FI Morning Grain Comments 02/05/21

PDF attached

Morning.
Look for positioning in futures and options ahead of the Tuesday USDA report. 

 

StatsCan
updated Dec stocks and Farm Futures released US 2021 acreage. 

 

U.S.
2021 SOYBEAN PLANTINGS SEEN AT 84.5 MILLION ACRES, UP 1.7% FROM 2020 -SURVEY

U.S.
TOTAL WHEAT AREA PLANTED FOR 2021 HARVEST SEEN AT 46.4 MILLION ACRES -SURVEY

U.S.
2021 SPRING WHEAT PLANTINGS SEEN AT 12.6 MILLION ACRES -SURVEY

ESTIMATES
BASED ON A SURVEY OF 806 FARMERS DURING JANUARY 2021 -FARM FUTURES

U.S.
WINTER WHEAT PLANTINGS FOR 2021 HARVEST SEEN AT 32.4 MILLION ACRES -SURVEY

U.S.
2021 CORN PLANTINGS SEEN AT 94.7 MILLION ACRES, UP 4% FROM 2020 -FARM FUTURES SURVEY

 

 

 

Weather

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

            Market
worry over heavy rainfall in northern and eastern Mato Grosso, Goias and Minas Gerais will influence today’s trade while some forecasters believe the drier GFS model run for Argentina is a concern with net drying during the next ten days. Despite the heavier
rainfall outlook in Brazil, Minas Gerais is not a strong contributor to soybean production – at least not in the areas expecting heavy rain. Parts of Mato Grosso will also get some periods of sunshine limiting the greatest rain delays to the north. Argentina’s
drying will be hindered by some periodic rainfall reducing the level of concern over its weather for now, but net drying is expected in portions of the nation. 

            South
Africa summer crop conditions remain very good with little change likely, despite drying in the west.

Australia’s
dryland sorghum and other crops would benefit from more routine rainfall, especially in Queensland, but that is not likely for a while. Recent rainfall in Australia has been very good for crops in New South Wales

           
India winter crops are beginning to reproduce and timely rain is needed to support the best possible yields. Rain this week failed to have much impact on crops other than wheat. Crop conditions are rated favorably, though, and more precipitation is needed
to get the best yields.

            China
and Europe crops are mostly dormant and will remain in favorable condition for the next few weeks. Western Europe has become a little too wet and recent flooding has damaged some crops in a part of France, the United Kingdom and a few other random locations.

           
Overall, weather today will likely provide a neutral to slightly bearish bias to market mentality.

 

MARKET
WEATHER MENTALITY FOR WHEAT: Concern remains over snow free areas in southwestern Canada’s Prairies and the northwestern and west-central U.S. Plains as colder air settles into those areas for a while through next week. Snow should precede the coldest conditions
to adequately protect dormant winter crops from winterkill. However, there is some potential that the depths of snow in minor production areas of Saskatchewan, northeastern Montana and parts of North Dakota that a little damage may still occur because of the
intensity of the cold expected.

            Snow
cover in northern Russia and northeastern Europe is sufficient to support crop needs during the colder periods that may evolve over the next week and deeper into February. Snow free areas in southern Europe, Ukraine and Russia’s Southern Region should not
be threatened by damaging cold weather in the next week.

            China,
India and Europe winter crops are in mostly good condition. Rain is needed in India during reproduction in February and a close watch on rain potentials is warranted over the next few weeks. Showers later this week over the next few days in the far north and
extreme east will be welcome, but greater volumes of rain will still be desired.

            Morocco
rain expected into the weekend will improve topsoil moisture for better wheat development potential in the spring. However, drought during the planting season may have permanently cut production in a small part of the nation. A boost in precipitation is still
needed across all other areas in northern Africa, but no area is drier than southwestern Morocco.

            Recent
increases in Middle East rainfall has improved field condition so that some improvement in crop conditions may follow.

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

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

Friday,
Feb 5:

• US
  Trade Balance
• Statcan
  reports on wheat, soy, durum, canola and barley stockpiles in Canada
• 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
• China’s
  CNGOIC to publish soybean and corn reports

Monday,
Feb 8:

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

Tuesday,
Feb 9:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, noon
• (CASDE
  ?)
• France
  agriculture ministry updates 2021 winter-crop planting estimates

Wednesday,
Feb 10:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Malaysian
  Palm Oil Board data on January palm oil end- stocks, output, exports
• Malaysia
  Feb. 1-10 palm oil export data from AmSpec, Intertek, SGS
• FranceAgriMer
  monthly grains report
• HOLIDAY:
  Vietnam

Thursday,
Feb 11:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Conab’s
  data on yield, area and output of corn and soybeans in Brazil
• Russian
  consultant IKAR holds agricultural conference, day 1
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  China, Japan, South Korea, Vietnam

