FI Morning Grain Comments 02/26/21

PDF attached

 

Morning.

 

Outside
markets are indicating a bearish undertone in commodities.  For the ags, much of the focus this morning in on CBOT soybean oil and meal while follow through selling and positioning ahead of the weekend is pressuring wheat and corn.  The USD was sharply higher
(up 42) and WTI down more than $1.00. China soybean meal futures fell 3.2% as SAF disease concerns rippled through the market.  The Ag Ministry issued a notice that all localities must step up control of African Swine Fever.  Other China ag related markets
traded lower.  Rotterdam oil and Malaysian palm (down 42 points) were lower.  Offshore values are leading soybean oil 44 points lower (184 lower for the week to date) and soybean meal $7.00 lower ($3.80 lower for the week). 

 

 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER CHANGES AND AREAS OF INTEREST

• Argentina
  is still looking dry biased for the next ten days with only a little rain in the west and north infrequently. 
  
• The
  dry bias will be most significant in the central and south
• rain
  is most likely in the west-central and northeast
• Brazil
  weather has not changed much overnight
• Rain
  will still fall in many areas at various times, but alternating periods of rain and sunshine are expected
• Fieldwork
  will advance around the precipitation, but some areas will be a little too wet for optimum conditions
• Rain
  still falls in a part of U.S. hard red winter wheat country Wednesday into Thursday next week, but it is being down-played in the west-central and southwestern high Plains
• Rainfall
  will vary from 0.05 to 0.25 inch in the west and 0.30 to 1.00 inch in the east
• Heavy
  rain still occurs through the weekend and into Monday in the Delta and Tennessee River Basin with some flooding expected.
  
• Rain
  totals of 2.50 to 6.00 inches are likely
• Some
  follow up rain is expected late next week that will push those totals even higher
• 06z
  GFS model run has increased snow and rain in the U.S. northern Plains, Upper Midwest and Canada’s eastern Prairies for March 6-8.
  
• This
  feature is overdone. 
• One
  more storm system occurs in the heart of the U.S. Midwest March 8-9, but is dependent upon the advancing colder air advertised into the north-central U.S. at that time.
  
• Unusually
  warm air will be present in the U.S. Midwest March 2-9 and some of this will be in eastern Canada’s Prairies, too, but cooling occurred shortly thereafter – at least for a little while
• River
  ice on the Mississippi, Missouri and Illinois rivers will slowly decrease during the next week to ten days
  
• Southwestern
  U.S. drought is not likely to change anytime soon
• West
  Texas dryness will prevail despite a few showers early next week and a few more late next week.
  
• Warming
  temperatures will increase drying rates between precipitation events, although the region cooled Thursday
• No
  relief from long term dryness is expected through the next ten days
• South
  Texas crop areas are still too dry
• 70-
  and 80-degree Fahrenheit high temperatures in the coming week will accelerate the dryness while raising soil temperatures. Planting in irrigated areas will occur soon
• Very
  little change in Russia/Ukraine or the remainder of Europe was noted overnight
• India
  remains dry and warm for the next ten days
• China
  still sees precipitation in most of the nation with the Yangtze River Basin and areas into the interior south are still expected to get abundant rain
• Yunnan
  remains dry biased through the next ten days possibly delaying corn planting
• Eastern
  Australia rainfall is erratic and mostly light except in northeastern New South Wales where the greatest rain is expected
• Interior
  western Australia is wetter biased for a while next week following a tropical cyclone that dissipates in the northwest 
  
• South
  Africa precipitation will remain limited for the next ten days, although some showers will occur intermittently
  
