FI Morning Grain Comments 03/31/22

PDF attached

 

Good
morning.

 

Mixed
to higher trade in CBOT agriculture futures pre-USDA reports. Estimates are below and attached. The wide ranges in stocks and acreage projections suggest a potential volatile trade when the numbers are released. Corn acres will be one of the top items to watch
along with soybean acres. USD is higher and WTI crude sharply lower as the US looks to release crude oil from reserves. Up to 1 million barrels per day could be released. Algeria bought a more than expected amount of wheat.

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MARCH 31, 2022

• Not
  much change was noted in the U.S. outlook overnight
• western
  hard red winter wheat production areas, West Texas and South Texas will continue dry over much of the coming ten days
• Wet
  biased conditions will continue in the heart of the Midwest, the Delta and Tennessee River Basin even though rain events will be less significant for a while after the greater rainfall overnight
  
• cool
  biased temperatures will maintain slow drying rates between rain events keeping field progress slow or delayed
• A
  cold surge is still advertised for late next week in the  eastern United States that may bring frost and freezes to the southeastern states, but the event is more than a week away leaving time for change
• California
  may get some mountain snow in about ten days, but confidence is very low
• Canada’s
  southwestern Plains may get some moisture in about ten days as well, but the event is too far out to have high confidence
• Frost
  and a couple of light freezes occurred overnight in some rural areas of San Luis and southwestern Cordoba, Argentina, according to some hourly data from unofficial reporting sites
  
• the
  cold could have produced some damage to  leaves, but it was not likely cold enough to  induce any permanent harm to  crops
  
• Official
  low temperature data was not available at the time of this writing
• Cold
  weather is still  expected in much of Europe and the western CIS over the next ten days resulting in higher late season energy demand and the potential  for some very heavy snowfall from central Europe through northwestern Ukraine and southern Belarus through
  west-central Russia to the Ural Mountains region – most of this week occur this weekend and next week 
• Drying
  in southern China after today will be ideal for rapeseed in the Yangtze River Basin and for early season corn  and rice planting
  
• sugarcane
  will benefit as well
• Warming
  in China will be good for wheat and rapeseed development

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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
Personal Income Feb: 0.5% (est 0.5%; prev 0.0%)

US
Personal Spending Feb: 0.2% (est 0.5%; prev 2.1%)

US
Real Personal Spending Feb: -0.4% (est -0.2%; prev 1.5%)

US
PCE Core Deflator (Y/Y) Feb: 5.4% (est 5.5%; prev 5.2%)

US
PCE Deflator (Y/Y) Feb: 6.4% (est 6.4%; prev 6.1%)

US
Initial Jobless Claims Mar 26: 202K (est 196K; prev 187K)

US
Continuing Claims Mar 19: 1307K (est 1340K; prev 1350K)

Canadian
GDP (M/M) Jan: 0.2% (est 0.2%; prev 0.0%; prevR 0.1%)

Canadian
GDP (Y/Y) Jan: 3.5% (est 3.6%; prev 3.9%; prevR 3.7%)

 

Corn

·        
US corn futures are higher on pre-USDA report positioning. Outside markets are limiting gains.  

·        
Ukraine is about 10 percent complete on summer crop plantings of about 400,000 hectares, slightly above last year’s pace. 

·        
Russia plans to increase its export quotas for nitrogen and complex fertilizers. Russia is a major producer of potash, phosphate, and nitrogen, with about 50 million tons produced a year, 13% of the global total.

·        
DATAGRO sees Brazil’s 2021-22 corn crop at 118.3 million tons versus 117.8 million previously.

·        
The US is still considering removing summer restrictions on ethanol blending in order to lower fuel costs.

·        
Weekly US ethanol production was down 6,000 barrels to 1.036 million (Bloomberg survey looked for it to be down 5,000) from the previous week and stocks up 381,000 barrels to 26.529 million (survey looked for up 137,000 barrels).
US gasoline stocks increase for the first time in 7 weeks and demand remains about inline from a year ago but down about 3-4 percent from pre-pandemic levels.

·        
USDA’s Broiler Report showed eggs set in the US up 1 percent from a year ago and chicks placed up slightly.  Cumulative placements from the week ending January 8, 2022, through March 26, 2022, for the United States were 2.23 billion.
Cumulative placements were down slightly from the same period a year earlier.

·        
USDA Hogs and Pigs report showed a less than expected March 1 all hogs, hogs kept for breeding and kept for market. The pig crop shrank from the previous year while the trade was looking for an expansion. Actual farrowings contracted
from a year ago and intentions are down as well. The report is viewed slightly negative for US feed demand.

