From: Terry Reilly
Sent: Saturday, March 21, 2020 12:53:47 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 03/20/20

PDF attached includes out updated China corn S&D


banks cut their interest rates 38 time this week.



  • Export
    sales of 756,000 metric tons of corn for delivery to China during the 2019/2020 marketing year;
  • Export
    sales of 340,000 metric tons of hard red winter wheat for delivery to China during the 2020/2021 marketing year and;
  • Export
    sales of 110,000 metric tons of soybeans for delivery to unknown destinations during the 2019/2020 marketing year.


Prospective Plantings and Grain Stocks reports are due out a week from Tuesday.  This afternoon we get monthly US Cattle on Feed. 


month rolling oil share

Reuters and FI




about U.S. Planting delays may remain even though less intensive rain is expected in the last days of March and early April. Concern will also be rising over second season corn production area soil moisture in the next two to three weeks and that too may excite
the market place a little bit.

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 second season corn production in Brazil. Argentina has had enough rain in central
and southern areas recently that many crops will finish out the growing season without much potential for additional losses even though the next two weeks look drier biased in several production areas and some warmer than usual weather will be returning.

Africa weather will be favorably mixed over the next two weeks supporting late season crop development. Limited rain in eastern Australia will be supportive of early season sorghum and other coarse grain and oilseed crop maturation and harvesting.

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.   

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.

is still needed throughout Southeast Asia, but mostly in the mainland areas and in some of the northern palm oil and coconut production areas of Indonesia. Peninsular Malaysia also needs a boost in rain.

weather today will maintain a mixed influence on market mentality, although a bullish move in the markets will likely continue for other reasons.



conditions around the world have not changed much and will not likely change much for a while. U.S. Plains crop areas have benefited from recent precipitation and will help improve early season crop development, although more rain is needed in the west central
parts of hard red winter wheat country. Some areas in the Midwest are too wet.

Prairies are expected to experience a good start to spring planting this year, but May could trend wetter.

winter crops are quite mixed with some areas in the northwest too wet. Improving soil moisture is expected in southeastern Europe which may improve crops after a poor environment for establishment last autumn. Lower area planted in parts of Europe will still
pull down production, but crops that did get planted may perform better than previously expected. That statement also pertains to Ukraine.

in Kazakhstan and eastern parts of Russia’s Southern Region will need to be closely monitored because much of the western CIS will experience a restricted precipitation pattern over the next two weeks.

has huge potential for crop improvements this spring. India’s winter crop will be very large as well. Rain is needed in southern Australia to improve planting potentials for late April through June.

Africa’s rain and that in Spain will help improve some crops, but Morocco’s production losses because of drought will not be fully recoverable.

weather today will likely contribute a mixed influence on market mentality with slight bullish bias.

World Weather Inc. and FI



Ag Calendar


  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • China
    grains, meat import data
  • Monthly
    MARS bulletin on crop conditions in Europe
  • EU
    weekly grain, oilseed import and export data
  • U.S.
    cold storage data for beef, pork, poultry, 3pm
  • Ivory
    Coast cocoa arrivals


  • U.S.
    poultry slaughter, 3pm
  • Brazil’s
    Unica may release sugar report (tentative)
    WH Group


  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • Malaysia’s
    palm oil export data for March 1-25
  • China
    Soy import numbers


  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
    Cocoa Association of Asia’s International Cocoa Conference and Dinner in Singapore postponed to June 1-2
  • International
    Grains Council monthly supply & demand report
  • Port
    of Rouen data on French grain exports
  • USDA
    hogs and pigs inventory, 3pm


  • ICE
    Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions ~2:30pm (~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

Bloomberg and FI



Commitment of Traders

trade missed the net fund corn position by more than 70,000 contracts and 40,000 for soybeans, largest miss in recent history. 



money went long soybean meal while the long position in soybean oil has been decimated.  There is still room for money mangers to add shorts in soybean oil. 




City wheat managed money

chart is offbeat from a two-year average.  Swap market participants are picking up the long side while money managers were caught short, at least by Tuesday evening, one reason for the rally in KC over Chicago wheat during the second half of the week. 








Ukraine’s economic minister upward revised their 2020 corn planting area to 5.4 million hectares from 5.2 million previously. 

China promised not to cut off the US poultry industry if bird flu was discovered in the US.  Instead, they will continue to leave the door open for imports in unaffected areas, if cases arise. 


on Feed

major surprises.  Inventories highest for month since 2008.  Marketings reach near 2011 level for month of Feb. 




  • Under
    the 24-hour announcement system, private exporters sold 756,000 tons of corn for delivery to China during the 2019/2020 marketing year. 





  • CBOT

    traded higher once again led by strength in US soybean meal and sharply higher China soybean meal futures (up 2.4% to 5-month high).  Good US soybean meal demand continues to support CBOT soybeans, and in a lighter sense soybean oil.  As of early Friday, there
    were no offers for Argentina soybean meal.  The slowdown in soybean meal shipments from Argentina has shifted business to the US.  Brazil has been out of the picture as a large soybean meal exporter due an increase in domestic use. 
  • Reuters
    late on Friday said a town in northern Rosario, Argentina, was blocking trucks from entering the town to prevent the spread or coronavirus.  But the local export chamber said shipments were unaffected.  The town of Timbues on Thursday announced the commercial,
    industrial and port activities would be suspended.  Reuters noted this port town is one of three in the Rosario area that combined, handles 80 percent of the Argentina primary and agriculture exports. 
  • Soybeans
    ended 19.25 higher in May and 16.75 cents higher in July.  Soybean meal basis the May was up $10.40.  July meal ended $8.40 higher. 
  • Soybean
    oil ended 11-16 points higher in part from a boost in Malaysian palm oil prices. 

