FI Morning Grain Comments 04/27/21

PDF attached

 

Good
morning.

 

USDA
announced 101,600 tons of corn sold to unknown.  This morning we find sharply higher prices with nearby soybean oil limit higher. Most contracts broke just before the electronic close (meal and back month corn lower).  Story over Brazil second crop corn, adverse
weather, and inflation has not changed much and traders are left wondering how long will this rally last.  Corn is up seven consecutive sessions.  Soybeans are at an early 2013 high. Traders looking for a small decline in US wheat ratings were taken back after
they dropped 4 points in the combined good/excellent categories.  US corn and soybean plantings came in at expectations but are still perceived as slow. 

 

European
vegetable oils were up a very large 15 to 50 euros from yesterday and meal up 8-12 euros.  Malaysian palm ripped higher by 182 points to 4069 and cash was up $42.50/ton $1,030/ton.  China soybean futures were down 1.0%, China meal up 0.8%, and SBO down 120
points or 1.3%.  Indonesia raised its crude palm oil reference price tax for May at $1,110 a ton from $1,093.83 in April.  Export taxes for crude palm oil in May will be higher at $144 per ton, while export levies for the edible oil will be unchanged at $255
per ton. April crude palm oil was at $116 per ton. China
cash crush margins on our analysis improved to 170 cents from 149 previous.  Taiwan’s MFIG seeks 65,000 tons of corn on Wednesday for July 9-August 12 shipment, depending on origin.  Ukraine’s Black Sea ports restricted grain loading operations due to rain,
mainly in the Odessa region.

 

 

 

Weather

US
corn and soybean plantings were as expected at 17 and 8 percent, respectively, but corn is lagging its respected 5-year averages by 3 points.  Soybeans are running 3 points above average.  US spring wheat plantings were reported at 28 percent, as expected
and 9 points above average.  US winter wheat ratings declined a more than expected 4 points to 49 percent good/excellent, 4 points below trade expectations and below its 53 percent average.  But by class HRW wheat increased 1.3% from the previous week, and
white was up slightly.  SRW declined 0.6% (see wheat section). 

 

 

Next
7 days

 

World
Weather Inc. 

TODAY’S
WEATHER HIGHLIGHTS

• Southwest
  US Plains will be dry biased
• There
  is still some precipitation in the northern U.S. Plains and Canada, but not as much as yesterday
• Midwest
  weather will be well mixed
• A
  little too much rain Wednesday into Thursday in the lower Ohio River Valley and northern Delta
• Europe
  is not dry and cool, but cool with some periodic precipitation
• Western
  Russia is definitely wet and cool with western Russia quite wet
• Ukraine
  is not as wet as Russia or as wet as previously advertised, but is plenty moist and cool
• Brazil
  has some opportunity for rain in the May 6-13 period, according to the GFS model, but it is too aggressive with a cool front coming northward
• Net
  drying is still expected in the coming ten days
• Seasonable
  temperatures
• Argentina
  still looks well mixed with rain and sunshine
• Temperatures
  will be seasonably warm this week and a little milder next week
• Western
  Australia still has some potential for rain late this week and early next week; amounts will be light

Source:
World Weather Inc. & FI

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range                                    

Wheat                 
564,047                 versus   400000-625000

Corn                     
1,951,012             versus   1100000-1700000

Soybeans           
233,911                 versus   150000-300000

 

 

Macro

ADM
quarterly profit jumps 76% on agricultural unit boost – Reuters News

US
FHFA House Price Index (M/M) Feb: 0.9% (est 1.0%; prev 1.0%)

 

 

Corn

• CBOT
  corn
  basis the May surpassed $7.00 (last 2013) overnight ($6.96 @ electronic close). Limits expanded to 40 cents.  May is up 7 consecutive sessions.  Ongoing Brazil second crop worries are supporting corn along with a perceived slow US corn planting pace.  Rain
  mid this workweek may stall fieldwork progress across the US Midwest, especially the lower Ohio River Valley and northern Delta.   Brazil will see net drying over the next ten days before some rain occurs May 6-13.  US corn exports are also fueling this rally
  as delayed corn arrivals for the second crop could extend the US export demand well through the summer months. 
  
• Also
  adding to SA grain crop availability concerns are low water levels that lighten shipments.  We are hearing depths for Argentina’s side is ok but Paraguay has issues that may force more trucks to deliver product. 
  
• Soybean
  and Corn Advisory: 2020/21 Brazil Corn Estimate Lowered 3.0 mt to 100.0 Million
• Corn
  is not the only commodity that sees expanded limits.  Butter, milk, lumber have expanded limits. 
  https://www.cmegroup.com/trading/price-limits.html
  
• US
  corn and soybean plantings were as expected at 17 and 8 percent, respectively, but corn is lagging its respected 5-year averages by 3 points. 
  
• On
  Monday funds bought an estimated net 60,000 corn contracts.
• The
  USD was slightly higher as of 7:45 pm CT. 

