FI Morning Grain Comments 03/26/21

PDF attached

 

Morning.
 

 

Nearby
CBOT soybean oil prices are higher (after May ended limit lower Thursday) in part to higher WTI crude oil (+$1.34 as of 7:45 am CT).  Other global vegetable oil prices were mostly lower from yesterday morning. Palm oil traded more than 4% lower and overnight
reached a 3-month low on Friday.  China Dalian’s most-active soyoil contract fell 5.5% and China palm oil fell 6.2%.  CBOT soybeans were mixed and meal lower.  Back month corn and soybean contracts could remain on the defensive from large US planting intention
estimates. Corn futures are mostly lower following weakness in wheat. USDA’s quarterly hogs and pigs report showed the swine heard fell by 2 percent from a year ago, perceived bearish for feed prices.
South
Korean importers bought a large amount of wheat this week but on Friday passed on corn due to high prices. 

 

 

Bloomberg
USDA survey results, US stocks & plantings

 

 

Reuters
trade estimates

Stocks

 

Plantings

 

Weather

SD
could see temps in the 80’s this weekend. 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 except for the Ten River Basin where too much rain will occur. 
Severe weather for US yesterday and today will yield(ed) local heavy rain. 

 

1-day
precipitation

 

7-day
precipitation

 

 

World
Weather Inc.

Source:
World Weather inc.

 

Source:
World Weather inc.

 

 

Bloomberg
Ag Calendar

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

Sunday,
March 28

• Daylight
  saving time begins in most of Europe, clocks move forward one hour

Monday,
March 29:

• Ivory
  Coast cocoa arrivals
• USDA
  Export Inspections – corn, soybeans, wheat, 11am
• EU
  weekly grain, oilseed import and export data
• U.S.
  winter wheat condition, 4pm
• HOLIDAY:
  India

Tuesday,
March 30:

• EARNINGS:
  WH Group

Wednesday,
March 31:

• EIA
  weekly U.S. ethanol inventories, production
• USDA
  stocks and prospective planting – corn, wheat, soy, barley, sorghum
• Malaysia’s
  March palm oil export data
• Unica
  report on cane crush and sugar production in Brazil (tentative)
• U.S.
  agricultural prices paid, received, 3pm

Thursday,
April 1:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• Australia
  commodity index
• U.S.
  corn for ethanol, soybean crush, DDGS production, 3pm
• HOLIDAY:
  Mexico, Argentina and several other Latin American countries

Friday,
April 2:

• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• HOLIDAY:
  Good Friday holiday across most of Europe, Africa, Americas and parts of Asia

Source:
Bloomberg and FI

 

 

 

 

 

Macro

US
Consumption Adjusted Real (M/M) Feb: -1% (est -0.7%, prevr 3.4%) 

Personal
Consumption (M/M) Feb: -7.1% (est -7.3%, prevr 10.1%)

Core
PCE Price Index (M/M) Feb: 0.1% (est 0.1%, prevr 0.2%)

Core
PCE Price Index (Y/Y) Feb: 1.4% (est 1.5%, prev 1.5%)

PCE
Price Index (M/M) Feb: -1% (prev 0.3%)

PCE
Price Index (Y/Y) Feb: 1.6% (prevr 1.4%)

US
Adv Gods Trade Balance (Feb): -86.7Bln (prev -84.58Bln)

Wholesale
Inventories Adv (Feb): 0.5% (prevR 1.4%)

Retail
Inventories Ex-Auto Adv (Feb): 1.2% (prevR 0.2%)

 

 

Corn

• CBOT
  corn was mixed to lower at the electronic close from lack of bullish news.  Higher WTI and a lower USD was limiting downside risk.  The USDA pig report showed inventories down 2 percent from a year ago, indicating less corn was fed than expected last quarter. 
  March 31 is USDA report day so expect traders to increase positioning today through Tuesday. 
  
• South
  Korean importers bought a large amount of wheat this week but on Friday passed on corn due to high prices. 
  
• Reuters
  trade estimates for US corn plantings average 92.21 million acres, above USDA’s February estimate of 92.0 million and compares to 90.819 million year ago. 
  
• Yesterday
  15,648 Dec 370 puts traded and OI was up 12,003. 
• Funds
  on Thursday sold an estimated net 20,000 contracts. 
• The
  EIA (Energy Information Administration) will expand their biofuel data in its monthly report to by adding renewable fuels on March 31, including production capacities for biodiesel and feedstocks used in the production.  It will be called Monthly Biofuels
  Capacity and Feedstocks Update, replacing Monthly Biodiesel Production Report.  USDA will adopt the data. 
  
• The
  container ship blocking passage in the Suez Canal may not be dislodged until at least Wednesday.  One analyst suggested 7% of US seaborne grain exports could be affected, most of it corn. 
  

