FI Morning Grain Comments 03/19/21

PDF attached

 

Morning.
 

 

USDA
announced 800,000 tons of corn for China 2020-21 delivery. 
Morning forecast calls for the SE US seeing a little more precipitation over the next 10 days, delaying field work activity. The Midwest will see rain Sunday through Tuesday. US HRW wheat country will continue to see improving conditions.  The Argentina weather
forecast is slightly drier this morning for the next week.  Brazil’s forecast is unchanged-less frequent rain that of earlier this month.
After
taking a hit from energy prices on Thursday, CBOT corn was higher.   May corn overnight held above a 20-day MA support level of $5.4525.  Later today USDA will release Cattle on Feed.  Look for WTI to influence corn prices today.  The outside commodity markets
seem to be stabilizing this morning which is providing a little rebound to the US CBOT soybean complex with exception to nearby soybean oil which followed Malaysian palm oil lower.  Concerns are increasing over the number of Covid-19 cases increasing across
the EU with many countries going back on partial lockdown.  Argentina Rosario port workers went on strike this morning for 24 hours to protest layoffs at one of the local crush facilities.  Soybean oil is looking at a 3-4 percent weekly loss this week at current
levels.  Malaysian palm futures overnight were down about 2% percent and are 10% lower for the week. 
Bunge
cancelled 30 SBO receipts, Decatur, IN.  Note
the EU changes clocks this weekend. US wheat futures were mostly lower as good US weather is limiting upside movement. French soft wheat crop conditions declined slightly in the week to March 15 at 87%, down from 88% a week ago and well up from 63% a year
ago.  Durum fell to 85% from 88% the previous week (67% year ago), winter barley unchanged at 85% vs. 62% year ago. 
South
Korean flour millers bought 38,000 tons of US milling wheat for shipment between June 1 and June 30.  (Reuters)  South Korean four millers bought 50,000 tons of Australian milling wheat for July arrival. 

 

 

 

Weather

 

 

 

World
Weather Inc.

Argentina
received some extremely beneficial and important rainfall earlier this week lifting topsoil moisture in key crop areas after a prolonged period of dry weather for some areas. Additional rain in Argentina today into Saturday and again late next week will help
prevent moisture stress from getting back to the extreme levels of this past week. However, the rain may be more significant in the northeast and east-central crop areas than in the southwest allowing the southwest to dry down again.

            Brazil
weather is advertised drier in center south, center west and interior southern crop areas next week and into the following weekend. The drier weather will be ideal in helping to get soybean harvesting and corn planting completed. The nation is still expected
to see a huge soybean crop, although the quality of that crop in a few areas has suffered from recent bouts of excessive rain.

            South
Africa crops remain in good shape as are late season sorghum and other coarse grain and oilseeds in Australia. China’s winter rapeseed is rated favorably, but drier weather would be better for southern crops.

            Europe
rapeseed is suspected of being in favorable condition and needs warmer weather to break dormancy.

            China
rapeseed needs some drier and warmer weather, but conditions are mostly favorable.

            India’s
winter crops are filling and beginning to mature. Showers in the coming week will benefit a few of the most immature crops.

            Overall,
weather today will likely maintain a mixed influence over market mentality.

 

Relief
from drought in the central U.S. Plains this week has greatly changed the region’s production potential. Rain is still needed in southern parts of the region and some will soon fall, but the south is not likely to get as much relief as that of the north and
a close monitoring of crop conditions there may be warranted.

            Concern
over dryness in the northwestern U.S. Plains and Canada’s Prairies remains and will prevail into April. However, changes in weather are expected in April and May that should bring improved soil moisture and a better small grain prospect.

            U.S.
soft wheat areas in the Midwest, Delta and southeast are experiencing favorable moisture, but need to warm up so that the excess moisture can be evaporated between storm systems. Instead the region is probably going to see too much moisture and experience
a little flooding.