• The
  European Union granted imports licenses for 65,000 tons of corn imports, bringing cumulative 2020-21 imports to 12.152 MMT, 30 percent below same period year ago

• 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.

• Private
  exporters reported to the U.S. Department of Agriculture export sales of 101,600 tons of corn delivery to unknown destinations. Of the total, 50,800 metric tons is for delivery during the 2020/2021 marketing year and 50,800 metric tons is for delivery during
  the 2021/2022 marketing year.
• South
  Korea’s KOCOPIA bought 50,000 tons of corn expected from Ukraine at an estimated $339.88 a ton c&f for arrival around July 20.
  

 

 

Soybeans

• CBOT
  soybeans
  are highest since 2013 and supported this morning by limit up May soybean oil amid sharply higher cash prices.  Malaysian palm futures closed 182 points higher (jumped most in 11 months) and cash was up $42.50/ton to $1,030/ton.  Egypt is in for vegetable
  oils on Wednesday.  May crush is sitting at $1.0850. 
• US
  corn and soybean plantings were as expected at 17 and 8 percent, respectively, but corn is lagging its respected 5-year averages by 3 points.  Soybeans are running 3 points above average. 
  
• Indonesia
  raised its crude palm oil reference price tax for May at $1,110 a ton from $1,093.83 in April.  Export taxes for crude palm oil in May will be higher at $144 per ton, while export levies for the edible oil will be unchanged at $255 per ton. April crude palm
  oil was at $116 per ton.
• Funds
  on Monday bought an estimated net 16,000 soybean contracts, 5,000 soybean meal and 9,000 soybean oil.
• There
  were no changes to CBOT registrations.   
• Offshore
  values were leading CBOT SBO 118 points lower and meal $1.80 short ton higher. 
  
• Rotterdam
  vegetable oil values were 15-50 euros higher from this time previous session and Rotterdam meal mostly 4-12 euros higher. 
  
• China
  cash crush margins on our analysis were 170 cents (149 previous) vs. 141 cents late last week and compares to 132 cents year earlier. 
  
• China:
  

• Malaysian
  palm oil: (uses settle price).
  

• Viterra
  announced they plan to build a 2.5 million ton canola crushing plant in Regina, Saskatchewan, set to open sometime in late 2024.  This would be the largest canola crushing plant in the world. 
  
• The
  European Union reported soybean import licenses since July 1 at 11.937 million tons, above 11.817 million tons a year ago. European Union soybean meal import licenses are running at 13.844 million tons so far for 2020-21, below 14.574 million tons a year ago.
  EU palm oil import licenses are running at 4.277 million tons for 2020-21, below 4.685 million tons a year ago, or down 9 percent.
• European
  Union rapeseed import licenses since July 1 were 5.370 million tons, above 5.178 million tons from the same period a year ago.

 

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 under the food export program seeks 420 tons of vegetable oils for June 1-30 shipment.  
  

 

Wheat

• US
  wheat futures are higher on follow through buying and an unexpected 4-point decline in US winter wheat ratings. 
  The
  southwest US Plains will be dry biased for the balance of the workweek.  There is still some precipitation in the northern U.S. Plains and Canada, but not as much as yesterday, according to World Weather.  Midwest weather will be well mixed but there will
  be a little too much rain Wednesday into Thursday in the lower Ohio River Valley and northern Delta. 
  
• Lowest
  offer for Egypt seeking wheat for August 11-20 shipment was Romanian wheat at $268.47/ton. 
  
• Funds
  on Monday bought an estimated net 18,000 CBOT SRW wheat contracts.
• US
  spring wheat plantings were reported at 28 percent, as expected and 9 points above average. 
  
• US
  winter wheat ratings declined a more than expected 4 points to 49 percent good/excellent, 4 points below trade expectations and below its 53 percent average. 
  

• September
  Paris wheat was up 2.00 at 228.25 euros. 
• The
  EU crop monitor MARS group lowered the average soft wheat yield for the EU crop to 5.86 tons per hectare from an initial projection of 5.89 in March, and 3 percent above a five-year average.  MARS revised down the 2021 EU winter barley yield to 5.83 tons per
  hectare from 5.88 previous.
• The
  European Union granted export licenses for 165,000 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 21.677 MMT, well down from 29.498 million tons committed at this time last year, a 27 percent decrease.  Imports are
  near unchanged from year ago at 1.717 million tons.

 

Export
Developments.

• Lowest
  offer for Egypt seeking wheat for August 11-20 shipment was Romanian wheat at $268.47/ton. 
  
• Results
  awaited: Jordan seeks 120,000 tons of feed barley on April 28 for Oct-Nov shipment. 
  
• Algeria’s
  state grains agency OAIC seeks 50,000 tons of wheat on Wednesday, April 28, with offers remaining valid up to Thursday, April 29.
• Bangladesh
  seeks 50,000 tons of milling wheat on May 6. 

 

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.