• Net
  drying is expected
• Crop
  and field conditions are still rated well for now
• Portions
  of North Africa are still too dry raising concern over spring crop development
• Some
  rain fell in Morocco Thursday and more showers are likely into Monday improving soil conditions in some areas
• Northwestern
  Algeria and southwestern Morocco are driest in North Africa, although Tunisia and northeastern Algeria have been drying down recently and may not get much moisture for a while.
• Mexico
  drought conditions are still prevailing, although the impact on winter crops is low due to irrigation
• Water
  supply is low in some areas and a notable improvement in rainfall is needed, but not very likely
• Dryland
  winter crops are stressed and will yield poorly
• Freeze
  damage is common in northern parts of the nation due to a couple of cold surges this winter
• West
  Africa rainfall will remain mostly confined to coastal areas for a while, but may drift to the north into some coffee and cocoa production areas early next week
• East-central
  Africa precipitation will be scattered over the coming week
• The
  lightest and most infrequent rain occurring in Ethiopia and parts of Uganda while the most significant rain occurs in Tanzania where all crop areas will get moisture
• Southeast
  Asia rainfall will occur relatively normally over the next two weeks
• Mainland
  areas will be mostly dry, although a few showers could pop up across the region next week
• All
  of the precipitation will be sporadic and light having little to no impact on crops or soil conditions
• Philippines
  rainfall will be scattered and light
• Indonesia
  and Malaysia weather during the next two weeks will bring rain to most crop areas maintaining a very good outlook for crop development
• Sumatra,
  Peninsular Malaysia and eastern Borneo have been drying out recently and greater rain is needed
• New
  Zealand weather over the next ten days will include erratic and often light rainfall and seasonable temperatures
  
• Mexico
  precipitation in the coming ten days will be mostly confined to the east coast
• Central
  America precipitation will continue greatest along the Caribbean Coast and in Guatemala while the Pacific Coast is relatively dry
• Southern
  Oscillation Index is beginning to fall once again and was at +12.12 this morning. The index is expected to continue to fall notably over the next several days
• Canada
  Prairies will experience seasonable temperatures over the next ten days with precipitation mostly near to below average
• Some
  occasional precipitation will occur along the front range of mountains in Alberta and across the southwestern Prairies as well as in a few northeastern crop areas
• Southeast
  Canada will experience near to above normal amounts of precipitation in the coming week while temperatures are seasonable.
  

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

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

Monday,
March 1:

• USDA
  Export Inspections – corn, soybeans, wheat, 11am
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• Malaysia’s
  February palm oil exports data
• Australia
  Commodity Index
• U.S.
  DDGS production, corn for ethanol, 3pm
• USDA
  soybean crush, 3pm
• HOLIDAY:
  South Korea

Tuesday,
March 2:

• Australia’s
  Abares to release agricultural commodities report
• Abares
  to hold online Outlook 2021 conference, March 2-5
• New
  Zealand global dairy trade auction
• U.S.
  Purdue Agriculture Sentiment, 9:30am
• International
  Sweetener Colloquium virtual event to cover sugar outlook, March 2-3

Wednesday,
March 3:

• EIA
  weekly U.S. ethanol inventories, production
• ANZ
  Commodity Price
• Brazil’s
  Unica to release sugar production, cane crush data

Thursday,
March 4:

• FAO
  World Food Price Index, grains supply and demand reports
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• U.S.
  National Coffee Association hosts annual convention (virtual), March 4-5

Friday,
March 5:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Malaysia’s
  March 1-5 palm oil export data
• FranceAgriMer
  weekly update on crop conditions
• China’s
  CNGOIC to publish supply and demand reports on commodities such as corn and soybeans

Source:
Bloomberg and FI

 

 

 

 

 

 

Macros

US
Personal Income Jan: 10.0% (est 9.5%; prev 0.6%)

US
Personal Spending Jan: 2.4% (est 2.5%; prev -0.2%)

US
PCE Core Deflator (M/M) Jan: 0.3% (est 0.1%; prev 0.3%)

US
PCE Core Deflator (Y/Y) Jan: 1.5% (est 1.4%; prev 1.5%)

US
PCE Deflator (M/M) Jan: 0.3% (est 0.3%; prev 0.4%)

US
PCE Deflator (Y/Y) Jan: 1.5% (est 1.4%; prev 1.3%)

US
Advance Goods Trade Balance (USD) Jan P: -83.7B (est -83.0B; prevR -83.2B; prev -82.5B)

US
Wholesale Inventories (M/M) Jan P: 1.3% (est 0.4%; prevR 0.5%; prev 0.3%)

US
Retail Inventories (M/M) Jan: 1.3% (est 0.5%; prev 1.0%)

Canadian
Industrial Product Price (M/M) Jan: 2.0% (est 1.9%; prev 1.5%)

Canadian
Raw Materials Price Index (M/M) Jan: 5.7% (prev 3.5%)

 

 

Corn.

• Corn
  futures are lower on follow through selling, end of month positioning, and a sharply higher USD.  Outside markets are also providing a bearish sentiment. 
  