Friday,
Feb 12:

• 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
• Russian
  consultant IKAR holds agricultural conference, day 2
• New
  Zealand Food Prices
• HOLIDAY:
  China, Hong Kong, Indonesia, Malaysia, South Korea, Singapore, Vietnam, Thailand, Philippines

Source:
Bloomberg and FI

 

 

 

 

 

Total
stocks of principal field crops at December 31

                
Dec 2018  Dec 2019  Dec 2020  Dec 2018-2019 December 2019-2020

        
           thousands of   tonnes                % change

Total
wheat        25259     25825     24845          2.2               -3.8

Durum
wheat         5518      4661      4763        -15.5                2.2

Wheat ex.
durum    19741     21163     20082          7.2               -5.1

Barley             
4943      5954      5680         20.5               -4.6

Canola            
15152     15907     12140          5.0              -23.7

Corn
for grain     11628     10700     11055         -8.0                3.3

Dry
field peas      2550      2660      2565          4.3               -3.6

Flaxseed            
410       387       377         -5.6               -2.6

Lentils            
2306      2410      1848          4.5              -23.3

Oats   
            2406      2671      2682         11.0                0.4

Rye                 
169       179       297          5.9               65.9

Soybeans           
4287      4053      3688         -5.5               -9.0

 

Macros

 

Corn.

• Corn
  futures during down after a choppy open this morning on positioning ahead of this weekend and the USDA report due out Tuesday. 
   There
  was a 101,600 ton sale to unknow under the USDA 24-hour sales this morning. 
   Prices remain near a 7-1/2 year high and some think some fund long liquidation will show up in this afternoon’s COT report. 
  Farm Futures came out with a whopping 94.7 million corn area for the US and 84.5 million soybean area. 
  
• Goldman
  roll starts today. 
• China
  reported an outbreak of H5N8 bird flu in eastern Jiangsu.
• The
  China National Grains & Oils Information Center – corn imports at 20 million tons in the 2020-21 season, up from 15 million tons predicted in January.  China cash corn is near multiyear highs. 
  
• Effective
  after the close of business on 2/5/21, Mar 2021 corn futures maintenance margins to $1,500 per contract from $1,400; Mar 2021 wheat futures contract maintenance margins were also increased to $1,900 per contract from the current $1,800.

 

Corn
Export Developments

·        
Under the 24-hour reporting system private exporters sold 101,600 tons of corn to unknown. 

·        
South Korea’s NOFI group bought 65,000 tons of corn from either the US or SA at $289.39/ton c&f for arrival around June 10. 

 

 

Soybean
complex.  

• The
  US soybean complex is higher on China buying of scattered US and Brazilian soybeans and a low US area estimate of 84.5 million acres by Farm Futures.  If realized on the planted area, soybean stocks in 2021-22 are expected to remain below 250 million bushels
  if China demand keeps up with its current pace.  The 84.5 million would be bullish over the long run. 
  
• StatsCan
  reported a slightly lower Canadian canola stocks estimate (page 1). 
• We
  heard China bought an April Brazilian soybean cargo yesterday, one shipment for May from Brazil and a February US boat. 
  
• Look
  for positioning today amid USDA S&D report due out Tuesday.  We should see an update from China on the same day. 
  
• Offshore
  values are leading the CBOT soybean oil 13 points higher (50 lower for the week) and meal $4.30 higher ($4.80 lower for the week). 
  
• Malaysian
  palm oil futures: 
  

• China
  cash crush margins were 203 cents on our calculation (216 previous), compared to 171 at the end of last week and to 84 year ago.
  
• China

 

MPOB
Malaysian palm data is due out Feb 10.  Breakdown of January estimates (in tons):

                               
Range                                                   Median

Production         
1,108,000-1,400,000                        1,160,000

Exports
                1,000,000-1,500,000                        1,056,000

Imports
               0-282,000                                             110,000

Closing
stocks    1,158,000-1,360,000                        1,287,000

 

Oilseeds
Export Developments

·        
None reported.  We did hear China bought a US soybean cargo and 2 out of Brazil (see above). 

 

Wheat

• US
  wheat is higher on technical buying and a lower USD after prices declined earlier in the week.  News for wheat is lacking. 
  

• StatsCan
  reported a lower than expected Canadian all-wheat stocks estimate (page 1). 
  

• US
  weather, with temperatures plunging well below normal levels over the next 7 days, does not appear to be a threat. 
  
• EU
  March milling wheat was up 0.25 at 225.00 euros.

 

Export
Developments.

• Jordan
  seeks 120,000 tons of animal feed barley on Feb. 9.
• Jordan
  seeks 120,000 tons of wheat on Feb 10.  

 

Rice/Other

·        
Syria is in for 25,000 tons of rice on February 9.