From: Terry Reilly
Sent: Saturday, February 29, 2020 9:25:50 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 02/28/20

PDF attached



a week.  USD tanked late on Friday after Powell commented on using tools to stabilize economy.  COVID-19: 83,000+ infected and 2,800+ deaths. 
countries report initial cases.   
Three trillion+ USD has been wiped out of the S&P since the panic started.  2870 is the 50 percent retracement level for the S&P. 




about Argentina drying and rising crop stress potentials over the next couple of weeks may begin influencing market trade in the next few days. There will also be some concern over flooding rain expected in Minas Gerais, Goias, Rio de Janeiro and northeastern
Sao Paulo, Brazil in the next seven days. Some important drying will occur in Brazil before the greater rain falls and that will support second season planting for a while.

Asia weather is quite varied. World Weather, Inc. anticipates an erratic shower and thunderstorm pattern in March supporting early season moisture boosting.

Winter grain and oilseed crops will remain favorably rated and poised for improvement in the spring in China and southeastern Europe. India’s winter crops are expected to perform well this year because of greater than usual rainfall.

U.S. early season planting may be slow this year in the Delta, southeastern states and possibly the lower Midwest because of frequent rain and wet field conditions.

Africa will get some timely rainfall along with parts of Australia to maintain a favorable outlook. With that said, eastern Australia production has not improved much, but some sorghum has received supplemental rainfall recently.

weather today may contribute a neutral to slightly bullish bias, but other world factors will likely have much more influence on the market



over rising temperatures in the central and southern U.S. Plains over the next couple of weeks might have the markets attention. Wheat will be brought out of dormancy in Texas and Oklahoma along with areas to the east. Cold weather may return later in March
and/or April to bring back freezes which could place some of the crop at risk. Crops in Kansas, Colorado and Nebraska will lose winter hardiness as well.

crops are going to come into spring favorably moist except in the far south where greater rain will be needed. Kazakhstan will also need greater rain in the spring while Ukraine already has enough moisture to induce some improvement just as soon as seasonal
warming arrives.

Africa’s outlook has not changed for Morocco, but there is a little more rain slated for Tunisia and northeastern Algeria over the next two weeks. No general soaking of rain is expected, but any showers would be welcome.

Australia’s winter small grains will not be planted prior to late April which leaves plenty of time for improved weather and soil conditions.

wetter outlook over the next two weeks will further ensure a significantly large-sized winter crop.

and Spain need to warm up along with Italy to support spring planting and to stimulate early season crop development when weather conditions improve.

Overall, weather today will likely maintain a mixed influence on market mentality.

World Weather Inc. and FI



Ag Calendar

FEB. 28:

  • ICE
    Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions ~1:30pm (~6:30pm London)
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • FranceAgriMer
    weekly update on crop conditions
  • U.S.
    agricultural prices paid, received, 3pm
    Olam, Golden Agri, Sime Darby


  • AmSpec,
    Intertek, SGS palm oil export data for Feb. 1-28
  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • EU
    weekly grain, oilseed import and export data
  • Ivory
    Coast cocoa arrivals
  • Australia
    commodity index, 12:30am
  • Brazil
    soybean, sugar, corn and coffee exports, 1:15pm
  • USDA
    soybean crush, DDGS output, corn for ethanol, 3pm
  • SGS
    palm oil export data for Feb. 1-29


  • Abares
    agriculture outlook conference, Canberra
  • Purdue
    Agriculture Sentiment, 9:30am
  • BRF
    4Q19 earnings before market open, Sao Paulo


  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • New
    Zealand commodity price
  • Abares
    agriculture outlook conference
  • CNGOIC’s
    monthly supply/demand report on China soy, corn


  • FAO
    world food price index, 4am
  • Day
    1 of three-Day National Coffee Association USA Annual Convention
  • Intertek
    Malaysia palm oil export data for March 1-5
  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, 8:30am
  • Port
    of Rouen data on French grain exports


  • ICE
    Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions ~1:30pm (~6:30pm London)
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • FranceAgriMer
    weekly update on crop conditions


  • China
    soybean import volume data

Bloomberg and FI






Managed money futures and options showed soybean meal net short a record 77,112 contracts. 

Traditional funds were just shy of the record net short for soybean meal






US$ Swaps pricing is hinting up to 4 interest US rate cuts by January 2021, according to analysts. 

