FW: FI Morning Grain Comments 03/05/20

PDF attached

 

Morning.

 

 

 

Weather

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

The
South America weather outlook remains of interest today, but if rain falls in central Argentina next week as advertised the impact of recent dry and warm to hot weather will be minimized. Argentina will continue to progressively become too dry through the
weekend and areas that do not get rain next week in northeastern and some southern locations will see stress conditions get great enough to harm late season production potentials.

Brazil’s
drying in the west and south will be ideal for promoting soybean harvesting and second season crop planting. Wet weather in Minas Gerais and Goias should ease up during the next ten days, although showers and thunderstorms will still occur periodically.

The
situation in South America may not be critical enough to move markets in a big manner, but there might be some bullish influence from the weather amidst a huge array of other market concerns that may counter any influence from the weather.

            India’s
and China’s winter crop outlooks are still good and improvement has occurred in recent weeks across parts if Europe. South Africa’s weather has not changed from that of late last week.  The U.S. outlook remains wet for many areas from the lower Midwest into
the Delta and southeastern states over the next couple of weeks possibly slowing early season planting potentials. There is plenty of time for the weather to improve for better planting potentials.

 

MARKET
WEATHER MENTALITY FOR WHEAT: 

Earlier
than usual crop development is expected for many production areas around the world, but as long as there is no threatening cold coming up the situation is not likely to be significant. Huge crops are still expected from India and China will end up with a big
crop as well. North Africa production is destined to be low based mostly on dryness in Morocco and northwestern Algeria. Europe winter crops are in mostly good shape, although rain is still needed in the southeast.

            U.S.
wheat is expected to remain in favorable shape, but greening and early season development in the southern Plains could be aggressive for a while due to unusually warm weather.

            Overall,
weather today may produce a neutral bias on market mentality.

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

 

USDA
export sales were
ok for everything except for soybeans. Corn was on the low end of expectations.  Sorghum sales were 71.6k.  Soybean meal shipments were a marketing year high. 

 

 

 

 

 

Macros

 

 

 

Corn.

·        
Corn futures are lower but expect a two-sided trade.

·        
Rumors are circulating Cofco bought US DDGS overnight. 

·        
USDA corn export sales of 769,200 tons were near the low end of expectations.  Crop year to date commitments are still running well below a year ago level.  Sorghum sales were 71,600 tons.  Pork sales were 33,700 tons with bulk going to
Mexico. 

·        
WTI crude was down $0.19 as of 7:44 am CT.

·        
Baltic Dry Index increased 37 points to 599 points, a 6 percent increase.  

• The
  USDA Broiler Report showed eggs set in the US up 4 percent from a year ago and chicks placed up 4 percent.  Cumulative placements from the week ending January 4, 2020 through February 29, 2020 for the United States were 1.71 billion. Cumulative placements
  were up 4 percent from the same period a year earlier.
• Secretary
  Perdue said there is less than a 10 percent chance producers will get another round of trade aid by the end of this year.
  
• Weekly
  US ethanol production increased 25,000 barrels to 1.079 million barrels, highest in a month.  A Bloomberg poll was looking for it to be down 8,000 barrels.  Stocks were up 246,000 barrels to 24.964 million, a weekly record. A poll was looking for an increase
  of 89,000 barrels. Corn crop year to date ethanol production is now running 0.1 percent above the same period a year ago.  As of early January it was running 1.6 percent below the year ago pace. 
  

 

Export
Developments

• Taiwan’s
  MFIG bought 65,000 tons of corn from Argentina for May or June shipment.  It was bought at 156.82 over the July.
  

 

 

Soybean
complex.

• CBOT
  soybeans,
  meal and oil are lower on light technical selling. 
• The
  Brazilian real hit a fresh record low, reaching 4.6134.  The Argentina peso is weaker and USD down 32 at the time this was written. 
  
• It
  was said China bought about 30 cargos of soybeans this week for mostly April/May shipment.  Origin was mainly from Brazil. There were also actively buying palm oil (7 cargos this week).  China palm oil ripped higher by 3.4 percent overnight.  MPOB palm as
  up 29 MYR or 1.2 percent. 
• Argentina’s
  soy crushing group CIARA said the increase in export taxes on soybean meal and soyoil will make Argentina less competitive in international trade and hurt companies.
• CBOT
  meal registrations were down 435, soybean oil down 8 and soybeans down 72. 
  
