From: Terry Reilly
Sent: Thursday, April 09, 2020 8:19:18 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 04/09/20

PDF attached

 

Morning
Conab reported a 1.8MMT upward revision to its Brazil corn production and lowered soybeans by 2.1 million tons from March.  China CASDE showed projected 2019-20 China corn imports higher but industrial use down from last month.  USDA
export sales were good for grains but not so great for the soybean complex and wheat.  USD was down 30 at the time this was written. 
US
Initial Jobless Claims Apr 4: 6606K (exp 5500K; prevR 6867K; prev 6648K).  Fed also announced a new 2.3 trillion program to support economy.

 

 

Weather

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

Overall,
the same general theme remains in place for the next ten days; including a cooler than usual bias for the central and eastern U.S. while precipitation is below average in the northern Plains and upper Midwest, more near average in the lower and eastern Midwest
and near to above normal in the lower Delta and Atlantic Coast states. This weekend’s snow and rain event will be aggressive from the west-central Plains into the Midwest with a band of significant snow from Nebraska and northwestern Kansas into the western
Great Lakes region while an outbreak of severe thunderstorms and heavy rain occurs from the Delta into a part of the middle Atlantic Coast states. Weather systems in the balance of the two weeks are less intensive, although it would not be surprising to see
an Atlantic Coast and/or eastern Midwest storm system in week 2.

 

Overall,
the same general theme has been preserved in our official forecast limiting rainfall in southern Brazil crop areas during much of the next two weeks, although completely dry conditions are unlikely. The rain that falls will be a little too sporadic and light
to maintain today’s soil moisture profile which suggests some drying will take place. Crop conditions are very good today, but could deteriorate later this month and in May if there is no improved rainfall and that might threaten second season corn production
in at least a part of the growing region during May. Argentina’s limited rainfall will maintain a very good crop maturation and harvest environment with enough milder weather to help slow some of the drying that is expected while the weather is dry biased.

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS:
 

Some
temporary relief from dryness occurred in some Safrinha crop areas in Brazil earlier this week 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 today 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 in areas that are not bothered with wet soil or rainfall, but cooling is under way and a weekend storm system promises precipitation for nearly all areas. Field progress will advance most significantly from the
lower Delta to northern Florida, Georgia and South Carolina today and into Friday 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 cooling down briefly which may slow the prospects for spring planting, but rapeseed development in key production areas will advance favorably.

            Oilseeds
in Philippines are 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 trend cooler today, but will cool down more significantly during the late week and weekend and early next week 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.

            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 in eastern Turkey in much of Iran and parts of 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

 

No
Changes in CBOT registrations

 

 

 

 

Bloomberg
Ag Calendar

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

 

China
CASDE

  • China’s
    corn imports in 2019/20 were seen at 4 million tons, up 1 million from the forecast
  • China
    lowered industrial consumption of corn in 2019/20 to 82.5 million tons, down 2 million tone from the previous month
  • Revised
    an estimate for edible oils consumption in 2019/20 down by 960,000 tons, at 32.43 million tons.
  • Forecasts
    for production, consumption, and imports of soybeans remained the same as last month.
  • No
    table was provided by the newswire

Source:
Reuters and FI

 

 

 

 

 

 

 

 

Actually,
due out 4/10 (wrong date in table above)

 

USDA
export sales

  • US
    pork sales surged to 55,900 tons; a marketing year high. 
  • US
    sorghum export sales were also robust at 373,800 that included 186,600 tons for China.
  • US
    corn export sales were excellent at 1.849 million tons for 2019-20 and new-crop came in at 608,800 tons. 
  • All-wheat
    sales of 258,700 were again disappointing.
  • US
    2019-20 soybean export sales of 270,400 were very poor, well below expectations, and down from 957,400 tons last year.
  • Soybean
    meal sales for 2019-20 slipped below 200,000 tons to 193,300 tons but improved from the previous week.  Soybean meal shipments were ok at 273,100 tons.
  • US
    soybean oil export sales current crop-year were 24,100 tons.  Shipments were poor at 5,400 tons.

 

 

 

 

 

 

Macros

·        
US Initial Jobless Claims Apr 4: 6606K (exp 5500K; prevR 6867K; prev 6648K)

o  
US Continuing Claims Mar 28: 7455K (exp 8236K; prevR 3059K; prev 3029K)

·        
Covid-19 cases are about peaking around now across the US

 

 

Corn.

·        
Corn futures are higher on robust USDA export sales, slowing US corn plantings and strong import demand by South Korea so far this week.

·        
Conab estimated the Brazil corn production at 101.9 million tons, 0.4k above a Bloomberg trade guess and 1.8 million tons above March projection. 

  • US
    pork sales surged to 55,900 tons; a marketing year high. 
  • US
    sorghum export sales were also robust at 373,800 that included 186,600 tons for China.
  • US
    corn export sales were excellent at 1.849 million tons for 2019-20 and new-crop came in at 608,800 tons. 

·        
Parana, Mato Grosso do Sul, Sao Paulo and Mato Grosso’s south may not see rain until April 14. 

·        
Goldman Roll – third day.