FW: FI Morning Grain Comments 04/13/20

PDF attached

 

Morning. 
US
wheat is higher on solid global import demand, corn lower on US feed and industrial demand woes and soybean complex mixed with soybean oil lower on a 3 percent decline in palm prices.  Little planting, if any, was completed across the US Delta and Southeast
over the weekend due to widespread precipitation. 

 

 

 

Weather

Japan’s
weather bureau estimates a 60 percent chance of no El Nino.

 

 

World
Weather’s take on the 06z run this morning:

UNITED
STATES

• GFS
  reduced rain from northern Alabama through southeastern Kentucky and the southern Appalachian Mountains
  • The
    change was needed
• GFS
  reduced heavy rain suggested from southern Mississippi and southeastern Louisiana to northern Florida and southern Georgia Sunday into next Monday the model also shifted some of the greater rainfall a little farther to the north from northeastern Louisiana
  to South Carolina
  • These
    changes were needed
• GFS
  shifted rain to the northwest during mid-week next week with areas from Missouri to southern Ohio and Kentucky getting 0.50 to0 1.50 inches of rain instead of mostly Kentucky and Tennessee previously
  • The
    some of the change was needed
• Precipitation
  was removed from the west-central high Plains during early next week
• GFS
  intensified a storm in the Great Plains late next week and into the following Saturday
  
  • This
    feature was too intense
• The
  same storm noted above in the Great Plains moves through the Midwest April 25-26and was also too intense in that region, as well

The
bottom line remains about as it has been. This week will be coldest east of the Rocky Mountains and a warming trend is expected to evolve next week. This morning’s large storm in the central and eastern U.S. April 24-26 is overdone, but there will be potential
for increased rainfall during the second half of next week and into the following weekend. There will still be too much rain in the Delta and southeastern states over the next two weeks which will hinder fieldwork.

 

SOUTH
AMERICA

• No
  significant changes were noted in the first week of the outlook this morning
• GFS
  reduced rain from northern Rio Grande do Sul to Paraguay and western Mato Grosso do Sul early next week
  • The
    change was needed
• GFS
  reduced rain from Uruguay into Entre Rios and immediate neighboring areas of Argentina late next week into the following Saturday
  • The
    reduction was needed
• GFS
  intensified rainfall advertised from Rio Grande do Sul, Brazil to northeastern Argentina April 25-27
  • This
    will not verify

The
bottom line remains about the same today. Argentina will experience restricted rainfall, although not totally dry conditions. The environment will be good for late maturing crops and for promoting additional harvest progress. Southern Brazil will get some
rain, but there is potential for net drying in at least a part of the region. Northern Brazil will continue to experience frequent rainfall this week with a decrease in rainfall next week.

 

 

OTHER
AREAS

• France
  and western Germany are wetter for late next weekend into early next week
  
• Eastern
  Europe is drier today than Sunday with rain limited to today and Tuesday as a cool front moves through the region
• Some
  reduction in precipitation was noted in western Russia mostly to the west of the Ural Mountains and from the middle Volga River Basin northward in the first week of the outlook
  
• Some
  rain will fall in Ukraine, albeit only lightly
• Kazakhstan
  is still advertised to get very little precipitation
• China’s
  Yangtze River Basin is still advertised to become rainy again
• Australia
  will be drier this week
• North
  Africa will be wetter than usual this week
• South
  Africa will be wetter than usual this week

 

Source:
World Weather Inc. and FI

 

Seven-day
outlook:

 

 

 

Source:
World Weather Inc. and FI

 

 

 

 

 

Bloomberg
Ag Calendar

MONDAY,
April 13:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• Ivory
  Coast cocoa arrivals
• U.S.
  crop progress – corn, soybeans, cotton; winter wheat condition, 4pm
• Easter
  Monday holiday in many countries, including Australia, U.K. and Germany

TUESDAY,
April 14:

• China
  soybean import data
• Vietnam
  trade data for rice, rubber and coffee
• HOLIDAY:
  India, Bangladesh

WEDNESDAY,
April 15:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• AmSpec,
  Intertek palm oil export data for April 1-15
• FranceAgriMer
  monthly cereals balance sheet
• New
  Zealand food prices
• Malaysia
  CPO export tax
• India
  monsoon forecast (tentative)

THURSDAY,
April 16:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
• Port
  of Rouen data on French grain exports
• EARNINGS:
  Barry Callebaut half-yearly results

FRIDAY,
April 17:

• ICE
  Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions
• 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

 

Weekend
webinars

University
Of Illinois:

• Acres
  & Crisis: Prospective Plantings and Perspectives from the Past.

