From: Terry Reilly
Sent: Wednesday, April 08, 2020 3:47:20 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 04/08/20

PDF attached includes US cash crush, snapshot for USDA, and US broiler charts. 


reported a stunning ethanol production number.  Brazil soybean shipments for the week ending April 4 were very robust.  USD was higher.  Sinograin is releasing 500,00 tons of soybeans to Cofco from state reserves.  SK bought more corn. 





temporary relief from dryness occurred in some Safrinha crop areas in Brazil in the past day or two and the region will continue to be closely monitored over the next few weeks for signs of dryness and crop stress. World Weather, Inc. anticipates at least
a part of the production region will struggle with dryness in May during reproduction, but it is unclear how widespread that will be. Some new production forecasts will be released from Brazil Thursday and the impact of drought in Rio Grande do Sul will be
further enlightened.

crop areas will experience net drying for a while, but crops will be fine during much of the period. A few areas may become a little dry, but it is late enough in the growing season to limit the impact on production.

Africa late season crop development will remain favorable and recent rain in eastern Australia along with that expected late this week will maintain better pre-planting soil conditions for canola. More rain will be needed throughout all of southern Australia
this month to more favorably moisten the soil for aggressive early season planting.

weather remains very good for late season crop maturation and early harvest progress.

recent cold has not seriously hurt rapeseed. Warming under way now will accelerate a decrease in soil moisture and raise the need for rain. However, aggressive spring planting will begin while soil moisture is still marginally favorable, and rain is absent.
Soil temperatures are rising quickly.

planting conditions may improve for another day or two in areas that are not bothered with wet soil or rainfall as very warm temperatures prevail. Field progress will advance most significantly from the lower Delta to northern Florida, Georgia and South Carolina
over the next couple of days and then rain this weekend will shut everything down again. South Texas rainfall recently has improved sorghum and corn conditions, but more is needed especially in the far south of Texas. Precipitation periodically in the eastern
Midwest and developing cool weather this weekend into next week will limit fieldwork.

is warming up briefly, but it too will be cooling off soon slowing the prospects for spring planting, but rapeseed development in the key production areas will advance favorably.

in Philippines is still struggling with dryness and significant rain is needed for its coconut and oil palm crops.

weather today may have a mixed influence on market mentality.

World Weather Inc. and FI



in the marketplace may continue today over a broad-based drying trend in Europe and limited soil moisture in Romania, southwestern Ukraine Kazakhstan and eastern parts of Russia’s Southern Region. However, a burst in spring planting is expected in Europe because
of warm and dry conditions. It will not be long before complaints about poor emergence conditions will evolve because of dryness.

wheat development will advance a little faster briefly because of warmer weather, but expected cooling will slow things down a bit for a while. India’s harvest will begin to increase. Australia’s recent rain in New South Wales and that expected through Thursday
will be good for lifting topsoil moisture, but follow up rain must occur prior to the planting season late this month. All of the remaining crop areas in southern Australia still need a general soaking of rain before planting begins in late April and May.

weather will remain very warm to hot today in the southern Plains east through the lower Midwest and southeastern states. Cooling is expected again during the late week and weekend with frost and freezes likely next week deep into the Plains and eventually
across the Midwest. Permanent crop damaging conditions are unlikely, but some vegetative development in the Plains may get burned back by frost and freezes. There will be some concern over permanent damage in southern Oklahoma, Texas and the Delta if temperatures
get much colder in the forecast.

Africa wheat is still rated favorably in Tunisia and northeastern Algeria and the same is true in Spain. Morocco crop production is still expected to be down for the year because of persistent dryness.

in the Middle East will be frequent from Turkey through northern Iran to Afghanistan. Some of these areas need to start drying out to protect grain quality.

weather today is expected to have a mixed influence on market mentality with a bullish bias.

World Weather Inc. and FI










Ag Calendar

April 8:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • CNGOIC’s
    monthly report on China soy, corn supply and demand
  • FranceAgriMer
    monthly cereals balance sheet

April 9:

  • USDA’s
    monthly World Agricultural Supply and Demand (Wasde) report, noon
  • China
    agriculture outlook committee (CASDE) to publish monthly supply/demand forecast for soybean, corn, cotton and sugar
  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
  • Port
    of Rouen data on French grain exports
  • Brazil
    crop agency Conab posts 7th report on 2019-20 soy, grains output

April 10:

  • ICE
    Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • FranceAgriMer
    weekly update on crop conditions
  • Malaysian
    Palm Oil Board to release stockpiles, export and production data
  • Cargo
    surveyors AmSpec and Interetk to release Malaysia’s April 1-10 palm oil export numbers

Bloomberg and FI













Corn ended moderately lower after EIA reported a huge decline in weekly ethanol production.  They started higher on SE Asian corn interest.  Funds sold an estimated net 5,000 corn contracts.  We will see if
corn prices can stabilize after the USDA report on Thursday.  Parana, Mato Grosso do Sul, Sao Paulo and Mato Grosso’s south may not see rain until April 14. 

US ethanol production plummeted 407,000 barrels per day to 672,000 since late February, a 38 percent drop. 

