FI Morning Grain Comments 03/30/21

PDF attached

 

Morning.
 

 

USD
was higher this morning and WTI lower.  Today look for position ahead of the USDA reports due out Wednesday. 

 

 

 

Weather

 

World
Weather Inc.

Opportunity
remains for some greater precipitation in the Northern Plains after this upcoming weekend; though, how significant this precipitation will be also remains questionable. This evening’s GFS model run was wetter in the Northern Plains in the second week of the
outlook; however, the model was likely too wet. One of the increases involved a weather disturbance shown to impact South Dakota and southern Montana into central Minnesota April 8 – 12. This disturbance was not in the midday GFS model run. A disturbance is
possible; though, weaker than what this evening’s run suggested.  In Brazil, some greater rain will gradually start to occur in northern areas late this week into next week which will help promote some increase of topsoil moisture. Conditions in Argentina
are still expected to be favorable over the next two weeks.

Source:
World Weather inc.

 

Source:
World Weather inc.

 

Bloomberg
Ag Calendar

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
• EIA
  monthly ethanol and biodiesel / renewable / biodiesel fuel reports
• 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

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
302,188         versus   350000-600000  range

Corn             
1,695,215     versus   1200000-2250000             range

Soybeans   
425,364         versus   150000-575000  range

 

Soybeans
and Corn Advisory:

2020/21
Brazil Soybean Estimate Increased 1.0 mt to 133.0 Million

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

 

Corn

• Corn
  futures are lower from follow through selling ahead of the USDA reports due out Wednesday, higher USD, and lower WTI.  
  
• A
  large Chinese hog company warned the use of illegal African swine fever vaccines last year may drive up domestic hog prices due to a reduced inventory that occurred during 2020.  Imports of beef and pork from the US helped the company offset a 46 percent decline
  in pig inventories during 2020. 
• Funds
  on Monday sold an estimated net 16,000 contracts. 
• 50%
  of the TX corn crop had been planted versus 46 average. 
• USDA
  US corn export inspections as of March 25, 2021 were 1,695,215 tons, within a range of trade expectations, below 2,017,525 tons previous week and compares to 1,270,152 tons year ago. Major countries included Japan for 423,010 tons, China for 275,054 tons,
  and Mexico for 253,145 tons.
• The
  European Union granted imports licenses for 161,000 tons of corn imports, bringing cumulative 2020-21 imports to 11.646 MMT, 27 percent below same period year ago.
  

 

Export
developments.

• None
  reported

 

 

Soybeans

• CBOT
  soybeans are lower despite a reversal in product spreads (meal higher and SBO lower). The USD was 22 points higher, and crude was down nearly $0.90 by 7:20 am CT.  Positioning ahead of USDA’s March 1 stocks and 2021 planting intentions is expected.  Yesterday
  we saw US soybean inspections fall for the 4^th consecutive week. 
  
• Malaysian
  palm oil fell to a five-week low. 
• Funds
  on Monday sold an estimated net 6,000 soybean contracts, sold 4,000 soybean meal and bought an estimated 5,000 soybean oil.  
  
• There
  were no changes to CBOT registrations.  
• Rotterdam
  vegetable oil prices were 5-20 euros lower for the nearby positions (back months mixed).  Rotterdam meal was mostly 1-5 euros lower. 
  
• Offshore
  values were leading CBOT SBO 163 points lower and meal $2.30 short ton higher. 
  
• China
  cash crush margins on our analysis were 171 (145 Monday) vs. 169 cents late last week and compares to 207 cents year earlier. 
  

 

China
futures:

Malaysian
palm oil: (uses settle price)

• USDA
  US soybean export inspections as of March 25, 2021 were 425,364 tons, within a range of trade expectations, below 495,329 tons previous week and compares to 414,054 tons year ago. Major countries included China for 96,151 tons, Japan for 81,237 tons, and Egypt
  for 49,300 tons.
• The
  European Union reported soybean import licenses since July 1 at 11.024 million tons, above 10.609 million tons a year ago. European Union soybean meal import licenses are running at 12.565 million tons so far for 2020-21, below 13.308 million tons a year ago.
  EU palm oil import licenses are running at 4.068 million tons for 2020-21, below 4.290 million tons a year ago, or down 5 percent.
• European
  Union rapeseed import licenses since July 1 were 4.942 million tons, above 4.929 million tons from the same period a year ago.

 

Export
Developments

• The
  USDA seeks 540 tons refined veg oil, under the McGovern-Dole Food for Education export program (470 tons in 4 liter cans and 70 tons in 4 liter plastic bottles/cans) on April 6 for May 1-31 (May 16 – Jun 15 for plants at ports) shipment. 
  

 

 

Wheat

• Despite
  a decline in selected US state winter wheat crop ratings, US wheat prices are under the defensive from a higher USD and lack of global export business outside of Algeria in for wheat on Wednesday.  On Monday US all-wheat inspections were lowest since January
  14. 
• Australia’s
  weather department declared an end to La Nina and sees average conditions across Australia for the next three months.  We believe lingering effects will promote a wet spring for the lower US Midwest and upper Delta. 
  
• EU
  May milling wheat was up 0.50 at 211.25 euros as of 7:00 am CT. 
• Funds on Monday bought an estimated net 2,000 CBOT SRW wheat contracts. 
  
• KS winter wheat conditions were 50% good and excellent, down from
  45 previous week.  Nebraska was rated 38% good to excellent, up from 34% at the end of February. TX winter wheat conditions were 28% good and excellent, down from 29 previous week.  OK winter wheat conditions were 61% good and excellent, down from 62 previous
  week.  CO fell to 28% from 33 week earlier.  MT dropped to 54 from 69% month ago. 
  
• Ukraine’s wheat exports fort this marketing year (Jul-Jun) may fall short of the predicted 17.5 million
  ton volume previous predicted by the economy minister. 
• USDA US all-wheat export inspections as of March 25, 2021 were 302,188 tons, below a range of trade expectations,
  below 653,755 tons previous week and compares to 385,957 tons year ago. Major countries included Nigeria for 80,087 tons, Philippines for 58,326 tons, and Japan for 30,565 tons.
  
• The European Union granted export licenses for 195,000 tons of soft wheat exports, bringing cumulative 2020-21
  soft wheat export commitments to 19.793 MMT, well down from 25.624 million tons committed at this time last year, a 23 percent decrease.  Imports are near unchanged from year ago at 1.655 million tons.
  

 

Export Developments.

• Algeria seeks at least 50,000 tons of milling wheat on Wednesday
  for May shipment. 
• 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

·        
Bangladesh lowest offered for 50,000 tons of rice was $411.93/ton CIF for shipment within 40 days of contract signing. 

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

·        
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 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.