Coppess,
J., N. Paulson, G. Schnitkey, C. Zulauf and K. Swanson. "Acres & Crisis: Prospective Plantings and Perspectives from the Past."
farmdoc daily (10):66,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, April 9, 2020. 
https://farmdocdaily.illinois.edu/2020/04/acres-crisis-prospective-plantings-and-perspectives-from-the-past.html?utm_source=farmdoc+daily+and+Farm+Policy+News+Updates&utm_campaign=5958f1c98f-FDD_RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_2caf2f9764-5958f1c98f-173649469 

• Impacts
  of Covid-19 on Agricultural Assets and Lending Markets https://farmdoc.illinois.edu/event/impacts-of-covid-19-on-agricultural-assets-and-lending-markets?utm_source=Webinar+List&utm_campaign=de18e823c3-EMAIL_CAMPAIGN_2020_02_20_07_26_COPY_01&utm_medium=email&utm_term=0_166a5dd42c-de18e823c3-175287057
  

 

Kansas
State:

Ongoing
Effects on Livestock Markets from COVID-19 Pandemic

https://agmanager.info/news/recent-videos/ongoing-effects-livestock-markets-covid-19-pandemic

 

 

CFTC
Commitment of Traders

・        
As of 4/7/20

・        
Traditional funds were less short in corn by 20,100 contracts and more long in soybeans by 26,700 contracts. 

・        
There were no major surprises in wheat or soybean products. 

・        
Traditional funds and managed money sold about 18,000 soybean meal contracts over the five-day period and bought around 8,000 soybean meal. 

 

 

 

 

 

 

Corn.

・        
Corn futures are lower on ongoing US feed and industrial demand woes.  A pork processor in IA that is thought to contribute to about 4 to 5 percent of US production will idle its plant because of coronavirus issues.  Little planting, if
any, was completed across the US Delta and Southeast over the weekend due to widespread precipitation. 

・        
Late last week there was talk China bought US corn.  On Friday it was announced US HRW and soybeans were sold under the USDA 24-hour reporting system, but no corn. 

・        
Goldman Roll C fourth day. 

・        
USDA confirmed a case of H7N3 bird flu at a commercial farm in South Carolina. This is the first case of any bird flu kind for the US since 2017 (HAI and LPAI H7N8), and not the same strain that killed 50 million birds in 2014 and 2015
(H5N1, H5N2 and H5N8).  The H7N3 does not infect humans that we know of. 

• More
  and more meat processing plants are closing due to coronavirus outbreaks.  100’s of workers tested positive and at least three American meal workers have passed from the disease.  One plant in Colorado’s Weld County tested positive.
  
• Over
  the weekend we learned a large US pork processing plant will shut down indefinitely. Smithfield Foods Inc. plant in Sioux Falls, South Dakota accounts to 4 to 5 percent of US production. 
  

・        
Brownfield: PLANTING CORN AT ‘A $100/ACRE LOSS’.  They see break even in corn around $3.50-$3.60/bu. 
https://brownfieldagnews.com/news/planting-corn-at-a-100-acre-loss/

• French
  corn plantings as of April 6 were running at 4%, up from 1% a week earlier and below 13% last year. 
  
• Columbia
  suspended corn, sorghum and soybean import tariffs until June 30. 
• The
  USDA Attaché estimate China corn imports for 2020-21 at 7 million tons, up 1 million from previous.  Production was projected at250 million tons for 2020, down 4 percent from 2019.  
  https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Annual_Beijing_China%20-%20Peoples%20Republic%20of_04-01-2020

 

Corn
Export Developments

• Results
  awaited: Syria seeks 50,000 tons of soybean meal in a combo with 50,000 tons of corn on May 12.
  
• Late
  last week Algeria bought 40,000 tons of corn from Argentina for FH May shipment at near $194 to $195/ton c&f.
  

 

Soybean
complex.

• CBOT
  soybeans
  were unchanged to mostly higher led by the upside in the back months.  Soybean meal was mixed with the nearby two contracts slightly lower while soybean oil was 16-19 points lower as of 6:49 on lower lead from palm oil. 
  

・        
Last week Sinograin agreed to release another 500,000 tons of soybeans from state reserves to Cofco. 

• Bloomberg
  reported about a million tons of 2019 Canadian canola that was left in the fields over the winter could be harvested soon.
  
• IL
  crude SBO was last heard around 50 over, East nominal 75 over and West 25 over. Gulf fob degummed oil was nominal 200 over.  Argentina was nominally 10 under and Brazil degummed oil nominal 40 over.
• APK-Inform
  reported new-crop rapeseed quotes dropped $20-30 per ton FOB Black Sea since mid-March to around $378-380 per ton for July delivery.
• APK-Inform
  estimated the Ukraine 2020 sunflower crop at 15.4-15.7 million tons, nearly unchanged from 2019 while the soybean crop could decline to 3.9-4.2 million tons from 4.4 million tons in 2019.  September to date sunflower oil exports are up 83 percent.
  

・        
Offshore values are leading CBOT soybean oil 23 points lower and meal $ 0.60 higher. 

・        
EU is on holiday. 

・        
China:  Monday

・        
China cash crush margins as of this morning, using our calculation, were 213 cents per bushel and compares to 214 cents a week ago and negative 55 cents around this time last year. 

・        
ITS reported Malaysian palm exports during the 1-10 April period at 312,900 tons, down 6.6 percent from the previous month. 