 

 

 

 

Corn
Upside and Downside Price Scenarios

Bubela,
H., K. Swanson and G. Schnitkey. “Corn Upside and Downside Price Scenarios.”
farmdoc
daily
(12):41,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, March 30, 2022.

 

Export
developments.

• None
  reported

 

Soybeans

·        
The CBOT soybean complex is mixed with SBO lower, and meal & soybeans higher despite a sharp decline in WTI crude oil and poor export sales for soybeans. Positioning ahead of the USDA report is in play.

·        
Russia is looking into banning sunflower seed exports and impose a quota on sunflower oil to combat rising domestic prices from April 1 through August 31.

·        
(Bloomberg) — Ukraine may collect 53.3m tons of grains and oilseeds in the 2022 season, 51% lower than the record set last year, local consultant APK-Inform.

·        
ITS reported Malaysian palm oil exports for the month of March at 1.353 million tons, a 7.4 percent increase from February shipments.  AmSpec reported 1.292 million tons, a 6.7 percent increase from February. 

·        
June Malaysian palm oil settled 225 ringgit lower to 5,705. Cash palm was down $25 at $1,510 per ton.

·        
From this time yesterday morning Rotterdam meal from SA were mostly 5-9 euros higher and vegetable oils mixed. 

·        
China May soybeans were up 1.7%, meal up 0.3%, soybean oil up 0.9% and palm up 0.3%.

·        
Offshore values are leading SBO 75 points lower and meal $1.10 short ton lower. 

 

 

 

 

Export
Developments

·        
Turkey bought 18,000 tons of sunflower oil (lowest $1,896.90/ton).

·        
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 are higher despite poorer than expected USDA export sales and a higher USD. Black Sea concerns continue to underpin the market.

·        
China allocated another $315 million USD to winter wheat producers to help stabilize their crop.

·        
Ukraine said they have 13 million tons of corn stocks and 3.8 million tons of wheat.

·        
May Paris wheat futures were up 3.50 euros (1%) to 366 euros.

 

Export
Developments.

·        
Saudi Arabia seeks 355,000 tons of 12.5% protein wheat for Sep-Nov delivery. 

·        
Jordan passed on 120,000 tons of milling wheat for shipment during May, June, or July.

·        
Algeria bought about 600,000 tons of milling wheat with prices around 448/ton C&F for May and/or June shipment.

·        
Yesterday Tunisia bought about 125,000 tons of soft wheat and 100,000 tons of feed barley. The wheat was bought between $418.68 and $455.75 per ton and barley $442.68 and $457.96 per ton.  The wheat was 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.

·        
Bangladesh is in for 50,000 tons of wheat with a deadline of April 4. Bangladesh seeks 50,000 tons of wheat on April 11 for shipment within 40 days after contract signing.

 

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

 

USDA Export Sales

Poor export sales posted for corn, wheat, and soybean meal, at least on a combined crop year basis. Old crop soybeans and old crop soybean oil were ok. 1.3
million tons were posted for old crop soybeans that included China (593,200 MT, including 121,000 MT switched from unknown destinations and decreases of 3,600 MT). There were no China corn or wheat sales. Sorghum saw net reductions of 16,200 tons.  Pork sales
were good at 27,600 tons. 

 

 

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING  3/24/2022

 

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	14.7	1,422.3	1,426.7	179.2	6,052.5	7,087.1	25.8	390.4
SRW	2.8	516.1	331.4	54.3	2,242.5	1,451.5	55.5	419.5
HRS	55.4	1,020.2	1,550.7	102.4	4,214.4	5,927.0	0.0	372.7
WHITE	21.6	512.4	2,030.7	13.0	2,816.5	4,628.6	0.0	222.6
DURUM	0.5	19.0	78.3	0.3	170.0	592.1	0.0	49.4
TOTAL	95.0	3,489.9	5,417.7	349.2	15,495.9	19,686.3	81.3	1,454.6
BARLEY	-8.2	5.7	5.8	0.0	14.7	23.1	8.2	8.2
CORN	636.9	21,473.8	31,808.4	1,882.4	32,180.3	33,917.6	286.8	2,425.5
SORGHUM	-16.2	2,919.3	2,562.8	339.2	3,840.8	3,824.7	0.0	0.0
SOYBEANS	1,305.8	11,797.1	6,024.9	670.2	43,544.9	54,739.7	54.0	8,164.8
SOY MEAL	103.0	3,087.1	2,476.8	238.9	6,068.4	6,459.6	60.5	337.4
SOY OIL	30.9	186.0	107.4	12.1	447.3	531.8	0.0	0.0
RICE
L G RGH	12.0	227.2	316.2	19.0	942.0	1,092.6	0.0	0.0
M S RGH	0.0	3.3	5.3	0.2	10.9	23.5	0.0	0.0
L G BRN	0.2	16.4	3.7	0.3	33.6	33.9	0.0	0.0
M&S BR	0.1	43.9	69.0	0.2	42.5	84.4	0.0	0.0
L G MLD	2.4	71.9	49.4	4.4	573.6	453.6	0.0	0.0
M S MLD	2.2	239.2	261.1	3.4	260.9	369.7	0.0	0.0
TOTAL	17.0	602.0	704.7	27.5	1,863.4	2,057.6	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	234.0	7,573.8	5,105.5	331.1	6,623.5	9,471.5	111.7	2,464.1
PIMA	7.4	156.1	247.5	12.1	282.6	491.8	8.2	23.1

