FI Morning Grain Comments 05/04/21

PDF attached

 

Good
morning.

 

A
sharply higher USD (up 30 points as of 7:39 am CT) is doing little to slow an early morning rally. The fundamentals have not changed.  High cash prices, tight inventories, and Brazilian weather continues to support prices.  April Brazil soybean exports were
very large. Some might be eyeing the CFTC fund positions as there is still some room to the upside for managed money to add long positions.  Recall there were no record long position posted as of last Tuesday.  The USDA soybean crush report was viewed supportive
for the soybean products.  Malaysian palm fell 19 points and cash was down $2.50/ton.  Overnight Tunisia announced an import tender for 50,000 tons of feed barley and SK is in for 134,994 tons of rice. 

 

 

 

Weather

 

 

 

 

Next
7 days

 

Bloomberg
Ag Calendar

Tuesday,
May 4:

• Purdue
  Agriculture Sentiment
• New
  Zealand global dairy trade auction
• EARNINGS:
  Bunge, Andersons, Minerva
• HOLIDAY:
  Japan, China, Thailand

Wednesday,
May 5:

• EIA
  weekly U.S. ethanol inventories, production
• Malaysia
  May 1-5 palm oil export data
• New
  Zealand Commodity Price
• HOLIDAY:
  Japan, China

Thursday,
May 6:

• FAO
  World Food Price Index
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports

Friday,
May 7:

• China
  customs publishes trade data, including imports of soy, edible oils, meat and rubber
• 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
• CNGOIC
  monthly report on Chinese grains & oilseeds
• Canada’s
  Statcan to issue wheat, canola, barley and durum stockpile data
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
509,932                 versus   400000-600000  range

Corn                     
2,139,077             versus   1100000-2150000             range

Soybeans           
143,418                 versus   150000-300000  range

 

Macro

US
Trade Balance (USD) Mar: -74.4B (est -74.3B; prevR -70.5B; prev -71.1B)

Canadian
International Merchandise Trade Mar: -1.14B (est 0.55B; prev 1.04B)

Canadian
Building Permits (M/M) Mar: 5.7% (est 1.5%; prevR 3.1%; prev 2.1%)

 

Corn

• CBOT
  corn
  is higher on bull spreading on same old news. The fundamentals have not changed.  High cash prices, tight inventories, and Brazilian weather continues to support prices. 
  
• Some
  might be eyeing the CFTC fund positions as there is still some room to the upside for managed money to add long positions.  Recall there were no record long position posted as of last Tuesday. 
  
• US
  corn plantings came in slightly above trade expectations and should be around 50 percent complete by Wednesday.  As a coworker mentioned, it’s not what’s going in the ground but what’s in the bins that matters.  As of Sunday Iowa was at 69%, Minnesota 60%
  and Illinois 54% planted.
• On
  Monday, the funds in corn were flat.
• There
  were no surprises in USDA’s corn for ethanol use for the month of March.  DDGS production is on the rise. 
  
• USDA
  US corn export inspections as of April 29, 2021 were 2,139,077 tons, within a range of trade expectations, above 1,954,012 tons previous week and compares to 1,349,204 tons year ago. Major countries included China for 770,794 tons, Japan for 503,356 tons,
  and Mexico for 252,032 tons.
• Crude-oil
  production from OPEC members declined by 50,000 barrels per day in April, according to the latest Bloomberg survey. 
  

 

 

Export
developments.

• None
  reported

 

 

 

Soybeans

• CBOT
  soybeans
  are sharply higher despite a higher USD and China on holiday.  April Brazil soybean exports were a very good 14.8 million tons, up from 13.5 million for March and down from 17.4 million from April 2021. The USDA soybean crush report was viewed supportive for
  the soybean products.  Malaysian palm fell 19 points and cash was down $2.50/ton.  Some traders are concerned India demand for palm oil will slow because of the surge in COVID-19 cases. 
  
• USDA
  March US soybean crush came in 0.1 million bushels below expectations at 188.2 million, 6.1 million per day, up from 5.9 million per day for February and down from 6.2 million for March 2020. Soybean oil stocks declined to 2.245 billion from 2.306 billion
  at the end of February and are below 2.327 billion a year ago.  Stocks were 78 million pounds below a Bloomberg trade guess.  Soybean meal stocks also fell to 448,000 short tons from 584,000 at the end of February.  We find this bullish SBO and meal relative
  to soybeans. 
• US
  planting progress at 46% complete for corn and 24% for beans is progressing at a rapid pace. 
  
• China
  will be on holiday through Wednesday for Labor Day.
• Offshore
  values were leading CBOT SBO 44 points lower and meal $1.70 short ton higher. 
  
• Rotterdam
  vegetable oil values were mixed and Rotterdam meal mostly 4-14 euros higher. 
  
• China
  cash crush margins on our analysis were 178 cents vs. 178 cents late last week and compares to 132 cents year earlier. 
  
• China:
  Holiday
• Malaysian
  palm oil: (uses settle price).
  

• Funds
  on Monday sold an estimated net 10,000 soybean contracts, sold 7,000 soybean meal and bought 7,000 soybean oil. 
  
• USDA
  US soybean export inspections as of April 29, 2021 were 143,418 tons, below a range of trade expectations, below 284,074 tons previous week and compares to 381,177 tons year ago. Major countries included Mexico for 57,978 tons, Costa Rica for 16,697 tons,
  and Indonesia for 14,566 tons.

 

 

EIA
– U.S. imports of biomass-based diesel increased 12% in 2020

U.S.
imports of biomass-based diesel, which include biodiesel and renewable diesel, grew 12% in 2020 to more than 31,000 barrels per day (b/d), increasing for the second consecutive year. Imports of biomass-based diesel increased in 2020 because of growing demand
to meet government renewable fuel programs. U.S. consumption of biomass-based diesel, unlike demand for other fuels, remained relatively unaffected by responses to COVID-19 during 2020.

https://www.eia.gov/todayinenergy/detail.php?id=47816&src=email

 

Export
Developments

• Results
  awaited: Algeria
  seeks 30,000 tons of soybean meal on April 29 for shipment by June 15.
• Results
  awaited: Tunisia seeks 27,000 tons of soybean oil and/or rapeseed oil for late June / early July shipment. 
  

 

Wheat

• US
  wheat was higher this morning on strength in corn.  Overnight Tunisia announced an import tender for 50,000 tons of feed barley and SK is in for 134,994 tons of rice. 
  
• September
  Paris wheat was up 2.25 euros to 218 as of around 7:30 am CT. 
• Funds
  on Monday sold an estimated net 12,000 CBOT SRW wheat contracts.
• USDA
  US all-wheat export inspections as of April 29, 2021 were 509,932 tons, within a range of trade expectations, below 581,087 tons previous week and compares to 588,193 tons year ago. Major countries included China for 165,891 tons, Mexico for 67,379 tons, and
  Japan for 59,111 tons.

 

Export
Developments.

• Tunisia
  seeks 50,000 tons of optional origin animal feed barley on May 5 for shipment between June 5 and June 20 if from the Black Sea or slightly earlier if form Europe. 
  
• The
  Philippines seeks up to 185,000 tons of wheat on May 4 for shipment in June, July and August depending on origin.
  
• Bangladesh
  seeks 50,000 tons of milling wheat on May 6. 

 

Rice/Other

·        
Results awaited: Offers low as $407.79/ton – Bangladesh seeks 50,000 tons of rice on May 2.  

·        
South Korea’s Agro-Fisheries & Food Trade Corp seeks 134,994 tons of rice from Vietnam, China, the United States and Australia, on May 13, for arrival between September 2021 and January 2022.