FI Morning Grain Comments 03/23/22

PDF attached

 

Good
morning.

 

USD
is higher, crude oil up more than $3.85, and equities lower. Commodity markets remain volatile.
Higher
trade in oilseeds and grains this morning on follow through bullish sentiment over the Ukraine/Russia situation. Russia was thought to have advanced in on the southern port city of Mariupol. EU May rapeseed oil hit a contract high overnight. Canadian canola
also reached a contract high. Rapeseed and canola supplies remain very tight. May soybeans, back over $17.00, is shy of its respected contract highs. Corn is back over $7.50, and wheat is higher. June Malaysian palm oil (up 3 consecutive session) settled 225
ringgit higher to 6,192. Cash palm was up $25/ton to $1,565 ton (1.6%). China May soybeans were down 0.5%, meal up 0.6%, soybean oil lower by 0.7% and palm up 2.3%.

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MARCH 23, 2022

• U.S.
  weather will continue active with more precipitation coming and going across a part of the  Plains, Midwest, Delta and interior southeastern states over the next ten days to two weeks
  
• next
  storm to impact hard red winter wheat areas will be during mid-week next week, but it will not be nearly as significant as recent storms have been with the  high Plains region getting a limited amount of moisture
• The
  storm next week in the central U.S. should favor the  northern Plains and Midwest as well as the Delta
• Another
  storm will impact a part of the Plains in early April, and it will probably favor southeastern hard red winter wheat areas leaving other areas with limited precipitation
• Too
  much  moisture in a part of the eastern Midwest, Delta and southeastern states could lead to spring planting delays
• West
  and South Texas are unlikely to see much precipitation during the next ten days to two weeks
• California
  will get some moisture this weekend into early next week, but it will not be a major event and much more precipitation will still be needed
• South
  America is still poised to be wet biased for a while. 
• Some
  heavy rain fell in southern Paraguay overnight with parts of southern Brazil and northeastern Argentina also getting significant moisture
• Additional
  heavy rain from eastern Argentina into Paraguay and southern Brazil is expected through the weekend leading to some flooding and a threat to a few crops in low lying areas
• Bahia
  and northern Minas Gerais will remain  quite dry and in need of rain while other areas in Brazil  see a good mix of weather
• Eastern
  Australia cotton and sorghum areas will get some rain Thursday into early next week possibly raising  some concern over cotton fiber quality
• Europe
  will trend wetter in the second week of the forecast after a prolonged period of less than usual moisture
• Spain,
  Portugal and northwestern Africa will continue to see bouts of rain in this first week of the outlook
• Southern
  China will be quite wet during the coming week. 
• Cooler
  and wetter conditions will return to western Russia this weekend into next week putting more snow back on the ground after recent melting. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

ARS
CB raises 200bps to 44.5%

US
MBA Mortgage Applications Mar 18: -8.1% (prev -1.2%)

US
MBA 30 Yr Mortgage Rate Mar 18: 4.50% (prev 4.27%)

 

Corn

·        
May CBOT corn
is back over $7.50.  A breakout above $7.6750 could provide support. We think contract highs will eventually be tested.

·        
USD is higher, crude oil higher, and equities lower.

·        
The European Commission proposed setting up a fund to distribute 500 million euros ($550 million) to help farmers and expand acreage.  They will also provide relief for Ukraine producers.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 2,000 barrels to 1.028 million (1015-1038 range) from the previous week and stocks up 145,000 barrels to 26.090 million.

 

Export
developments.

• Turkey
  seeks 325,000 tons of corn on March 28. Optional origin for April 8 and May 5 shipment.  They also seek 175 tons of local corn.  500k total makes us wonder if they are covered for reserves.
  

 

 

 

Soybeans

·        
CBOT May
soybeans, back over $17.00, is shy of its respected contract highs. US soybean demand is strong with good crush margins and increasing export demand. Yesterday 240,000 tons was reported to unknown.

·        
EU May rapeseed oil hit a contract high. Canadian canola also reached a contract high. Rapeseed and canola supplies remain very tight.

·        
Russia is looking into setting up sunflower oil export quotas.

·        
A protest by Brazil tax collectors are stalling payments to exporters, according to the National Association of Grain Exporters (Anec). The protest at the Santos port in Sao Paulo is delaying the issuance of phytosanitary certificates. 

·        
June Malaysian palm oil settled 225 ringgit higher to 6,192. Cash palm was up $25/ton to $1,565 ton (1.6%).

·        
From this time yesterday morning Rotterdam meal from SA were mixed and vegetable oils unchanged to as high as up 80 euros. 

·        
China May soybeans were down 0.5%, meal up 0.6%, soybean oil lower by 0.7% and palm up 2.3%.

·        
Offshore values are leading SBO 1 point higher and meal $4.70 short ton higher. 

 

Export
Developments

• Qatar
  seeks to buy 960k cartons of corn oil in a tender closing April 4.

 

Wheat

·        
US wheat futures are higher this morning on Ukraine grain production uncertainty and higher outside related commodity markets.

·        
Russia was thought to have advanced in on the southern port city of Mariupol.

·        
Ukraine should start sowing sunflower and other summer grains soon but it’s hard to tell how much of the area will be lost this year.

·        
Ukraine March through June wheat exports may only reach 200,000 tons, according to APK-Inform.

·        
Russia’s winter grain weather favored early development for the 2022 crop.  Russia is expected to raise this year’s grain crop, including both winter and spring grains, to 123 million tons, according to the latest agriculture
ministry forecast, up from 121.3 million tons in 2021.

·        
China’s wheat crop still looks dire and but it’s unknown if the country will soon increase imports as they are actively selling wheat out of reserves.

·        
May Paris wheat futures were up 7.75 euros to 386.75 euros.

·        
Nestle SA, the world’s largest food maker, said it’s suspending manufacturing in Russia (Bloomberg).

 

Ukrainian
fightback gains ground west of Kyiv

https://www.msn.com/en-us/news/world/ukrainian-fightback-gains-ground-west-of-kyiv/ar-AAVp8q5?li=BBnb7Kz

 

Export
Developments.

·        
Turkey started buying wheat for their import tender of up to 210,000 tons. 12.5% protein was sold at $423.90-$424.42 per ton c&f.

·        
Cancelled: Jordan was seeking 120,000 tons of barley. Possible shipment combinations were between July 16-31, Aug. 1-15, Aug. 16-31 and Sept. 1-15. 

·        
Results awaited: Iraq extended their deadline to buy 50,000 tons of hard milling wheat until March 22.

·        
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. 

·        
Bangladesh is in for 50,000 tons of wheat with a deadline of April 4.

 

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