From: Terry Reilly
Sent: Wednesday, April 08, 2020 8:27:39 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 04/08/20

PDF attached

 

Morning
USD is higher.  Sinograin is releasing 500,00 tons of soybeans to Cofco from state reserves.  SK bought more corn.

 

 

Weather

World
Weather’s take on the 06z run this morning:

Overall,
the GFS model run this morning seemed to bring about quite a few changes that were needed. The details of the outlook are probably not nearly as important as the general theme of weather and that theme maintains a cool northwesterly flow aloft across the central
and eastern United States for the next ten days and possibly a little longer beginning at the end of this week. The northwesterly flow will bring brief periods of rain and some snow through the Plains, Midwest, Delta and southeastern states. Some planting
progress will be possible, but it will be a challenge because of periodic light precipitation and cool temperatures which may disfavor rapid drying and keep soil temperatures a little low. Temperatures are still advertised well below average in the Plains
next week and below average in the Midwest, Delta and eastern states as well. A close watch on extreme lows will be needed for a few of the more advanced wheat crops and flowering canola in the southern Plains and Delta, but hard red winter wheat areas and
most soft wheat areas in the Midwest should not be seriously harmed by the cold.

 

The
general theme of weather has not changed great today, although the GFS is beginning to back off on some of the southern Brazil precipitation that has been advertised recently. This change is expected and needed. The region will not be completely dry, but an
erratic rainfall pattern is most likely and will lead to some concern about second season corn development in late April and especially May for at least some of the production region. Argentina weather will remain supportive of late season crop development
and fieldwork.

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS:
 

Some
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.

            Argentina
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.

            South
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.

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

            Europe’s
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.

            U.S.
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.

            China
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.

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

            Overall,
weather today may have a mixed influence on market mentality.

Source:
World Weather Inc. and FI

 

MARKET
WEATHER MENTALITY FOR WHEAT:

Concern
in the market place 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.

China
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.

            U.S.
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.

            North
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.

            Wheat
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.

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

Source:
World Weather Inc. and FI

 

Seven-day
outlook:

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

 

 

 

Bloomberg
Ag Calendar

WEDNESDAY,
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

THURSDAY,
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

FRIDAY,
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

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

Macros

Covid-19
cases are starting to slow in NYC

 

 

 

Corn.

·        
Corn futures are higher for the second day on global import demand and bottom picking. 

·        
Goldman Roll – second day. 

·        
China plans to increase domestic of agriculture goods. 

  • A
    Bloomberg poll looks for weekly US ethanol production to be down 62,000 at 930,000 barrels (700-825 range) from the previous week and stocks to increase 605,000 barrels to 26.322 million.   We are looking for US weekly ethanol production to declined 55,000
    barrels to 840,000 barrels and stocks to increase 450,000 barrels to a record 25.717 million. 
  • The
    US court rejected a refiner waiver for EPA biofuel waivers. 

 

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.

 

 

Soybean
complex
.

  • CBOT
    soybean
    s
    are higher along with soybean meal. Soybean oil is lower on product spreading. 

·        
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. 

·        
Offshore values are leading CBOT soybean oil 46 points lower and meal $1.20 higher. 

·        
Rotterdam vegetable oils this morning  were unchanged to 2 euros higher and Rotterdam meal when imported from SA were mostly 1-7 euros lower. 

·        
China: 

·        
China cash crush margins as of this morning, using our calculation, were 207 cents per bushel (203 previous session) and compares to 207 cents a week ago and negative 62 cents around this time last year. 

·        
Malaysian palm markets:
 Higher
on plant slowdowns or shutdowns in Malaysia. 

 

Oilseeds
Export Developments

 

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