From: Terry Reilly
Sent: Monday, March 23, 2020 8:16:41 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 03/23/20

PDF attached




Feds announced a major expansion of lending facilities. 
banks cut their interest rates 38 time last week.
Prospective Plantings and Grain Stocks reports are due out a week from Tuesday. 





is expecting to receive some important rainfall at timely intervals to help minimize the return of crop moisture stress. Brazil, however, continues to be on a watch list for dryness in some southern second season corn production areas. Dryness is not an issue
today, but it could evolve in the next few weeks without greater rain and this may catch the attention of the market place this week depending on how each computer forecast model run handles the situation.

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.

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 will 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 bullish 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.

Africa rain during the weekend was good for late developing wheat and barley, but much of the lost production in Morocco because of dryness was permanent.

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.

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


World Weather Inc. and FI


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







Canadian Wholesale Trade Sales (M/M) Jan: 1.8% (prev 0.9%)




Late last week it was rumored China bought more US corn than what showed up in Friday’s 24-hour announcement system. 

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

Germany confirmed a case of H5N8 bird flu on a farm in the northern state of Lower Saxony, Germany. 

Cattle on Feed inventories were highest for month since 2008.  Marketings reach near 2011 level for month of Feb. 

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. 







  • CBOT

    9.50-14.75 cents higher led by meal (+$7.50 May) amid problems in Argentina and good US meal demand. Soybean oil is higher. CBOT crush is sitting at 140.50 basis the May.
  • Argentina
    is on holiday Monday and Tuesday for public holiday. 
  • The
    SMK/SMN traded as high as +11.80 and is now trading in the 10.70 area.
  • Last
    we heard Il SBO basis was 25 over, east 50 over, west 25 under and Gulf 175 over fob.  Brazil degummed 90 over and Argentina nominally 80 over. 
  • Canada’s
    Agriculture and Agri-Food estimates 2020 canola production at 18.5 million tons, below 18.649 million ton in 2019-20.  This would be the 4th consecutive year of a decline in production after a record was achieved in 2017. 
  • Ukraine
    sunflower oil exports so far for 2019-20 were up 72 percent to 2.878 million tons (Aug-Sep) from 1.671 million tons during the same period a year ago. 
  • Offshore
    values are leading CBOT soybean oil 46 points lower and meal $1.90 higher.

Rotterdam vegetable oils this morning were mixed from the previous day.  Rotterdam meal when imported from SA were up 8-19 euros. 

Chinese crushers only operated at 39.8% of capacity last week, according to Cofeed.  China crushed around 1.387 million tons of soybeans last week, down 5.7% from the previous week, and the lowest since 2016. 

China:  Meal high limit higher on Monday. 

China cash crush margins as of this morning, using our calculation, were 194 cents per bushel, and compares to 168 cents a week ago and negative 60 cents around this time last year. 

Malaysian palm markets:

  • 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.
  • 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. 


Export Developments



US wheat is mostly higher on strong global demand for milling wheat and feed grains.  Chicago wheat is higher for the 5th consecutive session. 

Over the weekend Turkey and Algeria announced wheat import tenders. 

Russia’s Prime Minister said Russia was considering limiting some food and medicine exports. 

May Paris wheat was up 4.50 euros at 195.75 euros a ton.

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. 

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.

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. 

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.





  • Mauritius bought 6,000 tons of rice from India and Pakistan at an average price of $394/ton c&f. 
  • 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. 


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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