From: Terry Reilly
Sent: Monday, March 02, 2020 8:29:36 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 03/02/20

PDF attached



China developed a vaccine for ASF. 

88,000+ infected and 3,300+ deaths

stopped 143 meal







  • Argentina
    will be left mostly dry and warm for at least another week and the rain advertised for next week does not look like it will be able to seriously replenish lost moisture

    • Temperatures
      will be well above average with highs in the middle 80s through the 90s and some periodic extremes near and above 100 Fahrenheit
    • The
      March weather outlook is offering some relief, but rainfall will continue lighter than usual, but not quite as dry as that of this coming 10 days
    • Argentina’s
      bottom line

      will become more threatening to late season crops as the ground continues to dry out and temperature heat up. Subsoil moisture will carry crops through the week ahead, but widespread rain will be needed a couple of times this month throughout the nation to
      ensure the best late season production potentials. Late double-cropped soybeans, late corn, sorghum and some peanuts will be vulnerable the dry spell. Production potential will be most threatened this weekend into next week except in those few areas that are
      already too dry like southern Buenos Aires and parts of San Luis.


  • Brazil’s
    south and some areas in center west will experience net drying for the next ten days with some forecast models suggesting two weeks of drier than usual weather

    • Temperatures
      will not be as anomalously warm as those in Argentina, but plenty of sunshine and seasonable temperatures will be quick to deplete topsoil moisture over the coming week

      • Subsoil
        moisture will remain favorable, however
    • The
      environment will be very good for summer late season soybean harvesting and second season corn and cotton planting


  • Brazil’s
    northern center south and far north will receive frequent rain in the coming week and sufficient rain next week to maintain wet field conditions

    • Greatest
      rainfall next ten days will be from Minas Gerais, far northeastern Sao Paulo and Rio de Janeiro to Tocantins, central and northern Goias and northeastern Mato Grosso

      • Rain
        totals of 3.00 to more than 5.00 inches will occur this week with amounts of 1.00 to 3.00 inches possible next week
      • Bahia,
        Espirito Santo and other far northeastern Brazil crop areas will be wetter than usual while little to no rain is expected in the west and south
    • Temperatures
      will be milder than usual in many areas this week, but the southwest will tend warmer this weekend into next week quickening evaporation and drying rates
    • The
      bottom line for Brazil

      will still be good this week, but increasing crop moisture stress is expected in parts of the west and south as the ground firms up additionally. Excellent field progress is expected in the drier areas, but moisture will soon be needed to support second season
      crops. Moisture returning to Bahia, Espirito Santo and areas northeast into Pernambuco will be good for late season crop development. Too much rain has been falling in Minas Gerais and a few immediate neighboring areas recently and this trend will continue.
      Water supply has been rising rapidly and reports of flooding are expected to rise as well. Sugarcane in Minas Gerais needs drier weather, coffee needs some sunshine and early season soybeans in Goias and Minas Gerais need to dry out for faster harvesting.

World Weather Inc. and FI


Ag Calendar


  • 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
    montly 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









Rice up 68 – see above








USD is down sharply

Money markets are pricing in a half-point cut in U.S. central bank interest rates




WTI crude oil was up more than $1.00 earlier this morning, which lent strength to the CBOT corn market.  A US economic stimulus is perceived as positive for commodity prices.  There is speculation the US will lower interest rates to stabilize
the economy, due to face company earning headwinds from logistical problems from coronavirus outbreaks. 

Lower USD could trigger long positioning.

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

Cure to ASF?

China is preparing for a potential locust invasion.  Last week they said ducks released could help combat the infestation.



None reported




  • U.S.
    production of biodiesel was 133 million gallons in December 2019, 6 million gallons higher than production in November 2019. 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.  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.

Offshore values are leading CBOT soybean oil 75 points higher and meal $3.40 higher.

Rotterdam vegetable oils this morning were down 2-3 euros for nearby soybean oil positions and up around 5 euros for rapeseed oil. Rotterdam meal when imported from SA were 3-7 euros higher. 


China cash crush margins as of this morning, using our calculation, were 134 cents per bushel, compared to 126 cents a week ago and negative 35 cents around this time last year. 

Cargo surveyor SGS reported February Malaysian palm exports at 1,075,954 tons, 144,530 tons below the same period a month ago or down 11.8%, and 155,904 tons below the same period a year ago or down 12.7%.

Malaysian palm markets:


Export Developments






US wheat is lower but don’t discount a two-sided trade on a sharply lower USD and speculation for a US interest rate cut. 

USD was lower by 58 points earlier this morning.

May Paris wheat futures were down 1.00 at 183.25 euros as of early this morning.

Ukraine’s 2020 wheat crop was estimated at 25.8 million tons bu UGA. 

Russia exported 28.6 million tons of grain from July1, 2019 to February 27, 2020, down from 35 million tons during the same period a year earlier. 



Export Developments.



  • None reported



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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