FI Morning Grain Comments 03/05/21

PDF attached

 

Morning.
 

 

US
jobs data was disappointing.  USD rallied by 55 points by 7:35 am CT.  US equities turning lower.  CBOT corn futures are leading the US agriculture markets while soybeans and soybean oil extended gains.  Palm and China veg oils were higher overnight. Soybean
meal was near unchanged at the time this was written.  ICE canola extended gains on tight rapeseed and canola supplies in Europe and Canada.  Paris wheat is lower along with US futures in part to the Pakistan passing on 300,000 tons of wheat due to high prices. 
The Philippines bought less than expected wheat, but SK picked up a couple cargoes of opt. origin wheat.  The SA weather forecast is mostly unchanged. Brazil rains will occur across the east central and northern areas through Tuesday while east central and
northwest areas will see ongoing delays in fieldwork.  Argentina rains, although light, should favor southern Cordoba, northern La Pampa, and northwestern Buenos Aires on Monday.

 

 

 

 

 

 

Weather

 

 

 

Bloomberg
Ag Calendar

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

Sunday,
March 7:

• China
  National People’s Congress in Beijing
• China
  customs to publish trade data, including import numbers for soy, edible oils, meat and rubber

Monday,
March 8:

• USDA
  Export Inspections – corn, soybeans, wheat, 11am
• EU
  weekly grain, oilseed import and export data
• China
  National People’s Congress in Beijing
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Russia
• EARNINGS:
  Marfrig

Tuesday,
March 9:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, noon
• China
  National People’s Congress in Beijing

Wednesday,
March 10:

• EIA
  weekly U.S. ethanol inventories, production
• Malaysian
  Palm Oil Board data on February palm oil end-stockpiles, output, exports
• China
  National People’s Congress in Beijing
• Malaysia’s
  March 1-10 palm oil export data
• ISO
  sugar conference
• FranceAgriMer
  monthly grains report

Thursday,
March 11:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• China
  National People’s Congress in Beijing
• New
  Zealand Food Prices
• Conab’s
  data on yield, area and output of corn and soybeans in Brazil
• HOLIDAY:
  India, Indonesia

Friday,
March 12:

• 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
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

Macros

US
Change In Nonfarm Payrolls Feb: 379K (est 198K; prevR 166K; prev 49K)

 

Corn

• Corn
  futures are higher on Brazilian production concerns, Algeria buying 30,000 tons of corn, and WTI crude oil establishing new contract highs.  Talk of China pig crop rebound might also be supporting US corn futures. 
  
• Yesterday
  funds were net sellers of 3,000 corn contracts on the session. 
• Vietnam
  and other countries are relaxing on German pork import bans after ASF was discovered in wild boar last year.  
  
• China
  plans to raise the minimum purchase price for wheat and rice and expand corn planting.  The lowered support prices for most commodities in 2018 due to high inventories.  For wheat this would be the first increase since 2014. 
  
• (Reuters)
  – China’s first hog breeding exchange traded fund (ETF) makes its debut on the Shenzhen Stock Exchange on Friday, the first of three tied to the country’s booming pork sector that is rebuilding after African swine fever decimated herds in 2018. 
  

 

Export
developments.

• Algeria
  bought about 30,000 tons of corn, optional origin, at $289/ton to $293/ton c&f, for shipment by April 15.

 

Soybeans

• Soybeans
  are higher this morning on bottom picking but we see gains limited due to a higher USD and Brazilian soybean shipments increasing over the next few weeks.  SA crop concerns and a rebound in China pork prices underpins the market.  Soybean meal in China is
  starting to get cheap enough to entice an increase for feed use but importers may want to see better returns on crush margins before setting off another round of soybean purchasing.  Soybean meal basis CBOT was near unchanged while soybean oil extended gains
  on strength in outside vegetable oil markets and higher energy markets. 
• ICE
  canola basis May was up 4.60 as of 7:10 am CT to 787.
• The
  SA weather forecast is mostly unchanged. Brazil rains will occur across the east central and northern areas through Tuesday while east central and northwest areas will see ongoing delays in fieldwork.  Argentina rains, although light, should favor southern
  Cordoba, northern La Pampa, and northwestern Buenos Aires on Monday.
• Yesterday
  funds were net buyers 2,000 soybean contracts, sellers of 3,000 soybean meal contracts and net buyers of 5,000 bean oil contracts.
• Indonesia
  today will see heavy rain for parts of Indonesia’s Sumatra, Java, Kalimantan and Sulawesi. 
  
• Rotterdam
  vegetable oil prices were about unchanged to up 20 euros from this time yesterday. 
  
• Offshore
  values are leading soybean oil 83 lower (25 lower week to date) and SBM CBOT futures $1.80 lower ($7.00 lower for the week).
• China
  cash crush margins on our analysis were 101 cents, down from 112 cents late last week. 
  
• China
  soybean meal prices fell to their lowest levels this year in China.

China
futures:

Malaysian
palm oil: about unchanged for the week

 

• The
  Buenos Aires Grains Exchange said they may lower the Argentina soybean crop, currently estimated at 46 million tons if rains fail to materialize over the next few weeks.  They went onto say the corn yields are also threatened.  A Reuters trade guess for the
  Argentina soybean production is at 47.4 million tons, down from 47.5 million tons from Feb.  Brazil soybeans are estimated at 133.1 million tons, up from 133 in Feb. 
  

 

Export
Developments

• None
  reported

 

May
oil share near highs.

Source:
Reuters and FI

 

Wheat

• Wheat
  futures
  are lower in part to the Pakistan passing on 300,000 tons of wheat due to high prices.  The Philippines bought less than expected wheat, but SK picked up a couple cargoes of opt. origin wheat. 
  
• The
  USD was up 50 points as of 7:32 am CT. 
• Yesterday
  funds were net sellers of 5,000 net soft wheat contracts on the session.
• Black
  Sea trades were quiet towards the end of this week as producers start to shift focus on new crop.  The inverse in Paris wheat is also keeping some traders away. 
  
• Ukraine
  producers are expected to kick off the spring planting season next week, a little later than last year because of snow coverage. 
  
• Over
  in France barley plantings reached 50 percent as of March 11, up from 19 percent week earlier.  French soft wheat was rated 88 percent good/excellent, up one point from previous week. 
  
• French
  wheat shipments outside EU and Britain: 821,000 tons in February, up from 561,000 tons in January and below the season high of 877,000 tons in November.  
  
• EU
  May milling wheat was down 1.50 at 200.25 euros as of 7:15 am CT. 

 

Export
Developments.

• South
  Korea’s MFG bought 130,000 tons of feed wheat, optional origin.  Both 65,000 ton consignments were bought at an estimated $282.86 a ton c&f for arrival in South Korea around Aug. 24 and at $275.14 a ton c&f for arrival in South Korea around Sept. 24. (Reuters)
• The
  Philippines bought about 55,000 tons (145,000 sought) of milling wheat for April and June shipment.  No prices were given but traders thought it was below $310/ton.  
• Pakistan
  may have passed on 300,000 tons of wheat due to high prices. 
• Results
  awaited: Saudi Arabia seeks 540,000 tons of barley on Friday, valid until Monday, for April – May shipment. 
  
• Results
  awaited: 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.

 

Rice/Other

·        
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.