FI Morning Grain Comments 03/02/21

PDF attached

 

Morning.

 

Soybeans
and soybean meal are seeing follow through selling from lack of US soybean export developments and increasing SA supplies. Brazil logistical bottlenecks are starting to loosen up. Soybean oil is higher on technical buying and spreading. CBOT corn is lower
on lack of bullish news.  Wheat prices are finding a bid on declines in selected US state winter wheat conditions and increasing global tender developments. 

 

 

 

Weather

 

World
Weather Inc.

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

Dryness
worry in Argentina and continued rain to western Brazil will maintain concern to over soybean harvesting and corn planting. Argentina is firming up and limited rainfall and warm temperatures for the next ten days will deplete soil moisture and bring on greater
crop stress as some plants continue in the reproductive and filling stages of development. Brazil’s wetter bias returning to the south will slow farming activity after recent good field progress has occurred while conditions were drier biased.

            Weather
elsewhere in the world is of little concern. Australia’s summer crop areas will dry down stressing some unirrigated production areas. India will continue to dry down as well threatening some of the drier winter crop areas with a little yield decline. Europe
winter oilseed production areas are still mostly in favorable condition with warming needed to bring rapeseed out of dormancy. South Africa summer crops are still poised to produce very well.

            Early
season planting delays may continue for a little while in the southern U.S., but improving weather is expected later in March.

           
Overall, weather today will likely produce a mixed environment for market trade with the soybean harvest beginning to pressure some of the trade activity. The market will soon be flooded with soybeans reducing concern over short supply for a while.

 

MARKET
WEATHER MENTALITY FOR WHEAT:  A general lack of threatening temperatures will keep weather a little less influential on market trade today, although there will still be some concern over U.S. long term dryness biases in the Plains and drought in Canada remains
a concern. Rain in U.S. hard red winter wheat areas Thursday into Friday and the potential for some needed moisture in the northern Plains next week may add a little bearishness to market mentality.

Russia,
Ukraine and the remainder of Europe is not expected to have much influence on market trade decisions today since soil moisture is still favorable and there is no threatening cold in snow free areas.

            North
Africa rainfall for this week looks promising in Algeria and Tunisia and that may translate into better production potential later in the season, although more moisture will still be needed. China winter crops remain in good condition while those in India
are still not experiencing the best weather for the best yields.

            Overall,
weather today may have a neutral to bearish on market trade decisions.

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat         
272,820         versus   300000-500000  range

Corn             
1,636,876     versus   1150000-1750000             range

Soybeans   
879,582         versus   400000-800000  range

 

Soybean
And Corn Advisor:

2020/21
Brazil Soybean Estimate Increased 2.0 mt to 132.0 Million

2020/21
Brazil Corn Estimate Unchanged at 105.0 Million Tons

2020/21
Argentina Soybean Estimate Unchanged at 46.0 Million Tons

2020/21
Argentina Corn Estimate Unchanged at 45.5 Million Tons

 

Macros

Canadian
Quarterly GDP Annualized Q4: 9.6% (est 7.2%; prev 40.5%)

Canadian
GDP (M/M) Dec: 0.1% (est 0.1%; prev 0.7%)

Canadian
GDP (Y/Y) Dec: -3.0% (est -3.0%; prev -2.8%)

Canadian
January GDP Expected To Rise 0.5% – StatsCan Flash Estimate

 

German
retail sales fell 4.5% on the month in real terms after an upwardly revised decline of 9.1% in December. The January reading undershot a Reuters forecast for a decline of 0.3%. (Reuters)

 

 

Corn.

• Corn
  futures is lower on lack of bullish news and Brazilian second corn crop, that is planted, receiving rain.  Yesterday the funds sold an estimated net 23,000 corn contracts and we estimated managed money net long at 335,000 contracts (F&O). 
  
• We
  see bottom picking if corn gets down in the $5.25-$5.30 area.  May corn has been mostly trading in a $5.25 and $5.60 range since mid-January. 
  
• Malaysia
  will cull 3,000 pigs after finding ASF in the Borneo state of Sabah.
• The
  European Union granted imports licenses for 140,000 tons of corn imports, bringing cumulative 2020-21 imports to 10.600 MMT, 29 percent below same period year ago
• USDA
  US corn export inspections as of February 25, 2021 were 1,636,876 tons, within a range of trade expectations, above 1,266,555 tons previous week and compares to 896,221 tons year ago. Major countries included Japan for 351,564 tons, China for 346,713 tons,
  and Mexico for 232,159 tons.
• NASS
  reported the January corn for ethanol use 7 million higher than expected at 430 million bushels, 2 million below December and well below 469 million a year ago. 
  

 

Corn
Export Developments

• Taiwan’s
  MFIG bought 65,000 tons of corn from Argentina at an estimated 210.12 cents a bushel c&f over the July 2021 contract. US corn was offered about 12-13 cents over that amount. 
  
• Iran’s
  SLAL seeks up to 60,000 tons of corn on Wednesday.

 

 

 

Soybean
complex.  

• CBOT
  soybeans
  and soybean meal are lower from follow through selling
  on lack of US soybean export developments and increasing SA supplies. Soybean and Corn Advisor lifted his Brazil soybean crop estimate by 2 million tons to 132 million tons. Losses are limited on poor SA weather.  Argentina will see about 25-50% of normal
  precipitation through the middle of March while parts of Brazil will be too wet to harvest. 
  
