FI Morning Grain Comments 03/16/22

PDF attached

 

Good
morning.

 

Day
21.  Overnight there was talk that Ukraine/Russia peace talks improved. Covid concerns are increasing as Europe and Asia are seeing a rise in cases. Hong Kong reported 29,272 new COVID-19 cases, where 217 deaths were reported in the past 24 hours. The USD
is sharply lower by 48 points at the time this was written. WTI crude traded two-sided, currently higher. US equities are higher. The soybean complex is higher led by soybean oil. Grains are lower on renewed hopes Ukraine shipments will soon resume. Global
wheat export develops are very strong. A Bloomberg poll looks for weekly US ethanol production to be down 5,000 barrels to 1.023 million (1.015-1.035 range) from the previous week and stocks up 21,000 barrels to 25.292 million.

 

 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MARCH 16, 2022

• U.S.
  hard red winter wheat areas are still poised to get rain and amounts are looking greater today over a larger part of more important crop country
  
• two
  storms produce the rain – first Thursday into Friday, but that event will leave many areas from the Texas Panhandle to SW Kansas with limited rain
  
• A
  second storm Sunday into Tuesday of next week will be a larger event preceded by hot and windy conditions and followed by cooler weather briefly
  
• rainfall
  seems to be a little too heavy a little too far to the south and future model runs could change this
• If
  the models are correct sufficient rain will fall for improved greening and better root and tiller repair and development into late March
• Not
  much has changed elsewhere
• Argentina
  will see restricted precipitation through the weekend and next week’s rain may be limited as well, but enough should fall to maintain favorable crop development
• All
  of Brazil will get rain during the next ten days supporting long term crop development including Safrinha corn and cotton as well as supporting coffee, citrus and sugarcane 
• Rain
  is still expected from the Middle East to the mountains of western Xinjiang, China during the next ten days bolstering topsoil moisture for wheat development and cotton planting 
  
• runoff
  potentials from the mountain snowpack should improve for Xinjiang, China and many other areas including India and Pakistan to some degree
• Australia
  rainfall will continue limited for the next week and then eastern areas may get some moisture in the following week
• China
  will experience abundant rain in the Yangtze River Basin possibly leading to some local flooding in rapeseed and wheat areas
  
• The
  moisture may be good for early rice and corn planting, but delays in fieldwork are possible until drier days resume
• North
  Africa and southwestern Europe will get needed rain during the next two  weeks
• Southeastern
  Europe will also get some showers
• Central,
  northeastern and east-central Europe will not likely see much precipitation for a  while
• Western
  Russia coolness will prevail, but there is no threat of winterkill to winter grains

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

Macros

US
MBA Mortgage Applications Mar 11: -1.2% (prev 8.5%)

US
MBA 30 Year Mortgage Rate Mar 11: 4.3% (prev 4.1%)

US
Retail Sales Advance (M/M) Feb: 0.3% (est 0.4%; prev 3.8%)

US
Retail Sales Ex Auto Feb: 0.2% (est 0.9%; prev 3.3%)

US
Retail Sales Ex Auto And Gas Feb: -0.4% (est 0.4%; prev 3.8%)

US
Retail Sales Control Group Feb: -1.2% (est 0.3%; prev 4.8%)

US
Import Price Index (M/M) Feb: 1.4% (est 1.6%; prev 2.0%)

US
Import Price Index Ex Petroleum (M/M) Feb: 0.7% (est 0.8%; prev 1.4%)

US
Import Price Index (Y/Y) Feb: 10.9% (est 11.3%; prev 10.8%)

Canadian
CPI (Y/Y) Feb: 5.7% (est 5.5%; prev 5.1%)

Canadian
CPI NSA (M/M) Feb: 1.0% (est 0.9%; prev 0.9%)

Canadian
CPI Core Median (Y/Y) Feb: 3.5% (est 3.5%; prev 3.3%)

Canadian
CPI Core Common (Y/Y) Feb: 2.6% (est 2.4%; prev 2.3%)

Canadian
CPI Core Trim (Y/Y) Feb: 4.2% (est 4.2%; prev 4.0%)

Canadian
Wholesale Trade Sales (M/M) Jan: 4.2% (est 3.9%; prev 0.6%)

 

 

Corn

·        
CBOT corn is
lower following weakness in wheat and slowing global import tender developments.

·        
Trade is waiting for developments over the potential Canadian Pacific Railway worker strike. A strike could threaten fertilizer and grain movement for the US, Canada, and overseas buyers.

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

·        
A Bloomberg poll looks for weekly US ethanol production to be down 5,000 barrels to 1.023 million (1.015-1.035 range) from the previous week and stocks up 21,000 barrels to 25.292 million.

 

Export
developments.

• Iran
  opened a new import tender for corn, barley and soybean meal that was set to close March 16.
  
• 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.
• 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. 
   