We lowered our con for ethanol use, for the 5th time in over two weeks, by 50 million bushels today to 4.950 billion, and compares to USDA’s March estimate of 5.425 billion and 5.378 billion during
2018-19.  This puts our 2019-20 US corn carryout to 2.020 billion bushels, compared to USDA’s 1.892 billion.  This assumes we see ethanol production start to rebound in May.  Next week will likely be down again for the daily ethanol rate, but we should be
nearing a bottom. 

Goldman Roll – second day. 

China plans to increase domestic of agriculture goods. 

  • The
    US court rejected a refiner waiver for EPA biofuel waivers. 
  • The
    EU awarded 480,000 tons of corn imports and 270,000 tons of barley under its duty-free quota program. 
  • Brazil
    farm lobby CAN mentioned Q1 Brazil corn exports fell 51 percent due to strong domestic demand. 
  • The
    USDA Broiler Report showed eggs set in the US up 2 percent from year ago (slowing) and chicks placed up slightly.  Cumulative placements from the week ending January 4, 2020 through April 4, 2020 for the United States were 2.67 billion. Cumulative placements
    were up 3 percent from the same period a year earlier.
  • More
    and more meat processing plants are closing due to coronavirus outbreaks.  At least three American meal workers have passed from the disease. 


ethanol production

declined a large 168,000 barrels per day to 672,000 for the week ending 4/3/2020 and is down 407,000 barrels per day over the past five weeks.  Going back to June 2010, when EIA started to record the weekly data, this week marks the lowest in recorded history,
and the largest weekly drop on record.  Ethanol stocks were a record 27.091 million barrels, up 1.374 million from the previous week and up 2.951 million barrels over the last two weeks.  We are wondering where they are storing the excess ethanol.  The decline
in ethanol production below 700,000 barrels signals the distress in the industry is larger than thought.  September 2019-April 3 combined ethanol production is running 1.1 percent below the comparable period year ago.  Annualized corn use at 672,000 barrels
per day implies 3.7 billion bushels of corn per year, down from 5.9 billion as of late February.  Ethanol blending into conventional gasoline fell to 86 percent from 86.3% previous week and compares to 92.3 percent 4-weeks ago. 





Export Developments

  • Taiwan’s
    MFIG bought 65,000 tons of corn at 149.70 cents over the September contract for June 3-June 22 shipment. 
  • Algeria
    seeks 40,000 tons of corn from Argentina for FH May shipment. 
  • South
    Korea’s FLC bought 58,000 tons of corn at $184.98/ton for arrival around September 10. 
  • South
    Korea’s MFG bought 138,000 tons of corn at $181.49/ton for arrival in October. 

  • Syria
    seeks 50,000 tons of soybean meal in a combo with 50,000 tons of corn on May 12.





  • CBOT
    and soybean meal ended mixed to near unchanged while soybean oil fell on positioning ahead of the USDA report due out on Friday.  We also get MPOB palm data.  News was very thin other than a record-breaking decline in corn for ethanol use, which we think spilled
    over into soybean oil amid expectations for a slowdown in biodiesel production.  With that said, the majority of diesel engines on US roads are trucks, which are moving at the moment. 
  • Robust
    Brazil soybean exports may continue to limit any short-term gains in the Brazil soybean market.  ANEC reported March 29 through April 4 Brazil soybean exports totaled 3.2 million tons, with no corn shipped.  51 boats were filled during that time. 
  • An
    Argentina export lineup shows nearly 450,000 tons of crude soybean oil to be shipped during the month of April, up from 205,000 tons reported for March and compares to 329,000 tons for April 2019. 
  • Water
    levels for Argentina’s Parana River are at a 11-year low, limiting the amount of grain and oilseed shipments. 

China was back in buying Brazilian soybeans for May and June shipment. We heard 3-4 cargoes trade on Tuesday. 

Brazil’s Abiove mentioned exports of soybeans to China are largely unaffected by Covid-19. 

Correction to palm oil comment.  Yesterday we mentioned 500,000 tons of palm fruit yields about 100,000 tons of palm oil.  This is not correct.  MPOA estimates about 189,000 tons of crude palm oil, which was
confirmed by Reuters. 


Export Developments

  • Syria
    seeks 50,000 tons of soybean meal in a combo with 50,000 tons of corn on May 12.



4/1/20 (top end of range lowered)





  • In
    an SBS import tender, Japan bought 26,000 tons of feed wheat and no barley for arrival in Japan by July 31. 
  • Lebanon
    maybe in soon for wheat.
  • Japan
    seeks 128,760 tons of food wheat from the US and Australia on Thursday. 

  • Turkey
    seeks 250,000 tons of wheat on April 10 for April 20 and May 15 shipment, optional origin. 
  • Ethiopia
    postponed their import tender for 400,000 tons of wheat until April 23.  They are in for 200,000 tons on April 15 in a separate tender. 




Updated 4/2/20

  • May Chicago $5.15 and $5.68 range
  • May KC $4.40 and $4.90 range
  • May MN $5.15 and $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


Skype: fi.treilly


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