 

 

This
summary is based on reports from exporters for the period March 18-24, 2022.

Wheat:  Net
sales of 95,000 metric tons (MT) for 2021/2022 were down 39 percent from the previous week and 58 percent from the prior 4-week average.  Increases primarily for South Korea (45,000 MT), Mexico (30,500 MT, including decreases of 1,200 MT), Guatemala (29,800
MT switched from unknown destinations), Colombia (27,000 MT, including 25,000 MT switched from unknown destinations), and El Salvador (18,800 MT switched from unknown destinations), were offset by reductions primarily for unknown destinations (60,800 MT) and
Nigeria (15,900 MT).  Net sales of 81,300 MT for 2022/2023 were reported for Mexico (32,000 MT), Colombia (31,300 MT), Nigeria (13,000 MT), and Peru (5,000 MT).  Exports of 349,200 MT were down 5 percent from the previous week, but up 2 percent from the prior
4-week average.  The destinations were primarily to Mexico (113,600 MT), Japan (83,100 MT), the Philippines (65,500 MT), Colombia (44,600 MT), and Nigeria (33,100 MT). 

Corn: 
Net sales of 636,900 MT for 2021/2022 were down 35 percent from the previous week and 53 percent from the prior 4-week average.  Increases primarily for Japan (217,800 MT, including 125,000 MT switched from unknown destinations and decreases of 7,600 MT),
Colombia (103,800 MT, including 41,000 MT switched from unknown destinations and decreases of 20,100 MT), Mexico (86,600 MT, including decreases of 116,600 MT), Vietnam (69,300 MT, including 68,000 MT switched from unknown destinations), and Taiwan (66,000
MT switched from unknown destinations), were offset by reductions primarily for unknown destinations (74,300 MT), Lebanon (50,000 MT), and China (18,400 MT).  Net sales of 286,800 MT for 2022/2023 were reported for unknown destinations (254,800 MT), Mexico
(30,000 MT), and Honduras (2,000 MT).  Exports of 1,882,400 MT were up 26 percent from the previous week and 24 percent from the prior 4-week average.  The destinations were primarily to China (457,600 MT), Japan (432,200 MT), Mexico (335,200 MT), Colombia
(170,800 MT), and Canada (96,800 MT). 

Optional
Origin Sales: 
For 2021/2022, new optional origin sales of 60,000 MT were reported for unknown destinations.  Options were exercised to export 65,000 MT to unknown destinations from the United States.  The current outstanding balance of 530,800
MT is for unknown destinations (300,000 MT), South Korea (130,000 MT), Morocco (60,000 MT), Italy (31,800 MT), and Saudi Arabia (9,000 MT).  For 2022/2023, the current outstanding balance of 3,900 MT is for Italy.

Export
Adjustments: 
Accumulated exports of corn to Mexico were adjusted down 698 MT for week ending March 17th.  This shipment was reported in error.

Barley: 
Total net sales reductions of 8,200 MT for 2021/2022 were up noticeably from the previous week and from the prior 4-week average.  The destination was Japan.  Total net sales of 8,200 MT for 2022/2023 were for Japan.  No exports were reported for the week.

Sorghum: 
Net sales reductions of 16,200 MT for 2021/2022–a marketing-year low–were up noticeably from the previous week, but down noticeably from the prior 4-week average.  Increases reported for China (50,800 MT, including 68,000 MT switched from unknown destinations
and decreases of 23,000 MT) and Japan (1,000 MT), were more than offset by reductions for unknown destinations (68,000 MT).  Exports of 339,200 MT–a marketing-year high–were up 33 percent from the previous week and 58 percent from the prior 4-week average. 
The destinations were primarily to China (328,300 MT) and Japan (10,500 MT).