 

 

EIA
expects crude oil prices higher than $100 per barrel in coming months

https://www.eia.gov/todayinenergy/detail.php?id=51658&src=email

 

Soybeans

·        
The soybean complex is higher led by soybean oil on strong global import demand. Rising Covid-19 cases may limit upside in soybeans as traders brace for potential port closures.  Soybean meal is higher on expectations for some
export demand to shift to the US after Argentina suspended product registrations.

·        
Anec sees March Brazil soybean exports reaching 12.9 million tons, down from 13.769 million previous. 

·        
June Malaysian palm oil settled 262 ringgit lower to 6,067 (4.5%). Cash palm was down $32.50/ton to $1,555/ton (2%).

·        
From this time yesterday morning Rotterdam meal from SA unchanged to 3 euros lower and vegetable oils unchanged to 20 euros lower.

·        
China May soybeans were up 0.3%, meal down 1.2%, soybean oil up 0.3% and palm 1.0% higher.

·        
Offshore values are leading SBO 48 points higher and meal $0.20 short ton higher.

·        
NOPA reported the US February crush at 165.1 million bushels, in line with trade expectations, down from 182.2 million last month, but up from a year earlier of 155.2 million bushels. Soybean oil stocks were 2.059 billion pounds,
74 million pounds above trade expectations and largest end-of-month stocks since April 2020. They were down from 2.026 billion at the end of January and well up from 1.757 billion year earlier. 

 

Export
Developments

• Iran’s
  GTC issued a tender (3/15) to buy about 30,000 tons of soyoil, set to close March 16. They are also seeking offers for sunflower oil and palm olein oil.
  
• Iran’s
  SLAL issued a tender (3/15) to buy about 60,000 tons of barley, 60,000 tons of corn and 60,000 tons of soybean meal, set to close March 16.
• From
  last week – 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.
  
• Qatar
  seeks to buy 960k cartons of corn oil in a tender closing April 4.
• (Bloomberg)
  — Ethiopia to Import 150m Liters of Cooking Oil, Waives Import Tax.  Ethiopia has procured 12.5 million liters of cooking oil to stabilize the market and plans to import 150 million liters over three months, Minister for Finance Ahmed Shide says on broadcaster
  Fana Corp. 

 

Wheat

·        
US wheat futures are lower to start the day session on technical selling and renewed hopes over peace talks between Ukraine and Russia.  Don’t discount a higher trade during the day session.

·        
France’s feed makers’ association SNIA requested that the government curb grain exports in order to ensure security of 800,000 to 1 million tons of cereals are available each month for feed.

·        
Wheat was up sharply yesterday on talk Ukraine spring plantings could decline nearly 40 percent per APK-Inform. It’s too early to tell how Ukraine spring plantings will end up. The government is taking many measures to support
producers. 

·        
Global import demand remains very strong.

·        
India is taking measures to boost wheat exports. India exported 6.12 million tons of wheat last year from 1.12 million tons year earlier.

·        
Traders on Tuesday reported large shipments of wheat from Germany to Iran.

·        
May Paris wheat futures were down 6.50 euros at 379.75 euros earlier.

·        
Ukraine is working up plan to finance a loan program for producers that will provide around 845 million dollars and new tax breaks. 

·        
U.S. hard red winter wheat areas will see rain Thursday and Friday in the central Plains with additional precipitation in the southern Plains during Sunday through Tuesday. 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.

·        
(Reuters) – Egypt’s cabinet on Wednesday agreed to add 65 Egyptian pounds ($4.15) per ardeb (150 kilograms) to its procurement price of local wheat as an incentive for farmers to sell more of the local crop to the government ahead
of the harvest. The government will now pay 865-885 Egyptian pounds per ardeb depending on purity levels, the cabinet said.

 

Export
Developments.

·        
Two Philippine groups are in for a combined 270,000 tons of feed wheat. One tender seeks 215,000 tons in four consignments for shipment between May 3 and Aug. 20.  The second tender seeks at least 55,000 tons for July/October
shipment.

·        
Iran’s GTC seeks 60,000 tons of milling wheat for shipment in April and May.

·        
Bangladesh’s lowest offer for 50,000 tons of milling wheat was $409.97/ton CIF for shipment within 40 days of contract signing. 

·        
Japan’s AgMin in a SBS import tender bought only 760 tons of feed barley. The original tender called for 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival by Aug. 25. 

·        
Jordan seeks 120,000 tons of barley on March 23. Possible shipment combinations are between July 16-31, Aug. 1-15, Aug. 16-31 and Sept. 1-15. 

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

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

·        
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.

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

·        
(Bloomberg) – Zambia to Import 100,000 Tons of Wheat to Fill Deficit: Times

Zambia
will start importing wheat in two weeks to fill a shortfall, state-owned Times of Zambia newspaper reports, citing Millers Association of Zambia President Andrew Chintala.

 

Rice/Other

·        
(Bloomberg) — Qatar is seeking to buy 1.2m bags of rice in a tender that closes April 4, according to the Ministry of Commerce and Industry’s website.  Qatar also seeks to buy 960k cartons of corn oil in a tender closing April
4