FW: FI Evening Grain Comments 04/13/20

PDF attached

 

 

 

 

Weather

Japan’s
weather bureau estimates a 60 percent chance of no El Nino.

 

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS:

Today’s
weather has not changed much since Friday for most areas around the world. The U.S. will continue to deal with frequent bouts of precipitation and temperatures will be colder biased in the Midwest, Delta and southeastern states as well as the southern Plains
this week. The environment will not be conducive for improving field conditions.

            In
South America, conditions will remain favorable in Argentina over the next week to ten days, although soil moisture will decline and that may lead to some need for timely rain in a few of the very latest maturing crops. Brazil crop weather will be favorably
mixed for mostly good conditions during the next ten days, but greater rain may be needed in the drier pockets of the south.

            China
will see a good mix of rain and sunshine in east-central areas which may promote some planting, but it will be slow for a little while longer. Planting in southern China will remain very slow until better drying conditions evolve.

            India’s
weather will be good for winter oilseed maturation and harvest progress. South Africa weather will remain good for both late season crop development and early season harvesting.

Southeast Asia oil palm and coconut production is advancing well except in parts of the Philippines where dryness is prevailing.

            Europe
dryness may raise some worry among a few coarse grain producers, but the areas that usually plant first have some moisture to work with. Rapeseed in France, Germany and the U.K. may need some moisture soon.

            Overall,
weather today will likely provide a mixed influence on market mentality.

Source:
World Weather Inc. and FI

MARKET
WEATHER MENTALITY FOR WHEAT:

No
permanent crop damage is expected this week as unusually cold air overtakes much of the U.S. hard red winter wheat production areas. Cooling in the Midwest will also have little to no impact on crop production.  Some vegetation burning is expected in both
areas, however.

Dryness in Europe and a few areas in Ukraine, southern Russia and Kazakhstan will continue a concern, but there is still plenty of time for improved weather before crops are at risk of a change in production potential.

            China
and India wheat production potentials still look very good as do yields in Pakistan. Southern Australia’s long-range outlook is also improving for planting conditions late this month and especially in May and June.

            Planting
in South Africa may be getting off to a better than usual start because of recent precipitation and that which is coming. Some areas in southern Brazil will need rain soon for planting and establishing its winter wheat.

            Overall
weather today will have a mixed influence on market mentality.

Source:
World Weather Inc. and FI

 

Weekend
webinars

University
Of Illinois:

• Acres
  & Crisis: Prospective Plantings and Perspectives from the Past.

Coppess,
J., N. Paulson, G. Schnitkey, C. Zulauf and K. Swanson. “Acres & Crisis: Prospective Plantings and Perspectives from the Past.”
farmdoc daily (10):66,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, April 9, 2020.
https://farmdocdaily.illinois.edu/2020/04/acres-crisis-prospective-plantings-and-perspectives-from-the-past.html?utm_source=farmdoc+daily+and+Farm+Policy+News+Updates&utm_campaign=5958f1c98f-FDD_RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_2caf2f9764-5958f1c98f-173649469

• Impacts
  of Covid-19 on Agricultural Assets and Lending Markets https://farmdoc.illinois.edu/event/impacts-of-covid-19-on-agricultural-assets-and-lending-markets?utm_source=Webinar+List&utm_campaign=de18e823c3-EMAIL_CAMPAIGN_2020_02_20_07_26_COPY_01&utm_medium=email&utm_term=0_166a5dd42c-de18e823c3-175287057
  

 

Kansas
State:

Ongoing
Effects on Livestock Markets from COVID-19 Pandemic

https://agmanager.info/news/recent-videos/ongoing-effects-livestock-markets-covid-19-pandemic

 

USDA
inspections versus Reuters trade range

Wheat
608,709           versus  300000-500000           range

Corn
1,029,886        versus  800000-1200000         range

Soybeans
442,024           versus  300000-500000           range

 

 

 

 

