week 36 percent G/E. 

Texas
27 percent G/E, unchanged previous week. 

Oklahoma
57 percent, up from 53 percent previous week. 

 

 

Weather

 

World
Weather Inc.

Another
weather disturbance with significant precipitation is still expected late Tuesday through Thursday with the central and portions of southern Hard Red Winter Wheat Region involved, central and southern Corn Belt, and Delta and southeastern states involved as
well. Rain and thunderstorms will occur except for a strip from the Texas Panhandle into western Iowa where some snow will also occur. This precipitation will further benefit soil moisture in the Hard Red Winter Wheat Region but may also lead to some localized
flooding, especially in the Corn Belt, Delta, and southeastern states.

 

In
Argentina, occasional periods of shower and thunderstorm activity in the next seven to ten days are still expected to help reduce crop stress and stop the decline in crop conditions. In Brazil, rain in the next two weeks is still expected to benefit late season
summer crops but lead to some additional fieldwork delays, especially with soybean harvesting and corn planting.

Source:
World Weather inc.

 

 

 

Bloomberg
Ag Calendar

Tuesday,
March 16:

• New
  Zealand global dairy trade auction

Wednesday,
March 17:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Unica may release cane crush, sugar production data (tentative)

Thursday,
March 18:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• China
  customs to publish trade data, including import numbers for corn, wheat, sugar and pork
• USDA
  total milk production

Friday,
March 19:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  cattle on feed

Saturday,
March 20:

• China
  3rd batch of Jan.-Feb. trade data, including country breakdowns for energy and commodities. No timing

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat         
683,492         versus   300000-500000  range

Corn             
2,203,962     versus   1200000-1900000             range

Soybeans   
518,789         versus   350000-650000  range

 

Macros

 

Corn

• Corn
  futures are
  higher in the front months (nearby up 4 consecutive days) and lower in the back contracts.  The strength was in part to follow through buying after export inspections topped 2.2 million tons on Monday and ongoing planting delays in Brazil.  Back months are
  lower from a private group calling for the US corn area to end up higher that USDA’s working estimate.  Allendale estimated the corn area at 92.8 million acres, above USDA’s 92 million. 
  
• RBOB
  is lower.  Yesterday it was thought to have supported RIN prices and corn futures as it traded to a July 2018 high. 
  
• We
  expect US corn inspections to remain robust over the next several weeks.  It’s going to take some time for US corn shipments to reach USDA’s 2.6 billion projection. As of March 11, 1.179 billion bushels had been shipped, or 45 percent of USDA’s export estimates. 
  
• Today
  is day two of CBOT expanded position limits.  Some traders are looking for an eventual small increase in volatility, yet to be seen. 
  
• China
  plans to auction off corn this week and its should give the trade a glimpse of demand.  African swine fever has raised feed demand alarms in recent weeks. 
  
• USDA
  US corn export inspections as of March 11, 2021 were 2,203,962 tons, above a range of trade expectations, above 1,672,691 tons previous week and compares to 985,206 tons year ago. Major countries included Japan for 516,426 tons, China for 356,855 tons, and
  Mexico for 354,953 tons.

 

Export
developments.

• Taiwan’s
  MFIG seeks up to 65,000 tons of corn, optional origin (NA or SA) on March 17 for May 27-June 15 shipment. 
  

 

 

Soybeans

• The
  soybean complex was
  mostly under pressure (meal higher) from follow through selling after the poor NOPA crush (17-month low) and expectations for the 2021 US soybean and corn area to end up above USDA’s agriculture outlook forum.  Yesterday we saw the February crush come in 13.5
  million bushels below trade expectations.  This should be a little friendly for the products but implied demand for soybean oil use was less than what we would have expected.  Allendale’s 90.3 million acres of soybeans estimated yesterday is above USDA’s working
  estimate of 90 million acres.  They pegged corn at 92.8 million, above USDA’s 92.0 million. 
  
