FI Morning Grain Comments 04/05/22

PDF attached

 

Good
morning.

 

Higher
trade in CBOT agriculture futures led by wheat after USDA reported a much lower than expected combined good/excellent winter wheat condition. The rally in wheat is supporting corn and soybeans. Black Sea concerns continue to underpin the market. A rally in
WTI crude oil is supporting global vegetable oil prices. June Malaysian palm oil settled 223 ringgit higher to 5,915. Cash palm was up $25 at $1,540 per ton. China is on holiday, returning Wednesday. Offshore values were leading soybean oil 28 points lower
and meal $1.50 lower. US corn plantings were 2 percent and spring wheat 3 percent at and near expectations, respectively.  Initial 2022 US winter wheat conditions were reported 3 percent excellent and 27 good. Very poor at 18 percent for winter wheat.

 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 5, 2022

• Few
  changes of significance were noted overnight
• Western
  and southern Texas and the high Plains region of hard red winter wheat country in the United States will miss out on significant precipitation for a while
• A
  mini-blizzard may impact southern Manitoba, eastern parts of the Dakotas and Minnesota during mid-week this week, but with the rain switching from rain to snow and back again at times the accumulations of snowfall will bey quite varied
  
• some
  areas in the upper Midwest will get 3-9 inches of snow with greater amounts in northern Minnesota
• Some
  beneficial precipitation is expected along the Alberta/Saskatchewan border in Canada today, but much  more will be needed over a larger area to seriously ease drought
• Too
  much moisture will continue in the Midwest, Delta and Tennessee River Basin over the coming week
  
• the
  problem is mostly the byproduct of light precipitation and cool temperatures
• warming
  expected late this weekend and next week will accelerate drying rates for a few days before the next wave of heavy rain arrives 
• an
  outbreak of severe weather is expected during mid-week next week
• Southern 
  Brazil, southern Paraguay and  northeastern Argentina are still slated to receive waves of rain over saturated soil during the coming week resulting in significant runoff and some flooding
  
• drier
  weather is needed to protect crop conditions
• Net
  drying is still expected in much of Mato Grosso and northern Mato Grosso do Sul, Brazil during the next week to nearly ten days, but there may be some timely rainfall after that
  
• Safrinha
  crops are expected to remain in good condition 
• Drying
  will continue in northeastern Brazil
• India’s
  weather will be good for winter crop maturation and harvest progress
• China
  is expecting improved rapeseed and wheat development conditions due to warm and dry conditions this week
  
• better
  planting weather is also expected for early corn and rice in the south
• Frequent
  rain  and snow from Europe into western Russia will continue into next week
• Melting
  snow in western Russia this weekend and next week will contribute to the runoff and might result in some enhanced flood potential
• Tropical
  cyclones are expected in the Bay of Bengal, South  China Sea and western Pacific Ocean later this week with the northern Philippines impacted by one early next week and Myanmar by another storm late next week. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
297,341                 versus   250000-550000  range

Corn                     
1,528,357             versus   800000-1650000                range

Soybeans           
737,372                 versus   450000-1000000                range

 

Macros

Yesterday
– Shanghai Reports Over 10,000 Covid Infections For First Time

US
Trade Balance Feb: -$89.2Bln (est -$88.56Bln; prev -$89.70Bln)

Canadian
International Merchandise Trade Feb: 2.66Bln (est 3.00Bln; Prev 2.62Bln)

US
Crude Oil Exports Fell To 3.30 Million Barrels Per Day In February (Vs 3.32 Million Bpd In January) – US Census

 

 

Corn

·        
US corn futures are higher following strength in wheat and US weather concerns for the summer growing season.  Long term weather forecasts call for drier than normal conditions for the heart of the US. Yesterday USDA released
a dire wheat condition that partially sums up the problem with the current drought conditions for the Great Plains. 

·        
December corn hit a new contract high of $7.0850 earlier. 

