FI Morning Grain Comments 03/21/22

PDF attached

 

Good
morning.

 

Day
26. Strong start to the week for the US agriculture markets on good global wheat demand and Argentina tax developments. The USD was up about 6 points, WTI crude oil over $4 higher and equities mostly lower. Ukraine has rejected Russia’s demand to surrender
the port city of Mariupol, according to headlines. Argentina raised export taxes for soybean oil and soybean meal products by 2 points to 33 percent until the end of the year. Offshore values are leading soybean oil higher and meal lower. Palm oil futures
in Malaysia were up 145 points and cash up $40/ton to $1,520 per ton.  China futures were mixed with vegetable oils lower, meal higher and soybeans slightly lower.

 

 

 

 

 

 

Weather

 

World
Weather Inc.

 

 

 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Monday,
March 21:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Ivory
  Coast cocoa arrivals
• Malaysia’s
  March 1-20 palm oil export data
• USDA
  total milk production, 3pm
• HOLIDAY:
  Japan

Tuesday,
March 22:

• EU
  weekly grain, oilseed import and export data

Wednesday,
March 23:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• U.S.
  cold storage data for beef, pork and poultry, 3pm
• HOLIDAY:
  Pakistan

Thursday,
March 24:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef
• Brazil’s
  Unica may release cane crush, sugar output data
• USDA
  red meat production, 3pm
• HOLIDAY:
  Argentina

Friday,
March 25:

• ICE
  Futures Europe weekly commitments of traders report, ~2:30pm
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Malaysia’s
  March 1-25 palm oil export data
• U.S.
  cattle on feed, poultry slaughter

Source:
Bloomberg and FI

 

 

 

 

 

 

CFTC
Commitment of Traders

Combined
soybeans, meal, oil, corn, Chicago wheat and KC wheat managed money futures and options net long positions were a record at 803,110 net long contracts.

Combined
soybeans, meal, oil, corn, Chicago wheat and KC wheat net long Index Fund positions were a record at 1,155,009 net long contracts.

Index
funds bought a large amount of corn.

 

 

 

 

 

Macros

 

Corn

·        
CBOT corn
was higher this morning following a rally in wheat and concerns Ukraine summer corn production could plummet this year.

·        
USD was higher, WTI crude oil up more than $4.50 and US equities mostly lower.

 

Export
developments.

·        
South Korea’s KOCOPIA bought 60,000 tons of corn from the United States at an estimated $426 a ton c&f for arrival around June 15.

• Results
  awaited: 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.

 

Soybeans

·        
CBOT soybeans are higher led by the products with traders looking for US meal and soybean oil demand to increase after Argentina raised export taxes. CBOT crush basis May was up 9.50 cents to $1.86.

·        
Argentina raised export taxes for soybean oil and soybean meal products by 2 points to 33 percent until the end of the year. They are looking to combat inflation, which is running at about 50% annually. Back in 2020 they reduced
taxes.  There might be a good amount of pushback by producers and the local crushing association.  Some suggest the action is illegal and required a vote.

·        
China ended up buying 3.51 million tons of soybeans from Brazil during the Jan-Feb period, more than double year ago.

·        
June Malaysian palm oil settled 145 ringgit higher to 5,774. Cash palm was up $40/ton to $1,520/ton (2.6%).

·        
Note palm fell 16 percent last week.

·        
Cargo surveyor SGS reported month to date March 20 Malaysian palm exports at 723,997 tons, 93,091 tons below the same period a month ago or down 11.4%, and 9,671 tons below the same period a year ago or down 1.3%.  AmSpec reported
744,841 tons. ITS 755,977 tons, down 8.4 percent.

 

·        
From this time yesterday morning Rotterdam meal from SA were mixed and vegetable oils unchanged to 5 euros lower.

·        
China May soybeans were down 0.5%, meal up 0.9%, soybean oil lower by 1.5% and palm down 3.2%.

·        
Offshore values are leading SBO 162 points higher and meal $0.40 short ton lower. 

 

Export
Developments

• Egypt
  seeks international and local vegetable oils on Monday. Amounts are unknown.
  
• Qatar
  seeks to buy 960k cartons of corn oil in a tender closing April 4.

 

Wheat

·        
US wheat futures are higher Monday on strong global export developments and no end in sight with the Ukraine/Russia situation.

·        
May Paris wheat futures were up 7 euros or 1.9% to 368.75 euros earlier.

·        
India is in talks with Egypt, Turkey, China, Bosnia, Sudan, Nigeria, Iran and other countries to export wheat. The government has started investing in logistics to take advantage of the high global wheat prices.

·        
Ukraine’s presidential adviser Oleh Ustenko warned Ukraine may not produce enough crops to export if this year’s sowing campaigns is disrupted by Russia’s special operation.  Ukraine dies have enough grain and food reserves for
a year’s worth of consumption. 

·        
Brazil lowered their wheat import tariff in case they need to import from non traditional countries.

·        
Effective March 29, Russia’s export duty will increase to $86.40 from $86.30 per ton. Barley will rise to $79.60 from $77.40 per ton and corn to $53.20 from $54.10 per ton.

 

Export
Developments.

·        
Turkey bought a total of 430,000 tons of wheat late last week from their two import tenders (Thursday and Friday).

·        
Turkey seeks another 210,000 tons of wheat on March 23

·        
The Philippines bought an unspecified amount of Australian wheat. Originally one tender was for 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.

·        
South Korean flour millers bought 45,000 tons of wheat from the US for May 16-Jun 15 shipment. Soft white wheat 11% protein was bought near $420s a ton and soft white wheat of 9% protein bought in the mid $470s a ton. Hard red
winter wheat of 11.5% protein was purchased near low $480s a ton and northern spring/dark northern spring wheat of 14% protein in the high $440s a ton. (Reuters)

·        
China sold 522,804 tons of wheat on March 16 out of auction, nearly 100 percent of what was offered. 

·        
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 seeks 120,000 tons of milling wheat on March 24. Possible shipment combinations are May 16-31, June 16-30, July 1-15 and July 16-31.

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

 

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

·        
(Reuters) – South Korea’s state-backed Agro-Fisheries & Food Trade Corp. purchased an estimated 26,791 tons of rice to be sourced from Vietnam in an international tender which closed in late February, European traders said on
Monday. The purchase all involved Vietnamese long grain rice, with 9,000 tons bought at $510.70 a ton c&f for arrival in South Korea around June 30, 9,000 tons bought at $507.99 a ton c&f for arrival around Sept. 30 and 8,791 tons bought at $517 a ton c&f
also for arrival around Sept. 30, traders said.