FW: FI Morning Grain Comments 03/13/20

PDF attached

 

As
you most likely heard, the CME has suspended floor trading for options at the conclusion of Friday’s session. As we all deal with the uncertainty of this unknown virus and attempt to navigate the unknowns, we wanted to give an overview of what avenues for
trading of options are available. Futures International LLC is and will remain one of the largest liquidity providers for agricultural products, having access to the world’s largest liquidity pools available.  We have all the systems already in place to access
these markets through block trades, cross trades, Globex and OTC if desired.  Our liquidity pool includes, but not limited to, hedge funds, market makers, locals, and money managers that make markets.  Futures International LLC has already been practicing
execution during non pit hours for several years, so we are more than ready for this transition.  As one of the largest options companies at the CBOT, we can provide the service needed both through execution and discovery.

 

Morning.
Central banks are injecting money into local economies.  
US equity futures were limit up early this morning.  China lowered bank reserve requirements for the second time this year. 

 

 

Source: Reuters and FI

 

 

Weather

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Worry
over U.S. wet weather will begin to rise as an active weather pattern further delays early-season planting of corn in the Delta and interior southeastern parts of the nation.

Rain
has fallen significantly in parts of central Argentina the past two days and more rain is coming for much of the nation over the next four days bolstering topsoil moisture for improved crop conditions after several weeks of dry and warm weather.

            Dryness
in southern Brazil will stress some crops and threaten a little production since there will not be much relief prior to early next week. Relief next week may be temporary with additional drying coming a little later in the month.

Europe
is plenty moist and poised for good early spring crop development, although moisture is needed in the southeastern and southwestern corners of the continent. Recent flooding and that expected to continue in northwestern Europe could damage a few crops in low-lying
areas.

China
winter crops along with those in India will perform well this winter with good yields.

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

 

MARKET
WEATHER MENTALITY FOR WHEAT: 

Recent
weather and that which is coming this week will continue to promote early season winter crop development in the U.S. southern Plains, Delta and southeastern states as well as southern Russia, southern Ukraine and parts of China. Moisture in Canada’s Prairies
will improve spring planting conditions when seasonal warming begins. North Africa will continue struggling for moisture in Morocco and northwestern Algeria as well as in parts of Spain this week, but some rain may fall this weekend into next week to offer
a little relief.

           
Overall weather today will likely provide a neutral to bearish bias to 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 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

MONDAY,
MARCH 16:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• EU
  weekly grain, oilseed import and export data
• AmSpec,
  Intertek, SGS release palm oil export data for March 1-15
• Ivory
  Coast cocoa arrivals

TUESDAY,
MARCH 17:

• New
  Zealand global dairy trade auction

WEDNESDAY,
MARCH 18:

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

THURSDAY,
MARCH 19:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
• Port
  of Rouen data on French grain exports
• USDA
  total milk, red meat production, 3pm

FRIDAY,
MARCH 20:

• 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
• AmSpec,
  Intertek, SGS release palm oil export data for March 1-20
• U.S.
  cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

 

Macros

·        
Higher trade in equities. 

·        
US Tsy Sec Mnuchin: : Fed, Treasury Are Working To Provide Unlimited Liquidity – – CNBC

·        
NY Fed Accepts $45.15B Of $45.15B In Bids At Overnight Repo Operation

·        
US House Speaker Pelosi: Trump Admin, House Democrats Are Close To A Deal On New COVID-19 Legislation

·        
US President Trump Calls For Payroll Tax Cut – Twitter

 

 

Corn.

·        
Worst weekly loss for agriculture markets since 2008. 

·        
Corn is higher on strength in WTI crude oil and bottom picking.   Funds sold an estimated net 30,000 corn contracts in the previous two sessions.  

·        
A top China oil trader is looking to back out of some crude deals, according to Bloomberg. 

·        
China will waive port construction fees for international cargos (from March 1) until June 30. 

·        
Yesterday US gasoline futures fell to its lowest level since 2008.  Ethanol futures are higher this morning but the large decline in energy prices is straining the US ethanol industry. 

 

Export
Developments

• Under
  the 24-hour reporting system, private exporters sold 136,000 tons of corn to South Korea. 
  
• South
  Korea’s KFA (69k), MFG (140k) and FLC were in for corn overnight.  Some trades were heard around $200 to $203.50/ton. 
  
• Yesterday
  South Korea’s NOFI group bought 5 cargos of corn for July-Sep arrival at $192-$205.50/ton. 
  
• China
  auctioned off 20,000 tons of pork on Friday. 

 

Soybean
complex.

• CBOT
  soybeans
  are higher today but remain near a 10-month lower.  Global commodity prices were rebounding as of early this morning.  Meal and SBO were also higher.   Oil share is higher.  
  
• Brazil’s
  Mato Grosso do Sul and Parana states will remain under stress from net drying over the next week. 
  
• Offshore
  values are leading CBOT soybean oil 63 points higher (22 higher for the week to date) and meal $0.80 ($1.00 higher for the week).
  

·        
Rotterdam vegetable oils this morning were unchanged for nearby soybean oil positions and down around 25 euros for rapeseed oil. Rotterdam meal when imported from SA were mixed. 

·        
China:

·        
China cash crush margins as of this morning, using our calculation, were 128 cents per bushel (120 previous), and compares to 136 cents a week ago and negative 21 cents around this time last year. 

• India’s
  vegetable oil imports in February fell 10 percent to 1.1 million tons from a year ago (SEA). Palm oil imports in February stood at 540,470 tons (594,470 tons in January) and soyoil imports were 322,448 tons.

·        
Malaysian palm markets:
 near
a five-month low. Down 7 percent for the week. 

• Argentina’s
  BA Grains Exchange lowered its projection for soybeans to 52 million tons, from 54.5 million tons.  They are not the only local group to lower Argentina’s soybean production.  Argentina’s Rosario Stock Exchange this morning unexpectedly projected lower to
  51.5 million tons from 55 million tons. They cited a fall in soybean yields due lack of rains over the past few days. 
  

 

Oilseeds
Export Developments

• There
  were no 24-hour announcements this morning for the soybean complex. 

 

 

Wheat

·        
US wheat is higher
on technical buying. 

·        
French soft wheat conditions declined to 63 percent G/E as of March 9, down one point from the previous day, well down from 96% year ago.  It’s the lowest for this time in nine years.  Spring barley sowing
was 34% complete by Monday, up only marginally from 33% a week earlier and 32% two weeks ago.

·        
May Paris wheat futures were up 2.25 euros as of early this morning.

·        
Russian wheat exports fell 12 percent to 26.7 million tons, crop year to date, from last season, according to the Federal Center of Quality & Safety Assurance for Grain & Grain Products.

·        
The southern Great Plains wheat has an opportunity for rain one time or another over the next week.  The Northern Great Plains may see rain on and off over the next two weeks, but temperatures will be mainly
below normal. 

 

 

Export
Developments.

• Japan bought 100,100 tons of milling wheat-AgMin. 
  
• Results awaited: Syria seeks 200,000 tons of wheat from Russia, Bulgaria,
  or Romania, on March 11. 
• 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 18. 
• 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