·        
US corn seeding progress was reported by USDA at 2 percent complete, compared to 2 last year and 2 5-year average.  Traders looked for 2 percent complete.

·        
Reuters estimated more than 22 million US chickens and turkeys have been killed since February due to outbreaks of bird flu, not including backyard flocks. USDA on Sunday confirmed an outbreak in Texas, its first case of the year. 
In 2015, 50 million US birds were culled due to bird flu. 

·        
USDA US corn export inspections as of March 31, 2022 were 1,528,357 tons, within a range of trade expectations, below 1,614,419 tons previous week and compares to 2,160,490 tons year ago. Major countries included China for 458,671
tons, Mexico for 267,892 tons, and Japan for 180,021 tons.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
The CBOT soybean complex is higher on strength in wheat, an Argentina truckers’ union threatening a strike, Black Sea concerns and higher energy markets underpinning global vegetable oils markets. Brazil premiums are strong.

·        
Argentina’s national transport federation is demanding the government increase the tariffs on grain producers to reflect the higher costs for fuel. Reuters noted 86% of ag goods carried to ports are trucked and 13 percent is railed.
Trucks are obviously important.

·        
June Malaysian palm oil settled 223 ringgit higher to 5,915. Cash palm was up $25 at $1,540 per ton.

·        
China is on holiday, returning Wednesday.

·        
Rotterdam vegetable oil prices were up 10-15 euros and meal unchanged to 7 euros higher.

·        
Offshore values were leading soybean oil 28 points lower and meal $1.50 lower.

·        
USDA US soybean export inspections as of March 31, 2022 were 737,372 tons, within a range of trade expectations, above 631,604 tons previous week and compares to 384,662 tons year ago. Major countries included China for 348,188
tons, Egypt for 156,008 tons, and Mexico for 82,149 tons.

 

Export
Developments

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

• USDA
  seeks 2,710 tons of packaged oil on April 7 for May shipment (May 23-June 13 for plants at posts).
  

 

Due
out April 11

 

Wheat

·        
US winter wheat ratings reported 10 points below trade expectations are lifting US wheat futures higher. Texas and some surrounding areas will see rain one time or another of the next 7-10 days that could improve conditions, but
many other US winter wheat areas will see net drying.  We think conditions can only improve from this point going forward.  Few more import tenders were announced, a sign that global demand remains strong. 

·        
May Paris wheat futures were up 4.25 euros at 368.25 euros.

·        
There was a Reuters story stating Russia is in no rush to expand ruble payments for exports. Unsure if this would make a difference for some importers that have placed sanctions on the country.

·        
AKIpress: The Russian government lifted the ban previously imposed on March 14 on the export of wheat and grain crops to the Eurasian Economic Union.

·        
Initial US winter wheat rating was reported a record low 30 percent for the combined good and excellent categories (record for early April), well below 53 percent year ago and 51 percent 5-year average. Traders looked for 40 percent.
This is bullish. But there is still time for the US Great Plains to see a soaking that could improve the crop. 

·        
Spring wheat seeding progress for the US was reported at 3 percent complete, compared to 5 last year and 3 percent for the 5-year average.  Traders looked for 2 percent complete.

·        
USDA US all-wheat export inspections as of March 31, 2022 were 297,341 tons, within a range of trade expectations, below 343,087 tons previous week and compares to 637,275 tons year ago. Major countries included Mexico for 96,611
tons, Philippines for 88,262 tons, and Taiwan for 36,534 tons.

 

Export
Developments.

·        
Japan seeks 137,516 tons of food wheat this week for June through August loading. 

·        
The Philippines are in for 50,000 tons of feed wheat on April 6 for July-December shipment.

·        
Jordan passed on 120,000 tons of barley.

·        
Iraq seeks wheat this week.

·        
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.

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

 

Rice/Other

·        
None reported

·        
Results are awaited on Qatar seeking rice.