Limited
winterkill in Europe and the western CIS, very good crop and field conditions in China and a relatively good environment for India winter crops will leave little reason for much bullish bias today.

Australia’s
autumn outlook is also poised toward a favorable planting environment. North Africa crops are in fair to very good condition, although production has been reduced in southwestern Morocco because of a multi-year drought and greater rain is still needed. Northwestern
Algeria is also drier than usual and needs moisture – some of which will occur this weekend into early next week.

            Overall,
weather today may maintain a bearish bias to market mentality.

Source:
World Weather inc.

 

Bloomberg
Ag Calendar

Friday,
March 19:

• 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
• U.S.
  cattle on feed

Saturday,
March 20:

• China
  3rd batch of Jan.-Feb. trade data, including country breakdowns for energy and commodities. No timing

Monday,
March 22:

• USDA
  Export Inspections – corn, soybeans, wheat, 11am
• EU
  weekly grain, oilseed import and export data
• U.S.
  cold storage data — pork, beef, poultry
• Ivory
  Coast cocoa arrivals

Tuesday,
March 23:

• Bursa
  Malaysia Derivatives virtual palm oil conference 2021, day 1
• HOLIDAY:
  Pakistan

Wednesday,
March 24:

• EIA
  weekly U.S. ethanol inventories, production
• Bursa
  Malaysia Derivatives virtual palm oil conference 2021, day 2
• U.S.
  poultry slaughter
• EARNINGS:
  JBS
• HOLIDAY:
  Argentina

Thursday,
March 25:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Seminar
  on sustainable palm oil in India by the Solvent Extractors’ Association and the Malaysian Palm Oil Board
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports
• Malaysia’s
  March 1-25 palm oil export data
• USDA
  hogs & pigs Inventory, red meat production

Friday,
March 26:

• 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

Canadian
Retail Sales (M/M) Feb -1.1% (est -3.0%; prev -3.4%)

–
Canadian Retail Sales Ex. Auto (M/M) Feb -1.2% (est -2.7%; prev -4.1%)

Canadian
February Retail Sales Rose 4.0% In StatsCan Flash Estimate

 

Corn

• After
  taking a hit from energy prices on Thursday, CBOT corn was higher.   May corn overnight held above a 20-day MA support level of $5.4525. 
  China
  bought 800,000 tons of corn as reported under the 24-hour system. 
• Funds
  on Thursday sold an estimated net 35,000 contracts. 
• Later
  today USDA will release Cattle on Feed. 
• EIA
  reported US generated 902 million D6 blending credits in February, up from 1.1 billion in January. 
  

	February	February
Fuel (D Code)	RINs	Volume (Gal.)
D3	41,131,835	41,131,835
D4	305,901,758	193,877,673
D5	12,248,766	8,140,810
D6	901,789,755	896,422,583

 

Export
developments.

• Under
  the 24-hour reporting system, private exporters sold 800,000 tons of corn to China for 2020-21 delivery. 
  

 

 

Soybeans

• The
  outside commodity markets seem to be stabilizing this morning which is providing a little rebound to the US CBOT soybean complex with exception to nearby soybean oil which followed Malaysian palm oil lower.  Concerns are increasing over the number of Covid-19
  cases increasing across the EU with many countries going back on partial lockdown.  Argentina Rosario port workers went on strike this morning for 24 hours to protest layoffs at one of the local crush facilities.  Soybean oil is looking at a 3-4 percent weekly
  loss this week at current levels.  Malaysian palm futures overnight were down about 2% percent and are 10% lower for the week. 
  
• Bunge
  cancelled 30 SBO receipts, Decatur, IN. 
• Funds
  on Thursday sold an estimated net 14,000 soybean contracts, sold 4,000 soybean meal and 9,000 soybean oil.
  
• Traders
  are soaking in some of the developments for the China and US meeting in Alaska.  Talks have not stalled but apparently, they were included pointing fingers over serious issues. 
  
