FI Morning Grain Comments 04/04/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 1,084,000 metric tons of corn for delivery to China.  Of the total, 676,000 metric tons is for delivery during the 2021/2022 marketing year and 408,000 metric tons is for delivery during the 2022/2023 marketing year.

 

Higher
trade in CBOT soybean complex and grains as renewed Black Sea shipment concerns underpin commodities. Ukraine/Russia situation worsened over the weekend. WTI is up about $4.05 and USD 30 points higher.  Saudi Arabia bought 625,000 tons of wheat, more than
expected. Jordan and Bangladesh are back in for wheat.  China is on holiday. Palm futures were up 126 points and cash up $25/ton. This afternoon we should see US crop progress show a 2 percent corn sowing figure and winter wheat G/E condition around 47 percent. 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 4, 2022

• A
  little rain and snow will fall along the Alberta/Saskatchewan border this week improving  topsoil for a part of the  drought stricken region, but much more precipitation will still be needed
• Drought
  will continue in the high Plains of U.S. hard red winter wheat country and both western and southern Texas over the next ten days
• Too 
  much rain will impact the heart of the Midwest, Delta and Tennessee River Basin this week while temperatures become colder biased limiting drying rates
  
• This
  will result in poor drying conditions, too much moisture and some flooding 
• fieldwork
  will be delayed until late this month in all three areas
• Cold
  temperatures in the mid-south and southeastern parts of the U.S. late this week and into the weekend could induce some frost and freezes impacting some of the more advanced winter wheat, but the region is considered to be a minor production area 
• South
  America has a few areas of interest, too, 
• Too
  much moisture will fall in southern Paraguay and southern Brazil during the next week to nearly 10 days resulting in significant runoff and harvest delays
  
• there
  may also be some concern over unharvested crop quality
• Mato
  Grosso and northern Mato Grosso do Sul are expected to dry down over the next ten days
  
• soil
  conditions in these areas are saturated or nearly saturated today
• the
  topsoil  will firm up, but Safrinha crops will develop normally
• rain
  is advertised by some models for days 11-15 and if that occurs the  moisture will replenish topsoil moisture and leave the longer term outlook for crops in the region mostly good
• Bahia
  and  northern Minas Gerais are too dry and minor corn, soybean, coffee and sugarcane are being impacted
• Australia
  will see some rain in cotton areas during the coming week raising a little concern over fiber quality
• Too
  much moisture in western Russia and melting snow promises to create some flooding for a little while
• Cool
  weather in Europe during the  weekend induced some frost and freezes in many areas
  
• crop
  damage might have occurred to the more advanced winter wheat in Spain along with citrus and other fruit and  vegetable crops

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Monday,
April 4:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Responsible
  Sourcing and Ethical Trade Forum, April 4-5, London
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  China

Tuesday,
April 5:

• U.S.
  crop progress and planting data for corn and cotton; winter wheat condition, 4pm
• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  April 1-5 palm oil export data
• Purdue
  Agriculture Sentiment, 9:30am
• New
  Zealand global dairy trade auction
• HOLIDAY:
  China, Hong Kong

Wednesday,
April 6:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• New
  Zealand Commodity Price
• HOLIDAY:
  Thailand

Thursday,
April 7:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Vietnam’s
  customs department releases coffee, rice and rubber export data for March
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans

Friday,
April 8:

• FAO
  World Food Price Index
• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• 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
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

 

 

CFTC
Commitment of Traders

The
net long index fund position for the combined Chicago wheat, KC wheat, corn, oats, soybeans, meal and soybean oil were again a record, at 1.175 million contracts, up from 1.171 million previous week. Traditional funds reduced long positions as of last Tuesday.
They were less long than expected for corn and meal and much more long than expected for Chicago wheat.