• USDA
  export sales showed meal shipments at a marketing year high at 338,300 tons. Meal sales were 316,700 tons.  SBO sales were good at 43,500 tons and shipments were just over 35,300 tons.  Soybean sales commitments are running at their lowest level since 2011-12. 
  
• Offshore
  values are leading CBOT soybean oil 22 points lower and meal $0.30 higher.
  

·        
Rotterdam vegetable oils this morning were up 3-4 euros for nearby soybean oil positions and down around 3 euros for rapeseed oil. Rotterdam meal when imported from SA were mostly unchanged. 

·        
China:

·        
China cash crush margins as of this morning, using our calculation, were 143 cents per bushel, up 4 cents from the previous day, and compares to 126 cents a week ago and negative 35 cents around this time
last year. 

·        
Malaysian palm markets:
 Reuters
poll calls for Feb palm stocks down 1.4% to 1.73MMT.

 

 

Oilseeds
Export Developments

None
reported

 

 

Wheat

·        
US wheat futures were lower (Chicago and KC) on technical selling and slow US export developments.  MN was mixed. 

·        
USDA export sales of 542,500 tons were within expectations and up from 381,900 tons a week earlier. 

·        
USD was lower by 33 points earlier this morning.

·        
FAO Food Price Index averaged 180.5 points in February, down 1.0 percent from the previous month but 8.1 percent higher than a year earlier. 

·        
Reuters: Old-crop Black Sea wheat was quoted at $245 a ton, including cost and freight (C&F) to Asia, down from $250 a ton last week. Wheat from the new crop, which will be harvested in the months ahead, was
offered at $225 C&F a ton, compared with $230 last week.

·        
Ukraine and Russia are in need of rain ahead of spring plantings.  

·        
May Paris wheat futures were down 0.50 at 183.75 euros as of early this morning.

 

 

 

Export
Developments.

• The Thai Feed Mill Association (TFMA) bought 120,000 tons of optional-origin animal feed wheat from the Black Sea region at around $211
  to $212 a ton c&f in two consignments for shipment in July.
• Tunisia bought 117,000 tons of optional origin soft wheat and 50,000 tons of feed barley for shipment during March-May and May-June, respectively. 
  
• Jordan seeks 120,000 tons of feed barley on March 11.  June-FH Aug. shipment. 
  
• Morocco seeks 354,000 tons of US durum wheat on March 5 for arrival by May 31.
  
• Jordan seeks 120,000 tons of wheat on March 10.  Sep-Oct 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 Aug
  27, on March 11. 
• Turkey seeks 305,000 tons of wheat on March 11 for late March and/or early shipment. 
  
• Syria seeks 200,000 tons of wheat from Russia by March 23.  No purchase was made that closed on February 17. 
  
• Ethiopia seeks 400,000 tons of wheat on April 7.  IN a separate tender, they seek 200,000 tons of wheat on April 1.  Both
  are optional origin. 

 

Rice/Other

• None reported
  

 

 

Export Sales Highlights   

This summary is based on reports from exporters for the period February 21-27, 2020. 

• Wheat: 
  Net sales of 542,400 metric tons for 2019/2020 were up 42 percent from the previous week and 27 percent from the prior 4-week average.  Increases primarily for Taiwan (102,500 MT), South Korea (85,800 MT), Indonesia (77,000 MT), Mexico (75,000 MT, including
  30,000 MT switched from unknown destinations and decreases of 1,400 MT), were offset by reductions primarily for unknown destinations (76,700 MT).  For 2020/2021, total net sales of 28,000 MT were for Mexico.  Exports of 648,800 MT were up 59 percent from
  the previous week and 36 percent from the prior 4-week average.  The destinations were primarily to Thailand (115,400 MT), Mexico (101,500 MT), the Philippines (99,600 MT), Indonesia (77,000 MT), and South Korea (66,000 MT).
  
