From: Terry Reilly
Sent: Monday, March 16, 2020 1:55:55 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 03/16/20

PDF attached


Fed Slashes Rates to Near Zero, Deploys Massive Bond Buying of $700 bil. Macros continue to dictate prices.  Fundamentals will return eventually. 



Source: Reuters and FI




Today’s weather will not provide much bullish support except from the United States where a wet bias will continue in the Delta and Tennessee River Basin as well as in parts of central and eastern crop areas of Texas. South Texas moisture will be welcome and dry conditions in the far southeastern U.S. will support planting.

South America weather is still advertised to be mostly good for Argentina and southern Brazil, although the distribution of rain over the next two weeks will have much to say about late season corn, soybean and peanut production.

South Africa rainfall will be good for production and drier weather in eastern Australia will be supportive of early season sorghum and other coarse grain and oilseed crops.

India winter crops are still poised for excellence this year and drier weather will be needed in late March and especially April to protect crop quality.         

China’s winter weather has spring planting prospects looking very good. Rain in Spain and Portugal will improve spring planting potentials and support improved winter crop conditions.

Rain is still needed throughout Southeast Asia, but mostly in the mainland areas and in some of the northern palm oil and coconut production areas.

Overall, weather today will maintain a neutral to bearish bias to market mentality



Cooling in southern Russia and southern Ukraine this week will help keep winter crop development in check after recent greening. Winter crop development potential in China remains very good and India is experiencing some fine filling conditions after a successful reproductive season. Europe wheat small grain production potential continues to improve and rain in North Africa and Spain this week may bring on some improvement for those areas as well.

            U.S. winter crops are in mostly good shape, although drier weather is needed in the Delta. Southeastern Canada and the heart of the Midwest also need some drier weather.

            Overall, weather today will maintain a neutral to bearish bias to market mentality.

Source: World Weather Inc. and FI


Bloomberg Ag Calendar


  • USDA weekly corn, soybean, wheat export inspections, 11am
  • EU weekly grain, oilseed import and export data
  • AmSpec, Intertek, SGS release palm oil export data for March 1-15
  • Ivory Coast cocoa arrivals


  • New Zealand global dairy trade auction


  • EIA U.S. weekly ethanol inventories, production, 10:30am


  • USDA weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
  • Port of Rouen data on French grain exports
  • USDA total milk, red meat production, 3pm


  • 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
  • AmSpec, Intertek, SGS release palm oil export data for March 1-20
  • U.S. cattle on feed, 3pm

Source: Bloomberg and FI



USDA inspections versus Reuters trade range                                            

·         Wheat 449,653     versus  350000-600000           range

·         Corn    977,879     versus  700000-1050000         range

·         Soybeans  436,358 versus  400000-750000           range



                  REPORTED IN WEEK ENDING MAR 12, 2020

                            — METRIC TONS —


                                                   CURRENT     PREVIOUS 

             ———– WEEK ENDING ———-  MARKET YEAR  MARKET YEAR

  GRAIN      03/12/2020  03/05/2020  03/14/2019    TO DATE     TO DATE  


BARLEY          1,197           0         836       30,328        7,810 

CORN          977,879     829,865     812,893   15,925,674   27,424,573 

FLAXSEED            0           0          24          520          366 

MIXED               0           0           0            0            0 

OATS              100           0           0        2,866        2,093 

RYE                 0           0           0            0            0 

SORGHUM        76,528      58,711      25,519    1,536,916      974,701 

SOYBEANS      436,358     579,102     849,700   30,573,717   27,707,970 

SUNFLOWER           0           0           0            0            0 

WHEAT         449,653     459,400     385,143   19,722,391   18,011,087 

Total       1,941,715   1,927,078   2,074,115   67,792,412   74,128,600 









·         May corn ended 11 cents lower at $3.5475 and July down 10 cents to $3.5850. 

·         Corn futures were lower on weakness in WTI and other outside commodity markets.  The selloff pulled grain and oilseeds prices to fresh multi-month lows.  Reuters noted S&P 500 companies lost $2 trillion in market value after markets opened on Monday. 

·         Agriculture futures and options volume were heavy. 

·         USDA shuttered parts of its main Washington, DC, headquarters after an employee tested positive for coronavirus. 

·         USDA US corn export inspections as of March 12, 2020 were 977,879 tons, within a range of trade expectations, above 829,865 tons previous week and compares to 812,893 tons year ago. Major countries included Mexico for 334,507 tons, Japan for 260,907 tons, and Colombia for 91,972 tons.

·         Ukraine announced they will restrict food exports, travel, surgeries, and many other routine activities.  They are in talks with the IMF for financial support.  They are urging people to stay at home.  Ukraine later said they are not planning to ban grain exports, which could have trigged some additional pressure to corn futures. 

