FW: FI Morning Grain Comments 03/06/20

PDF attached

 

Morning.

 

USD
down hard this morning.  Both the real and peso touched fresh lows.  WTI crude sharply lower.

 

 

 

 

Weather

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

The
South America weather outlook remains of interest today, but if rain falls in central and southern Argentina next week as advertised the impact of recent dry and warm to hot weather will be kept relatively low. Argentina will continue to progressively become
too dry through Monday, however, and areas that do not get rain next week in northern and some far 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. Subsoil
moisture remains sufficient to support crops in Brazil.

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,
but it will not happen in the next couple of weeks.

 

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

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

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

MONDAY,
MARCH 9:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals

TUESDAY,
MARCH 10:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, noon
• Brazil
  Conab soybean and corn yield, area and production, 8am
• China
  agriculture ministry (CASDE) supply & demand monthly report
• AmSpec,
  Intertek, SGS release palm oil export data for March 1-10
• Malaysian
  Palm Oil Board data on palm production, exports, stocks
• Ros
  Agro 4Q results

WEDNESDAY,
MARCH 11:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• Santander
  and Datagro hold sugar, ethanol conference, Sao Paulo
• FranceAgriMer
  monthly cereals balance sheet

THURSDAY,
MARCH 12:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
• Port
  of Rouen data on French grain exports
• New
  Zealand food prices, 5:45pm

FRIDAY,
MARCH 13:

• 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

Source:
Bloomberg and FI

 

 

 

 

 

Deliveries,
registrations, OI & Options

Bunge
was active again cancelling soybean meal registrations.  Wednesday night they cancelled 435.  Thursday evening another 72 were cancelled. 

 

 

 

 

 

Macros

·        
OPEC Has No Intention To Cut Output Without Russia – RTRS Source (Russia rejected OPEC’s cuts)

·        
WTI was down more than $2.00/barrel before the US day session started. 

·        
Mexico made a deal to imports millions of barrels of Venezuelan crude oil. 

 

 

Corn.

·        
Corn futures are lower in response to lower energy products. 

·        
WTI crude was down $2.42 as of 6:51 am CT.

·        
In a barter transaction, Mexico will supply Venezuela with corn and water trucks in exchange for millions of barrels of crude oil.  

 

Export
Developments

• South
  Korea’s KFA bought 65,000 tons of corn from South America at around 207.95/ton c&f for June 1-30 shipment. 
  

 

Soybean
complex.

• CBOT
  soybeans
  are lower on weakness in the Brazilian real, widespread commodity selling and lack of Chinese soybean buying from the United States.  The real has been grind lower all week which erased early gains in soybean earlier this week.   Soybean meal is slightly higher
  in the non expiring contracts on product spreading and expectations for a slowdown in Argentina soybean meal exports. 
  
• CBOT
  soybean oil was on the defensive early this morning from sinking energy prices and weaker offshore values.  Malaysian palm fell 2.9 percent or 73 MRY and cash slipped $15.00/ton.  ITS yesterday reported March 1-5 palm oil shipments down 38 percent from the
  first five days of February.  China vegetable oils were also under pressure overnight. 
  
• USD
  was down 100 points earlier this morning.  The Brazilian real hit a fresh record low, reaching 4.6663. 
  
• Late
  yesterday we heard all four main Argentina producer groups agreed to go on a 4-day strike starting Monday. 
  
• Yesterday
  China granted exemptions to some crushers to buy US soybeans for one year. 
  
• Offshore
  values are leading CBOT soybean oil 16 points lower (69 points higher for the week to date) and meal $0.60 higher ($3.80 higher for the week).
  

·        
Rotterdam vegetable oils this morning were down 17 euros for nearby soybean oil positions and down around 14 euros for rapeseed oil. Rotterdam meal when imported from SA were 5-9 euros lower.  

·        
China:

·        
China cash crush margins as of this morning, using our calculation, were 136 cents per bushel, down 7 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 Chicago and KC wheat futures are lower while MN type wheat is higher in the nearby contracts.  A sharply lower USD could create a two-sided trade in the futures.  US wheat sales for export could potentially
increase today and over the weekend if market conditions hold.    

• USD
  was down 100 points earlier this morning.  The Brazilian real hit a fresh record low, reaching 4.6663. 
  
• Ukraine’s
  grain exports were 41.7 million tons so far in the July 2019 to June 2020 season, up 24%, according to the Ministry for Development of Economy, Trade and Agriculture. For 2010-21 grain production they projected 65-70 million tons and exports at 40 million
  tons. 
• The
  Russian Federal Center of Quality & Safety Assurance for Grain & Grain Products reported grain exports are down 13 percent to 25.9 million tons. 
  

·        
May Paris wheat futures were down 2.50 at 181.75 euros as of early this morning.

·        
France crop progress. 

o  
Spring barley plantings 33% complete by March 2, up from 32% a week earlier and below 88% year ago.

o  
Soft wheat condition unchanged at 64%, below 86% last year.

o  
Winter barley condition down 1 point to 65% from previous week, below 80% year ago. 

 

Export
Developments.

• None reported.
  
• Yesterday Morocco received no offers for 354,000 tons of US durum wheat for arrival by May 31.
  
• Jordan seeks 120,000 tons of wheat on March 10.  Sep-Oct shipment. 
  
• Jordan seeks 120,000 tons of feed barley on March 11.  June-FH Aug. 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