FI Morning Grain Comments 04/28/21

PDF attached

 

Good
morning.

 

Profit
taking in CBOT markets after recent multi year highs and bull spreading are features this morning.  Lower trade in other commodity markets are also weighing on US agriculture futures.  The US should see improving crop weather but the demand story will not
go away. Several import tender developments populated overnight. The morning weather forecast showed not much change around the world. Argentina will see a good mix of rain and sunshine and the U.S. Northern Plains and Canada’s Prairies will continue to see
net drying. Look for another volatile session. 

 

 

 

Weather

Next
7 days

 

 

Bloomberg
Ag Calendar

Wednesday,
April 28:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Unica publishes data on cane crush and sugar output (tentative)

Thursday,
April 29:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• International
  Grains Council monthly report
• HOLIDAY:
  Japan, Malaysia

Friday,
April 30:

• 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
• U.S.
  agricultural prices paid, received
• Malaysia’s
  April 1-30 palm oil export data
• FranceAgriMer
  weekly update on crop conditions
• Holiday:
  Vietnam

Source:
Bloomberg and FI

 

 

 

 

Macro

US
Retail Inventories (M/M) Mar: -1.4% (est -0.1%; prev 0.0%)

US
Advance Goods Trade Balance (USD) Mar: -90.6B (est -88.0B; prevR -87.1B; prev -86.7B)

Revisions
To Priors For US Wholesale, Retail Inventory Data

US
Wholesale Inventories Mar P: 1.4% (est 0.5%; prevR 0.9%; prev 0.6%)

US
Retail Inventories (M/M) Mar: -1.4% (est -0.1%; prevR 0.1%; prev 0.0%)

Canadian
Retail Sales (M/M) Feb: 4.8% (est 4.0%; prev -1.1%)

Canadian
Retail Sales Ex-Auto (M/M) Feb: 4.8% (est 3.5%; prev -1.2%)

 

 

 

Corn

• CBOT
  corn
  is higher basis May on strong US corn basis and South Korean buying and the back months are seeing profit taking. 
  The
  US should see improving crop weather but the demand story will not go away. The morning weather forecast showed not much change around the world. Argentina will see a good mix of rain and sunshine and the U.S. Northern Plains and Canada’s Prairies will continue
  to see net drying.
• We
  are hearing Argentine FOB corn is $.90/bu below the US Gulf this morning. 
  
• On
  Tuesday sold bought an estimated net 3,000 corn contracts.
• The
  USD was 12 points higher as of 7:45 am CT. 
• Friday
  is First Notice Day and we don’t look for corn deliveries. 
• APK-Inform
  reported Ukraine’s 2020-21 season corn ending stocks could reach a record 2.7 million tons, up 70% from last season.  Ukraine harvested 30.3 million tons of corn in 2020 and the consultancy forecast that the exports might total 23.2 million tons. (Reuters)
• South
  Africa’s Crop Estimates Committee (CEC) will update their 2020-21 corn production on April 29 and a Reuters trade estimate is at 16.349 million tons, up from 15.922 million tons projected in March and above 15.3 million collected last year. 
  
• A
  Bloomberg poll looks for weekly US ethanol production to be up 4,000 barrels (938-965 range) from the previous week and stocks down 41,000 barrels to 20.406 million.
  

 

Export
developments.

• South
  Korea’s MFG bought between 140,000 and 210,000 tons of corn.  Volume was not known at time of writing.  Reuters noted one consignment for arrival around Aug. 25 involved 16,000 tons bought at the estimated flat price of $311.13 a ton c&f. Another 52,000 tons
  was not known. Shipment was for between June 27 and July 16 if sourced from South America or between July 7 to July 26 if from South Africa. Another consignment was SA corn for arrival around Sept. 5, at an unknow price. 
  

• South
  Korea’s NOFI group bought 69,000 tons of corn at an estimated $317.24 a ton c&f. expected to be sourced from South America, for arrival around Aug. 5.

Note
yesterday South
Korea’s KOCOPIA bought 50,000 tons of corn expected from Ukraine at an estimated $339.88 a ton c&f for arrival around July 20.

• Taiwan’s
  MFIG bought about 65,000 tons of corn sourced from Argentina at an estimated premium of 214.95 U.S. cents a bushel c&f over the September contract, for shipment between July 9 and July 28. . No offers were reported for U.S. or South African corn. Brazilian
  corn was offered at 235.75 cents.

 

 

Soybeans

• CBOT
  soybeans
  are lower led by the back months. Nearby soybean meal is mixed while the back months are lower.  Soybean oil is under pressure but the May/July spread continues to widen. 
  Profit
  taking in CBOT markets was the theme yesterday that spilled over into today as investors digest the recent multi year highs.  Lower trade in other commodity markets are also weighing on US agriculture futures.  The US should see improving crop weather but
  the demand story will not go away. China soybean margins on our analysis continues to improve. We are finally starting to see rationing take place for US soybeans as processors take downtime and slow run rates. 
  
• CBOT
  soybean registrations are zero after 5 receipts were cancelled out of Hennepin, IL.     
  
• Funds
  on Tuesday sold an estimated net 13,000 soybean contracts, sold 4,000 soybean meal and flat in soybean oil.
• Offshore
  values were leading CBOT SBO 205 points lower and meal $4.30 short ton lower. 
  
• Rotterdam
  vegetable oil values were 15-50 euros lower from this time previous session and Rotterdam meal mostly 9-15 euros lower. 
  
• China
  cash crush margins on our analysis were 195 cents (170 previous) vs. 141 cents late last week and compares to 132 cents year earlier. 
  
• China:
  

• Malaysian
  palm oil: (uses settle price).
  

• On
  Tuesday U.S. Supreme Court justices heard arguments for the case HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association, concerning the Clean Air Act small refinery exemptions.  Reuters note the justices appeared divided in an appeal by three
  refineries in Wyoming, Utah and Oklahoma “of a lower court ruling that faulted the U.S. Environmental Protection Agency for giving the companies waivers from the Clean Air Act’s renewable fuel standard requirements.” (Reuters)

 

Export
Developments

• Algeria
  seeks 30,000 tons of soybean meal on April 29 for shipment by June 15. 
• Egypt’s
  GASC received offers for vegetable oils and lowest offer for soyoil was $1,263 a ton for 30,000 tons for payment at sight.  Lowest offer for sunflower oil was $1,603 a ton for 10,000 tons. Both are for arrival June 21-July 10.
  They
  are also in for local vegetable oils, 3,000 soybean oil and 1,000 sunflower oil for June26-July 15 arrival. 
  
• The
  USDA under the food export program seeks 420 tons of vegetable oils for June 1-30 shipment.  
  

 

Wheat

• US
  wheat futures are lower on profit taking and improving weather for the US southern Greta Plains. 
    
• Funds
  on Tuesday sold an estimated net 3,000 CBOT SRW wheat contracts.
• September
  Paris wheat was down 5.00 at 222.50 euros. 

 

Export
Developments.

• Jordan
  passed on 120,000 tons of feed barley on April 28 for Oct-Nov shipment. 
  
• Results
  awaited: Algeria’s state grains agency OAIC seeks 50,000 tons of wheat, with offers remaining valid up to Thursday, April 29.
• Bangladesh
  seeks 50,000 tons of milling wheat on May 6. 

 

Rice/Other

·        
Results awaited: Bangladesh delayed their 50,000-ton rice import tender that was set to close April 18, to now April 26.  

·        
Bangladesh seeks 50,000 tons of rice on May 2.