  • Under
    the 24-hour announcement system, private exporters sold 110,000 tons of soybeans for delivery to unknown destinations during the 2019/2020 marketing year. 
  • Funds
    bought an estimate net 14,000 soybean contracts, bought 10,000 soybean meal and 2,000 soybean oil.  

China crush margins are good.  China cash crush margins as of Friday morning, using our calculation, were 168 cents per bushel (145 previous), and compares to 128 cents a week ago and negative 28 cents around
this time last year. 

  • China
    was thought to have bought 7-8 cargos of Argentina and Brazil soybeans for May-July 2020 and March 2021, according to AgriCensus.  The CNGOIC sees China importing more soybeans on a daily basis May onward.  March and April imports may be less than expected. 
    Inventories are expected to be tight through the end of April. 
  • Soybean
    harvesting in Brazil reached 70.1% through Friday, above an average of 68.5%, according to ARC Mercosul.  They estimated Mato Grosso soybean collection was complete while Parana was 80% done.  However, drought-stricken Rio Grande do Sul was only 20% complete.
  • Argentina
    is on holiday Monday and Tuesday for public holiday. 
  • IL
    workers will have to stay home as ordered by the governor.  Business will be usual as normal. 
  • US
    plantings are around the corner.  Iowa’s agriculture secretary on Friday said “the global coronavirus pandemic is not expected to disrupt or delay the U.S. spring planting season for farmers, even as the virus spreads across the United States”-Reuters.  In
    our opinion, that statement is very true.  Prior to the global epidemic, we already feared some small producers across the US would go under in 2020, as predicted by many economists, but overall total area is expected to end up near average for plantings. 

Cargo surveyor SGS reported month to date March 20 Malaysian palm exports at 644,421 tons, 99,809 tons below the same period a month ago or down 13.4%, and 281,010 tons below the same period a year ago or
down 30.4%.


Export Developments

  • Under
    the 24-hour announcement system, private exporters sold 110,000 tons of soybeans for delivery to unknown destinations during the 2019/2020 marketing year. 
  • Yesterday
    Egypt’s GASC bought a combined 120,000 tons of soybean and sunflower oil, 60,000 tons each. Reuters noted the soybean oil was bought at $634.50 a ton c&f and the sunflower oil at $676.50 a ton c&f. 

    • 30,000
      tons of soybean oil for arrival between May 20 and June 10.
    • 60,000
      tons of sunflower oil for arrival between May 20 and June 10.
    • 30,000
      tons of soyoil for arrival between June 15 and July 5.





Chicago May wheat ended 4.25 cents higher at $5.3925 KC May up 3.50 cents at $4.6900, and MN May up 1.25 cents at $5.2100. 

Good US demand and rumors China may have bought 2 US HRW wheat cargos off of TX supported prices Thursday into Friday morning.  Then on Friday USDA announced 340,000 tons
hard red winter wheat

was sold under the 24-hour announcement system. 

Funds bought an estimated net 5,000 Chicago wheat contracts.

Effective Sunday night, the maintenance margins for CBOT wheat increase 14 percent to $1,425 per contract from $1,250 for the May position.  All initial margin rates are 110 percent of these levels. 

Morocco will extend its suspension of soft wheat import duty until June 15.  They also suspended duties on durum and grains.  Not only they have restricted movement, Morocco is facing a significant rainfall
deficit, with rainfall down 40 percent from last year.  Morocco has about three months of supplies for grains. 

On March 21 the FOA warned panic buying may drive world food inflation, but mentioned the world has ample grain and oilseed supplies.  The inflation was tied to government lockdowns as countries issued large
tenders for milling wheat and flour.  Chicago wheat futures were up 6 percent for the week.  Meanwhile, some countries are suffering from the pandemic.  Some European countries closed borders meaning food imports have stopped.

France AgriMer reported spring barley sowings at 40 percent as of March 16, up 6 points from a week earlier, well below 97 percent last year. 

France’s soft wheat was rated 63% good/excellent, well below the 85% last year. 

Rain is need for the Black Sea region. 

SovEcon 2020 Russian wheat crop was projected at 129.8 million tons, up 8.6MMT from last year.  Wheat was estimated at 84.4 million tons, up 9.9 million tons. 

May Paris wheat settled up 2.00 euros, or 1.1%, at 191.25 euros ($203.59) a ton.

Saudi Arabia has 81,000 tons of flour in storage, the state grain buyer SAGO said.  They can produce 15,150 tons per of flour per day.






  • South
    Korea seeks 20,000 tons of rice from China on March 25 for arrival around July 30. 
  • South
    Korea seeks 73,664 tons of rice on March 25 for arrival around end of Sep. to Oct 31. 


Updated 3/18/20 – revised higher for KC and MN

CBOT Chicago May wheat is seen in a $4.85-$5.40 range

CBOT KC May wheat is seen in a $4.25-$4.80 range

MN May wheat is seen in a $4.90-$5.55 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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