• Malaysian
  palm futures were down 3 percent overnight after hitting a 13-year high on Monday.  China soybeans fell 1.4% and China mela was up 0.8%.  China SBO increased 0.8%.  Reuters: The price of crude palm oil (CPO) peaked at RM4,247.50 per ton yesterday, an all-time
  high in the country’s palm oil industry history, compared to RM4,193 per ton on Thursday, which was the highest in 13 years. 
  
• The
  trade may see additional downgrades to the Argentina soybean crop in coming days, but we think this is already worked in.  Some people were noting the weakness in soybeans today was related to increasing soybean shipments out of Brazil. 
  
• AgRural
  estimated Brazil soybean harvest at 46% complete as of March 11, up from 35% previous week, and 59% a year earlier.  They have the crop at 133 million tons.  Brazil corn plantings were 74% complete, compared to 54% week earlier and 89% a year earlier. 
  
• Rotterdam
  vegetable oil prices were unchanged to 15 euros lower and meal mostly 2-7 euros higher. 
  
• Offshore
  values are leading CBOT SBO unchanged and meal $0.30 short ton lower.
• China
  cash crush margins on our analysis were 182 cents, (unch) up from 178 cents late last week and compares to 168 cents year earlier. 
  

China
futures:

Malaysian
palm oil:

• SGS:
  Malaysian palm shipments down 1 percent for the March 1-15 period to 549,273 tons. 
  
• USDA
  US soybean export inspections as of March 11, 2021 were 518,789 tons, within a range of trade expectations, below 595,325 tons previous week and compares to 494,906 tons year ago. Major countries included China for 159,359 tons, Egypt for 90,202 tons, and
  Bangladesh for 57,425 tons.

 

Export
Developments

• Iran
  seeks 30,000 tons of sunflower oil and 30,000 tons of soybean oil on March 18 for March and April shipment. 
  
• Today
  the USDA CCC seeks 2,030 tons of packaged oil on March 16 for shipment Apr 16 – May 15.

 

 

Wheat

• US
  wheat futures are lower after KS and OK winter wheat conditions improved after the US saw a great rain event late last week. 
  
• Selected
  US state crop ratings:

Kansas:
winter wheat condition rated 6% very poor, 16% poor, 40% fair, 35% good, and 3% excellent (38).  Previous week 36 percent G/E. 

Texas
27 percent G/E, unchanged previous week. 

Oklahoma
57 percent, up from 53 percent previous week. 

• Germany’s
  association of farm cooperatives estimated the 2021 wheat crop up 0.9% on the year to 22.34 million tons.  They put the 2021 winter rapeseed crop down 0.7% to 3.48 million tons.  Winter barley was expected to increase 2.7% to 9.07 million tons while spring
  barley was projected to decrease 5.7% to 1.89 million tons from a smaller planted area.
• Russia
  said they will stop intervening in regulation of grain exports if the situation stabilizes. 
  
• EU
  May milling wheat (down 6 sessions) was down 1.25 at 221.25 euros as of 6:30 am CT. 
  
• USDA
  US all-wheat export inspections as of March 11, 2021 were 683,492 tons, above a range of trade expectations, above 484,652 tons previous week and compares to 469,191 tons year ago. Major countries included Philippines for 177,995 tons, Korea Rep for 100,138
  tons, and China for 67,260 tons.

 

May
Paris wheat

Source:
Reuters and FI

 

Export
Developments.

• Pakistan
  seeks 300,000 tons of wheat for April-August shipment and lowest offer was $285.97/ton c&f for August shipment.  April was thought to be $323.97/ton. 
  

• Jordan
  seeks 120,000 tons of animal feed barley, for shipment between October 1 and November 15.  Reuters noted only one trading house participated. 
  
• Japan
  seeks 135,603 tons of food wheat from the US, Canada and Australia. 

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on March 18.

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 208,217 tons of rice, on March 25 for arrival in South Korea in 2021 between May 1 and Oct. 31.  64,444 tons of non-glutinous brown rice is sought from the United States. 
Rest from Thailand, China, Australia and Vietnam.

·        
Bangladesh also seeks 50,000 tons of rice on March 28.

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