From: Terry Reilly
Sent: Wednesday, March 11, 2020 8:13:24 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 03/11/20

PDF attached


Mixed trade in ags. USD was down 37 earlier.  Stocks are selling off.  BOE lowered interest rates by 50 points to 1 percent. 





World Weather Inc. warned the SST outlook will help promote wet weather for the lower eastern Midwest and mid-south regions during the spring. 



over U.S. wet weather will begin to rise as an active weather pattern further delays early-season planting of corn in the Delta and interior southeastern parts of the nation.

fell significantly overnight in northwestern Argentina bolstering topsoil moisture for improved crop conditions after several weeks of dry and warm weather. The moisture will shift slowly to the north over the next few days and much of the dryness present
Tuesday will be replaced by a more favorable environment for crop development – at least in some of the more important production areas. Dryness in the north will be slower easing.

in southern Brazil will stress some crops and threaten a little production since there will not be much relief prior to early next week.

is plenty moist and poised for good early spring crop development, although moisture is needed in the southeast corner of the continent. Recent flooding and that expected to continue in northwestern Europe could damage a few crops in low-lying areas.

winter crops along with those in India will perform well this winter with good yields.

weather today will likely provide a mixed influence with a slight bearish bias due to rain in Argentina.



weather and that which is coming this week will continue to promote earlier than usual winter crop development in the U.S. southern Plains, Delta and southeastern states as well as southern Russia, southern Ukraine and parts of China. Moisture in Canada’s
Prairies will improve spring planting conditions when seasonal warming begins. North Africa will continue struggling for moisture in Morocco and northwestern Algeria as well as in parts of Spain this week, but some rain may fall this weekend into next week
to offer a little relief.

Overall weather today will likely provide a neutral to bearish bias to market mentality.

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI



Ag Calendar


  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • Santander
    and Datagro hold sugar, ethanol conference, Sao Paulo
  • FranceAgriMer
    monthly cereals balance sheet


  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
  • Port
    of Rouen data on French grain exports
  • New
    Zealand food prices, 5:45pm


  • 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

Bloomberg and FI






Bank of England cut interest rates by 50 points. 

World Meteorological Organization’s annual State of the Global Climate report said a projected 22m people were displaced by extreme weather in 2019, up from 17.2m the year before (Bloomberg). 

New York Fed Accepts All $132.38 BLn Of Bids At Overnight Repo Operation

US CPI (M/M) Feb 0.1% (est 0.0%; prev 0.1%)

CPI (Y/Y) Feb 2.3% (est 2.2%; prev 2.5%)

Core CPI (M/M) Feb 0.2% (est 0.2%; prev 0.2%)

Core CPI (Y/Y) Feb 2.4% (est 2.3%; prev 2.3%)

US Real Weekly Earnings (M/M) Feb 0.5% (prev 0.1%)

Real Average Weekly Earnings (Y/Y) Feb 0.7% (prev 0.0%)

Real Average Hourly Earnings (Y/Y) Feb 0.6% (prevR 0.5%; prev 0.6%)

Canadian Capacity Utilization Q4 81.2% (est 81.1%; prevR 81.5%; prev 81.7%)US recession odds increased to 53 percent, highest since 2009 (Bloomberg). 

UK Sees 2020 GDP Growth 1.1% Vs 1.4% Previously

-Sees 2021 GDP Growth 1.8% Vs 1.6% Forecast Previously 





Grains are lower and soybean complex higher. Corn was off 1.75 at the electronic close.  US export developments remain light. 

Argentina will see rain in its central growing region which will be beneficial for late planted corn. 

USDA estimated US corn stocks at 1.892 billion bushels, unchanged from the previous month. 

Yesterday USDA increased its estimate for the SAf corn crop from 14.5MMT to 16 million tons. Good rains fell across the western growing areas during January and February. 

(Bloomberg) — U.S. seaports could see a slowdown of as much as 20% in February, March and much of April as the coronavirus outbreak cancels cargo sailings and some dock and warehouse workers are sent home. 

Brazil’s Parana is 84 percent complete with second crop corn plantings.  Ideal plantings occur before March 10, the pivot date for yield vulnerability. 