GRAINS
INSPECTED AND/OR WEIGHED FOR EXPORT

REPORTED IN WEEK ENDING APR 09, 2020

— METRIC TONS —

————————————————————————-

                                                  CURRENT
PREVIOUS 

             ———–
WEEK ENDING ———-  MARKET YEAR  MARKET YEAR

GRAIN      04/09/2020  04/02/2020  04/11/2019    TO DATE     TO DATE  

 

BARLEY
0           0           0       30,499        9,108 

CORN
1,029,886   1,279,364   1,191,442   20,371,971   31,933,828 

FLAXSEED
0           0          72          520          462 

MIXED
0           0           0            0            0 

OATS
0           0         499        3,243        2,592 

RYE
0           0           0            0            0 

SORGHUM
195,368       9,160      11,488    1,982,484    1,071,424 

SOYBEANS
442,024     300,915     476,305   32,338,327   30,645,028 

SUNFLOWER
0           0           0            0            0 

WHEAT
608,709     350,190     528,714   21,442,019   19,935,798 

Total
2,275,987   1,939,629   2,208,520   76,169,063   83,598,240 

————————————————————————-

CROP
MARKETING YEARS BEGIN JUNE 1 FOR WHEAT, RYE, OATS, BARLEY AND

FLAXSEED;
SEPTEMBER 1 FOR CORN, SORGHUM, SOYBEANS AND SUNFLOWER SEEDS.

INCLUDES
WATERWAY SHIPMENTS TO CANADA.

 

 

Macros

 

·
USD was down 16 points by 2 pm CT.

 

 

Corn.

 

• Corn
  futures trended lower but late in the session bounced well off session lows after the May contract held above its contract low.  Top global mineral oil producing companies agreed to a deal to lower daily output by about a tenth to help stabilize prices, but
  at the same time acknowledged world petrol/gasoline consumption will continue to come under pressure.  This didn’t sit well with corn longs hoping for a short-term recovery in US ethanol production.  Futures also started the day lower from ongoing concerns
  over corn for feed demand.  On the other hand, wet weather across the majority of the US growing areas is keeping producers from fieldwork activity, which is slightly supportive.  Cold weather for the US for the remainder of the week will slow evaporation
  rates.  After the morning open, 1,400 July corn puts traded at $3-$3.375.  1,500 CZ 380/360 put spreads were sold at 14.   US meat futures dropped like a rock today on coronavirus concerns related to logistics.
  
• USDA
  US corn export inspections as of April 09, 2020 were 1,029,886 tons, within a range of trade expectations, below 1,279,364 tons previous week and compares to 1,191,442 tons year ago. Major countries included Mexico for 348,402 tons, Japan for 262,124 tons,
  and Korea Rep for 131,115 tons.
• Little
  planting, if any, was completed across the US Delta and Southeast over the weekend due to widespread precipitation.
  

·
USDA confirmed a case of H7N3 bird flu at a commercial farm in South Carolina. This is the first case of any bird flu kind for the US since 2017 (HAI and LPAI H7N8), and not the same strain that killed 50
million birds in 2014 and 2015 (H5N1, H5N2 and H5N8).  The H7N3 does not infect humans that we know of.

• More
  and more meat processing plants are closing due to coronavirus outbreaks.  100’s of workers tested positive and at least three American meal workers have passed from the disease.  One plant in Colorado’s Weld County tested positive.
  
• Over
  the weekend we learned a large US pork processing plant will shut down indefinitely. Smithfield Foods Inc. plant in Sioux Falls, South Dakota accounts to 4 to 5 percent of US production.  

·
Brownfield: PLANTING CORN AT ‘A $100/ACRE LOSS’.  They see break even in corn around $3.50-$3.60/bu.
https://brownfieldagnews.com/news/planting-corn-at-a-100-acre-loss/

• French
  corn plantings as of April 6 were running at 4%, up from 1% a week earlier and below 13% last year.
  

