FI Morning Grain Comments 03/09/21

PDF attached

 

Morning.
 USDA
Report day.  Traders are looking for downward revisions to US corn and soybean crops, and production for Argentina corn, Argentina soybean, and Brazil corn crops. 

 

The
soybean complex is seeing follow though momentum from yesterday’s close as soybeans and oil climb higher and meal lower.  Offshore values are leading meal $1.60 lower and SBO 19 points lower.  Malaysian palm was again higher, this time by 37 MRY while chase
was down $2.50/ton.  SBO in China was up 1.6%.  Corn and wheat futures are seeing a reversal this morning form yesterday’s direction at the close with corn lower and wheat higher.  Kansas winter wheat ratings declined one point in the G/E to 36 percent as
of 3/7 from the previous week and are down from 40% as of February 22 and 43% as of Jan 25. 

 

USD
was 20 points lower and WTI 1 cent higher as of 7:35 am CT. US equities were signaling a higher open.  There was not much agriculture news overnight. China CASDE didn’t make many changes to their soybean and corn outlooks. Safras & Mercado estimated Brazil’s
soybean crop at 130 million tons in 2021, down from 133.1 million tons in January.

 

 

 

Weather

 

 

World
Weather Inc.

In
Argentina, dryness is still an issue; though, some erratic shower and thunderstorm activity will increase later this week and especially in the first half of next week. Due to the erratic nature of the rain, some pockets will not get much; however, the situation
will at least improve some from what is has recently been.

           
In Brazil, conditions will continue to be favorable in most of the nation’s key crop areas. There will be some fieldwork delays though where rain is heaviest, particularly in the north.

 

Significant
precipitation is still expected late Wednesday into Sunday from the Hard Red Winter Wheat Region through the Corn Belt. The Delta will be impacted mostly Sunday. The significant moisture may also get up into the southeastern part of the Northern Plains. This
precipitation will be very important for notable soil moisture improvement in the Hard Red Winter Wheat Region that will benefit spring crop production. Much of this will involve rain; however, there will be a snow component as well from the northwestern Hard
Red Winter Wheat Region into Minnesota which is concerning for livestock due to calving season. The precipitation will also be great enough from central Oklahoma into central Missouri to cause flooding.

Source:
World Weather inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat         
482,130         versus   250000-500000  range

Corn             
1,544,460     versus   1200000-1800000             range

Soybeans   
587,594         versus   400000-800000  range

 

Macros

US
CPI due out on Wed.

 

Corn

• Corn
  futures are seeing a reversal this morning form yesterday’s direction at the close.  Reuters noted there are three vessels loaded with US ethanol headed to China (about 240,000 barrels or 30k x 3 tons). 
  
• Yesterday
  funds were net buyers of 4,000 corn contracts on the session. 
• Empty
  containers are hard to find for nearby shipment across the US.  Some locations it’s nearly impossible to booked for less than three weeks.  Los Angeles port is very backed up, for example.  Expect DDGS export pace to remain slow over the next couple of months. 
  
• USDA
  US corn export inspections as of March 04, 2021 were 1,544,460 tons, within a range of trade expectations, below 2,046,712 tons previous week and compares to 829,865 tons year ago. Major countries included China for 348,443 tons, Japan for 309,000 tons, and
  Mexico for 206,648 tons.
• The
  European Union granted imports licenses for 285,000 tons of corn imports, bringing cumulative 2020-21 imports to 110.927 MMT, 27 percent below same period year ago

 

Export
developments.

• None
  reported

 

 

Soybeans

• The
  soybean complex is seeing follow though momentum from yesterday’s close as soybeans and oil climb higher and meal lower.  Offshore values are leading meal $1.60 lower and SBO 19 points lower.  Malaysian palm was again higher, this time by 37 MRY while chase
  was down $2.50/ton.  SBO in China was up 1.6%.  Paris
  Rapeseed is up 18.2% month on month.  CBOT soybeans are at a six year high. 
  
