PDF Attached

 

Nearby
SBO crushed our 12 month outlook: SBO rises above 49.25.  46 was my predicted high in October 2020.  As a LT bullish component of vegetable oil based on supplies drying up over years, never thought oils share would finally see gains around this time of year. 

 

 

The
US Senate voted 92-7 in favor for Tom Vilsack as the US secretary of agriculture.  Soybean oil was the feature today rising more than 2 percent on fund and option buying.  First notice day for deliveries against CBOT March futures contracts is Friday.  There
are 6 days left until the end of the meteorological winter. 

 

 

Weather

 

North American Weather System

 

SA Week 1 Accum Precipitation (mm) Forecast

 

SA Week 2 Accum Precipitation (mm) Forecast

 

 

World
Weather Inc.

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

No
major trend changes were suggested this evening for Argentina or Brazil. That will leave some market concern over long term crop development potential in both countries. Pockets of crop stress in Argentina will expand and deepen over time. In Brazil, good
weather is expected in the south from southernmost Mato Grosso to southwestern Sao Paulo and into Rio Grande do Sul and Paraguay while there will be some ongoing concern about field progress and general crop and field conditions in northern and eastern Mato
Grosso and a few areas in Tocantins, Goias and Minas Gerais.

            Weather
in the rest of the world is mostly not adverse enough to have much sway on market mentality. India will trend dry and warmer this week into next week and China’s southern rapeseed will continue breaking dormancy while experiencing a wetter bias in soil conditions
for a while.

            Overall,
weather today will likely generate a mixed influence on market mentality with a bullish floor remaining for support.

 

MARKET
WEATHER MENTALITY FOR WHEAT:  No crop damaging cold is expected around the world in the next ten days. Bitter cold is likely later this week in Russia’s southern region, but snow will precede the event tonight into Tuesday with Wednesday the coldest morning.

            China
precipitation in the coming ten days will be good for future wheat development. Recent rain in India was good for minor wheat areas in the south, but the north still needs more moisture to induce the best yields.

            Middle
East weather looks favorable while North Africa will still need a more generalized rain after sporadic showers occur this week.

            Europe
crop areas will dry down for a while this week and that will help reduce flood potentials.

            U.S.
hard red winter wheat areas may get a little more precipitation later in the week and next week, but it will be light.

            U.S.
Midwest, Delta and southeastern wheat areas will stay plenty wet as will southeastern Canada.

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

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

Wednesday,
Feb 24:

  • EIA
    weekly U.S. ethanol inventories, production
  • Amsterdam
    sustainable cocoa conference (Feb 24-26)
  • U.S.
    poultry slaughter, 3pm
  • MPOB
    palm oil prices seminar

Thursday,
Feb 25:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • Port
    of Rouen data on French grain exports
  • International
    Grains Council monthly report
  • Malaysia’s
    Feb. 1-25 palm oil export data
  • USDA
    red meat production, 3pm
  • EARNINGS:
    Minerva, BRF, FGV (tentative), Golden Agri

Friday,
Feb 26:

  • ICE
    Futures Europe weekly commitments of traders report, 1:30pm (6:30pm London)
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • U.S.
    agricultural prices paid, received, 3pm
  • Earnings:
    Olam
  • HOLIDAY:
    Thailand

Source:
Bloomberg and FI

 

Macros

About
5% To 10% Of Shuttered US Oil Production May Never Recover Post-Freeze -Trafigura

 

Philadelphia
Fed Non-Manufacturing Regional Business Activity Index Feb: 3.9 (prev -17.5)

Philadelphia
Fed Non-Manufacturing Full-Time Employment Index Feb: 2.8  (prev 3.1)

Philadelphia
Fed Wage And Benefit Cost Index Feb: 21.7 (prev 16.4)

Philadelphia
Fed Non-Manufacturing Firm-Level Business Activity Index Feb: 7.5 (prev -14.3)

Philadelphia
Fed Non-Manufacturing New Orders Index Feb: 4.0 (prev 0.2)

 

Canada
Factory Sales Rose 2.5% M/M In January – StatsCan Flash

 

Corn.

  • Corn
    futures were higher (2-week high) on follow through buying and sharply higher soybeans. Lower wheat was seen capping gains but as prices turned nearby corn caught a bid.  March and May corn are back above the psychological $5.50 level.  Higher WTI crude oil
    is aiding gains. 
  • Funds
    bought an estimated net 7,000 corn contracts. 
  • China
    apparently is not out of the woods to achieve fully pre ASF hog production, at least in the northern provinces.  Cold weather has increased the spread of the disease, according to a Bloomberg article.  One analyst they cited noted China’s hog herd could have
    fallen as much as 15 percent over the winter from new outbreaks, including new variants. Pork prices will help sort through actual supply as about 90 percent of the population has returned back to normal levels from Covid restrictions. 
  • Poland’s
    egg supply is threatened by bird flu outbreaks across Europe, particularly Poland.  Bird flu cases are approaching 2016 levels.  Prices for eggs on the wholesale market in Poland increased by about 18% to 20% at the end of January.
  • Soybean
    and Corn Advisory:
    • 2020/21
      Brazil Corn Estimate Unchanged at 105.0 Million tons
    • 2020/21
      Argentina Corn Estimate Unchanged at 45.5 Million Tons

  • A
    Reuters poll calls for South Africa’s CEC to initially report their 2020-21 corn production at 16.872 million tons, up from the 15.300 million tons last season.  The first survey of the season is expected to show 8.929 million tons of white maize and 7.943
    million tons of yellow maize.  They will release the report on Thursday. 
  • A
    Bloomberg poll looks for weekly US ethanol production to be down 92,000 barrels (727-910 range) from the previous week and stocks down to 207,000 barrels to 24.090 million.

 

Corn
Export Developments

·        
None reported

 

Updated
2/22/21

March
corn is seen trading in a $5.25 and $5.75 range.

May
corn is seen in a $5.15 and $6.00 range.

July
is seen in a $5.00 and $6.00 range.

December
corn is seen in a $3.75-$6.00 range.

 

Soybean
complex
.
 

 

Updated
2/22/21

March
soybeans are seen in a $13.50 and $15 range (up150, 75 cents).

March
soymeal is seen in a $415 and $450 range (unch, up $15).

March
soybean oil is seen in a 47.50 and 50.50 cent range. (up 25; up 150)

 

Wheat

  • Ukraine’s
    grain stocks at the end of January were 18.2 million tons (State Statistics Service).  They included 5.1 million tons of wheat. 

 

Other
states attached after text.

 

Export
Developments.

  • Syria
    seeks 200,000 tons of wheat for shipment within 60 days of contract signing. 

 

Rice/Other

·        
Mauritius seeks 4,000 tons of long grain white rice, optional origin, on March 2, for delivery between April 15 and June 15.

 

 

The
big melt.
 US
35% coverage versus 47% Monday and 66% Saturday.  Month ago 27.5%. 

 

 

Updated
2/22/21

March
Chicago wheat is seen in a $6.30‐$7.00 range.

March
KC wheat is seen in a $6.00‐$6.70 range.

March
MN wheat is seen in a $6.00‐$6.55 range.

We
see the May trading ranges keeping a 10 to 15 cent premium over March for the balance of the month. 

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International
One Lincoln Center
18 W 140 Butterfield Rd.

Oakbrook Terrace, Il. 60181

W: 312.604.1366

treilly@futures-int.com

ICE IM: 
treilly1

Skype: fi.treilly

 

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