 

 

 

 

Macros

US
Factory Orders (M/M) Feb: -0.5% (est -0.6%; prev R 1.5%)

–
Factory Orders Ex-Trans (M/M): 0.4% (est 0.3%; prev R 1.2%)

US
Durable Goods Orders (M/M) Feb F: -2.1% (est -2.2%; prev -2.2%)

–
Durables Ex-Trans: -0.6% (est -0.6%; prev -0.6%)

–
Cap Goods Orders Nondef Ex-Air: -0.2% (prev -0.3%)

–
Cap Goods Ship Nondef Ex-Air: 0.3% (prev 0.5%)

 

 

Corn

·        
US corn futures are higher on gains in WTI and China kicking off 2022-23 corn buying by picking up 1.084 million tons per USDA 24-hour sales. The sale is the largest (new-crop) announcement since May 2021.

·        
The Ukraine/Russia situation worsened over the weekend, but talks are still on the table. Look for headline trading this week. 

·        
December corn hit a new contract high of $6.99 earlier. 

·        
EIA reported February corn for ethanol production at 405 million bushels, 10 million below a Bloomberg poll, down from 464 million from January and well above 333 million year ago (pandemic). 

 

 

Export
developments.

·        
Private exporters reported sales of 1.084 million tons of corn for delivery to China during the 2022/2023 marketing year.

 

 

 

Soybeans

·        
The CBOT soybean complex is higher from world trade shipping concerns, higher outside energy markets and strength in global vegetable oils. 

·        
Traders look for Malaysian palm oil stocks as of 3/31 to fall to a one year low.

·        
June Malaysian palm oil settled 126 ringgit higher to 5,692. Cash palm was up $25 at $1,515 per ton.

·        
From this time Friday morning, Rotterdam meal from SA were mostly 10-18 euros lower and vegetable oils 10-15 euros higher. 

·        
China is on holiday, returning Wednesday.

·        
Offshore values are leading SBO 54 points lower and meal $3.80 short ton higher. 

·        
USDA NASS reported February soybean crush at 174.4 million bushels, 1 million below a Bloomberg poll, below 194.3 million for January and 10.1 million above 164.3 million crushed year earlier. The February crush came out to 6.23
million bushels per day, down from 6.27 million during January and the record 6.39 million per day posted for December 2021. Soybean oil stocks at the end of February were 2.566 billion pounds, highest level since April 2020, 48 million above an average trade
guess, 66 million above end of January and 260 million above end of February 2021. Part of the reason for larger than expected stocks was the yield. The soybean oil yield increased to 11.84 pounds per bushel from 11.72 pounds during January and was highest
since July 2021. Soybean meal stocks slipped to 386,000 short tons from 431,000 short tons during January and compares to 584,000 short tons for February 2021. The February soybean meal yield was 46.90 versus 46.67 previous month and 47.69 year ago.

 

 

Export
Developments

·        
China will auction another 500,000 tons of imported soybeans from its reserves on April 7.

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

 

Wheat

·        
US wheat futures are higher on strong global demand and higher outside related markets. 

·        
We look for the initial US winter wheat rating to be reported below its respected five-year average.  Combined G/E could end up below 47 percent.  55 percent is 5-year average.

·        
Uzbekistan plans to buy up to 600,000 t of grain for state stockpiles.

·        
May Paris wheat futures were up 1.50 euros to 366.50 euros.

 

Export
Developments.

·        
Saudi Arabia bought 625,000 tons of 12.5% protein wheat (355,000 tons sought) for Sep-Nov delivery. The average price was $422.47/ton. Origins offered included EU, Black Sea, NA, SA, and Australia.

·        
Last week Iraq bought 100,000 tons of German wheat at an average price of $570/ton. The deadline for the tender was March 24 and was initially for April through May shipment.

·        
Iraq again seeks wheat this week.

·        
Results awaited: Lowest offer $406.83/ton.  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.

·        
Jordan seeks 120,000 tons of milling wheat on April 6 for LH May and/or through July shipment.

·        
Jordan seeks 120,000 tons of feed barley on April 5.

 

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