·         Germany reported a H5N8 bird flu case in Saxony. 

·         The EU imported 14.83 million tons of corn so far this year, down 14 percent from the same period  year ago. 


Export Developments

  • South Korea’s KFA indeed buy 52,000 tons of corn on Friday, at $202.90/ton c&f for arrival around August 5. 
  • South Korea’s MFG bought 132,000 tons of corn at $200.40/ton to $203.40/ton c&f for August 9 and July 21 arrival, respectively. 


Updated 3/9/20


Soybean complex.

·         USDA US soybean export inspections as of March 12, 2020 were 436,358 tons, low end of a range of trade expectations, below 579,102 tons previous week and compares to 849,700 tons year ago. Major countries included Egypt for 171,654 tons, Mexico for 52,042 tons, and Japan for 30,407 tons.

  • ITS reported Malaysian palm exports at 489,635 tons for the first 15 days of the month, down 9.6 percent from the same period a month ago. 
  • Poor palm oil demand from India was to blame for the decline in Malay palm exports. 
  • European rapeseed futures sank to their lowest level since FH 2015. 
  • EU soybean imports reached 9.93 million tons from July 2019  through March 15, 4 percent below last year.  EU rapeseed imported reached 4.42 million tons, a 40 percent increase from the same period year earlier.  That’s impressive.  Soybean meal imports were running at 12.5 million tons, a 2 percent increase from year earlier.  Palm oil imports are naturally running below last year’s pace at 3.93 million tons, a 14 percent decline. 


Oilseeds Export Developments

  • There were no 24-hour announcements this morning for the soybean complex. 



NOPA reported a record daily crush rate for the month of February.  At 5.73 million bushels per day, it was up from 5.71 in January.  The February crush came in at 166.3 million bushels, 1.3 million above a Reuter trade guess and well above 154.5 million in February 2019.  Note 2020 there was an extra day to account for.  Soybean oil stocks were reported at 1.922 billion pounds, 115 million below an average trade guess and below 2.013 billion reported for January 2020.  At the end of February, US soybean oil stocks are highest for that month since 2014.  Soybean oil stocks for the southeast were 20.1 million pounds, slightly below 20.3 million for February 2019.  SBO stocks for the southwest were 35.2 million pounds, above 32.9 million year earlier.  The soybean yield came in at 11.49 pounds per bushel, below 11.50 previous month, and well below 11.69 pounds year ago.  Soybean meal exports during February slipped to 763,000 short tons from 785,000 year earlier.  Cumulative October-February soybean meal exports are running slightly below last year’s pace.  This implies US domestic soybean meal demand is robust. 





Updated 3/16/20 – revised lower



·         US wheat traded lower in KC and Chicago following outside markets despite strong global import demand.  Mn closed up 3 cents basis the May position.  It was interesting to see MN wheat and rice as the two markets with a higher close. 

·         USDA US all-wheat export inspections as of March 12, 2020 were 449,653 tons, within a range of trade expectations, below 459,400 tons previous week and compares to 385,143 tons year ago. Major countries included Philippines for 66,080 tons, Japan for 57,807 tons, and Nigeria for 52,003 tons.

·         Russian grain exports increased over the past week due to a weak ruble, according to SovEcon.  Russian wheat with 12.5% protein content loaded from Black Sea ports fell by $6 to $207 a ton FOB at the end of last week, according to SovEcon via Reuters.

·         Egypt said they have enough wheat for 3.6 months in reserves.  They also said they have enough soybean oil to last until August 1. 

·         Germany’s 2020 wheat crop was seen at 22.79 million tons, according to the local farm coop, down 1.2 percent from last year.  The rapeseed crop was seen at 3.44 million tons, up 21.9 percent from last year. 

·         Coceral lowered their outlook for EU soft wheat production to 136.5 million tons from 137.9 million last month and compares to their forecast of 145.7 million tons for 2019. 

·         May Paris wheat futures were down 2.00 euros to 175.00 euros.

·         EU soft wheat exports reached 22.2 million tons since July, a staggering 72 percent increase from the same period a year ago.  We don’t see EU slowing down anytime soon. 


Export Developments.



  • South Korea seeks 73,664 tons of rice on March 25 for arrival around end of Sep. to Oct 31. 
  • Sugar prices hit a 6-month low. 


Updated 3/16/20

·        CBOT Chicago May wheat is seen in a $4.75-$5.40 range

·        CBOT KC May wheat is seen in a $4.00-$4.65 range

·        MN May wheat is seen in a $4.90-$5.35 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

ICE IM:  treilly1

Skype: fi.treilly


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