 

Vietnam
update on ASF
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Vietnam%20African%20Swine%20Fever%20Update_Hanoi_Vietnam_04-08-2020

 

Corn
Export Developments

• Results
  awaited: Syria seeks 50,000 tons of soybean meal in a combo with 50,000 tons of corn on May 12.
  
• Late
  last week Algeria bought 40,000 tons of corn from Argentina for FH May shipment at near $194 to $195/ton c&f.
  

 

 

 

Updated
4/9/20

• May
  corn is seen in a $3.15 and $3.65 range.  July could reach below $3.00 if we ongoing US industrial demand destruction. December is seen in a $2.85-$3.95 range.
  

 

 

Soybean
complex

 

• Soybeans
  fell following bear spreading in soybean meal over concerns of weakening US feed demand.  Soybean July 860 and 870 puts options were active.  July crush fell for the third consecutive day to 85.75 cents to its lowest level since early November 2019.  A few
  weeks ago, it was trading around $1.17.  Soybean oil saw an outside day lower.  July soybeans dropped 8.75 cents, July meal by $3.30/short ton, and July soybean oil by 49 points.
  
• IL
  crude SBO was last heard around 50 over, East nominal 75 over and West 25 over. Gulf fob degummed oil was nominal 200 over.  Argentina was nominally 10 under and Brazil degummed oil nominal 40 over.
• USDA
  US soybean export inspections as of April 09, 2020 were 442,024 tons, within a range of trade expectations, above 300,915 tons previous week and compares to 476,305 tons year ago. Major countries included Egypt for 179,965 tons, Mexico for 123,261 tons, and
  China Main for 70,678 tons.

·
Last week Sinograin agreed to release another 500,000 tons of soybeans from state reserves to Cofco.

• Bloomberg
  reported about a million tons of 2019 Canadian canola that was left in the fields over the winter could be harvested soon.
  
• APK-Inform
  reported new-crop rapeseed quotes dropped $20-30 per ton FOB Black Sea since mid-March to around $378-380 per ton for July delivery.
• APK-Inform
  estimated the Ukraine 2020 sunflower crop at 15.4-15.7 million tons, nearly unchanged from 2019 while the soybean crop could decline to 3.9-4.2 million tons from 4.4 million tons in 2019.  September to date sunflower oil exports are up 83 percent.
  

·
ITS reported Malaysian palm exports during the 1-10 April period at 312,900 tons, down 6.6 percent from the previous month.

·
The Malaysian Palm Oil Board will reduce the crude palm export duty from current 5 percent to 4.5 percent for May.

·
Malaysian palm markets:
 MBOB
S&D was viewed as bearish but a slowdown in April production supported prices on Friday.

 

Oilseeds
Export Developments

 

• Last
  Wednesday the USDA bought 9,070 tons of vegetable oils for its export program from $1,008.95 to $1,085.77 per ton.
  
• On
  April 21 the USDA seeks 1,510 tons of vegetable oils under its PL480 program. 
• On
  Friday USDA reported under the 24-hour announcement system on 4/10/20, private exporters sold 120,000 tons of soybeans for delivery to unknown.
  • 60,000
    tons is for delivery during the 2019-20 marketing year
  • 60,000
    tons is for delivery during the 2020-21 marketing year
• Results
  awaited:  Syria seeks 50,000 tons of soybean meal in a combo with 50,000 tons of corn on May 12.
  

 

 

 

 

 

 

Updated
4/13/20

• May
  soybeans are seen in a $8.40-$8.80 range.  July $8.45-$8.95 range.
• May
  soybean meal is seen in a $283 to $310 range.  July $285-$320 range. 
• May
  soybean oil range is 26.00 to 28.50.  July 26.00-30.00 range. 

 

 

 

Wheat

 

• All
  three US wheat markets were higher early on Monday but traded two sided.  Chicago ended 1.25-2.00 cents lower, KC wheat 1.75-2.50 cents lower and MN wheat 4.0-4.75 cents lower.
  
