FW: FI Morning Grain Comments 03/16/20

PDF attached

 

Morning.

 

Fed
Slashes Rates to Near Zero, Deploys Massive Bond Buying of $700 bil. Macros continue to dictate prices.  Fundamentals will return eventually. 

 

 

Source: Reuters and FI

 

 

Weather

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Today’s
weather will not provide much bullish support except from the United States where a wet bias will continue in the Delta and Tennessee River Basin as well as in parts of central and eastern crop areas of Texas. South Texas moisture will be welcome and dry conditions
in the far southeastern U.S. will support planting.

South
America weather is still advertised to be mostly good for Argentina and southern Brazil, although the distribution of rain over the next two weeks will have much to say about late season corn, soybean and peanut production.

South
Africa rainfall will be good for production and drier weather in eastern Australia will be supportive of early season sorghum and other coarse grain and oilseed crops.

India
winter crops are still poised for excellence this year and drier weather will be needed in late March and especially April to protect crop quality.         

China’s
winter weather has spring planting prospects looking very good. Rain in Spain and Portugal will improve spring planting potentials and support improved winter crop conditions.

Rain
is still needed throughout Southeast Asia, but mostly in the mainland areas and in some of the northern palm oil and coconut production areas.

Overall,
weather today will maintain a neutral to bearish bias to market mentality

 

MARKET
WEATHER MENTALITY FOR WHEAT: 

Cooling
in southern Russia and southern Ukraine this week will help keep winter crop development in check after recent greening. Winter crop development potential in China remains very good and India is experiencing some fine filling conditions after a successful
reproductive season. Europe wheat small grain production potential continues to improve and rain in North Africa and Spain this week may bring on some improvement for those areas as well.

            U.S.
winter crops are in mostly good shape, although drier weather is needed in the Delta. Southeastern Canada and the heart of the Midwest also need some drier weather.

            Overall,
weather today will maintain 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

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

 

 

 

 

 

 

CFTC
Commitment of Traders

 

 

·        
For soybeans traditions funds bought an estimated net 20,100 funds futures only contracts.  At net long 31,500 contracts, funds bought 37,100 contracts more than expected. 

·        
For corn traditional funds bought an estimated net 9,300 funds futures only contracts.  At net long 14,900 contracts as of March 10, funds bought 15,300 contracts more long than estimated. 

·        
Funds also missed the position in soybeans meal.  Funds were 31,400 contracts more long than expected. 

 

 

 

 

 

 

Macros

·        
Equities and bonds are in focus. 

 

 

 

Corn.

·        
Corn futures are lower on weakness in WTI and other outside commodity markets. 

·        
Germany reported a H5N8 bird flu case in Saxony. 

 

 

Export
Developments

• South
  Korea’s KFA indeed buy 52,000 tons of corn on Friday, at $202.90/ton c&f for arrival around August 5. 
  
• South
  Korea’s MFG bought 132,000 tons of corn at $200.40/ton to $203.40/ton c&f for August 9 and July 21 arrival, respectively. 
  

 

Soybean
complex.

• CBOT
  soybeans
  are lower on widespread commodity selling.  WTI is below $30.    
• NOPA
  is due out at 11 am this morning.  See trade estimates below. 
• Ukraine
  sunflower exports, according to APK-Inform, are running 76 percent above last year’s pace at 2.781 million tons (Aug-Sep). 
  
• Offshore
  values are leading CBOT soybean oil 40 points lower and meal $3.30 higher.
  

·        
Rotterdam vegetable oils this morning were 10-20/ton lower. Rotterdam meal when imported from SA were mixed. 

·        
China soybean meal was higher overnight by 2.5-3.0 percent as traders remain concerned soybean shipments from Brazil will be delayed. 

·        
China cash crush margins as of this morning, using our calculation, were 138 cents per bushel, and compares to 128 cents a week ago and negative 28 cents around this time last year. 

• ITS
  reported Malaysian palm exports at 489,635 tons for the first 15 days of the month, down 9.6 percent from the same period a month ago. 
  

·        
Malaysian palm markets:
 

 

Oilseeds
Export Developments

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

 

 

Wheat

·        
US wheat is lower
following outside markets despite strong global import demand.   

·        
Egypt said they have enough wheat for 3.6 months in reserves.  They also said they have enough soybean oil to last until August 1. 

·        
Germany’s 2020 wheat crop was seen at 22.79 million tons, according to the local farm coop, down 1.2 percent from last year.  The rapeseed crop was seen at 3.44 million tons, up 21.9 percent from last year. 

·        
May Paris wheat futures were down 2.00 euros as of early this morning.

 

Export
Developments.

• Algeria seeks 50,000 tons of durum wheat on March 17 for April shipment. 
  
• Jordan seeks 120,000 tons of feed barley on March 18. 
  
• Jordan seeks 120,000 tons of milling wheat on March 17. 
  
• 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

• South Korea seeks 73,664 tons of rice on March 25 for arrival around end of Sep. to Oct 31. 
  
• Sugar prices hit a 6-month low.