FI Morning Grain Comments 03/23/21

PDF attached

 

Morning.
 

 

SBO
was in play overnight but back off much most of its gains on a higher USD and WTI down more than $2.  Corn is lower on lack of US export developments while wheat continues to trend lower on improving US winter wheat conditions from recent rains. 

 

 

 

Weather

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.  Eastern Australia will dry down this week.

 

World
Weather Inc.

UNITED
STATES

• Greater
  rainfall has been suggested for the Tennessee River Basin and a part of the lower Delta this weekend
• Some
  of the increase was overdone
• Less
  rain was suggested for West Texas, north-central Texas, Oklahoma, southeastern Kansas and southern Missouri late this weekend into early next week
• Some
  of the reduction was needed
• Rain
  was removed from the southern Plains during the middle part of next week
• Some
  of this reduction was needed
• Greater
  rain was advertised for the eastern Midwest during mid-week next week
• Some
  of this increase was needed
• GFS
  reduced rain in the lower and eastern Midwest, Delta and Tennessee River Basin April 2-4 which it was increased in Texas and Oklahoma
• Some
  of this was necessary
• GFS
  increased rain in the southern Plains and a part of the Delta April 3-5
• The
  boost may have been a little overdone

 

ARGENTINA

• No
  changes were noted in the first week of the outlook
• The
  second week of the outlook was drier
• Rain
  was removed from southeastern and some central parts of Argentina in the latter part of next week into the following weekend
• A
  little too much rain may have been removed, but this was a relatively weak event to begin with
• GFS
  was drier in the last days of the model run, April 5-6
• A
  little too much rain was removed

Overall,
too much rain was removed from the second week outlook

 

BRAZIL

• No
  changes were noted relative to the previous model run in the first week of the outlook
• Rain
  was reduced April 2-4 in the interior southern parts of the nation
• Some
  of this reduction was needed
• Rain
  was also reduced from southern Brazil April 5-7
• Too
  much rain was removed, but the previous model run was too wet

Source:
World Weather inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat         
648,485         versus   325000-575000  range

Corn             
1,962,118     versus   1600000-2200000             range

Soybeans   
489,405         versus   300000-600000  range

 

Soybean
and Corn Advisory:

2020/21
Brazil Soybean Estimate Unchanged at 132.0 Million Tons

2020/21
Argentina Soybean Estimate Unchanged at 46.0 Million Tons

2020/21
Brazil Corn Estimate Unchanged at 105.0 Million Tons

2020/21
Argentina Corn Estimate Unchanged at 45.5 Million Tons

 

Macro

US
Philadelphia Fed Non-Manufacturing Regional Business Activity Mar: 38.6 (prev 3.9)

 

Corn

• Corn
  is mostly lower on lower wheat and lack of export developments.  US corn acre expectations are mostly coming in north of 93 million acres.  The higher acres come at the expense to something, but unlikely soybeans.  However, FBN has an 87.6 soybean acre estimate. 
  
• May
  corn support is seen at $5.3950. 
• Funds
  on Monday sold an estimated net 11.000 contracts. 
• USDA
  US corn export inspections as of March 18, 2021 were 1,962,118 tons, within a range of trade expectations, below 2,274,441 tons previous week and compares to 868,864 tons year ago. Major countries included Mexico for 451,335 tons, China for 417,624 tons, and
  Korea Rep for 349,837 tons.
• USDA
  hog and pig report estimates from Bloomberg:  Hog inventory seen falling to 76.059 million head vs 76.179 last March.   Breeding inventory seen down 1.3% y/y, and market hogs seen falling 0.1% y/y. The pig crop seen 0.5% higher y/y.  March-May farrowing intentions
  seen down 0.8% y/y, and June-Aug. seen falling 0.5% y/y.  Report due out March 25. 
  
• April
  options expire this Friday. 

 

Export
developments.

• There
  were no USDA 24-hour sales. 

 

 

Soybeans

• Nearby
  soybeans are off from their overnight highs in part to bearish outside markets.  Strength in SBO basis May supported soybeans.  Oil/meal spreads are starting to correct a touch.  Some traders are disappointed May SBO did not follow the synthetics at yesterday’s
  close.  Watch the May SBO contract as it could fill the 56.37 gap.
• Malaysian
  palm futures rallied more than 2% overnight (+87 MRY & cash up $12.50).  China vegetable oil prices rallied while soybean meal in Dalian are trading near a year to date low and have dropped more than 15% from the 2014 highs in January, according to Bloomberg. 
  
• Funds
  on Monday bought an estimated net 1,000 soybean contracts, sold 8,000 soybean meal and bought 9,000 soybean oil.
  
