FW: FI Morning Grain Comments 02/14/20

PDF attached

 

Morning. 

 

US
is on holiday Monday.  Positioning is seen today.  Covid-19 continues to hang over the markets. 

 

USDA
later today will release its 2020:

·       
Agriculture projections at 11:00 am CT

https://www.ers.usda.gov/publications/

·       
Agriculture Baseline Database at 2:00 PM CT  

https://www.ers.usda.gov/calendar/?month=2&year=2020&day=14

 

 

 

Weather

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Not
much has changed overnight. Favorable soil moisture is present in Argentina, Brazil, South Africa, India and some eastern Australia locations which should support crop development.  There is still some concern over harvest conditions in early season soybean
areas of Goias and southwestern Minas Gerais which may lead to more delay in second season corn planting, but progress is being made every day and it looks as though the pace is not far from the five year average even though much slower than last year. Good
field working conditions have been occurring in other areas and that should minimize the amount of crop that will be later planted.

           
Too much rain in northeastern South Africa in the past week has resulted in some flooding. Crop damage has not been assessed, but the region impacted is a minor production region in eastern Limpopo and northeastern Mpumalanga. Other areas in South Africa have
ideal crop development conditions.

More
rain will fall this week in northern and eastern Europe and from there to Ukraine and that will improve early season crop development potentials for areas that were too dry last autumn.

China’s
winter crops are still rated favorably with a big potential for improving rapeseed conditions in the early weeks of spring after recent weeks of rain.

India’s
winter crops are still poised to perform quite favorably, despite a drier biased outlook for the next ten days.

Southeast
Asia crops are still rated well, despite erratically distributed rainfall in recent weeks.

Eastern
Australia sorghum conditions have improved, but drought remains in key production areas and much more rain will be needed before winter planting of canola begins in late April. Summer crop development has improved, but it will still be a very small crop.

           
Today’s weather will have a mixed influence on market mentality.

 

MARKET
WEATHER MENTALITY FOR WHEAT: 

Many
of the winter crop areas in the world that experienced poor crop establishment because of dryness last autumn have seen some timely precipitation in recent weeks. The moisture should help improve winter crop establishment prior to reproduction this spring.
There has also been very little winterkill this year and that should be supporting larger crops. With that said there may have been some damage in a few minor wheat areas in central Nebraska Thursday morning when temperatures fell near slightly below zero
Fahrenheit while snow cover was minimal. Today’s bitter cold in the Midwest occurred in mostly snow covered areas.

            The
biggest dry concern today is in North Africa and in particular southwestern Morocco where durum wheat and barley production has been cut. There is potential for larger small grain production losses from North Africa if improved rainfall does not occur soon.
Spain and Portugal are also drying out, but have adequate subsoil moisture for now. The outlook leaves most of these areas dry or mostly dry for the next ten days and perhaps longer.

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

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

FRIDAY,
FEB. 14:

• ICE
  Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions ~1:30pm (~6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  crop conditions – French crops office expected to resume crop-conditions reports after winter break
• New
  Zealand food prices
• Biosev
  holds analyst conference call to discuss 4Q earnings.

MONDAY,
FEB. 17:

• MARS
  bulletin – monthly report on Europe crop conditions
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• Cosan
  Earnings Conference Call, Sao Paulo
• HOLIDAY:
  U.S. (President’s Day)

TUESDAY,
FEB. 18:

• Australian
  crop report from Abares, Canberra
• USDA
  weekly corn, soybean, wheat export inspections, 11am
• New
  Zealand global dairy trade auction

WEDNESDAY,
FEB. 19:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• EARNINGS:
  Marfrig

THURSDAY,
FEB. 20:

• USDA
  Agricultural Outlook – corn, wheat, soy, cotton acreage, 8:20am
• USDA
  milk, read meat production, 3pm
• Malaysia’s
  Feb. 1-20 palm oil exports data
• EARNINGS:
  Wilmar

FRIDAY,
FEB. 21:

• USDA
  outlook — corn, soy, wheat cotton end-stockpiles
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, 8:30am
• ICE
  Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions ~1:30pm (~6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  Cattle on Feed, 3pm
• EARNINGS:
  Pilgrim’s Pride

Source:
Bloomberg and FI

 

CBOT
registrations

·        
No changes

 

 

 

 

 

 

Macros

US
Retail Sales Advance (M/M) Jan: 0.3% (est 0.3% ; prevR 0.2% ; prev 0.3%)

US
Import Price Index (M/M) Jan: 0.0% (est -0.2% ; prevR 0.2% ; prev 0.3%)

Canadian
Existing Home Sales (M/M) Jan: -2.9% (est -0.1% ; prev 0.9%)

 

 

Corn.

