FI Morning Grain Comments 03/24/21

PDF attached

 

Morning.
 

 

CBOT
soybeans are higher again in part to a rebound in WTI crude oil despite a higher USD.  Crush margins are a little softer. CBOT soybean meal was higher and SBO trading lower.  Palm oil traded 7 MYR lower.  Rotterdam oils were lower for this time yesterday while
EU wheat was up $1-$3/ton.  China cash crush margins on our analysis were 169 (181 previous), vs. 175 cents late last week and compares to 184 cents year earlier.  Lower trade in corn with lower wheat and higher soybeans.  There were no global export developments
overnight but there were rumors China seeks corn for June shipment.  CBOT Chicago wheat is lower on a higher USD, improving US HRW wheat conditions and several countries passing on wheat imports due to high prices.  A Bloomberg poll looks for weekly US ethanol
production to be up 3,000 barrels (945-986 range) from the previous week and stocks up to 12,000 barrels to 21.352 million.

 

 

 

Weather

Brazil
will see a drier bias over the next seven days.  Monsoon rains are expected to withdraw later in April.  Argentina will see additional rains Wednesday into Friday.  South Cordoba and southeast BA will miss on some of the rains.  The US southern and central
Great Plains (HRW) bias eastern areas will see additional rain this week. Northern Plains & Canadian Prairies will be in focus this week as it remains too dry but the second week of the forecast calls for precipitation for the dry areas of Alberta.  Rest of
the US will be ok with exception of too much precipitation for the Delta that will slow fieldwork activity.  Midwest will not start planting for a week or two so there is no concern there except for the Ten River Basin where too much rain will occur.  Eastern
Australia will dry down this week.

 

 

World
Weather Inc.

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Argentina
and Brazil weather is looking good. Late season planting of Safrinha corn and harvesting of soybeans in Brazil is increasing with better weather especially later this week into next week. Argentina weather will be well mixed to support late season crop development.

            More
rain in the lower U.S. Midwest and Delta this week and into next week will keep fieldwork potentials in the Delta moving along slowly and the same may evolve in the lower Midwest in early April.

            Coarse
grain and oilseed conditions in Europe, the western CIS, India, China, Australia and South Africa will change very little in the coming week to ten days.

           
Overall, weather today will provide a mixed influence on market trade with a bearish bias. 

 

MARKET
WEATHER MENTALITY FOR WHEAT:  Rain in the U.S. central Plains this week will help to further ensure an improving production potential over the next week to ten days after dryness last autumn and winter and damaging cold in February. In the meantime, there
is need for moisture in the southwestern Plains.

            The
northern U.S. Plains and Canada’s Prairies are still dealing with drought and the pressure will build in these areas for rain to fall soon in order for spring cereals to be planted normally in April and May.  This region will soon have a greater level of influence
on market mentality. Canada’s Prairies are advertised a little wetter today for early next week.

            Soft
wheat in the U.S. Midwest and wheat in Europe, the CIS, China, India and portions of the Middle East and North Africa is rated favorably, although greater rain is needed in northwestern Algeria, southwestern Morocco, and from Syria into Iran and southward
to Jordan and Israel. Spain will need some rain soon, as well.

            Australia’s
planting prospects are good for eastern parts of the nation and should increase later in the year in western areas.

            South
Africa may also experience good planting weather this autumn.

            Overall,
weather today may keep some pressure on futures prices.

Source:
World Weather inc.

 

Bloomberg
Ag Calendar

Wednesday,
March 24:

• EIA
  weekly U.S. ethanol inventories, production
• Bursa
  Malaysia Derivatives virtual palm oil conference 2021, day 2
• U.S.
  poultry slaughter
• EARNINGS:
  JBS
• HOLIDAY:
  Argentina

Thursday,
March 25:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Seminar
  on sustainable palm oil in India by the Solvent Extractors’ Association and the Malaysian Palm Oil Board
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports
• Malaysia’s
  March 1-25 palm oil export data
• USDA
  hogs & pigs Inventory, red meat production

Friday,
March 26:

• 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

Source:
Bloomberg and FI

 

 

 

 

Macro

US
Durable Goods Orders (FebP): – 1.1% (est 0.5%, prev 3.4%)

US
Durable Ex Transportation (FebP): -0.9% (est 0.5%, prev 1.3%)

US
Cap Goods Orders Nondef Ex Air (FebP): -0.8% (est 0.5%, prev 0.4%)

US
Cap Goods Ship Nondef Ex Air (FebP): -1.0% (est -1.0%, prev 1.8%)

 

 

Corn

• Was
  a Mix trade in corn with lower wheat and higher soybeans. Higher USD pulled prices lower before the electronic pause. US corn acreage estimates are likely to be in focus for the balance of the week.  Analysts deadline to submit their findings is today for
  the March 31 USDA intentions report. There were no global export developments overnight but there were rumors China seeks corn for June shipment.  Thursday we will get export sales (estimates attached). 
  
• May
  corn support is seen at $5.46, then $5.40.75. 
• Funds
  on Tuesday bought an estimated net 4,000 contracts. 
• USDA
  hog and pig report estimates from Bloomberg:  Hog inventory seen falling to 76.059 million head vs 76.179 last March.   Breeding inventory seen down 1.3% y/y, and market hogs seen falling 0.1% y/y. The pig crop seen 0.5% higher y/y.  March-May farrowing intentions
  seen down 0.8% y/y, and June-Aug. seen falling 0.5% y/y.  Report due out March 25. 
  
• A
  Bloomberg poll looks for weekly US ethanol production to be up 3,000 barrels (945-986 range) from the previous week and stocks up to 12,000 barrels to 21.352 million.

