FW: FI Morning Grain Comments 01/25/19

PDF attached

 

Weather

·         No material changes to the world forecast. US one-month outlook calls for below normal temperatures for a large portion of the eastern US and below precipitation for upper-central Midwest.

·         Brazil saw additional rain in the central growing areas over the past day.

·         Brazil’s northeast will continue to see limited rainfall. MGDS and RGDS will dry down again this workweek. MG should see good weather. Parana and southern Minas Gerais will see daily showers.

·         Argentina will trend much wetter in the central and south this week while the northeast dries down.

·         The lower half of the US Great Plains still lacks snow coverage. U.S. temperatures will be coldest Thursday and Friday mornings in the Midwest and northern Plains.

·         Europe and western CIS will see rain and snow over the next two weeks.

·         Australia was again hot.

·         Belarus will see a frost event later this week that may impact winter grain crops in the south-east.

Source: World Weather Inc. and FI

 

SIGNIFICANT PRECIPITATION EVENTS FOR BRAZIL

      -Fri            40% cvg of up to 0.75” and local amts to 2.0”;

                        east Sao Paulo wettest; Paraguay to Rio Grande

                        do Sul driest

Sat-Mon           60% cvg of up to 0.75” and local amts to 2.0”

                        with some 2.0-3.50” amts in Mato Grosso and

                        Goias; Paraguay to Rio Grande do Sul driest

Tue                  20% cvg of up to 0.50” and local amts to 1.10”;

                        NE and NW wettest

Wed-Feb 1       40% cvg of up to 0.75” and local amts to 1.50”;

                        far south and NW wettest; driest SW

Feb 2-4            40% cvg of up to 0.75” and local amts over 2.0”;

                        wettest south; driest NE

Feb 5-7            60% cvg of up to 0.75” and locally more

 

SIGNIFICANT PRECIPITATION EVENTS FOR ARGENTINA

Tdy-Sat            60% cvg of 0.75-3.50” and local amts over 5.0”

                        from central Cordoba to east La Pampa and west

                        Buenos Aires with up to 0.75” and locally more

                        elsewhere; driest NE

Sun-Mon          40% cvg of up to 0.50” and local amts over 1.0”;

                        wettest SE

Tue-Jan 31       60% cvg of up to 0.75” and local amts over 2.0”;

                        driest north 

Feb 1-3            40% cvg of up to 0.75” and local amts over 2.0”;

                        wettest north

Feb 4-7            10-25% daily cvg of up to 0.40” and locally

                        more each day

Source: Reuters and FI

 

Source: World Weather Inc. and FI

 

Source: World Weather Inc. and FI

 

Source: World Weather Inc. and FI

 

Source: World Weather Inc. and FI

 

 

 

 

 

Bloomberg Ag Calendar (Most USDA reports are delayed due to government shutdown)

FRIDAY, JAN. 25:

• AmSpec, Intertek data on Malaysia’s Jan. 1-25 palm oil exports, ~10pm ET Thursday (~11am Kuala Lumpur Friday)
  • SGS data during same period, ~2am Friday (~3pm local time Friday)
• Unica cane crush, ~7am (~10am Sao Paolo) though exact timing may vary
• USDA cattle-on-feed report for December, 3pm (dependent on end of govt shutdown)
• ICE Futures Europe commitments of traders weekly report on coffee, cocoa, sugar positions, ~1pm ET (~6pm London)
• CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Olam report on its 2019-2024 strategic plan

MONDAY, JAN. 28:

• USDA weekly corn, soybean, wheat export inspections, 11am 
• EU weekly grain, oilseed import and export data, 10am ET (3pm London)
• Ivory Coast cocoa arrivals
• China starts options trading on corn, cotton and rubber
• Latin America fertilizer conference starts in Mexico City
• Public holiday in Australia

TUESDAY, JAN. 29:

• Latin America fertilizer conference continues
• Orbital Insight forum on AI, satellite imagery and natural disasters
• Argentina’s agriculture and environment ministries hold press conference to announce crop mapping tools the govt will use to adapt to climate change

WEDNESDAY, JAN. 30:

