From: Terry Reilly
Sent: Wednesday, March 25, 2020 2:31:55 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 03/25/20

PDF attached




from Buenos Aires to Cordoba and San Luis overnight occurred as advertised and has ensured abundant moisture for late season grain and oilseed crops throughout the region. Drier biased conditions are expected to prevail farther north for a while, but the most
important production areas in the nation are poised to finish out the growing season favorably, despite drying in early April.

soil moisture is still quite favorable for maintaining good crop conditions. There is need for greater rain in the south and some timely moisture will occur to ensure there is no serious stress to crops outside of Rio Grande do Sul where production cuts have
already occurred.

planting delays are expected to prevail through the first week of April due to wet field conditions and additional precipitation in the Delta and Tennessee River Basin with areas that are usually planted in early April also being impacted. Less rain and some
warming will occur for a little while in early April, but how significant that drying is remains to be seen.

India, China and Australia weather is mostly good for this time of year. Rain will have to fall in southern Australia by May to support autumn canola planting.

in southern Europe has been and will continue to be good for early corn planting in Spain, Portugal, Italy and eventually in the southern Balkan Countries, although warming is needed.

Asia oil palm production areas are favorably moist in many areas, but greater rain is needed in parts of the northern and eastern Philippines and in northern Sumatra as well as the Malay Peninsula.

Africa summer crops are developing favorably.

weather today will likely provide a mixed influence on market mentality with a slight bearish bias.



crop development prospects are favorable in portions of Europe, the CIS, India and China, although some of these regions did not experience good weather for establishment last autumn and it will be important that ideal weather and soil conditions are present
this spring to induce improvement prior to reproduction. More moisture is needed in the southern CIS, Romania and parts of Spain while less rain is needed to the north and that is exactly what should evolve this week, although Kazakhstan and Russia’s Southern
Region will stay too dry.

North Africa rain was good for late developing wheat and barley, but much of the lost production in Morocco because of dryness was permanent. Additional rain is expected over the next few days with drying this weekend.

Australia needs rain to bolster soil moisture prior to planting in late April and May, but there is plenty of time for weather changes to evolve. Some rain is expected in New South Wales next week, but confidence is low on its significance.

Middle East wheat areas will soon need drier weather to support grain maturation and the same will be true in Morocco.

small grain production areas are poised to develop favorably in this early spring, but greater moisture is needed in the west-central high Plains and less rain in the Midwest and Delta. Warming is needed too in some areas.

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

World Weather Inc. and FI


SA Week 1 Accum Precipitation (mm) Forecast


Ag Calendar


  • 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



US Crude Oil Futures Settle At $24.49/Bbl, Up $0.48 Or 2.00%

US Durable Goods Orders Feb P: 1.2% (exp -1.0%; prev -0.2%)



China looks to sell 20,000 tons of pork from reserves on March 27. 

South Africa’s Crop Estimates Committee (CEC) in its second crop production report of the season, estimated corn at 14.809 million tons, compared with 11.275 million tons last year.  It included 8.523 million
tons of white and 6.286 million tons of yellow.  A Reuters survey was at 14.959 million tons (8.672 white and 6.287 yellow).

The weekly USDA Broiler Report showed eggs set up 3 percent and chicks placed up 4 percent.  Cumulative placements from the week ending January 4, 2020 through March 21, 2020 for the United States were 2.29
billion. Cumulative placements were up 4 percent from the same period a year earlier.



production of ethanol declined 30,000 barrels from the previous week to 1.005 million, and stocks fell 458,000 barrels.  The decline in production was much less than trade expectations.  Bloomberg estimate was expecting a 56,000-barrel declined and stocks
to decrease 59,000 barrels. Next week look for a greater decrease in weekly ethanol production as plants shutter operations.  

 (Bloomberg) — The Trump admin. did not appeal a federal court ruling that limits its power to exempt oil refineries from biofuel-blending requirements, a decision that could mean only a handful of the facilities
are eligible for those valuable waivers in the future.

CBOT ethanol margins were increased





  • Under
    the 24-hour reporting system, US exporters sold 138,000 tons of corn to unknown for 2019-20 delivery. 
  • South
    Korea’s MFG seeks 66,000 tons of corn on Wed. for arrival around October 10.








