FI Morning Grain Comments 03/30/22

PDF attached

 

Good
morning.

 

US
agriculture futures are higher on renewed Black Sea concerns, rebound in WTI crude oil and lower USD. It’s too early to see if Russia will live up to their promise to de-escalate their military “operation.” Russia is looking to expand their list of commodities
for which importers have to pay in rubles, including grains. Taiwan bought 40,000 ton of US wheat while results are awaited on Tunisia and Algeria. Bangladesh  seeks 50,000 tons of wheat on April 11. A Bloomberg poll looks for weekly US ethanol production
to be down 5,000 barrels to 1.037 million (1.025-1.051 range) from the previous week and stocks up 137,000 barrels to 26.285 million.  Look for positioning today ahead of the end of month USDA reports. Hogs and Pigs will be out after the close.

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MARCH 30, 2022

• Less
  rain was advertised for the high Plains of the U.S. hard red winter wheat region today relative to that of Tuesday
  
• the
  change was needed and should verify well
• Wet
  conditions are still being advertised for the  U.S. Midwest, Delta and Tennessee River Basin during the next two weeks
  
• the
  problem is more due to the  lack of warm temperatures than due to persistent heavy rain
• drying
  rates between storm systems will not be very great for at least another week, although the second week of the outlook may get a little better
• West
  and South Texas cotton, corn and sorghum areas will continue dry biased for the next ten days  – at least
• California
  is unlikely to  get much precipitation leaving the  state facing a serious water issue during the summer
• Not
  much precipitation is expected in the northwestern U.S. Plains or the southwestern Canada Prairies during the next ten days
• In
  South America, southwestern Argentina will be dry biased for a while, but soil  moisture is sufficient to carry on normal crop development
• Frequent
  rainfall in southern Paraguay and parts of southern Brazil, as well as northeastern Argentina during the weekend and next week could raise some crop quality issues for rice and some other crops, but the impact is expected to be relatively low
• Less
  rain is advertised for Mato Grosso do Sul and southern Mato Grosso today over the next ten days, but World Weather, Inc. does not believe this is the beginning of the monsoon withdrawal and soil moisture will be plentiful to support crop needs
• Too
  much  rain and snow will fall from east-central Europe into the west-central parts of Russia in this coming week 
• China’s
  rapeseed and southern corn and rice areas will get a chance to dry down after a wet start to the growing season after Thursday
• Tropical
  disturbances may enhance rainfall during the next two weeks from Vietnam to the Philippines and possibly a part of Taiwan

Source:
World Weather Inc.

 

 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Wednesday,
March 30:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• USDA
  hogs and pigs inventory, 3pm

Thursday,
March 31:

• U.S.
  annual acreage prospective planting data for various farm commodities, including wheat, barley, corn, cotton, soybeans and sunflower, noon
• USDA
  quarterly stockpile data for wheat, barley, corn, oats, soybeans and sorghum, noon
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• U.S.
  agricultural prices paid, 3pm
• Malaysia’s
  March palm oil export data

Friday,
April 1:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Australia
  Commodity Index
• USDA
  soybean crush, DDGS output, corn for ethanol, 3pm
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

Reuters
trade estimates for USDA

 

 

 

 

 

Macros

US
GDP Annualized (Q/Q) Q4 T: 6.9% (est 7.0%; prev 7.0%)

US
GDP Price Index Q4 T: 7.1% (est 7.1%; prev 7.1%)

US
Core PCE (Q/Q) Q4 T: 5.0% (est 5.0%; prev 5.0%)

US
Personal Consumption Q4 T: 2.5% (est 3.1%; prev 3.1%)

US
ADP Employment Change Mar: 455K (est 450K; prev 475K)

 

 

Corn

·        
US corn futures are higher mainly on a rebound in US WTI crude oil and lower USD. 

·        
Look for positioning today ahead of the end of month USDA reports.

·        
Hogs and Pigs will be out after the close.

·        
The AgMin in Brazil’s state of Parana reported 85% of the first corn crop had been harvested as of Sunday, above 82% year earlier. Conab showed all Brazil first corn crop 47% collected versus 43% year earlier.

·        
Anec sees Brazil corn exports reaching 103,278 tons for the month of March, down from 110,000 previous. 

·        
Argentina farmers sold 19.5 million tons of corn for the 2021-22 season, according to AgMin data. That is up  744,000 tons for the week ending March 23. Argentina may produce 49 million tons this season.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 5,000 barrels to 1.037 million (1.025-1.051 range) from the previous week and stocks up 137,000 barrels to 26.285 million.