• There
  were no changes to CBOT registrations. 
• Indonesia
  set its crude palm oil price for April higher at $1,093.83 per ton, and export taxes for crude palm oil in April will be $116 per ton, up from $93 in March.  The crude palm oil reference price for March was set at $1,036.22 per ton.
  
• Malaysia’s
  2021 biodiesel exports are seen at lowest in four years due to European Union restrictions, to around 350,000 tons from 378,582 tons in 2020.
• Rotterdam
  vegetable oil prices were 5-40 euros higher (bias SBO upside) and meal $4-18 euros lower. 
  
• Offshore
  values are leading CBOT SBO 110 points lower and meal $9.00 short ton higher.
  
• China
  cash crush margins on our analysis were 181 (180 previous), up from 175 cents late last week and compares to 184 cents year earlier. 
  

China
futures:

• SGS
  reported Malaysian palm March 1-20 shipments down 0.1 percent from the same period previous month. 
  

Malaysian
palm oil:

• USDA
  US soybean export inspections as of March 18, 2021 were 489,405 tons, within a range of trade expectations, below 548,951 tons previous week and compares to 587,398 tons year ago. Major countries included Egypt for 164,686 tons, Mexico for 155,823 tons, and
  Indonesia for 79,875 tons.
• Richardson
  International plans to double its canola crushing capacity at Yorkton, Saskatchewan, to 2.2 million tons annually, according to Reuters.

 

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 lower again, from recent rains across US improving crop conditions. Chicago May wheat futures remain below its 100-day MA.  Next support level for May Chicago is seen at $616. 
  
• Funds
  on Monday were net even for SRW wheat contracts. 
• EU
  May milling wheat was 0.25 lower at 218.50 euros as of 7:55 am CT.  Support is seen at 215.00. 
  
• USDA
  Attaché on Egypt grain update: https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Annual_Cairo_Egypt_03-15-2021
  
• USDA
  US all-wheat export inspections as of March 18, 2021 were 648,485 tons, above a range of trade expectations, below 712,158 tons previous week and compares to 354,466 tons year ago. Major countries included Bangladesh for 116,570 tons, Japan for 81,837 tons,
  and Mexico for 78,460 tons.

 

Reuters
recap on US winter wheat ratings and corn plantings:

• Kansas
  was rated 45%
  G/E for the winter wheat crop, up from 38%
  a week earlier.
• Soil
  moisture readings were improving in Kansas, the top U.S. winter wheat producer. The USDA reported that Kansas topsoil moisture as of Sunday was short to very short in 17% of the state, a drop from 24% the previous week and 47% two weeks ago.
• For
  Oklahoma, another major wheat state, the USDA rated 62%
  of the winter wheat crop in good to excellent condition, up from 57%
  a week earlier.
• The
  USDA said 36% of Oklahoma’s wheat had reached the “jointing” stage of growth, ahead of the five-year average of 31%.
• For
  Texas, the No. 2 winter wheat state by planted area, the USDA rated 29%
  of the crop as good to excellent, up from 27%
  the previous week.
• The
  Texas corn crop was 38% planted, up from 26% a week ago and ahead of the state’s five-year average of 34%.
• For
  Colorado, the USDA rated 33% of the winter wheat as good to excellent, up from 25% the previous week.
• Farmers
  in the Plains states grow hard red winter wheat, the largest U.S. wheat class, which is milled into flour for bread.
• In
  Arkansas, where farmers grow soft red winter wheat used to make cookies and snack foods, the USDA rated 57% of the state’s wheat as good to excellent, up from 53% a week ago.
• The
  USDA rated 45% of the Louisiana winter wheat crop and 49% of Mississippi’s wheat as good to excellent.
  
• Corn
  planting was 52% complete in Louisiana and 11% complete in Mississippi.
• Over
  the winter and early spring, the USDA’s National Agricultural Statistics Service releases crop progress reports for select states. The government is scheduled to resume regular weekly U.S. crop progress reports on April 5.

 

Export
Developments.

• Thailand
  seeks up to 430,000 tons of animal feed wheat on Wednesday, March 24 for shipment during May and December.
• Cancelled. 
  2 participants: Jordan is in for feed barley. 
• South
  Korean group SPC seeks 35,000 tons of milling wheat from the United States and Canada on March 23. for arrival in July.
• The
  Philippines seek 155,000 tons of milling wheat and animal feed wheat on March 24 for shipment between April and July.
• Results
  awaited: Algeria’s ONAB seeks 40,000 tons of animal feed barley on March 18 for April 15-30 shipment.

 

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.