US ethanol production and stocks will be out later and with the recent decline in crush margins, some are looking for a decline in production. 

Rabobank estimates China pork production to decline 15-20 percent in 2020 after falling 20 percent in 2019.  We thought pig numbers were increasing in early 2020. 






  • CBOT
    meal and oil are all mostly higher on technical buying.  May soybeans may still have a chance over the next week to fill its recent down gap.  A combined 194k current and new crop soybean sale was announced today by USDA. 
  • Third
    day out of four for the Argentina producer strike. 
  • Brazil’s
    soybean basis popped overnight. We are hearing there was a lot of business done yesterday for June/July. 

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Rotterdam vegetable oils this morning were down 4 euros for nearby soybean oil positions and up around 2 euros for rapeseed oil. Rotterdam meal when imported from SA were unchanged. 


China cash crush margins as of this morning, using our calculation, were 137 cents per bushel (135 previous), and compares to 136 cents a week ago and negative 21 cents around this time last year. 

Malaysia would like to resolve the palm oil trade spat with India within a month. 

Malaysian palm markets:
stocks at the end of Feb are lowest since June 2017. 

USDA’s Chief Economist Robert Johansson in a testimony to the House said China’s purchases of U.S. agriculture products will be “shifted out further.” (Bloomberg)

  • USDA
    made little changes to their updated S&D estimate for US corn, soybeans and wheat.  They adjusted soybean oil for biodiesel use lower by 200 million pounds and took exports up by the same amount.  They lowered the price target for soybeans by 5 cents to 8.70/bu
    (farm price) and took SBO down to 31.50 cents from 33.50 last month.  The two cent move for SBO is hefty, in our opinion, but might reflect the recent moves in WTI crude oil.  SBM price target was left unchanged from the previous month at $305/short ton. 
  • Argentina
    is expected to get some rain relief over the next few days bias the central growing regions.  Rosario Grain Exchange has a 55 million ton estimate for soybeans and 50-million-ton corn crop. 
  • Argentina
    soybean crusher Vicentin may resume crush operations during second half March.  They offered a 50% of the value owed to producers. It’s unknown if any producers took that option. 


Export Developments



Mostly lower trade in US wheat. The southern Great Plains wheat development is expected to increase over the next few weeks and that area has an opportunity for rain one time or another over the next two weeks. 
The US southern Plains need moisture.  The Northern Great Plains may see rain on and off over the next two weeks, but temperatures will be mainly below normal. 

The trade is awaiting results for several wheat import tenders. 

FranceAgriMer estimated soft wheat exports outside the EU to 12.7MMT from 12.6MMT previously. 

May Paris wheat futures were down 0.75 euro as of early this morning.

USDA estimated US wheat stocks at 940 million bushels, unchanged from the previous month. 



  • Tunisia bought 125,000 tons of milling wheat.  Lowest offer was thought to be $206.74/ton
  • Results awaited: Tunisia is also in for 75,000 tons of barley. 
  • Japan in an SBS import tender received no offers for 120,000 tons of feed wheat and 200,000
    tons of feed barley for arrival in Japan by Aug 27. 
  • Japan in a new SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of feed
    barley for arrival in Japan by Aug 27, on March 18. 
  • Results awaited: Syria seeks 200,000 tons of wheat from Russia, Bulgaria, or Romania, on
    March 11. 
  • Results awaited: Algeria seeks 50,000 tons of milling wheat, optional origin, on March 11,
    valid until March 12, for April and/or May shipment depending on origin. 
  • Results awaited: Jordan seeks 120,000 tons of feed barley on March 11.  June-FH Aug. shipment. 
  • Results awaited: Turkey seeks 305,000 tons of wheat on March 11 for late March and/or early
  • Syria seeks 200,000 tons of wheat from Russia by March 23.  No purchase was made that closed
    on February 17. 
  • Ethiopia seeks 400,000 tons of wheat on April 7.  IN a separate tender, they seek 200,000 tons
    of wheat on April 1.  Both are optional origin. 



  • Outside markets remain primary focus
  • Malaysia imported 324,405 tons of sugar from India so far in 2020, well up from 110,000 tons and compares to the 2008 record of 313,406 tons.  Malaysia imported 1.95
    million tons of raw sugar in 2019.


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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