  • CBOT

    under considerable pressure basis the nearby positions while the back months ended higher.  The soybean meal spreads collapsed for the K/N and N/Q positions.  K/N meal went out at $3.40, down $4.10 from yesterday.  There was talk of soybean selling out of
    Brazil and hedging of meal out of Argentina.  SMK-SMN spread below…

  • Soybean
    oil ended higher on product spreading and higher WTI.  Price gains were limited on eroding global demand. 
  • India
    will go on lockdown for 21 days. They have 1.3 billion people.  Indian edible oil processors are scrambling to meet demand, according to Solvent Extractors’ Association of India. They estimate India’s edible oil imports could decline by 500,000 tons to 700,000
    tons in 2019-20 from 14.9 million tons a year earlier on demand destruction. November-October 2019-20 consumption could end up flat from last season at 23 million tons.  India is not the only country to scale back on vegetable oil imports.  Yesterday China’s
    National Bureau of Statistics reported vegetable oil imports for the first two months of 2020 down 12 percent to 1.22 million tons.  Palm oil imports were 610,000 tons, down 28 percent. 
  • China
    was quiet despite healthy crush margins.  They may have bought one cargo for May shipment on Wednesday and one shipment for 2021. 
  • China
    imports of US soybeans for the first two months of 2020 were 6.1 million tons, up significantly from year ago period.  China imported 5.1 million tons during the Jan-Feb period, down 26 percent from 6.9 million tons a year ago.  Soybean imports from Argentina
    amounted to 1.8 million tons, about unchanged from a year earlier. 
  • Brazil’s
    town of Canarana will amend its coronavirus lockdown by allowing grain traders to ship good out. 
  • South
    America looks a little drier for the next ten days.  Rain is forecast for Cordoba, southern Santa Fe, northern Buenos Aires today. Amounts will be light.  Brazil will be wet for many winter crop locations by the end of the end of this weekend. 
  • Argentina
    was back from holiday.  There was producer selling.  Earlier soybean supplies were labeled scarce according to the export chamber.  More than 70 municipalities throughout the country are enforcing anti-coronavirus measures. 

Russia’s vegetable oil lobby group is looking to limit sunflower seed exports for 6 months. 

The significant slowdown in EU rapeseed oil use for biodiesel production has caused unquoted imported values for Rotterdam.  Meanwhile, Dutch prices have fallen to a 5-year low, according to AgriCensus. 

The USDA Attaché estimated Indonesia palm oil production to reach 43.5 million tons in 2020-21, up from 42.5 million tons in 2019-20 and 41.5 million tons in 2018-19.  Exports are expected to increase to 28.5
million tons from 27.0 million tons for 2019-20. 

  • Palm
    oil plantations in Malaysia are starting to slow production as coronavirus is affecting operations. 

ITS reported Malaysian palm oil exports during the March 1-25 period at 838,793 tons, down 13.6 percent from the same period last month.  AmSpec reported 866,270 tons of palm oil shipped, off 12 percent from
previous month. 

Malaysian palm
traded higher for the fourth consecutive day. 


Export Developments

  • Under
    the 24-hour reporting system, US exporters sold 20,000 tons of soybean oil to South Korea for 2019-20 delivery. 







spreads widened by a large  amount today. The WK0/WN0 spread widened to 12.25 cents, a 6.0 cent move,
on a shortage of old crop high quality soft wheat (upper ECB).  Chicago wheat registrations are at only 11 contracts.   North American flour millers are going full out.  Be careful if you’re long the Chicago May/July wheat spread as HRW
wheat may find its way into the upper Midwestern region. 

  • Chicago
    May wheat settled 18.50 cents higher at $5.80 and July up 12.50 cents to $5.6775.
  • KC
    wheat ended 10.25 and 9.50 cents higher, for May and July, respectively.  May MN was up 3.50 cents from the Algeria import tender. Algeria bought 240,000 tons of milling wheat.  MFG passed on feed wheat due to high prices.
  • Global
    wheat flour demand is through the roof.  Kazakhstan recently banned flour exports. They are one of the largest exporters of flour. 
  • US
    southern Plains will see rain through Saturday and HRW wheat country is wetter for the 6-10 day and 11-15 day. 
  • Iraq’s
    trade ministry mentioned they need a million tons of wheat and 250,000 tons of rice to satisfy nearby domestic consumption. 

May Paris wheat ended 3.00 higher at 197.75 euros a ton.



May wheat/corn spread

Reuters and FI





  • Vietnam
    has no plans to cut off rice exports as coronavirus spreads. 
  • 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 3/23/20

  • CBOT Chicago May wheat is seen in a $5.20-$5.80 range

CBOT KC May wheat is seen in a $4.45-$5.25 range

MN May wheat is seen in a $5.10-$5.60 range



Terry Reilly

Senior Commodity Analyst C 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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