 

 

 

Export
developments.

• AgriCensus
  noted South Korea’s MFG bought 137,000 tons of optional origin (South American and/or SAf) corn at $382.18 & $384.50/ton CFR for July delivery.
  

 

Soybeans

·        
The CBOT soybean complex is mostly higher from strength in WTI crude oil, positioning ahead of the USDA reports, and a sharply lower USD. 

·        
The AgMin in Brazil’s state of Parana reported 83% of the soybean crop had been harvested as of Sunday, down from 88% year earlier. Conab showed all Brazil soybean crop 76% collected versus 70% year earlier.

·        
Reuters – Indonesia’s palm oil export levy collection in 2022 is estimated at 68.18 trillion rupiah ($4.76 billion), down from last year’s 71.6 trillion rupiah, said Eddy Abdurrachman, head of the palm oil fund agency.

·        
June Malaysian palm oil settled 90 ringgit lower to 5,930 Cash palm was down $30 at $1,535 per ton.

·        
From this time yesterday morning Rotterdam meal from SA were mostly 11-19 euros lower and vegetable oils 2-15 euros higher. 

·        
China May soybeans were up 0.5%, meal down 2.9%, soybean oil down 1.0% and palm down 1.2%.

·        
Offshore values are leading SBO 100 points higher and meal $2.60 short ton lower. 

·        
Anec sees Brazil soybean exports reaching 12.957 million tons for the month of March, up from 12.9 million previous.

·        
Investment bank Itau BBA expects Brazil 2022-23 soybean plantings to expand only 0.5%, slowest growth rate in more than 15 years. 2021-22 the area was 40.7 million hectares.

·        
Argentina farmers sold 11.5 million tons of soybeans for the 2021-22 season, according to AgMin data, for the week ending March 23. That compares to 12.8 million at same period year ago. Argentina may produce 42 million tons this
season.

 

Export
Developments

·        
Turkey seeks 18,000 tons of sunflower oil on Thursday.

·        
China plans to sell about 500,000 tons of soybeans on April 1.

• USDA
  seeks 2,710 tons of packaged oil on April 7 for May shipment (May 23-June 13 for plants at posts).
  
• Qatar
  seeks to buy 960k cartons of corn oil in a tender closing April 4.

 

Wheat

·        
US wheat futures abruptly turned higher before the electronic session ended on renewed Black Sea concerns. Higher corn, rebound in WTI crude oil and lower USD added to the bullish sentiment. It’s too early to see if Russia will
live up to their promise to de-escalate their military “operation.”

·        
Russia is looking at expanding their list of commodities requiring importers to pay in rubles, including grain and metals.

·        
Taiwan bought 40,000 ton of US wheat while results are awaited on Tunisia and Algeria.

·        
Ukraine is in talks with Romania to ship wheat out of the Constanta Black Sea port.

·        
May Paris wheat futures were up 9 euros (2.5%) to 366.50 euros.

 

Wheat
in 2023?

Schnitkey,
G., C. Zulauf, N. Paulson and K. Swanson. “Wheat in 2023?.” farmdoc daily (12):40,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 29, 2022.

https://farmdocdaily.illinois.edu/2022/03/wheat-in-2023.html

 

Export
Developments.

·        
Taiwan bought 40,000 tons of US wheat for shipment off the PNW during the May 14 and May 28 period. 14.5 percent dark northern spring wheat was bought at $439.82 a ton FOB PNW, 12.5 percent hard red winter wheat bought at $462.94
a ton FOB and 10.5% protein soft white wheat bought at $415.47 a ton FOB.

·        
Jordan bought about 60,000 tons of feed barley at an estimated $395.00 a ton c&f for shipment in the second half of July.

·        
Bangladesh seeks 50,000 tons of wheat on April 11 for shipment within 40 days after contract signing.

·        
Results awaited: Lowest offer $418.68/ton C&F.  Tunisia seeks 150,000 tons of soft wheat and 100,000 tons of feed barley. The wheat is sought for shipment between April 20 and June 25, depending on origin supplied. The barley
is sought for shipment between April 25 and June 25.

·        
Results awaited: Algeria seeks 50,000 tons of milling wheat for May and/or June shipment.

·        
Jordan issued an import tender for 120,000 tons of milling wheat for shipment during May, June, or July on March 31.

·        
Results awaited: 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