Rice: 
Net sales of 17,000 MT for 2021/2022 were down 80 percent from the previous week and 71 percent from the prior 4-week average.  Increases were primarily for Guatemala (5,500 MT), Honduras (3,500 MT, including decreases of 400 MT), Mexico (3,300 MT), Canada
(2,600 MT), and Saudi Arabia (800 MT).  Exports of 27,500 MT were down 49 percent from the previous week and from the prior 4-week average.  The destinations were primarily to Guatemala (11,000 MT), Honduras (6,000 MT), Canada (3,300 MT), Mexico (2,700 MT),
and Jordan (1,600 MT).

Soybeans: 
Net sales of 1,305,800 MT for 2021/2022 were up noticeably from the previous week and up 11 percent from the prior 4-week average.  Increases were primarily for China (593,200 MT, including 121,000 MT switched from unknown destinations and decreases of 3,600
MT), unknown destinations (520,700 MT), the Netherlands (56,000 MT, including 60,000 MT switched from unknown destinations and decreases of 4,000 MT), Japan (55,600 MT, including decreases of 2,100 MT), and Taiwan (32,400 MT, including decreases of 100 MT). 
Total net sales of 54,000 MT for 2022/2023 were for Mexico.  Exports of 670,200 MT were up 22 percent from the previous week, but down 6 percent from the prior 4-week average.  The destinations were primarily to China (331,900 MT), Vietnam (65,600 MT), Mexico
(63,300 MT), Egypt (57,100 MT), and the Netherlands (56,000 MT).   

Export
for Own Account:
For 2021/2022, the current exports for own account outstanding balance is 3,000 MT, all Canada.

Soybean
Cake and Meal: 
Net sales of 103,000 MT for 2021/2022 were down 61 percent from the previous week and 50 percent from the prior 4-week average.  Increases primarily for the Philippines (47,200 MT, including decreases of 2,200 MT), Ecuador (33,500 MT, including decreases of
2,500 MT), Morocco (30,000 MT), Canada (22,100 MT, including decreases of 600 MT), and Mexico (7,000 MT), were offset by reductions primarily for unknown destinations (52,900 MT).  Net sales of 60,500 MT for 2022/2023 were reported for unknown destinations
(60,000 MT) and Japan (500 MT).  Exports of 238,900 MT were up 75 percent from the previous week and 22 percent from the prior 4-week average.  The destinations were primarily to the Philippines (94,600 MT), Honduras (27,900 MT), the Dominican Republic (24,900
MT), Canada (22,800 MT), and Mexico (21,400 MT).

Soybean
Oil: 
Net sales of 30,900 MT for 2021/2022 were up noticeably from the previous week and from the prior 4-week average.  Increases were reported for Guatemala (19,500 MT), unknown destinations (6,500 MT), Costa Rica (4,000 MT), Canada (600 MT), and the Dominican
Republic (300 MT, including decreases of 1,400 MT).  Exports of 12,100 MT were down 38 percent from the previous week and 14 percent from the prior 4-week average.  The destinations were to the Dominican Republic (7,400 MT), Venezuela (3,000 MT), Mexico (1,300
MT), and Canada (400 MT).

Cotton: 
Net sales of 234,000 RB for 2021/2022 were down 24 percent from the previous week and 32 percent from the prior 4-week average.  Increases primarily for China (177,000 RB, including decreases of 2,800 RB), Vietnam (21,300 RB, including 1,600 RB switched from
China, 800 RB switched from South Korea, and decreases of 1,000 RB), Turkey (13,800 RB, including decreases of 100 RB), Indonesia (5,000 RB, including 600 RB switched from Japan), and Taiwan (4,800 RB), were offset by reductions for Italy (2,200 RB), South
Korea (800 RB), and Bangladesh (300 RB).  Net sales of 111,700 RB for 2022/2023 were primarily for Turkey (47,200 RB), Thailand (29,100 RB), Pakistan (13,800 RB), Vietnam (11,400 RB), and India (8,800 RB).  Exports of 331,100 RB were down 25 percent from the
previous week and 8 percent from the prior 4-week average.  The destinations were primarily to China (89,900 RB), Turkey (52,400 RB), Vietnam (47,000 RB), Pakistan (38,500 RB), and Mexico (20,000 RB).  Net sales of Pima totaling 7,400 RB were up noticeably
from the previous week and up 27 percent from the prior 4-week average.  Increases were primarily for India (3,500 RB), Peru (900 RB), China (900 RB), Bangladesh (800 RB), and Egypt (600 RB).  Net sales of 8,200 RB for 2022/2023 were primarily for India (4,400
RB) and Peru (2,600 RB).  Exports of 12,100 RB were up noticeably from the previous week and up 2 percent from the prior 4-week average.  The destinations were primarily to India (5,200 RB), China (3,100 RB), Peru (2,400 RB), Vietnam (1,000 RB), and Pakistan
(200 RB).    