• Corn:  Net sales of 769,200 MT for
  2019/2020 were down 11 percent from the previous week and 29 percent from the prior 4-week average.  Increases primarily for Mexico (248,100 MT, including decreases of 24,600 MT), South Korea (136,000 MT), Colombia (88,000 MT, including 17,000 MT switched
  from unknown destinations and decreases of 33,000 MT), Vietnam (66,000 MT, including 65,000 MT switched from unknown destinations), and Saudi Arabia (65,700 MT, including 65,000 MT switched from unknown destinations), were offset by reductions for Haiti (800
  MT).  For 2020/2021, net sales of 100,000 MT were for Mexico (98,000 MT) and Guatemala (2,000 MT).  Exports of 884,600 MT–a marketing-year high–were up 5 percent from the previous week and 18 percent from the prior 4-week average.  The destinations were
  primarily to Japan (335,600 MT), Mexico (277,600 MT), Vietnam (66,000 MT), Saudi Arabia (65,700 MT), and Guatemala (31,900 MT). 
  
• Optional Origin Sales:  For 2019/2020, new optional origin sales of 188,000 MT were reported for South Korea.  Options were exercised to export 58,900
  MT to Egypt from other than the United States.  The current outstanding balance of 779,000 MT is for South Korea (719,000 MT) and Israel (60,000 MT). 
  
• Export Adjustments:
   Accumulated exports of corn to Mexico were adjusted
  down 331 MT for week ending February 13^th.  The exports were reported in error and included in this week’s report.
  
• Barley: No net sales for 2019/2020
  were reported for the week.  Exports of 600 MT were up noticeably from the previous week, but down 14 percent from the prior 4-week average.  The destination was Japan.
• Sorghum:  Net sales of 71,600 MT for
  2019/2020 were down 84 percent from the previous week and 46 percent from the prior 4-week average.  Increases were for China (69,300 MT, including 66,000 MT switched from unknown destinations), Mexico (1,300 MT), and Japan (1,000 MT).   Exports of 93,200
  MT were up noticeably from the previous week and up 89 percent from the prior 4-week average.  The destinations were primarily to China (69,300 MT), Mexico (12,700 MT), and Japan (11,000 MT).
  
• Rice: 
  Net sales of 38,200 MT for 2019/2020 were down 27 percent from the previous week and 58 percent from the prior 4-week average.  Increases were
  primarily for South Korea (15,800 MT), Honduras (13,700 MT, including 10,000 MT switched from El Salvador), Mexico (6,700 MT), Japan (3,800 MT), and Guatemala (2,900 MT, including 1,900 MT switched from El Salvador). 
  Exports of 62,400 MT were up 77 percent from the previous week, but down 8 percent from the prior 4-week average.  The destinations were primarily
  to the Dominican Republic (15,500 MT), Honduras (14,400 MT), Guatemala (11,800 MT), South Korea (7,800 MT), and El Salvador (5,900 MT).
• Soybeans:  Net sales of 345,000 MT for 2019/2020 were up 2 percent from
  the previous week, but down 35 percent from the prior 4-week average.  Increases primarily for Mexico (164,000 MT, including decreases of 800 MT), Egypt (91,500 MT, including 90,000 MT switched from unknown destinations and decreases of 600 MT), the Netherlands
  (56,200 MT, including 60,000 MT switched from unknown destinations and decreases of 3,800 MT), Malaysia (50,300 MT, including 34,000 MT switched from unknown destinations), and Japan (42,300 MT, including decreases of 1,000 MT), were offset by reductions primarily
  for unknown destinations (135,200 MT).  For 2020/2021, total net sales of 1,400 MT were for Japan.  Exports of 695,600 MT were up 16 percent from the previous week, but down 22 percent from the prior 4-week average.  The destinations were primarily to Egypt
  (171,500 MT), China (132,000 MT), Mexico (88,200 MT), the Netherlands (56,200 MT), and Bangladesh (52,800 MT). 
  