• AmSpec, Intertek data on Malaysia’s Jan. 1-31 palm oil exports, ~10pm ET Wednesday (~11am Kuala Lumpur Thursday)
  • SGS data for same period, ~2am Thursday (~3pm local time Thursday)
• EIA weekly U.S. ethanol inventories, output, 10:30am
• Chinese president’s top economic aide, Vice Premier Liu He, visits Washington for trade talks, meeting with U.S. Trade Representative and Treasury Secretary, through Thursday

THURSDAY, JAN. 31:

• USDA weekly crop net-export sales, 8:30am (dependent on end of govt shutdown)
• Buenos Aires Grain Exchange weekly crop report
• Port of Rouen data on French grain exports
• Latin America fertilizer conference ends
• Bloomberg weekly survey of analysts’ expectations on grain, sugar prices
• EARNINGS: International Paper, Hershey Co., Diageo Plc

FRIDAY, FEB. 1:

• Australia January commodity index, 12:30am ET (4:30pm local time)
• Paris Grain Day conference, with speakers from Credit Agricole, Invivo Trading, Cyclope, MD Commodities, Euronext, USDA, Oil World, Sovecon
• India’s interim budget, with TLIV blog coverage
• ICE Futures Europe commitments of traders weekly report on coffee, cocoa, sugar positions, ~1pm ET (~6pm London)
• USDA cattle-on-feed report for December, 3pm (dependent on end of govt shutdown)
• CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm (dependent on end of govt shutdown)

Source: Bloomberg and FI

 

No changes in CBOT ag registrations

 

Weekly Bloomberg Bull/Bear survey

·         Soybeans: Bullish: 4 Bearish: 6 Neutral: 6

·         Corn: Bullish: 6 Bearish: 3 Neutral: 7

·         Wheat: Bullish: 8 Bearish: 4 Neutral: 3

·         Raw sugar: Bullish: 0 Bearish: 1 Neutral: 6

·         White sugar: Bullish: 1 Bearish: 1 Neutral: 5

·         White-sugar premium: Widen: 2 Narrow: 0 Neutral: 5

 

 

Macros

·         USD was down 42 points (8:07 CT).

·         WTI was $0.14 higher

·         Gold $9.90 higher

·         Dow 248 points higher.

·         China trade delegation meets with US officials in DC on Monday.

 

Corn.

·         Corn futures are moderately higher on past to declining SAf corn production prospects, lower USD, and new money inflow on Thursday. Total OI for corn was up 16.3k with prom month up 7.4k. 

• Today the Baltic Dry Index was 34 points lower (3.6%) to 905 points, lowest since 7/14/2017.

·         Feb options expire today.

• A Reuters poll calls for SAf corn area to decrease a large 18 percent to 1.998 million hectares, down from, down from 2.448 estimated in October and 2.318 hectares planted last season. The range of total maize estimates was 1.94 million to 2.07 million hectares.
• The US weekly EIA ethanol data was viewed slightly negative for US corn futures and neutral US ethanol futures.  Weekly US ethanol production was down 20,000 barrels from the previous week to 1.031 million barrels per day (bbl) and stocks increased 150,000 barrels to 23.501 million. Ethanol stocks of 23.501 million barrels are down 1.3% from a year ago and 1.5% above about 4 weeks ago.  The record for ethanol stocks was 24.281 million barrels set on 3/9/18.

·         Reuters noted when combining weekly Brazil shipment data and the lineup Williams puts out, Brazil corn shipments during January could end up near 3.5 million tons, above 2.5 million tons for soybeans. Apparently monthly corn shipments shave not been larger than soybean shipments for about a year.

 

Export Developments

• None reported

 

Soybean complex.

·         The US soybean complex is mixed with SBO in focus again as it gained over meal. Look for bull oil share traders to take profits. Soybeans are slightly higher in part to a lower USD.

·         China officials meet with US officials on Monday in DC.

·         March oil share is back above 32 percent.

·         Bloomberg reported six more US soybean vessels are headed to China, bringing total to 15.

·         Indonesia will leave its CPO export tax unchanged in February at zero percent. They will leave cocoa beans unchanged at 5 percent.

