From: Terry Reilly
Sent: Thursday, March 26, 2020 8:13:15 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 03/26/20

PDF attached


was extremely weaker ahead of US jobless claims.

Initial Jobless Claims Mar-21: 3282K (exp 1700K; prev 281K)

Continuing Claims Mar-14: 1803K (exp 1791K; prev 1701K)






good mix of weather is still anticipated for most of Brazil and Argentina crop areas over the next two weeks resulting in further support for good yields and crop quality. Production losses have occurred in Rio Grande do Sul this year along with some of the
early season corn and sunseed crop in Argentina because of dryness. The bulk of other crops have done favorably in both countries.

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. Kazakhstan and Russia’s Southern Region
will stay too dry for at least another week with some rain potential rising in the April 3-9 period.

Recent North Africa rain has been good for late developing wheat and barley, but much of the lost production in Morocco cannot be reversed. Additional rain is expected over the next several days.

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 northern Africa.

U.S. 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 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









export sales

were good all around, including 100k+ for sorghum.  China accounted for a good chunk for many commodities (see text after the wheat section).  Table summaries below. 






Initial Jobless Claims Mar-21: 3282K (exp 1700K; prev 281K)

Continuing Claims Mar-14: 1803K (exp 1791K; prev 1701K)

GDP Annualised (Q/Q) Q4 T: 2.1% (exp 2.1%; prev 2.1%)

Personal Consumption Q4 T: 1.8% (exp 1.7%; prev 1.7%)

GDP Price Index Q4 T: 1.3% (exp 1.3%; prev 1.3%)

Core PCE (Q/Q) Q4 T: 1.3% (exp 1.2%; prev 1.2%)

Wholesale Inventories (M/M) Feb P: -0.2% (exp -0.2%; R prev -0.3%)

Retail Inventories (M/M) Feb: -0.3% (exp -0.1%; prev 0.0%)




  • Corn
    prices are lower with a bias on bear spreading amid lack of fresh news.  Another biofuel group in the US announced cutbacks and closures for their plant facilities.  Ethanol margins are poor.
  • USDA
    export sales for corn exceeded 1.8 million tons, in large part to sales to China of 756,000 tons and Japan for 333,000 tons-91.2k switched), but the jump in outstanding sales does little to improve total crop-year commitments when comparing to the three previous
    years.  See China and total US commitment charts below the corn export development section.   
  • The
    near-term weather outlook calls for limited rainfall through mid-next week for the southeast but for precipitation to return again April 1-7 that may end up above normal. 
  • The
    US Senate coronavirus stimulus Bill adds $14 billion to the USDA CCC program, replenishes $30 billion trade aid for US producers (initiated last year) and provides $9.5 billion for producers impacted by the virus, including meat, dairy, and farmer markets. 

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

US 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.  

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.








  • CBOT

    lower led by bear spreading despite a few spikes in May soybean meal after 6:15 am CT.  Volume in the May meal remained light, but the contract jumped about $3.40 as of 7:29 am.  This rallied crush margins.  Soybean oil remained on the defensive from lower
    energy prices. 

  • USDA
    export sales for soybeans were 904,300 tons, well above the previous week and included 199,300 tons for China and 406,100 tons for unknown.  Soybean oil sales were 55,900 tons, a marketing year high.  Soybean meal sales of 251,200 tons included the usual suspects. 
  • China
    was thought to have bought a combined 500,000 tons of soybeans from Brazil and US last week on improving Chinese crush margins, according to CNGOIC.  Margins slipped a thought from yesterday on our analysis but are high enough to promote soybean buying. 
    Reuters noted crush margins in Rizhao, Shandong province, rose over the past two weeks to 360 yuan ($50.73) a ton, highest in 8 years.
  • China
    has been a good new crop buyer of Brazilian soybeans.  We think 2021 commitments for this time of year could be a record.  Several traders are eying the November 2020/March 2021 soybean spread that inverted to 27.25 cents, November premium on March 23, from
    2 cents March 16.  It’s current around 19 cents, November premium this morning.  Many are hoping that China will come in and buy US soybeans this fall.  Traders should look at the inverse in the November 2020/January 2021 spread.  We think it can move to a
    3-4 cent carry, assuming good weather (put a tight stop on it with unknown market conditions).  Brazil will not be online until February or March anyway. 
  • Argentina
    looks a little drier for the next ten days.  Brazil will be wet for many winter crop locations by the end of the end of this weekend. 
  • Argentina
    producers that recently harvested corn and soybeans have been reserve sellers despite the government issuing a resolution late on Wednesday allowing trucks to roam freely.  Many municipalities had stopped or controlled truck movement amid coronavirus. 
  • Offshore
    values are leading CBOT soybean oil 12 points higher and meal $2.30 lower.

Rotterdam vegetable oils this morning were about 22 euros lower for soybean oil from this time yesterday morning and rapeseed oil was up 25 euros from earlier this week.  Rotterdam meal when imported from
SA were 7-33 euros lower, bias Argentina.

China issued 6,400 force majeure certificates to help companies cope with coronavirus problems.


China cash crush margins as of this morning, using our calculation, were 177 cents per bushel (181 previous), and compares to 168 cents a week ago and negative 60 cents around this time last year. 

Indonesia January palm exports were 2.39 million tons, a 32 percent decrease from January 2019 and down from 3.72 million tons in December.

Malaysian palm markets:
four day winning streak in part to lower energy futures.

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


Refinitiv and FI


Export Developments