• Global
  vegetable oil price spikes are in focus with rapeseed oil futures trading limit higher during today’s session.  SBO was up 4 percent earlier on high volume. Keep an eye on US CPI inflation data due out Wednesday. 
  
• Yesterday
  the funds were net buyers 4,000 soybean contracts, sellers of 2,000 soybean meal contracts and net buyers of 5,000 bean oil contracts.
• China’s
  AgMin in its monthly WASDE report raised its forecast on 2020-21 rapeseed oil production to 5.43 million tons, up from 5.32 million tons last month.  Much of the soybean and corn balance figures were unchanged from last month.  They still see corn imports
  at 10 million tons and soybean imports at 98.10 million tons. 
• USDA
  will add demand for renewable diesel to its US soybean oil balance sheet, but not until they collect EIA data.  The EIA is planning to begin incorporating renewable diesel data in its Petroleum Supply Monthly report.  Soyoil use for renewable diesel is currently
  included in the food and industrial category.  See attached FI example.  Note our renewable use is a best guess. 
  
• AgRural
  reported Brazil soybean harvest progress as of Thursday was 35%, up 10 points from previous week, slowest pace in a decade and compares to 49% year earlier.  AgRural noted 54% of the second corn crop was planted, compared with 80% in 2020.
• ICE
  canola basis May was up 6.90 as of 7:15 am CT to 803.
• Rotterdam
  vegetable oil prices were about 2-5 euros higher from this time yesterday and meal mixed.
  
• Offshore
  values are leading soybean oil 20 points lower and SBM CBOT futures $1.60 lower.
• China
  cash crush margins on our analysis were 105 cents (113 previous), up from 113 cents late last week and compares to 128 cents year earlier. 
  

China
futures:

Malaysian
palm oil:

• USDA
  US soybean export inspections as of March 04, 2021 were 587,594 tons, within a range of trade expectations, below 1,003,955 tons previous week and compares to 589,900 tons year ago. Major countries included China for 213,569 tons, Egypt for 149,653 tons, and
  Indonesia for 80,890 tons.
• The
  European Union reported soybean import licenses since July 1 at 9.940 million tons, above 9.700 million tons a year ago. European Union soybean meal import licenses are running at 11.742 million tons so far for 2020-21, below 12.309 million tons a year ago.
  EU palm oil import licenses are running at 3.757 million tons for 2020-21, below 3.878 million tons a year ago, or down 3 percent.
• European
  Union rapeseed import licenses since July 1 were 4.666 million tons, above 4.554 million tons from the same period a year ago.

 

Export
Developments

• Pakistan
  bought 594,000 tons of soybean in recent weeks from Brazil and the US.  Pakistan is currently buying 200,000 to 250,000 tons of soybeans per month. 
  
• The
  USDA CCC seeks 2,030 tons of packaged oil on March 16 for shipment Apr 16 – May 15.

 

 

Wheat

• US
  wheat futures are higher this morning on deteriorating US winter wheat crop conditions. 
  
• Yesterday
  funds were net sellers of 5,000 net soft wheat contracts on the session.
• Kansas
  winter wheat ratings declined one point in the G/E to 36 percent as of 3/7 from the previous week and are down from 40% as of February 22 and 43% as of Jan 25.  Texas was 27%, down one point while OK improved to 53% from 46% week earlier. 
  
• USDA
  export inspections of 482,000 tons of wheat improved from the previous week and included 130,643 tons for China. 
  
• The
  USD was down 26 points as of 7:15 am CT. 
• EU
  May milling wheat was up 0.50 at 230.75 euros. 
• The
  European Union granted export licenses for 318,000 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 18.235 MMT, well down from 22.509 million tons committed at this time last year, a 19 percent decrease.  Imports are
  near unchanged from year ago at 1.572 million tons.

 

Export
Developments.

• Pakistan
  seeks 300,000 tons of wheat on March 16 for April-August shipment. 
• Algeria
  is in for more wheat.  They seek 50,000 tons of wheat on Tuesday, valid until Wednesday for March or April shipment, depending on origin. 
  

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on March 18.

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