FW: FI Morning Grain Comments 02/28/20

PDF attached

 

Morning. 
What a week.  COVID-19: 83,000+ infected and 2,800+ deaths. 
Iran Reports 143 New Coronavirus Cases, Total At 388 – RTRS.  More countries report initial cases. 

https://www.bbc.com/news/world-51235105   
Three trillion USD has been wiped out of the S&P since the panic started.  2870 is the 50 percent retracement level for the S&P. 

 

 

 

Weather

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Concern
about Argentina drying and rising crop stress potentials over the next couple of weeks may begin influencing market trade in the next few days. There will also be some concern over flooding rain expected in Minas Gerais, Goias, Rio de Janeiro and northeastern
Sao Paulo, Brazil in the next seven days. Some important drying will occur in Brazil before the greater rain falls and that will support second season planting for a while.

            Southeast
Asia weather is quite varied. World Weather, Inc. anticipates an erratic shower and thunderstorm pattern in March supporting early season moisture boosting.

           
Winter grain and oilseed crops will remain favorably rated and poised for improvement in the spring in China and southeastern Europe. India’s winter crops are expected to perform well this year because of greater than usual rainfall.

           
U.S. early season planting may be slow this year in the Delta, southeastern states and possibly the lower Midwest because of frequent rain and wet field conditions.

            South
Africa will get some timely rainfall along with parts of Australia to maintain a favorable outlook. With that said, eastern Australia production has not improved much, but some sorghum has received supplemental rainfall recently.

            Overall,
weather today may contribute a neutral to slightly bullish bias, but other world factors will likely have much more influence on the market

 

MARKET
WEATHER MENTALITY FOR WHEAT: 

Worry
over rising temperatures in the central and southern U.S. Plains over the next couple of weeks might have the markets attention. Wheat will be brought out of dormancy in Texas and Oklahoma along with areas to the east. Cold weather may return later in March
and/or April to bring back freezes which could place some of the crop at risk. Crops in Kansas, Colorado and Nebraska will lose winter hardiness as well.

            Russia
crops are going to come into spring favorably moist except in the far south where greater rain will be needed. Kazakhstan will also need greater rain in the spring while Ukraine already has enough moisture to induce some improvement just as soon as seasonal
warming arrives.

            North
Africa’s outlook has not changed for Morocco, but there is a little more rain slated for Tunisia and northeastern Algeria over the next two weeks. No general soaking of rain is expected, but any showers would be welcome.

           
Australia’s winter small grains will not be planted prior to late April which leaves plenty of time for improved weather and soil conditions.

            India’s
wetter outlook over the next two weeks will further ensure a significantly large-sized winter crop.

            France
and Spain need to warm up along with Italy to support spring planting and to stimulate early season crop development when weather conditions improve.

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

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

THURSDAY,
FEB. 27:

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

FRIDAY,
FEB. 28:

• 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.
  agricultural prices paid, received, 3pm
• AmSpec,
  Intertek, SGS palm oil export data for Feb. 1-28
• EARNINGS:
  Olam, Golden Agri, Sime Darby

MONDAY,
MARCH 2:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• Australia
  commodity index, 12:30am
• Brazil
  soybean, sugar, corn and coffee exports, 1:15pm
• USDA
  soybean crush, DDGS output, corn for ethanol, 3pm
• SGS
  palm oil export data for Feb. 1-29

TUESDAY,
MARCH 3:

• Abares
  agriculture outlook conference, Canberra
• Purdue
  Agriculture Sentiment, 9:30am
• BRF
  4Q19 earnings before market open, Sao Paulo

WEDNESDAY,
MARCH 4:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• New
  Zealand commodity price
• Abares
  agriculture outlook conference
• CNGOIC’s
  montly supply/demand report on China soy, corn

THURSDAY,
MARCH 5:

• FAO
  world food price index, 4am
• Day
  1 of three-Day National Coffee Association USA Annual Convention
• Intertek
  Malaysia palm oil export data for March 1-5
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, 8:30am
• Port
  of Rouen data on French grain exports

FRIDAY,
MARCH 6:

• 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

SATURDAY,
MARCH 7:

• China
  soybean import volume data

Source:
Bloomberg and FI

 

FND
Deliveries

 

 

CBOT
registrations

·        
Rice up 175

 

 

 

 

 

Macros

·        
US$ Swaps pricing is hinting up to 4 interest US rate cuts by January 2021, according to analysts. 