 

Export
developments.

• There
  were no USDA 24-hour sales. 

 

 

Fuente:
FOB Bolsa de Cereales

 

Soybeans

• CBOT
  soybeans are higher (4 sessions) again in part to a rebound in WTI crude oil despite a higher USD.  Crush margins are a little softer. CBOT soybean meal was higher and SBO trading lower.  Palm oil traded 7 MYR lower. China cash crush margins deteriorated. 
  Rumors of US imports of Argentina refined soybean oil is a little negative, but we think the weakness in SBO is more related to light technical selling. 
  
• May
  SBO gap of 56.37 could be filled today. 
• Funds
  on Tuesday bought an estimated net 5,000 soybean contracts, bought 2,000 soybean meal and bought 2,000 soybean oil.
  
• Some
  traders monitoring an Asian vegetable oil conference suggest overall comments/forecasts are slightly bearish. 
  Some notes via Reuters for the Virtual Palm and Lauric Oils Price Outlook Conference:
• Oil
  World:
• Global
  palm oil production is estimated to grow by 3.2 million tons through the 12 months to Sep. 30
• Indonesian
  output is estimated to grow by 3.3 million tons
• Malaysia
  will experience a drop of half a million ton
• World
  palm oil consumption may rise by less than one million ton this year
• Edible
  oil prices to peak in the next four weeks
• James
  Fry
• Malaysia’s
  crude palm oil prices forecast to fall to near 3,300 ringgit by end-2021 if crude oil is at $65 a barrel.
• Malaysia’s
  2021 crude palm oil production below 19.5 million ton
• Indonesia’s
  output is seen growing over 3.5 million tons
• Indonesian
  Palm Oil Association (GAPKI)
• Indonesia
  palm oil inventories shrink by almost half to 2.67 million tons by the end of 2021
• Production
  in the Southeast Asian nation seen rising 4% from 2020 to 49 million tons
• Exports
  seen rising to 37.6 million tons in 2021 from 34 million tons last year
• Indonesian
  crude palm oil to trade at $1,000-$1,150 per ton during the first half of this year.
• Dorab
  Mistry
• Malaysia’s
  crude palm oil futures hold at 3,300 ringgit ($799.22) a ton up to June, before bottoming out at 2,700 ringgit in the second half of the year, likely around September
• 2021
  palm oil production in Malaysia 19.6 million tons and 48 million tons for Indonesia
• World
  palm oil supply will expand by 3 million tons in 2021
• Anec:
  Brazil soybean exports 16.1 million tons.
• The
  U.S. EPA is finalizing a proposal to extend the deadlines for oil refiners to prove their compliance with RFS standards for 2019 and 2020. Refiners now have until Jan. 31, 2022, to submit compliance documentation for the 2020 year, and until Nov. 30, 2021,
  to submit for 2019.
• There
  were no changes to CBOT registrations.
• Rotterdam
  vegetable oil prices were mixed and meal $1-3 euros higher. 
• Offshore
  values are leading CBOT SBO 52 points lower and meal $0.20 short ton lower.
  
• China
  cash crush margins on our analysis were 169 (181 previous), vs. 175 cents late last week and compares to 184 cents year earlier. 
  

 

China
futures:

Malaysian
palm oil:

 

Export
Developments

• None
  reported.   

 

Wheat

• CBOT
  Chicago wheat is lower on a higher USD, improving US HRW wheat conditions and several countries passing on wheat imports due to high prices. 
  
• Next
  support level for May Chicago is seen at $660.25, then $6.16.  We look for KC to lose ground to Chicago wheat.  We like owning MN wheat due to weather problems (too dry) for the Northern Great Plains & Canadian Prairies. 
  
• Funds
  on Tuesday bought an estimated net 5,000 SRW wheat contracts. 
• EU
  May milling wheat was 2.25 lower at 218.75 euros as of 8:00 am CT.  Support is seen at 215.00. 
  
• Iraq
  sees domestic wheat production is seen at 5 million tons, enough for consumption. 
  

 

Export
Developments.

• South
  Korea’s (MFG) bought 66,000 tons of animal feed wheat at an estimated $274.99 a ton c&f for arrival in South Korea around Oct. 5.  Its optional origin.
• South
  Korea’s (FLC) bought 65,000 tons of animal feed wheat at an estimated $271.99 a ton c&f for arrival in South Korea around Oct. 15.  Its optional origin except Denmark, Argentina, China and India, traders said.
• Thailand
  passed on 430,000 tons of animal feed wheat for shipment during May and December. Prices were regarded as too high.
• The
  Philippines passed on 155,000 tons of milling wheat and animal feed wheat for shipment between April and July. Prices were regarded as too high. Feed wheat offers were believed to be over $300 a ton c&f.
• Japan
  bought only 600 tons of feed barley under its SBS import system.  They were in for 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival in Japan by August 26.
• Jordan
  will be back in for feed barley on March 30.   Possible shipment combinations are Oct. 1-15, Oct. 16-31, Nov. 1-15 and Nov. 16-30, the same periods as sought in the previous two tenders.
  
• Results
  awaited: South Korean group SPC seeks 35,000 tons of milling wheat from the United States and Canada on March 23. for arrival in July.

 

Rice/Other

·        
Bangladesh has two separate rice tenders and lowest offer for latest 50,000 tons of rice was $416.00/ton CIF

·        
Bangladesh bought 50,000 tons of rice from Vietnam at $522/ton.

·        
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.

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

·        
Syria seeks 39,400 tons of white rice on April 19.  Origin and type might be White Chinese rice or Egyptian short grain rice.