 

Export
developments.

• South
  Korea’s KOCOPIA group passed on 55,000 tons of corn due to high prices.  Offers ranged from $306 & $313/ton C&F.  It was for arrival around July 20. 
  

 

Quarterly
hogs and pigs: USDA reported the swine herd fell 2% as of March 1 from a year ago, while the industry thought it would slightly expand.  COVID-19 that temporarily closed production facilities around this time year ago prompted animal unit producers to
scale back on units. Higher priced feed inputs also likely impacted the national number of animal units.  The US swine herd totaled 74.773 million pigs as of March 1, down from 76.179 million a year ago (average estimate was 76.230 million).

 

 

Soybeans

• CBOT
  soybean complex was mixed with higher nearby soybean oil limiting losses in soybeans.  Meal was lower on product spreading and a bearish USDA pigs report. 
  
• Global
  vegetable oil prices were lower from yesterday.  Rotterdam nearby soybean oil and rapeseed oil fell about 10 euros per ton from late Thursday.  Palm oil traded more than 4% lower and overnight reached a 3-month low on Friday. 
  China
  Dalian’s most-active soyoil contract fell 5.5% and China palm oil fell 6.2%.
• Reuters
  trade estimates for US soybean plantings average 89.996 million acres, in line with USDA’s February estimate of 90 million and compares to 83.084 million year ago. 
  
• 100
  CBOT soybean oil receipts were canceled at the Volga, SD, location by South Dakota Soybean Processors. 
  
• Funds
  on Thursday
  sold
  an estimated net 14,000 soybean contracts, bought 3,000 soybean meal and sold 13,000 soybean oil.
  
• Argentine
  sold 12.45 million tons of 2020/21 soybeans (latest week +552,500 tons) – Ministry of Agriculture
  
• A
  Bloomberg survey on 2020-21 India palm oil imports showed traders looking for a 11 percent increase to around 8 million tons from previous season, while total edible vegetable oil consumption may end up unchanged.  Higher soybean oil and sunflower oil prices
  are thought to deter imports of those commodities, making India more dependent on palm oil. 
  
• Rotterdam
  vegetable oil prices were about 10 euros lower for the nearby positions and meal $3-5 euros higher. 
  
• Offshore
  values are leading CBOT SBO 79 points higher (138 lower for the week) and meal $0.20 short ton higher ($4.20 lower for the week)
• China
  cash crush margins on our analysis were 168 (167 previous), vs. 175 cents late last week and compares to 184 cents year earlier. 
  

 

China
futures:

Malaysian
palm oil: (uses settle price)

 

Export
Developments

• None
  reported.   

 

Wheat

• US
  wheat futures trended lower overnight from ongoing talk of improving US winter wheat conditions and favorable weather for the Black Sea and Australian crop areas. 
  
• Australian
  hay exporters are having a tough time getting China to grant import permits, adding to a list of commodities that is caught up in the trade tensions.  China consumes about 1 million tons of hay a year, with nearby a third coming from Australia.  China overnight
  also mentioned they will impose anti-dumping measures on some Australian wine imports from March 28 for five years.
• But
  the trade tensions between China and Australia have not impacted China wheat buying during the first two months of 2021.  China imports of Australian wheat surged 479 percent from the year earlier period.
  
• French
  soft wheat conditions as of March 22 were unchanged from the previous week at 87% good and excellent (62% year ago) – FranceAgriMer.  Durum was unchanged at 83% form previous week and compares to 63% year ago.  Initial spring barley conditions were very good
  at 92% compared with 86% a year ago. 
• EU
  May milling wheat was unchanged at 214 euros as of 7:10 am CT.  Next level of support is seen at 210.50. 
  
• Ukraine
  grain exports via Econ Min – down 22.7% to 34.73 million tons so far this season, including 14.22 million tons of wheat, 15.83 million tons of corn and 4.1 million tons of barley. 
  
• Funds
  on Thursday
  sold
  an estimated net 8,000 CBOT SRW wheat contracts. 

 

Export
Developments.

• Jordan
  will be back in for feed barley on March 30. Possible shipment combinations are Oct. 1-15, Oct. 16-31, Nov. 1-15 and Nov. 16-30, the same periods as sought in the previous two tenders.
  
• Ethiopia
  seeks 400,000 tons of optional origin milling wheat, on April 20, valid for 30 days.  In January Ethiopia cancelled 600,000 tons of wheat from a November import tender because of contractual disagreements. 
  

 

Rice/Other

·        
Mauritius seeks 4,000 tons of optional origin long grain white rice on April 16 for delivery between June 1 and July 31.

·        
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.

·        
Ethiopia seeks 170,000 tons of parboiled rice on April 20.