• Exports for Own Account:  For 2019/2020, the current exports for own account
  outstanding balance is 2,100 MT, all Canada.
• Soybean Cake and Meal:  Net sales of 316,700 MT for 2019/2020 were up noticeably
  from the previous week and up 64 percent from the prior 4-week average.  Increases primarily for the Philippines (138,500 MT), unknown destinations (90,000 MT), Canada (54,100 MT, including decreases of 500 MT), Denmark (35,000 MT, including 30,900 MT switched
  from Germany), and the United Kingdom (24,100 MT, switched from Germany), were offset by reductions primarily for Germany (55,000 MT).  For 2020/2021, total net sales of 4,900 MT were for Canada.  Exports of 338,300 MT–a marketing-year high–were up 22 percent
  from the previous week and 42 percent from the prior 4-week average.  The destinations were primarily to the Philippines (66,200 MT), Bangladesh (51,000 MT), Denmark (35,000 MT), the United Kingdom (24,100 MT), and Canada (23,200 MT).
• Soybean Oil: 
  Net sales of 43,500 MT for 2019/2020 primarily for Guatemala (16,000 MT), Colombia (15,800 MT), the Dominican Republic (5,700 MT), Jamaica (3,500 MT), and Mexico (2,100
  MT), were offset by reductions for El Salvador (800 MT).  Exports of 35,300 MT were up 72 percent from the previous week and 12 percent from the prior 4-week average.  The destinations were primarily to Morocco (19,000 MT), Peru (11,700 MT), Colombia (2,300
  MT), and Mexico (2,100 MT). 
• Cotton:  Net sales of 395,500
  RB–a marketing-year high–for 2019/2020 were up 84 percent from the previous week and 40 percent from the prior 4-week average.  Increases primarily for Vietnam (102,500 RB, including 4,500 RB switched from Hong Kong, 4,500 RB switched from Taiwan, and decreases
  of 11,700 RB), Turkey (77,500 RB), Pakistan (62,300 RB, including decreases of 38,400 RB), China (58,400 RB), and Bangladesh (44,000 RB), were offset by reductions primarily for Japan (19,700 RB) and Malaysia (2,000 RB).  For 2020/2021, net sales of 53,200
  RB were primarily for Malaysia (16,700 RB), Turkey (13,200 RB), Peru (7,000 RB), Vietnam (5,700 RB), and Indonesia (5,000 RB).  Exports of 478,200 RB–a marketing-year high–were up 48 percent from the previous week and 26 percent from the prior 4-week average. 
  Exports were primarily to Vietnam (107,400 RB), Pakistan (87,400 RB), Turkey (77,000 RB), China (73,400 RB), and Indonesia (24,700 RB).  Net sales of Pima totaling 9,100 RB were down 68 percent from the previous week and 33 percent from the prior 4-week average. 
  Increases primarily for Pakistan (3,500 RB), El Salvador (2,600 RB), China (2,500 RB), and India (1,500 RB, including decreases of 400 RB), were offset by reductions for Thailand (1,300 RB) and Japan (200 RB).  Exports of 15,800 RB were down 13 percent from
  the previous week, but up 53 percent from the prior 4-week average.  The primary destinations were India (5,400 RB), Pakistan (4,700 RB), China (2,000 RB), Bangladesh (1,100 RB), and Egypt (900 RB). 
  
• Exports for Own Account:  For 2019/2020,
  new exports for own account totaling 1,000 RB were to Pakistan (500 RB) and South Korea (500 RB).  Exports for own account totaling 2,800 RB to Indonesia (1,800 RB), Pakistan (500 RB), and India (400 RB) were applied to new or outstanding sales.  Decreases
  were reported for India (500 RB).  The current exports for own account outstanding balance of 27,900 RB is for Indonesia (16,100 RB), Bangladesh (5,300 RB), China (2,500 RB), India (2,400 RB), Vietnam (800 RB),
  South Korea (400 RB), and Malaysia (400 RB).

·        
Hides and Skins: Net sales of 338,500 pieces
for 2020 were down 8 percent from the previous week, but up 27 percent from the prior 4-week average.  Increases primarily for China (134,800 whole cattle hides, including decreases of 11,000 pieces), Thailand (61,200 whole cattle hides, including decreases
of 700 pieces), South Korea (59,400 whole cattle hides, including decreases of 2,300 pieces), Mexico (46,300 whole cattle hides, including decreases of 900 pieces), and Indonesia (25,400 whole cattle hides, including decreases of 300 pieces), were offset by
reductions for Brazil (1,800 whole cattle hides), Taiwan (1,300 whole cattle hides), and Italy (1,000 calf skins).  Exports of 321,400 pieces reported for 2020 were down 2 percent from the previous week and 23 percent from the prior 4-week average.  Whole
cattle hide exports were primarily to China (149,400 pieces), Mexico (66,400 pieces), South Korea (42,500 pieces), Thailand (23,800 pieces), and Taiwan (12,000 pieces).  Whole calf skins exports of 9,800 pieces were to Italy.