• The
  Argentina government released its monthly crop report on Thursday, and they left the 2020-21 corn area unchanged at 9.4 million hectares and 17 million hectares unchanged for soybeans.  They pointed out condition of the soybean crop is uneven.
  
• Note
  the EU changes clocks this weeks.
• EIA
  reported US generated 306 million D4 blending credits in February versus 300 in January. 
  
• Rotterdam
  vegetable oil prices were 10-30 euros lower and meal mixed. 
• Offshore
  values are leading CBOT SBO 17 points higher (79 lower for the week) and meal $4.10 short ton higher (6.70 higher for the week).
  
• India
  oilseed meal shipments were 393,309 tons in February from 128,761 tons a year earlier, and down from 500,720 tons in January
• CNGOIC
  reported China soybean oil stocks were 760,000 tons, off 80,000 tons from the previous week.  AgriCensus noted SBO stocks are lowest in three years.  The soybean crush has been running below 2 million tons for a few weeks now and last week fell about 200,000
  tons to just below 1.5 million tons. 
• China
  cash crush margins on our analysis were 175 cents, (168 previous) up from 178 cents late last week and compares to 168 cents year earlier. 
  

China
futures:

Malaysian
palm oil:

 

Export
Developments

• Results
  awaited: Iran seeks 30,000 tons of sunflower oil and 30,000 tons of soybean oil on March 18 for March and April shipment. 
  

 

Wheat

• US
  wheat futures were mostly lower as good US weather is limiting upside potential.  Losses are limited for MN after SK bought US milling wheat.  Chicago May wheat futures traded below its 100-day MA.  Next support level for May Chicago is now seen at $616. 
  

• Funds
  on Thursday sold an estimated net 6,000 SRW wheat contracts. 
• French
  soft wheat crop conditions declined slightly in the week to March 15 at 87%, down from 88% a week ago and well up from 63% a year ago.  Durum fell to 85% from 88% the previous week (67% year ago), winter barley unchanged at 85% vs. 62% year ago. 
  
• EU
  May milling wheat was 1.50 lower at 219.00 euros as of 7:30 am CT.  Support is seen at 220.00.  
• Ukraine’s
  EconMin reported grain exports are down 23% to date to 33.9 million tons.  Traders sold 13.98 million tons of wheat, 15.33 million tons of corn and 4.05 million tons of barley.
  

 

Export
Developments.

• South
  Korean flour millers bought 38,000 tons of US milling wheat for shipment between June 1 and June 30.  It involved 1,400 tons of soft white wheat of 9.5% to 10.5% protein at an estimated $268.05 a ton, 800 tons of soft white wheat of 8.5% maximum protein at
  $277.61 a ton, 10,300 tons of hard red winter of 11.5% minimum protein at $259.80 a ton and 15,500 tons of northern spring wheat of 14% minimum protein at $273.87 a ton. (Reuters)
• South
  Korean four millers bought 50,000 tons of Australian milling wheat for July arrival.  It involved 46,000 tons of Korean Australian standard white blend wheat bought at around $277 a ton FOB, and rest Australian hard wheat grade AH2 bought at an undisclosed
  price. (Reuters)
• Results
  awaited: Algeria’s ONAB seeks 40,000 tons of animal feed barley on March 18 for April 15-30 shipment.
• Jordan
  is back in for feed barley on March 23. Possible shipment combinations are Oct. 1-15, Oct. 16-31, Nov. 1-15 and Nov. 16-30. 
  

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 208,217 tons of rice, on March 25 for arrival in South Korea in 2021 between May 1 and Oct. 31.  64,444 tons of non-glutinous brown rice is sought from the United States. 
Rest from Thailand, China, Australia and Vietnam.

·        
Bangladesh also seeks 50,000 tons of rice on March 28.

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

·        
Syria seeks 39,400 tons of white rice on April 19.  Origin and type might be White Chinese rice or Egyptian short grain rice.