FI Morning Grain Comments 04/26/21

PDF attached

 

Good
morning.

 

Steady
as she goes.  Higher trade this morning on same fundamentals (weather and supply concerns).

 

Strong
US soybean & corn basis along with net drying seen for a portion of Brazil’s second corn crop for the balance of the month is supporting CBOT futures.  Parts of the US Delta saw flooding over the weekend from a large storm, from Central Louisiana through portions
of southern Mississippi to southeastern Alabama and southern Georgia (3-6 inches).  The US central Plains will be hot over the next few days deleting soil moisture levels. No threatening cold temperatures are expected over the next two weeks for the US corn
belt.  Brazil weekend rain was expected, and this workweek rain is expected across northern Mato Grosso, Tocantins, western Bahia, as well as Rio Grande do Sul, Brazil, while net drying occurs elsewhere, according to World Weather Inc.  Mexico is seeing drought
conditions that will last for at least another 2 weeks.  Frost and freezes continued in northeastern parts of the European continent during the weekend, but the outlook looks like weather improves. 

 

 

 

Weather

 

 

 

Next
7 days

 

World
Weather Inc. 

TODAY’S
MOST IMPORTANT WEATHER

• Brazil’s
  outlook is still dry biased for the next ten days and some forecast models keep the majority of Safrinha corn country mostly dry through the next two weeks
• Argentina’s
  weather still looks good with net drying this week and then some rain next week
• Western
  Russia, Belarus and central and western Ukraine are still advertised wet and cool biased over the coming week with a gradual trend toward less precipitation and some warming next week
  
• Europe
  will be cool and moist this week, although the North Sea region will be dry for a while this workweek
• North
  Africa will receive erratic rainfall and experience net drying in most areas except possible the far northernmost part of Morocco where rain is likely
• West-central
  Africa rainfall will be favorably mixed
• Indonesia/Malaysia,
  Mainland areas of Southeast Asia get periods of rain next two weeks

• Western
  Australia gets a little rain in the southwest late this week and more early next week over a larger part of the state that bolsters planting moisture, although more will be needed
• Some
  of the increase next week may be overdone
• U.S.
  outlook is still wet and stormy from late Tuesday into Thursday from eastern Oklahoma and central Texas to southern Illinois and southern Indiana; including the northern Delta where some excessive rain is expected and a little flooding
• Damaging
  wind, hail and some tornadoes will be possible, as well
• Virginia
  and the Carolinas are dry and need rain – some showers will occur briefly Friday
  
• West
  Texas rainfall potentials remain poor in the high Plains for at least ten days
• South
  Texas rainfall potential is also poor for next ten days
• Northern
  U.S. Plains and Canada’s Prairies will be drier biased in the coming week with some potential for at least a little rain in the following week

Source:
World Weather Inc. & FI

 

Bloomberg
Ag Calendar

Monday,
April 26:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop plantings – corn, wheat, cotton; winter wheat condition, 4pm
• Monthly
  MARS bulletin on crop conditions in Europe
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• Malaysia
  April 1-25 palm oil export data from AmSpec, SGS
• HOLIDAY:
  New Zealand

Tuesday,
April 27:

• Canada’s
  StatsCan releases data on seeded area for soybeans, barley, canola, wheat and durum

Wednesday,
April 28:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Unica publishes data on cane crush and sugar output (tentative)

Thursday,
April 29:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• International
  Grains Council monthly report
• HOLIDAY:
  Japan, Malaysia

Friday,
April 30:

• 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
• U.S.
  agricultural prices paid, received
• Malaysia’s
  April 1-30 palm oil export data
• FranceAgriMer
  weekly update on crop conditions
• Holiday:
  Vietnam

Source:
Bloomberg and FI

 

 

 

 

CFTC
Commitment of Traders

Corn
managed money futures and options were not a record as the trade missed the corn buying by a large amount. 

 

 

 

 

Due
out Tuesday April 27

 

 

Macro

 

Corn

• CBOT
  corn
  is higher today on ongoing fund buying amid Brazil second crop production concerns and heavy rain flooding local fields across the Delta over the weekend.  Brazil’s second corn crop is approaching the critical pollination stage.  Price increases in Chicago
  could stall this week with warmer weather expected across the US Midwest that could boost planting progress.  However, $7.00 corn is not out of reach.  For this afternoon we look for a modest increase in corn plantings by 8 point to 16 percent. 
  
• The
  USD was slightly higher as of 7:30 am CT. 
• There
  were rumors Friday that China bought about 1 million tons of Q1 2021-22 US corn. 
  
• May
  options are now expired and CBOT corn open interest on Friday fell about 39,000 contracts and soybeans nearly 19,200 contracts. 
  
• On
  Friday funds sold an estimated net 8,000 corn contracts.  (Weekend comment we mistakenly said they bought; fund sheet was correct). 
  