·        
Corn futures turned
higher on technical buying before the electronic close. They were lower overnight on waning US export demand. China was a big buyer of Ukraine corn this week.  Reuter reported cargos of US chicken bound for China have been rerouted to nearby countries because
of the coronavirus outbreak.  WTI was higher this morning by $0.50/barrel. 

·        
1380+ deaths and nearly 64,000 cases of coronavirus were recorded. 

·        
Argentina Buenos Aires Grain Exchange estimated the 2020 corn crop at 49 million tons.  USDA is at 50 million tons versus 51.0 million tons in 2019.  BA exchange is using a forecast of 50.6 million tons for
2019 (2019-20 local crop year).

·        
Agroconsult looks for the Brazil second corn crop to end up near 74.7 million tons, up from 74.0 from their previous projection.  USDA is using a combined crop-year production of 101.0 million tons for Brazil. 

 

Export
Developments

• Algeria’s
  ONAB bought about 35,000 tons of optional origin corn between $194.75 a ton c&f and $201 a toe c&f for shipment in the second half of March

·        
China sold 1.32 million tons of reserve corn to feed users across the southern provinces last week.   

·        
China’s state reserve held an auction on Friday to sell 20,000 tons of frozen pork. 
They apparently sold 14k. 

 

Soybean
complex.

·        
Soybeans are taking a breather after rallying mid-week.  Soybean meal is leading the charge lower while soybean oil is higher after a rebound in palm oil and talk of US domestic soybean oil end user demand
by biofuel companies. 

• US
  markets are closed for holiday on Monday. 
• CNGOIC:
  Feb imports of soybeans 4.8MMT
• NOPA
  will issue its US January crush on Tuesday (Monday in the US is a holiday).
  Reuters
  trade average is 173.7 million bushels, down from 174.8 in December.  End of Jan. stocks are seen at 1.782 billion pounds, above 1.757 billion at the end of December 2019. 
  
• The
  US$ is lower and the higher. The Brazilian Real was stronger at 4.3206 after hitting an all-time low on Thursday. 
  

·        
Offshore values are leading CBOT soybean oil 21 points higher (74 lower for the week to date) and meal  $0.70 lower ($2.00 lower for the week). 

·        
Rotterdam vegetable oils this morning were unchanged for nearby soybean oil positions and unchanged for rapeseed oil. Rotterdam meal when imported from SA were unchanged to 1 euro lower. 

·        
China:

·        
China cash crush margins as of this morning, using our calculation, were 147 cents per bushel (150 previous), compared to 139 cents more than a week ago and 40 cents around this time last year. 

·        
Malaysian palm markets:
 down
5.4 percent this week

• The
  USDA February Outlook Forum starts on Thursday. 

·        
Agroconsult looks for the Brazil soybean crop to end up near 126.3 million tons, up from 124.3 from their previous projection.  USDA is using 125.0 million tons. 

• The
  Rosario grains exchange estimated the Argentina soybean crop at 55 million tons, up 1 million tons from their last estimate.  USDA is at 53.0 MMT versus 55.3 in 2019. 
  

 

Oilseeds
Export Developments

• None
  reported

 

 

Wheat

·        
Chicago wheat prices are higher on technical buying.   

·        
March Paris wheat futures were up 1.00 at 193.75 euros as of early this morning.

·        
France began planting barley with 16 percent complete by Feb 10, above last year and average. 

 

Export
Developments.

• Syria
  seeks 200,000 tons of wheat from Russia on February 17 for shipment within 60 days of contract signing. 
  
• Turkey
  seeks 25,000 tons of barley on Feb. 18 for 2/26-3/15 loading. 
• Jordan
  seeks 120,000 tons of wheat, optional origin, on Feb 18.
• Jordan
  seeks 120,000 tons of feed barley on Feb 19. Possible shipment periods are May 1-15, May 16-31, June 1-15 and June 16-30.

• Turkey’s
  TMO seeks around 250,000 tons of wheat and 50,000 tons of durum on Feb. 18 for March shipment.
  
• Japan
  in an SBS import tender seeks 120,000
  tons of feed wheat and 200,000 tons of feed barley for arrival in Japan by July 30, on Feb. 19. 
  

 

Rice/Other

·        
Results awaited: Mauritius has delayed the deadline for to buy up to 6,000 tons of long grain white rice to Feb. 10, for delivery between May 1 and July 31.

·        
Results awaited: Turkey’s TMO seeks 20,000 tons of rice on Feb. 12 for shipment between Feb. 19 and April 6.