・        
The Malaysian Palm Oil Board will reduce the crude palm export duty from current 5 percent to 4.5 percent for May. 

・        
Malaysian palm markets:
 MBOB
S&D was viewed as bearish but a slowdown in April production supported prices on Friday.  On Monday prices fell as traders are worried slow export and biodiesel demand will build inventories. 

2-day
period due to US holiday

・        
Argentina truck arrivals to crush plants and ports are back to normal near 6,000 per day. 

 

Oilseeds
Export Developments

• Last
  Wednesday the USDA bought 9,070 tons of vegetable oils for its export program from $1,008.95 to $1,085.77 per ton. 
  
• On
  April 21 the USDA seeks 1,510 tons of vegetable oils under its PL480 program. 
  
• On
  Friday USDA reported under the 24-hour announcement system on 4/10/20, private exporters sold 120,000 tons of soybeans for delivery to unknown.
  • 60,000
    tons is for delivery during the 2019-20 marketing year
  • 60,000
    tons is for delivery during the 2020-21 marketing year
• Results
  awaited:  Syria seeks 50,000 tons of soybean meal in a combo with 50,000 tons of corn on May 12.
  

 

MPOB
S&D

March
Malaysian palm oil production was higher than expected.  At 1.397 million tons, it was 83,313 tons above a trade poll but 16 percent below March 2019.  There are expectations the daily production rate will be lower on April due to temporally production shutdowns,
but there are a few signs the situation is improving.  March exports were higher than expected but larger than anticipated imports and weak domestic demand led to end of March stocks to increase from the previous month to 1.729 million tons, first monthly
gain since September 2019.  End February Malaysian palm stocks were revised up about 30,000 tons and remain lowest since June 2017.  Export demand going forward looks weak and prices are expected to trend sideways to lower over the next 3-6 months. 

 

Malaysia’s
biggest palm oil producing state, Sabah, will reopen plantations and mills in six regions that don’t have any coronavirus infections.  Sabah accounts for about one fourth of Malaysia’s palm oil production. 

 

Malaysian
palm oil futures ended the week 3 percent higher.  On Friday the June futures contract closed 9 MYR higher to 2,313. 

 

 

Wheat

• US
  wheat futures were
  higher overnight on import demand.  Romania banned grain exports and Egypt looks to import 800,000 tons of wheat by early June. 
  
• US HRW wheat growing areas will see well below average temperatures this week.  Frosts, freezes and snow started over the
  weekend across the upper Great Plains into the upper Midwest.  Snow in the north will help protect the crop but the southern areas may see burn back.  It could get as low as the 20’s in the southern areas and teens in the north. 
  
• EU wheat futures are not trading due to holiday. 
  
• Romania will ban wheat and grain exports to non-EU countries until mid-May.  A Romanian wheat cargo destined for Egypt is
  held up by the export ban. 
• Egypt plans to buy 3.6 million tons of local wheat, enough to cover 4.5 months of local needs.  That should increase wheat
  reserves to over 10 months after they secure another 800,000 tons of wheat imports during their harvest season, which was announced Thursday.  Egypt harvests wheat from early May to early June.
  
• Ukraine 2020 wheat production was  estimated at 26.7 million tons from 28.3 million in 2019, according to APK-Inform. 
  
• Ukraine spring plantings were 18 percent complete as of April 9,m according to the Ministry for Development of Economy. 
  
• Jordan is set to receive 15 cargos of grain, or 950,000 tons between April and September. 
  
• Some India flour mills are running at only 25 percent of capacity due to lack of wheat for four. 
  
• India will export 50,000 tons of wheat to Afghanistan under a government to government arrangement.  They will also provide
  40,000 tons of grain to Lebanon under a similar arrangement. 
• FranceAgriMer reported 62 percent of the French wheat crop was in good and very good condition, as of April 6, unchanged
  from the previous week and compares to 83 percent year earlier.  The winter barley and durum wheat conditions fell one points from the previous week.  Spring barley was 63% emerged, up from 44% a week earlier and well below 98% last year. 
  

 

 

Export Developments.

• Saudi Arabia bought 600,000 tons of barley at an average price of $198.63/ton c&f for July-August shipment.
  
• Turkey’s TMO bought about 250,000 tons of 12.5%-13.5% protein optional origin wheat for April 20 and May 15.  Prices were widely unavailable.  At least 25,000 tons was
  bought at $239.65 a ton c&f.
• Jordan received offers for 120,000 tons of wheat. 
  
• USDA reported under the 24-hour announcement system on 4/10/20, private exporters sold 165,000 tons of hard red winter wheat for delivery to China. 
  
  • 55,000 tons for delivery during the 2019-20 marketing year
  • 110,000 tons for delivery during the 2020-21 marketing year
• Ethiopia postponed their import tender for 400,000 tons of wheat until April 23.  They are in for 200,000 tons on April 15 in a separate tender. 
  

 

Rice/Other

• South Korea seeks 35k rice from China on April 14 for arrival around end of Aug.