• After
  the close, Egypt announced they seek wheat for May 15-25 and May 26-June 5 shipment.  The Tender will be held on an FOB basis with a separate tender for freight.
  
• Egypt
  plans to buy 3.6 million tons of local wheat, enough to cover 4.5 months of local needs.  That should increase wheat reserves to over 10 months after they secure another 800,000 tons of wheat imports during their harvest season, which was announced Thursday.
  Egypt harvests wheat from early May to early June.
• USDA
  US all-wheat export inspections as of April 09, 2020 were 608,709 tons, above a range of trade expectations, above 350,190 tons previous week and compares to 528,714 tons year ago. Major countries included Philippines for 120,629 tons, Mexico for 85,209 tons,
  and Korea Rep for 66,100 tons.
• US
  HRW wheat growing areas will see well below average temperatures this week.  Frosts, freezes and snow started over the weekend across the upper Great Plains into the upper Midwest.  Snow in the north will help protect the crop but the southern areas may see
  burn back.  It could get as low as the 20’s in the southern areas and teens in the north.
  
• The
  GFS midday weather models reduced rain for France and Germany this weekend and April 23-25, respectively.
  
• Russian
  wheat prices at the end of last week were about $4.00/ton lower at $202/ton for new-crop, while old crop was up $3/ton to $227/ton.
  
• Romania
  will ban wheat and grain exports to non-EU countries until mid-May.  A
  Romanian wheat cargo destined for Egypt is held up by the export ban. 
• Ukraine
  2020 wheat production was  estimated at 26.7 million tons from 28.3 million in 2019, according to APK-Inform.
  
• Ukraine
  spring plantings were 18 percent complete as of April 9,m according to the Ministry for Development of Economy.
  
• India
  will export 50,000 tons of wheat to Afghanistan under a government to government arrangement.  They will also provide 40,000 tons of grain to Lebanon under a similar arrangement.
  
• Jordan
  is set to receive 15 cargos of grain, or 950,000 tons between April and September.
  
• FranceAgriMer
  reported 62 percent of the French wheat crop was in good and very good condition, as of April 6, unchanged from the previous week and compares to 83 percent year earlier.  The winter barley and durum wheat conditions fell one points from the previous week.
  Spring barley was 63% emerged, up from 44% a week earlier and well below 98% last year.
  

 

 

Export
Developments.

• Saudi
  Arabia bought 600,000 tons of barley at an average price of $198.63/ton c&f for July-August shipment.
  
• Turkey’s
  TMO bought about 250,000 tons of 12.5%-13.5% protein optional origin wheat for April 20 and May 15.  Prices were widely unavailable.  At least 25,000 tons was bought at $239.65 a ton c&f.
  
• Jordan
  received offers for 120,000 tons of wheat. 
• USDA
  reported under the 24-hour announcement system private exporters sold 120,000
  tons of hard red winter wheat for delivery to unknown destination.  Of the total, 60,000 tons is for 2019-20 marketing year and 60,000 tons is for 2020-21 marketing year.
• USDA
  reported under the 24-hour announcement system on 4/10/20, private exporters sold 165,000 tons of hard red winter wheat for delivery to China.
  
  • 55,000
    tons for delivery during the 2019-20 marketing year
  • 110,000
    tons for delivery during the 2020-21 marketing year
• Ethiopia
  postponed their import tender for 400,000 tons of wheat until April 23.  They are in for 200,000 tons on April 15 in a separate tender.
  

 

Rice/Other

• South
  Korea seeks 35k rice from China on April 14 for arrival around end of Aug.

 

 

Updated 4/9/20

 

• May Chicago $5.25 and $5.70 range.  July (new-crop) $5.00-$5.75.
  
• May KC $4.65 and $5.05 range.  July $4.50-$5.80
• May MN $5.20 and $5.45 range.  July $5.25-$5.55.