FI Morning Grain Comments 05/05/21

PDF attached

 

Good
morning.

 

Higher
trade on ongoing Brazil weather concerns and sharply higher ICE Canadian canola futures. 

 

 

Weather

Next
7 days

 

World
Weather, Inc.

Yesterday
evening:

Concern
remains of dryness in Safrinha corn areas of Brazil. Dryness is likely across most of this area through at least the next ten days to two weeks, especially since the monsoon has ended, and this evening’s GFS model run was similar to the midday GFS model in
showing no relief in this part of the nation. Conditions in Argentina will continue to be very good for late season crops.

 

Beneficial
precipitation is still expected through Sunday from north-central Montana into South Dakota and southwestern North Dakota. This will help raise soil moisture in the southwest part of the most drought-stricken area of the Northern Plains; though, more precipitation
will still be needed. Central and northwestern North Dakota and far northeastern Montana will likely miss out from at least some of this notable precipitation. This evening’s GFS model run was then drier in a large portion of the Northern Plains May 12 – 14
and May 17 – 19. The midday GFS model may have been a little too wet in the region; however, this evening’s run was too dry and an in-between solution is most likely for these two potential precipitation events.

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

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
  StatsCan to issue wheat, canola, barley and durum stockpile data
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

 

Macro

Brazil
Industrial Production (Y/Y) Mar: 10.5% (est 8.5%; prev 0.4%)

Brazil
Industrial Production (M/M) Mar: -2.4% (est -3.0%; prev -0.7%)

US
ADP Employment Change Apr: 742K (est 850K; prevR 565K; prev 517K)

 

Corn

• CBOT
  July
  futures are near an 8-year high.  The bulk of the Brazil corn will enter the critical pollination stage next week but the weather forecast does not offer widespread rains, at least over the next week. 
  
• Brazil
  fob corn prices hit another record this week of over $305/ton.  Aug was about $20-$30 lower. 
  
• Funds
  on Tuesday bought an estimated net 23,000 corn contracts. 
• A
  Bloomberg poll looks for weekly US ethanol production to be up 9,000 barrels (949-965 range) from the previous week and stocks down 12,000 barrels to 19.724 million.
  

 

Export
developments.

• None
  reported

 

 

Soybeans

• The
  CBOT soybean complex is higher in part to higher corn and strong ICE Canadian canola prices.  July ICE canola was up more than $30 to 927.60.  Bull spreading was a feature in meal.  SBO is higher.  Palm oil futures were up slightly as traders are concerned
  with India palm demand amid Covid-19.  Reuters survey for April Malaysian palm stocks to be near unchanged. 
  
• China
  will be back from holiday Thursday.
• Offshore
  values were leading CBOT SBO 52 points lower and meal $0.30 short ton lower. 
  
• Rotterdam
  vegetable oil values were unchanged to down 20 euros and Rotterdam meal mostly 4-7 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 Tuesday bought an estimated net 9,000 soybean contracts, bought 4,000 soybean meal and bought 3,000 soybean oil. 
  

 

MPOB
SND poll April – Reuters Poll

April
stocks seen down 0.27% m/m at 1.44 mln T

Output
seen up 8.9% at 1.55 mln T – survey

Exports
seen up 10% at 1.3 mln T – survey

Malaysian
Palm Oil Board data due on May 10

 

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 is higher from higher corn futures that are near an 8-year high. Fresh global import developments are also supportive. 
  
• September
  Paris wheat was up 2.25 euros to 222.75 as of around 7:00 am CT. 
• Funds
  on Tuesday bought an estimated net 6,000 CBOT SRW wheat contracts.
• Argentina
  2021-22 wheat production was estimated at 19 million tons, a record, by the BA Grains Exchange.  That would be up from 17 million tons this year. 
  
• Ukraine
  grain exports fell 24 percent to 39 million tons since July 2020, including 15.13 million tons of wheat and 19.14 million tons of corn. 
  

 

USDA
Attaché  – India grain and feed

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_New%20Delhi_India_04-29-2021

 

Export
Developments.

• Tunisia
  bought 50,000 tons of optional origin animal feed barley at $278.15/ton c&f for shipment between June 5 and June 20 if from the Black Sea or slightly earlier if form Europe. 
  
• The
  Philippines bought about 60,000 tons of Australian wheat for June-July shipment at about $315 to $320 a ton c&f.  They were in for 185,000 tons. 
  
• Taiwan
  Flour Millers’ Association seeks 89,425 tons US milling wheat on May 13.  One consignment of 42,505 tons is sought for shipment between July 2 and July 16. A second consignment of 46,920 tons is sought for shipment between July 19 and Aug. 2.
• Thailand
  seeks up to 455,000 tons of animal feed wheat and 420,000 tons of feed barley on May 6 in seven consignments of 60,000 to 65,000 tons between June and December.  The barley should be sourced from Australia only for shipments between June and December.
• 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.