FI Morning Grain Comments 03/20/23

PDF attached

 

Good
morning.

 

Don’t
discount a higher trade today. Some outside related markets rebounded earlier this morning.

 

No
USDA 24-H announcements. The Black Sea export deal was officially extended over the weekend, for at least 60 days, and that is weighing on grains. Macros are leading US agriculture markets lower. Gold and other selected commodity markets are serving as a safe
haven. USD was down 35 points as of 8:25 am and WTI crude oil 48 cents lower. US equities were mixed. Some traders speculate the US Fed will hold off on raising interest rates over the near term. Malaysia June palm futures were down 135 ringgit to 3,785 and
June cash was down $20 at $920.00/ton. Offshore values were leading SBO lower by about 205 points this morning and meal $4.90 short ton lower.
The
morning weather forecast slightly improved for the US Midwest and Delta. Rains favor eastern KS & OK tomorrow, then OK and northeastern TX Thursday through Friday. Argentina’s Cordoba, Santa Fe, and Entre Rios will see rain this week. Mato Grosso and Goias
will see rain this week, among other areas. Northeastern Brazil will see additional net drying.

 

 

CFTC
did not release a COT report on Friday. Our fund/managed money estimates as of March 17.

 

 

Weather

 

WORLD
WEATHER HIGHLIGHTS FOR MARCH 20, 2023

• Frost
  and freezes occurred in the Delta and southeastern United States overnight inducing damage to corn and wheat, although the area impacted was small and probably will not have a big impact on today’s markets
• Significant
  rain fell in southern Argentina during the weekend and central Argentina will get significant rain during mid-week this week
• Brazil’s
  Safrinha corn planting and soybean harvest progress likely advanced well during the weekend and more progress is likely this week from northern Rio Grande do Sul and southern Mato Grosso do Sul through Parana and Sao Paulo to southern Minas Gerais where the
  longer delays in fieldwork have occurred in the past few weeks
• U.S.
  weather has not changed much with drought to prevail in the southwestern Plains
• Southern
  Texas will have opportunity for rain this week, although much more will be needed
• California
  will get more rain and mountain snow raising the spring flood potential
• The
  Red River Basin of the North will receive more waves of snow during the next ten days and remain colder than usual raising the potential for flooding when warmer weather evolves later this season
• The
  U.S. Midwest, Delta and interior southeastern states will remain plenty moist during the next ten days
• Some
  dryness relief is likely in the lower Delta and areas east into Florida, although more rain will be needed
• North
  Africa will continue drier than usual over the next ten days to two weeks raising stress for some dryland crops
• India
  received rain during the weekend raising concern over the quality of filling and maturing wheat, rapeseed, mustard and pulse crops as well as a few other
• More
  rain will fall in northern and eastern crop areas periodically during the next ten days further raising concern over crop conditions, although a widespread serious production cut is unlikely
• China
  will be wettest in the Yangtze River Basin and areas to the south during the coming ten days
  
• More
  than 6.00 inches of rain fell in the south-central parts of the Yangtze River Basin during the weekend
• China’s
  lower Yellow River Basin and North China Plain will need moisture soon to maintain a good outlook for spring crop development
• Australia
  rainfall will be greatest in the southeast this week, but some rain will reach into eastern summer crop areas during the weekend and next week.
  

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Monday,
March 20:

• China’s
  trade data, including country breakdowns for various commodities
• MARS
  monthly report on EU crop conditions
• USDA
  export inspections – corn, soybeans, wheat, 11am
• Malaysia’s
  March 1-20 palm oil export data
• USDA
  total milk production

Tuesday,
March 21:

• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  Japan

Wednesday,
March 22:

• EIA
  weekly US ethanol inventories, production, 10:30am
• EARNINGS:
  Syngenta
• HOLIDAY:
  Indonesia

Thursday,
March 23:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Rabobank
  Farm2Fork Summit, Sydney
• Russian
  Grain Union holds conference in Kazan
• Brazil’s
  Unica may release cane crush and sugar output data (tentative)
• USDA
  red meat production, 3pm
• US
  cold storage data for pork, poultry and beef, 3pm
• HOLIDAY:
  Indonesia

Friday,
March 24:

• Marine
  Insurance London conference
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• FranceAgriMer’s
  weekly crop conditions reports
• US
  poultry slaughter
• HOLIDAY:
  Argentina

Source:
Bloomberg and FI

 

 

 

 

Macros

 

Corn

·        
Corn is lower from volatile outside markets and the extension of the Black Sea grain deal, but losses could be trimmed from a lower USD and rebound in selected US energy markets. Look for volatile trade from global headlines.

·        
There were no 24-H export announcements.

·        
USDA US cattle on feed was slightly higher than expected. While inventories are historically low, we see no major price movements from the monthly report.

 

Export
developments.

• None
  reported

 

 

Soybeans

·        
Soybean complex is lower on lower grains, lack of fresh news (no export developments), and improving US weather. Brazil soybean harvesting pace is expected to increase this week.

·        
India may see a 7.5% increase in rapeseed production to 11.5 million tons for 2022-23 (July-June) from 10.7 million year earlier, from record plantings. India did see adverse weather in January otherwise the production could have
been much higher.

·        
Malaysian palm futures hit a 6-week low despite robust March 1-20 palm oil shipments. AmSpec reported 1-20 March palm oil exports at 723,482 tons, a 29.8% rise from the same period a month ago. However, the pace did slow over
the last 5 days relative to 1-15 shipments.

·        
ITS reported March 1-20 Malaysian palm exports at 939,379 tons, up 20 percent from the same period month earlier.

·        
Malaysia June palm futures were down 135 ringgit to 3,785 and June cash was down $20 at $920.00/ton. 

• China
  soybeans were up 0.1%, meal down 2.1%, SBO down 0.1% and palm oil futures off 0.8%.

·        
Nearby Rotterdam vegetable oils were 5-50 euros lower from this time Friday morning and meal 7-12.50 euros lower.

·        
Offshore values were leading SBO lower by about 205 points this morning and meal $4.90 short ton lower.

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat futures are lower this morning from the Black Sea grain deal extension. A lower USD may limit downside risk.

·        
Taiwan seeks 56,300 tons of US wheat on March 24 for May 10-May 24 PNW shipment.

·        
China sold 136,815 tons of wheat out of reserves, 97 percent of what was offered at an average price of 2,799 yuan per ton.

·        
Paris May wheat was lower by 3.25 euros earlier at 262.25 per ton.

 

 

Export
Developments.

·        
Jordan seeks 120,000 tons of milling wheat on March 21 for Sep-Oct shipment.

·        
Jordan seeks 120,000 tons of feed barley on March 22.

·        
China plans to auction off 140,000 tons of wheat from state reserves on March 22.

 

Rice/Other

·        
South Korea seeks 121,800 tons of rice, most of it from China, on March 21.