·        
US Wholesale Inventories M/M (JanP): -0.2% (est 0.1%, prev -0.2%)

·        
US Personal Income (Jan): 0.6% (est 0.4%, prevR 0.1%)

·        
US Personal Spending (Jan): 0.2% (est 0.3%, prevR 0.4%)

·        
US PCE Deflator (M/M) Jan: 0.1% (est 0.2%, prev 0.3%)

US
PCE Deflator (Y/Y) Jan:1.7% (est 1.8%, prev 1.6%)

US
PCE Core Deflator (M/M) Jan: 0.1% (est 0.2%, prev 0.2%)

US
PCE Core Deflator (Y/Y) Jan:  1.6% (est 1.7%, prev 1.6%)

·        
Canada Quarterly GDP Annualized Q4:  0.3% (est 0.3%, prevR 1.1%)

·        
Canada Industrial Product Price (M/M) Jan: -0.3%  (prevR 0.3%)

·        
Mexico and Several Other Countries Confirms First Case Of The Coronavirus

 

 

Corn.

·        
Commodity and equity markets are rolling over for the sixth consecutive trading session.

·        
CBOT corn futures reached new contract lows. 

·        
Funds sold an estimated net 103,000 corn contracts since February 12.

·        
Crude oil was down about $1.60/barrel as of 7:55 CT.  

·        
CBOT corn open interest fell 16,075 contracts on Thursday. 

·        
Farm Futures: US corn area 96.6 million. That would be second largest on record behind 2012. 

 

Export
Developments

·        
None reported

 

 

Soybean
complex.

• Overlooking
  the expiring March contract, CBOT soybeans are seeing bear spreading this morning. Soybean oil down more than 60 points are leading the complex lower. USDA announced soybean meal sale to the Philippines, a reminder exports remain steady and bottom picking
  continues by major importers. Look for a record net short position in managed money soybean meal when updated by the CFTC this afternoon. 
  
• Malaysian
  palm oil fell nearly 6 percent and cash was hammered by falling about $30/ton.  Palm oil is a steal, in our opinion.
  

·        
CBOT open interest was down 18,836 in soybeans, down 20,569 in meal and down 17,655 in soybean oil. 

·        
Brazil’s currency made a new record low on Friday.  At the time this was written it was at 4.4976. The Argentina peso was again weaker.   

·        
Farm Futures: US soybean area 80.6 million acres

·        
Russia’s AgMin proposed increasing sunflower export tariffs, already set at 6.5 percent or not less than 9.75 euros (about $10.60/ton).  Some speculate the tariff could go to 20 percent. 

·        
Offshore values are leading CBOT soybean oil 46 points lower (10 lower for the week to date) and meal $1.40 lower ($1.60 lower for the week).

·        
Rotterdam vegetable oils this morning were down 12 euros for nearby soybean oil positions and down around 11 euros for rapeseed oil. Rotterdam meal when imported from SA were 4-9 euros higher. 

·        
China:

·        
China cash crush margins as of this morning, using our calculation, were 126 cents per bushel (133 previous day), compared to 159 cents a week ago and negative 12 cents around this time last year. 

·        
Malaysian palm markets:
 Worst
week in 11 years

 

Oilseeds
Export Developments

• Under
  the 24-hour system, USDA reported 135,000 tons of soybean meal was sold to the Philippines for 2019-20 delivery.
  

 

 

 

 

Wheat

·        
US wheat down for the third session on coronavirus concerns.

·        
USD was lower by 7 points earlier this morning.

·        
CBOT Chicago wheat open interest fell 5,304 contracts on Thursday.

·        
French wheat crop ratings were 64 percent as of Feb 24, down one point from the previous week but well below 85 percent year ago. 

·        
May Paris wheat futures were down 1.00 at 185.25 euros as of early this morning.

 

 

Export Developments.

• The Philippines bought 275,000 tons of feed wheat, optional origin, at $200-$230/ton for May 20-July 22 shipment. 
  
• Jordan seeks 120,000 tons of wheat on March 3. 
  
• Jordan seeks 120,000 tons of feed barley on March 4. 
  
• 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 March 4. 
  
• Morocco seeks 354,000 tons of US durum wheat on March 5 for arrival by May 31.
  
• Syria seeks 200,000 tons of wheat from Russia by March 23.  No purchase was made that closed on February 17. 
  

 

Rice/Other

• China set 2020 rice support prices to between 2420-2600 yuan per ton, and capped purchases to 50 million tons (30 japonica and 20 indica). 
  
• Indonesia looks to import 130,000 tons of sugar from India.