• Soybean
  oil is higher on technical buying and spreading. Look for a possible two-sided trade.  Malaysian palm futures fell for the third consecutive day.
  
• Brazil
  logistical bottlenecks are starting to loosen up. Last week the shipping lineup for soybeans hit a record high.  Brazilian producers collected 25% of the 2020-21 soybean crop of late last week according to AgRural, up 10 points from the previous week but well
  below about 40 percent year earlier. 
• Front
  month expiring March Paris rapeseed is seeing a short squeeze and traded earlier above 500 euros (May around 425.50 euros). 
  
• USD
  is higher and WTI slightly higher, as of 7:30.
• Yesterday
  funds sold 10,000 soybeans, 2,000 meal and 6,000 soybean oil.
• ICE
  canola May futures were 1.40 lower at 738/ton.
• Offshore
  values are leading soybean oil 25 points higher and soybean meal $4.00 lower. 
  
• China
  cash crush margins on our analysis were 112 cents (114 previous) versus 112 cents last week and compares to 136 cents around this time last year. 
  
• China
  

• Malaysian
  palm oil: third consecutive day decline. 

• USDA
  US soybean export inspections as of February 25, 2021 were 879,582 tons, above a range of trade expectations, above 803,548 tons previous week and compares to 589,230 tons year ago. Major countries included China for 333,597 tons, Japan for 93,908 tons, and
  Taiwan for 91,556 tons.
• The
  European Union reported soybean import licenses since July 1 at 9.583 million tons, above 9.378 million tons a year ago. European Union soybean meal import licenses are running at 11.441 million tons so far for 2020-21, below 12.133 million tons a year ago.
  EU palm oil import licenses are running at 3.690 million tons for 2020-21, below 4.485 million tons a year ago, or down 2 percent.
• European
  Union rapeseed import licenses since July 1 were 4.358 million tons, down 3 percent from 4.470 million tons from the same period a year ago.
• USDA
  NASS soybean crush of 196.5 million bushels was 0.9 million above trade expectations and confirms non-NOPA member plants also ran at very high rates during the month of January.  Soybean oil stocks came in near trade expectations and confirmed NOPA’s unusually
  high January soybean oil yield reported mid-Feb.  Soybean meal stocks were very high at 556,000 short tons as the implied yield came in above December. 
  

 

Soybean
Complex Export Developments

• Egypt’s
  GASC seeks at least 30,000 tons of soyoil and 10,000 tons of sunflower oil on Thursday for arrival May 1-15.
• The
  USDA seeks 190 tons of vegetable oil today for shipment Apr 1-30 (Apr 16-May 15 for plants at ports.
  
• Iran’s
  GTC seeks 30,000 tons of soyoil, 30,000 tons of sunflower oil and 30,000 tons of palm oil, all on March 2, for shipment in April.
  
• Iran’s
  SLAL seeks up to 60,000 tons of soybean meal on Wednesday.

 

 

Wheat

• Wheat
  futures are
  higher on US winter wheat crop ratings and fresh import tender announcements.  The strength of the USD might be limiting upside movement.  May Chicago, KC & MN contracts traded below key moving averages overnight but failed to generate additional selling pressure. 
  
• USDA
  selected weekly winter wheat crop ratings:

Kansas
37% vs. 40% previous week (topsoil moisture 42% short to very short).

Texas
28% vs. 30% previous week. Texas corn crop 3% planted. 

Oklahoma
46% vs. 48% previous week.

• Yesterday
  funds sold an estimated net 7,000 Chicago wheat contracts.  
• EU
  May milling wheat was up 1.25 euros at 231.50 euros.
• Ukrainian
  wheat exports totaled 13.7 million tons as of Mar 1, down 2.9 million from the same date year ago.  Ukraine used 78% of its 17.5 million tons wheat export quota for 2020-21. 
  
• The
  European Union granted export licenses for 652,000 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 17.556 MMT, well down from 21.478 million tons committed at this time last year, an 18 percent decrease.  Imports are
  near unchanged from year ago at 1.556 million tons.
• USDA
  US all-wheat export inspections as of February 25, 2021 were 272,820 tons, below a range of trade expectations, below 324,597 tons previous week and compares to 656,160 tons year ago. Major countries included Mexico for 95,989 tons, Indonesia for 74,344 tons,
  and Thailand for 57,900 tons.

 

Export
Developments.

• Japan
  seeks 82,937 tons of milling wheat from the United States and Canada later this week for April 21‐May 3 shipment. 
  

• Pakistan
  received offers for 300,000 tons of wheat with lowest around $332.44/ton c&f. 
  
• The
  Philippines seeks 145,000 tons of milling wheat on March 4 for April and June shipment. 
  
• Algeria
  seeks 50,000 tons durum wheat on Wednesday, March 3, valid until March 4, for shipment between April 1-15 and April 16-30. 
  
• Jordan
  saw at least four offers for 120,000 tons of wheat.  October
  and November shipment. 
• 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.
• Iran’s
  SLAL seeks up to 400,000 tons of animal feed barley on Wednesday, March 3, for shipment between March 10 and April 10.
• 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

·        
Results awaited: 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.

·        
Syria seeks 25,000 tons of white rice on March 29, from China or Egypt.