• Bulgaria
  reported a fifth bird flu outbreak at an industrial farm affecting 40,000 laying hens. 
  
• Last
  week Commodity Weather Group warned Brazil second corn crop drought stress is seen expanding to nearly 60% of the area.
  
• Brazil’s
  meat lobby group said meatpackers are looking at using more wheat for feed as grain prices are getting very expensive. 
  
• South
  Africa’s Crop Estimates Committee (CEC) will update their 2020-21 corn production on April 29 and a Reuters trade estimate is at 16.349 million tons, up from 15.922 million tons projected in March and above 15.3 million collected last year. 
  

 

Export
developments.

• South
  Korea’s FLC bought 65,000 tons of corn, likely from South America, at $305.99/ton c&f, for arrival around August 25. 
  

 

USDA
Cattle on Feed

Placements
rose a less than expected 128% as well as April 1 feed of 105%.  Placements did rise seasonally, and the less than expected figure should have little impact on grain prices this coming Sunday night.  Recall last month placements were reported at the bottom
of a 5-year range. 

 

 

 

Soybeans

• CBOT
  soybeans,
  meal and oil are all higher on supply concerns and strong US interior soybean basis. An Indiana location hit $16/bu late last week.  We are hearing Brazil’s FOB soybean price for May hit a new high of around $560/ton Friday.  Increasing Covid-19 cases across
  India may slow vegetable oil imports over the short term as parts of the country go back into lockdown. 
  
• We
  look for US soybean plantings to be reported up 2 points to 7 percent from the previous week. 
  
• Malaysian
  palm fell to close 40 points lower and cash dropped $7.50/ton to $987.50/ton.  China soybeans were up 0.4%, meal up 0.3% and SBO down 0.2%. 
  
• Egypt
  is in for vegetable oils.
• Last
  we heard IL SBO basis was 600 over and Gulf 800 over (up 200 points week over week).
  
• Cargo
  surveyor SGS reported month to date April 25 Malaysian palm exports at 1,116,919 tons, 102,757 tons above the same period a month ago or up 10.1%, and 157,831 tons above the same period a year ago or up 16.5%.  ITS reported April 1-25 Malaysian palm exports
  at 1.103 million tons, a 9 percent increase from the same period last month.  AmSpec reported 1.104MMT, up 8.5%. 
  
• Funds
  on Friday sold an estimated net 1,000 soybean contracts, flat on soybean meal and sold an estimated 1,000 soybean oil.
  
• There
  were no changes to CBOT registrations.   
• Offshore
  values were leading CBOT SBO flat and meal $1.90 short ton higher. 
• Rotterdam
  vegetable oil values were unchanged to 5 euros higher from this time previous session and Rotterdam meal mostly 1-7 euros higher. 
  
• China
  cash crush margins on our analysis were 149 cents vs. 141 cents late last week and compares to 132 cents year earlier. 
  
• China:
  

• Malaysian
  palm oil: (uses settle price).
  

 

Top
US and Brazil soybean export prices, bottom China soybean and meal stocks at ports

 

Export
Developments

• Egypt’s
  GASC seeks 30,000 tons of soybean oil and 10,000 tons of sunflower oil on April 28 for June 26-July 10 arrival.  They are also in for local vegetable oils, 3,000 soybean oil and 1,000 sunflower oil for June26-July 15 arrival. 
  
• The
  USDA bought 10,610 tons of bulk crude, degummed soybean oil last Thursday on behalf of the CCC program at $1,549/ton for 8,000 tons and rest at $1,658/ton. 
  
• The
  USDA under the food export program seeks 420 tons of vegetable oils for June 1-30 shipment.  
  

 

Wheat

• US
  wheat futures
  are higher on US drought concerns for the western crop areas and parts of West Texas. Rain this week for the southern Great Plains could stall the futures wheat rally, but the northern Great Plains could use rain, keeping MN futures gaining over Chicago type
  wheat. 
• Egypt
  is in for wheat. 
• China
  sold 311,837 tons of wheat, or only 7.75% of the total offered, at an auction of state reserves last week. 
  
• Funds
  on Friday bought an estimated net 1,000 CBOT SRW wheat contracts.
• September
  Paris wheat was up 3.25 at 222.50 euros. 

 

Export
Developments.

• Bangladesh
  seeks 50,000 tons of milling wheat on May 6. 
• Egypt
  seeks wheat for August 11-20 shipment, on April 27. 
• Jordan
  seeks 120,000 tons of feed barley on April 28 for Oct-Nov shipment. 

 

Rice/Other

·        
Results awaited: Bangladesh delayed their 50,000-ton rice import tender that was set to close April 18, to now April 26.  

·        
Bangladesh seeks 50,000 tons of rice on May 2.