• CBOT
  corn open interest was down about 49,200 contracts yesterday while the funds sold 11,000.  We estimate managed money futures and options are net long 377,000 contracts. 
  
• There
  were no changes in CBOT corn or oats registrations. 
• Today
  marks the last day for insurance calculations and the bean insurance price should be around $11.82, corn $4.57 and spring wheat $6.52.
  

 

Corn
Export Developments

·        
South Korea’s NOFI bought 137,000 tons of optional origin animal feed corn, for shipment in May and/or June, depending on origin.  68,000 tons was bought at an estimated $294.70 a toe c&f for arrival
in June. Another 69,000 tons was bought at an estimated $293.89 a ton c&f for arrival in July.

 

 

 

Soybean
complex.  

• CBOT
  soybeans,
  meal and SBO are sharply lower on follow through selling in outside markets and profit taking. 
  China
  soybean meal futures fell 3.2% as SAF disease concerns rippled through the market.  The Ag Ministry issued a notice that all localities must step up control of African Swine Fever.  Other China ag related markets traded lower. Rotterdam oil and Malaysian palm
  (down 42 points) were lower. 
• USD
  is up 48 and WTI 1.57 lower.
• There
  were no changes in CBOT soybean and meal registrations.  SBO registrations fell 25 to 1,248 contracts (Bunge Dec, IN).  There were 7 meal FND deliveries. 
  
• CBOT
  soybean open interest was down about 12,100 contracts.  Funds were net sellers yesterday of 15,000 soybeans, 4,000 meal and 2,000 soybean oil. 
  
• ICE
  canola May futures were 9.20 lower at 726/ton.
• Indonesia
  left its March crude palm oil export levies unchanged at $255/ton as they set the reference price at $1,036.22/ton vs. $1,026.78/ton for Feb.  Export taxes will remain at $93/ton. 
  
• APK-Inform:
  Sunflower oil out of the Ukraine increased about $130 a ton to a range of $1,455 to $1,470 per ton FOB, with delivery in March-May.
• Offshore
  values are leading soybean oil 44 points lower (184 lower for the week to date) and soybean meal $7.00 lower ($3.80 lower for the week). 
  
• China
  cash crush margins on our analysis were 112 cents (143 previous) versus 140 cents last week and compares to 126 cents around this time last year. 
  
• China
  

• Malaysian
  palm oil: Up 7 percent for the month. 

 

Soybean
Complex Export Developments

• None
  reported

 

 

 

Wheat

• Wheat
  futures are
  lower led by fund influenced Chicago SRW.  MN is gaining over KC and Chicago on expectations for spring wheat plantings to get passed up across the northern Great Plains as producers plant more profitable crops such as canola, soybeans and corn. 
  
• Yesterday
  funds sold an estimated 6,000 soft red winter wheat contracts. 
• EU
  May milling wheat was down 1.75 euros at 229.75 euros. 
• KC
  deliveries were 89.  There were no Chicago deliveries.
• MN
  deliveries were 652 (SG delivered 586 and Wells stopped 508.  JP also stopped 115). 
  
• Refinitiv:
  Australian
  Premium White wheat quoted around $318-$320 a ton, (C&F), to Southeast Asia, up from $310 a few weeks ago. Australian standard wheat offered at $314 a ton, C&F, while Australian hard wheat is around $325 a ton.  Black Sea new-crop wheat is being quoted at
  $280 a ton for August shipment.
• FranceAgriMer
  reported 87% of French soft wheat crops were in good or excellent condition by Feb. 22, up a point from the previous week and well above 64% year ago. 
  

 

Export
Developments.

• Jordan
  seeks 120,000 tons of animal feed barley on March 2.  Shipment is sought between Sept. 1-15, Sept. 16-30, Oct. 1-15 and Oct 16-31.
• Jordan issued a new
  import tender for 120,000 tons of wheat, set to close March 3 for October and November shipment. 
  
• Taiwan seeks 100,410
  tons of wheat form the US on March 4 for April 25-May 9 shipment, and May 12-May 26 shipment (2 consignments). 
  
• Syria
  seeks 200,000 tons of wheat for shipment within 60 days of contract signing. 
  

 

Rice/Other

·        
CBOT rice deliveries were 515 contracts. 

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

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 38,889 tons of rice from the United States and China, part arrival in South Korea around Sept. 30 from the US. Another 16,667 tons of non-glutinous short grain brown rice from
China is sought for arrival around June 30.