US Wholesale Inventories M/M (JanP): -0.2% (est 0.1%, prev -0.2%)

US Personal Income (Jan): 0.6% (est 0.4%, prevR 0.1%)

US Personal Spending (Jan): 0.2% (est 0.3%, prevR 0.4%)

US PCE Deflator (M/M) Jan: 0.1% (est 0.2%, prev 0.3%)

PCE Deflator (Y/Y) Jan:1.7% (est 1.8%, prev 1.6%)

PCE Core Deflator (M/M) Jan: 0.1% (est 0.2%, prev 0.2%)

PCE Core Deflator (Y/Y) Jan:  1.6% (est 1.7%, prev 1.6%)

Canada Quarterly GDP Annualized Q4:  0.3% (est 0.3%, prevR 1.1%)

Canada Industrial Product Price (M/M) Jan: -0.3%  (prevR 0.3%)

US Chicago PMI Feb: 49.0 (est 46.0; prev 42.9)

Mexico and Several Other Countries Confirms First Case Of The Coronavirus




CBOT corn futures reached new contract lows on Friday. But
corn ended
0.25 cents
despite starting the day lower on coronavirus concerns.  Friday positioning led to bull spreading.  With Argentina suspending grain and oilseed registrations, bull traders bought the front end of the corn market.  July corn ended unchanged and September was
down 0.25 cent. 

Crude oil was down more than $2.00/barrel as of 1:31 CT.  

Funds bought an estimated net 5,000 corn contracts.

Farm Futures: US corn area 96.6 million. That would be second largest on record behind 2012. 

China’s NBS reported 2019 pork output fell 21.3 percent from a year earlier. 

CME raised hog futures trading limits to 3.75 cents per pound from 3.00 cents. 



None reported






Brazil’s currency made a new record low on Friday. 

Farm Futures: US soybean area 80.6 million acres

Russia’s AgMin proposed increasing sunflower export tariffs, already set at 6.5 percent or not less than 9.75 euros (about $10.60/ton).  Some speculate the tariff could go to 20 percent. 

China cash crush margins as of this morning, using our calculation, were 126 cents per bushel (133 previous day), compared to 159 cents a week ago and negative 12 cents around this time last year. 


Export Developments

  • Under
    the 24-hour system, USDA reported 135,000 tons of soybean meal was sold to the Philippines for 2019-20 delivery.




production of biodiesel

was 133 million gallons in December 2019, 6 million gallons higher than production in November 2019.

  • The
    use of soybean oil for biodiesel production is ending up much lower than what we estimated, and December’s figure raises the question whether or not US soybean oil consumption for biodiesel will reach USDA’s 8.200-billion-pound target.  The low use partially
    justifies why NOPA soybean oil stocks were unusually higher than expected at the end of December and January. 
  • There
    were a total of 1,023 million pounds of feedstocks used to produce biodiesel in December 2019, up from 979 million in November and down from 1283 million for December 2018. We had a working estimate of 1,244 million pounds for December 2019. 
  • Soybean
    oil remained the largest biodiesel feedstock during December 2019 with 541 million pounds consumed, above 527 million pounds above November and below 768 million pounds for December 2018.  FI was looking for 670 million pounds! 
  • Soybean
    oil use for the first three months of the crop-year average 52.5 percent of total feedstock versus 57.3 percent year earlier. 
  • We
    lowered our soybean for biodiesel production to 8.175 billion pounds, 25 million below USDA.  Our tentative 2019-20 US soybean oil carryout is 1.46 billion pounds, below 1.515 billion USDA February S&D.  This will change when NASS updates their US crush.






month rolling Malaysian palm oil chart

Reuters and FI




  • May
    soybeans are seen in a wide $8.65-$9.15 range.
  • May
    meal is seen in a $280 to $3.05 range
  • May
    soybean oil range is 28.00 to 31.00 (lowered 50)



US wheat traded the day mostly lower on coronavirus concerns. KC and MN ended higher on late short covering. 
Chicago was down 2.50 cents, May KC wheat finished 1.50 cents higher and May MN ended 3.50 cents higher. 

wheat down for the third session on coronavirus concerns.

USD was lower by 34 points as of 1:40 pm CT.

Funds sold an estimated net 3,000 Chicago wheat contracts. 

French wheat crop ratings were 64 percent as of Feb 24, down one point from the previous week but well below 85 percent year ago. 

May Paris wheat futures were down 2.25 at 184.25 euros.





  • China
    set 2020 rice support prices to between 2420-2600 yuan per ton, and capped purchases to 50 million tons (30 japonica and 20 Indica). 
  • Indonesia
    looks to import 130,000 tons of sugar from India. 


Updated 2/28/20

CBOT Chicago May wheat is seen in a $5.00-$5.60 range

CBOT KC May wheat is seen in a $4.35-$4.85 range

MN May wheat is seen in a $4.95-$5.50 range



Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International │190 S LaSalle St., Suite 410│Chicago, IL  60603

W: 312.604.1366

AIM: fi_treilly


Skype: fi.treilly


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