·         Malaysian April palm futures ended 3 MYR lower at 2294MYR, and leading SBO 5 points lower. Malaysian April cash was $578.00/ton, unchanged.

·         AmSpec reported Malaysia palm exports during the Jan 1-25 period at 1.213 million tons, up 24.6 percent from 973,561 tons during the December 1-25 period. ITS shows an 18.5 percent increase to 1.204MMT.

·         China markets:

·         China cash crush margins were last positive 36 cents (33 on Thur), compared to positive 18 cents late last week, and compares to positive 80 cents a year ago. 

·         Rotterdam oils were unchanged to 7.50 euros higher from this time last session. Rotterdam meal when imported from SA were slightly lower.

·         Offshore values are leading the soybean oil 2 points higher (13 lower week to date) and meal $0.20 lower ($0.10 higher week to date).  

 

Export Developments

• Results awaited: Iran’s SLAL (state owned) seeks 200,000 to 300,000 tons of soymeal this week for shipment in February and March.
• South Korea seeks 100,000 tons of non-GMO soybeans on Jan 31 for arrival between Jan 2020 and Aug 2020.

 

Source: Refinitiv Eikon and FI

 

Wheat

• US wheat futures are mostly lower but don’t discount a two-sided trade. KC wheat lost a little ground to Chicago overnight. Black Sea markets were very quiet yesterday. Black Sea weather is ok with enough snow coverage. Lower US Central Plains and southern Greet plains lack snow coverage. Australia was again extremely hot yesterday.
• The USD is lower.
• Paris wheat is 0.25-1.00 euro lower.
• The Indonesian Flour Mills Association looks for Indonesian flour mill imports to increase 5-6 percent in 2019.  2018 actual wheat imports are on track to reach over 9.3 million tons.
• The Argentine AG ministry revised their wheat estimate -.45 MMT to 19.26 MMT. This is the first estimate since NOV from them. The ministry is still .56 MMT above Rosario’s estimate of 18.7 MMT and .26 MMT above the BA Grain exchange estimate. (Thanks MPI)
• Russia’s truck strike is not expected to have much of an impact on grain export flows.
• SovEcon estimated Russia’s 2018-19 grains and pulses exports at 44.6 million tons from 43.8MMT previous (42.5MMT for grains alone), including 35.6 million tons of wheat (up 500,000 tons).

·         We revised out US winter wheat area from 32.0 million acres to 31.8 million. OK was taken down 94,000 acres and TX was taken down 20,000 acres from our previous estimate. 

 

Export Developments.

• Algeria bought 200,000 tons to 250,000 tons of optional origin durum wheat at around $290 to $292 a ton c&f. Shipment was sought for Feb. 16-28 or March 1-15. 
• Taiwan seeks 55,000 tons of US wheat on January 29.
• Jordan seeks 120,000 tons of optional origin wheat on January 29 for April 1-15, April 16-30, May 1-15 and May 16-31 shipments.
• Jordan seeks 120,000 tons of optional origin feed barley on January 30. Possible shipment periods are June 1-15, June 16-30, July 1-15 and July 16-31.
• Turkey seeks 300,000 tons of wheat on Jan. 30, in 40 separate tenders each of 7,500 tons for shipment Feb. 6-25 and March 1-15.
• Japan in an SBS import tender seeks 220,000 tons of feed wheat and 200,000 tons of barley on January 30 for arrival by March 14.
• Ethiopia seeks 400,000 tons of milling wheat on Jan. 31 for shipment is two months after the contract award.
• Bangladesh seeks 50,000 tons of wheat on February 3 for shipment within 40 days of contract signing.
• Bangladesh seeks 50,000 tons of wheat on February 10 for shipment within 40 days of contract signing.
• Jordan’s state-owned Silos and Supply General Company seeks 25,000 tons of 11 percent protein milling wheat on Feb. 11 for shipment in March.

·         Syria’s seeks 200,000 tons of Russian wheat on March 4.

 

Rice/Other

·         Results awaited: Mauritius seeks 6,000 tons of optional origin rice on Jan 24 for delivery between March 15 and June 30 in shipping containers.