·        
Net sales of 116,800 wet blues for 2020
were down 6 percent from the previous week, but up 32 percent from the prior 4-week average.  Increases primarily for Italy (61,900 unsplit), Thailand (19,900 unsplit), Vietnam (15,600 unsplit), China (14,900 unsplit), and India (3,000 unsplit), were offset
by reductions for Italy (300 grain splits).  Exports of 133,400 wet blues for 2020 were down 24 percent from the previous week and 7 percent from the prior 4-week average.  The destinations were primarily to Italy (36,400 unsplit and 6,500 grain splits), China
(42,100 unsplit), Vietnam (20,900 unsplit), Thailand (14,300 unsplit), and Mexico (3,900 grain splits and 1,000 unsplit).  Net sales reductions of 900 splits resulting in increases for Italy (9,600 pounds) were more than offset by reductions for Vietnam (10,500
pounds).  Exports of 523,400 pounds were to Vietnam (483,300 pounds) and Italy (40,100 pounds).

·        
Beef:
Net sales of 12,900 MT reported for 2020 were down 8 percent from the previous week and 26 percent from the prior 4-week average. 
Increases were primarily for Japan (5,100 MT, including decreases of 600 MT), South Korea (2,000 MT, including decreases of 500 MT), Taiwan (1,900 MT, including decreases of 100 MT), Mexico (1,200 MT), and Canada (900 MT, including decreases of 100 MT).  Exports
of 16,600 MT were down 6 percent from the previous week and 7 from the prior 4-week average.  The destinations were primarily to Japan (6,100 MT), South Korea (4,300 MT), Mexico (1,900 MT), Canada (1,100 MT), and Taiwan (1,000 MT). 

• Pork:
  Net sales of 33,700 MT reported for 2020 were down 13 percent from the previous week, but up 12 percent from the prior 4-week average.  Increases were primarily for
  Mexico (17,500 MT), China (4,500 MT), Japan (3,800 MT), South Korea (3,300 MT), and Canada (1,400 MT).  Exports of 43,500 MT
  were up 2 percent from the previous week and from the prior 4-week average.  The destinations were primarily to China (17,500 MT), Mexico (10,800 MT), Japan (4,700 MT), South Korea (3,300 MT), and Canada (2,600 MT).

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING 2/27/2020

 

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	157.3	1,775.6	2,586.1	241.4	6,828.0	5,209.0	8.0	95.1
SRW	56.4	356.7	998.2	63.3	1,937.5	1,986.2	20.0	78.2
HRS	216.4	1,574.6	1,463.5	178.8	5,230.1	4,894.5	0.0	122.0
WHITE	112.3	1,057.1	1,148.2	165.2	3,591.4	3,826.0	0.0	20.9
DURUM	0.0	148.4	111.9	0.0	679.8	358.1	0.0	111.0
TOTAL	542.4	4,912.4	6,307.9	648.8	18,266.9	16,273.8	28.0	427.1
BARLEY	0.0	14.9	26.8	0.6	34.3	32.3	0.0	31.0
CORN	769.2	12,261.9	14,256.3	884.6	14,380.2	26,269.3	100.0	1,473.6
SORGHUM	71.6	668.9	173.9	93.2	1,069.9	699.0	0.0	33.0
SOYBEANS	345.0	4,432.3	12,712.5	695.6	29,633.0	26,482.0	1.4	343.4
SOY MEAL	316.7	3,421.7	3,584.9	338.3	4,737.5	5,137.6	4.9	100.7
SOY OIL	43.5	246.4	178.9	35.3	486.2	337.8	0.0	0.5
RICE
L G RGH	10.7	393.7	412.0	32.1	863.9	662.3	0.0	0.0
M S RGH	0.0	42.8	16.6	0.0	17.5	23.8	0.0	0.0
L G BRN	3.2	14.2	5.4	0.4	33.7	27.9	0.0	0.0
M&S BR	16.8	71.7	85.0	2.3	35.8	56.0	0.0	0.0
L G MLD	3.1	91.7	91.9	19.3	612.5	542.7	0.0	0.0
M S MLD	4.4	170.7	174.8	8.2	377.2	313.4	0.0	0.0
TOTAL	38.2	784.8	785.8	62.4	1,940.5	1,626.2	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	395.5	6,997.4	6,346.5	478.2	7,045.5	5,709.0	53.2	1,536.2
PIMA	9.1	230.3	205.2	15.8	256.9	327.2	0.0	35.3