FI Morning Grain Comments 03/22/21

PDF attached

 

Morning.
 

 

The
US southern and central Great Plains (HRW) bias eastern areas will see additional rain this week. Northern Plains & Canadian Prairies will be in focus this week as it remains too dry and the two week outlook does not suggest much precipitation.  Rest of the
US will be ok with exception of too much precipitation for the Delta that will slow fieldwork activity.  Midwest will not start planting for a week or two so there is no concern there.  Brazil will see a drier bias over the next seven to ten days.  Monsoon
rains are expected to withdraw later in April.  Argentina will see additional rains Wednesday into Friday.  Central Ukraine is a little wetter this week. Eastern Australia will dry down this week.

 

There
were no USDA 24-hour sales.  USD was down 5 and WTI off 6 cents at the time this was written.  Nearby soybeans are supported by a rally in soybean oil.  Offshore values are leading CBOT SBO 36 points higher and meal $4.30 short ton lower. Malaysian palm futures
rallied overnight (+113 MRY & cash up $22.50) after falling around 10% last week.  There were no changes to CBOT registrations.  AgRural reported 59% of Brazil’s soybean crop had been harvested vs. 46% previous week and 66% year ago.  90% of Brazil’s corn
crop (winter) had been planted).  News was slow over the weekend.  Corn is under pressure this morning after seeing a late rally last week.  CBOT Chicago wheat is near a three month low in part to good weather for the US and Black Sea region, China wheat auction
sales, and falling Black Sea cash wheat prices.  China sold 1.6 million tons of wheat at auction from 4.020 million tons offered (41%) at an average price of 2,356 yuan per ton ($362.04/ton). 43 million tons of wheat had been sold from auction since June 22,
2021. 

 

 

 

Weather

Last
7 days

 

 

World
Weather Inc.

Weather
during the weekend that advertised for the coming ten days will not likely throw the market into a tizzy and that may help to maintain the range bound trading session that has been occurring for a while.

            More
rain in the U.S. Midwest and Delta later this week and into the weekend will keep fieldwork potentials in the Delta moving along slowly and the same may evolve in the lower Midwest in early April.

            Coarse
grain and oilseed conditions in Europe, the western CIS, India, China, Australia and South Africa will change very little in the coming week to ten days.

           
Argentina weather will be favorably mixed for late season crop development and Brazil’s drier weather this week will be ideal for late soybean harvesting and Safrinha corn planting.

 

Another
round of rain in the U.S. central Plains will help to further ensure an improving production potential over the next week to ten days after dryness last autumn and winter and damaging cold in February. In the meantime, there is need for moisture in the southern
Plains.

            The
northern U.S. Plains and Canada’s Prairies are still dealing with drought and the pressure will build in these areas for rain to fall soon in order for spring cereals to be planted normally in April and May.  This region will soon have a greater level of influence
on market mentality.

            Soft
wheat in the U.S. Midwest and wheat in Europe, the CIS, China, India and portions of the Middle East and North Africa is rated favorably, although greater rain is needed in northwestern Algeria, southwestern Morocco, and from Syria into Iran and southward
to Jordan and Israel.

            Australia’s
planting prospects are good for eastern parts of the nation and should increase later in the year in western areas.

            South
Africa may also experience good planting weather this autumn.

            Overall,
weather today will likely keep some pressure on prices, but recent trade has prices up against technical support and that may help stop the recent fall in prices.

Source:
World Weather inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

CFTC
Commitment of Traders

Corn
was not as long as expected but the net long position for traditional funds and managed money remains very large. 

 

 

 

 

 

 

Macros

Canada
Feb Wholesale Trade Most Likely Fell 0.4% – StatsCan Flash Estimate

 

Corn

• Corn
  is under pressure this morning after seeing a late rally last week and lack of news.  Good precipitation across the US Midwest is beneficial for upcoming plantings.  Brazil winter corn is 90% planted.  North Carolina (US east coast) will see a cargo of Turkish
  corn hit the shores this week. 
• May
  corn support is seen at $5.6475.  April
  options expire this Friday. 
• There
  were no USDA 24-hour sales. 
• Funds
  on Friday bought an estimated net 18,000 contracts. 
• USDA
  Cattle on Feed was slightly higher at 12.0 million head, highest since 2006 for the month. 
  

 

 

Export
developments.

• There
  were no USDA 24-hour sales. 

 

Soybeans

• Nearby
  soybeans are supported by a rally in soybean oil.  Offshore values are leading CBOT SBO 36 points higher and meal $4.30 short ton lower. Malaysian palm futures rallied about 1% overnight (+113 MRY & cash up $22.50) after falling around 10% last week.  In coming
  weeks look for traders to increase chatter over RVO requirements and surge in SBO use for renewable fuel production. 
  
• News
  was slow over the weekend. 
• AmSpec
  reported Malaysian palm exports for the March 1 – 20 period rose 6.8 percent to 745,260 tons from 697,794 tons month earlier. ITS reported 734,463 tons, up 5.2%. 
  
• AgRural
  reported 59% of Brazil’s soybean crop had been harvested vs. 46% previous week and 66% year ago.  90% of Brazil’s corn crop (winter) had been planted). 
  
• Safras:
  Brazil soybean production 112.8MMT, down from 113.5 previous. 
• Malaysian
  palm futures rallied about 1% overnight (+113 MRY & cash up $22.50) after falling around 10% last week. 
  
• There
  were no changes to CBOT registrations. 
• Funds
  on Friday bought an estimated net 12,000 soybean contracts, bought 7,000 soybean meal and bought 2,000 soybean oil.
  
• Rotterdam
  vegetable oil prices were 5-20 euros higher and meal 2-7 euros higher. 
• Offshore
  values are leading CBOT SBO 36 points higher and meal $4.30 short ton lower.
  
• China
  cash crush margins on our analysis were 180, up from 175 cents late last week and compares to 184 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

• CBOT
  Chicago wheat is near a three month low in part to good weather for the US and Black Sea region.  Both Ukraine (wheat down $7/ton) and Russian (12.5% protein wheat off $7/ton) cash export prices for wheat and barley trended lower last week.  Egypt might be
  in for wheat this week. 
• Chicago
  May wheat futures remain below its 100-day MA.  Next support level for May Chicago is now seen at $616. 
  
• China
  sold 1.6 million tons of wheat at auction from 4.020 million tons offered (41%) at an average price of 2,356 yuan per ton ($362.04/ton). 43 million tons of wheat had been sold from auction since June 22, 2021. 
  
• Funds
  on Friday sold an estimated net 4,000 SRW wheat contracts. 
• Egypt
  said they have sufficient wheat reserves to last until the end of June. 
• EU
  May milling wheat was 1.25 lower at 218.50 euros as of 7:50 am CT.  Support is seen at 215.00. 
  
• Ukraine’s
  EconMin reported grain exports are down 23.4% to date to 34 million tons.  Traders sold 13.98 million tons of wheat, 15.33 million tons of corn and 4.05 million tons of barley.
  
• Ukraine’s
  grain stocks as of March 1 were down two million tons from a year ago to 15.9 million tons, including 4.6 million tons of wheat.
  

 

Export
Developments.

• Late
  last week it was announced Pakistan bought 300,000 tons of wheat at an estimated $285.97 a ton c&f for August shipment. 
  
• 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.