Optional
Origin Sales: 
For 2021/2022, the current outstanding balance of 57,200 RB is for Vietnam (52,800 RB) and Pakistan (4,400 RB). 

Exports
for Own Account: For
2021/2022, the current exports for own account outstanding balance is 100 RB, all Vietnam.

Hides
and Skins: 
Net sales of 332,600 pieces for 2022 were down 20 percent from the previous week and from the prior 4-week average.  Increases primarily for China (212,100 whole cattle hides, including decreases of 18,800 pieces), Thailand (39,400 whole cattle hides, including
decreases of 1,000 pieces), Mexico (26,100 whole cattle hides, including decreases of 700 pieces), Taiwan (24,900 whole cattle hides, including decreases of 700 pieces), and South Korea (19,400 whole cattle hides, including decreases of 1,100 pieces), were
offset by reductions for Indonesia (800 pieces) and Brazil (100 pieces).  Total net sales reductions of 1,400 calf skins were for Italy.  Exports of 502,500 pieces were up 3 percent from the previous week and 17 percent from the prior 4-week average.  Whole
cattle hides exports were primarily to China (286,200 pieces), South Korea (65,300 pieces), Mexico (62,200 pieces), Thailand (51,600 pieces), and Indonesia (9,500 pieces).  Total exports of 5,600 calf skins were to Italy.  In addition, total exports of 1,200
kip skins were to China.

Net
sales of 79,600 wet blues for 2022 were down 76 percent from the previous week and 39 percent from the prior 4-week average.  Increases primarily for China (46,000 unsplit), Italy (6,800 grain splits and 4,800 unsplit, including decreases of 100 unsplit and
100 grain splits), Vietnam (11,400 unsplit, including decreases of 100 unsplit), India (6,900 grain splits), and Thailand (6,500 unsplit, including decreases of 300 unsplit),
were offset by reductions primarily for the Dominican Republic (7,200 grain splits).  Exports of 180,600 wet blues were down 7 percent from the previous week, but up 35 percent from the prior 4-week average.  The destinations were primarily to Italy (28,700
grain splits and 26,900 unsplit), China (44,500 unsplit), Vietnam (40,800 unsplit), Thailand (13,300 unsplit), and Taiwan (10,900 unsplit).  Net sales of 1,228,600 splits were up noticeably from the previous week and up 88 percent from the prior 4-week average. 
The destinations were primarily for Vietnam (784,300 pounds, including decreases of 26,500 pounds) and South Korea (399,200 pounds, including decreases of 10,700 pounds).  Exports of 537,300 pounds were up 66 percent from the previous week and 12 percent from
the prior 4-week average. The destinations were to Vietnam (413,100 pounds) and China (124,200 pounds).

Beef: 
Net sales of 23,000 MT for 2022 were down 17 percent from the previous week and 7 percent from the prior 4-week average.  Increases primarily for China (7,100 MT, including decreases of 200 MT), Japan (5,300 MT, including decreases of 500 MT), South Korea
(4,600 MT, including decreases of 700 MT), Taiwan (1,100 MT, including decreases of 200 MT), and Mexico (1,000 MT), were offset by reductions for Kuwait (100 MT).  Exports of 20,400 MT were down 51 percent from the previous week and 11 percent from the prior
4-week average.  The destinations were primarily to South Korea (6,500 MT), Japan (5,200 MT), China (3,100 MT), Taiwan (1,600 MT), and Mexico (900 MT). 

Pork: 
Net sales of 27,600 MT for 2022 were up 19 percent from the previous week, but down 14 percent from the prior 4-week average.  Increases primarily for Mexico (14,300 MT, including decreases of 300 MT), Japan (4,000 MT, including decreases of 200 MT), South
Korea (2,400 MT, including decreases of 500 MT), Canada (2,300 MT, including decreases of 700 MT), and the Dominican Republic (1,200 MT), were offset by reductions for Chile (300 MT) and El Salvador (100 MT).  Exports of 30,600 MT were up 5 percent from the
previous week and 8 percent from the prior 4-week average.  The destinations were primarily to Mexico (13,200 MT), Japan (5,400 MT), China (3,500 MT), South Korea (2,900 MT), and Canada (1,600 MT).