From: Terry Reilly
Sent: Wednesday, April 15, 2020 8:22:35 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 04/15/20

PDF attached




+95 points. WTI crude oil back to $19-$20 area (supplies exceeding demand). NOPA and EIA ethanol data are due out later today.  After 11 sessions of decline, SBM is higher today. 




India monsoon rains were forecast to be average for 2020-

of Earth Sciences

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

recent trend has been to increase rainfall across key crop areas in the Midwest, Delta and interior southeastern states during the second week of the outlook. This trend fits very well with our April outlook in which greater than usual precipitation was advertised
for southern and eastern Midwest, Delta and southeastern states and was predicated upon the return of warmer weather in the second half of the month. That is exactly what is being advertised and today’s model trends are correct for the wetter bias, although
some of the intensity of precipitation is overdone.  The precipitation event advertised for later this week is about the same as previously suggested


little rain was suggested for Argentina, Uruguay, Paraguay of southern Brazil from Mato Grosso do Sul to western and southern Sao Paulo for the coming week. This is a little drier forecast than that of Tuesday, but one that is believable. Rain advertised for
central Argentina for late next week may evolve, but with a little less intensity than that advertised this morning by the GFS model run. The European model has rain for southern Argentina late next week while the Canadian model has it more widespread. Southern
Brazil, however, is not advertised to get much precipitation at all for the next ten days.



temperatures and some drying time in this first week of the U.S. Outlook will translate into better planting weather for some areas. A little fieldwork likely advanced Tuesday and more will occur today. The second week of the forecast will slow field progress
once again in quite a few areas.

South America, conditions will remain favorable in Argentina over the next week to ten days, although soil moisture will decline in some areas and that may lead to some need for timely rain in a few of the very latest maturing crop areas. Brazil crop weather
will be favorably mixed for mostly good conditions during the next ten days, but greater rain may be needed in the drier pockets of the south.

will see a good mix of rain and sunshine in east-central areas which may promote some planting, but it will be slow for a little while longer. Planting in southern China will remain very slow until better drying conditions evolve.

weather will be good for winter oilseed maturation and harvest progress. South Africa weather will remain good for both late season crop development and early season harvesting, but it will not be long before the need for drier weather will evolve.

Asia oil palm and coconut production is advancing well except in parts of the Philippines where dryness is prevailing.

dryness may raise some worry among a few coarse grain producers, but the areas that usually plant first have some moisture to work with. Rapeseed in France, Germany and the U.K. may need some moisture soon and they should get.

weather today will likely provide a mixed influence on market mentality.

World Weather Inc. and FI



week’s cold weather in the United States is not likely to have a huge impact on production, but permanent crop damage might have occurred in a few counties in southwestern Kansas and west Texas Tuesday morning while today’s temperatures do not appear to be
as cold in the Plains. Midwest low temperatures today were mostly above the damage threshold, although some wheat in southern Illinois has been reported to have been in the boot and heading stage (1%) and for the headed crop there might have been some damage.
The same can be said for wheat in Kentucky and parts of the Tennessee River Basin this morning as well.

in parts of Europe and a few areas in Ukraine, southern Russia and Kazakhstan will continue a concern, but there is still plenty of time for improved weather before crops are at risk of a change in production potential. Temperatures have been cool which has
kept the need for greater moisture low, but as seasonal warming occurs the need for moisture will rise. Some light rain will bring temporary relief to Ukraine and northern parts of Russia’s Southern Region during the next few days.

and India wheat production potentials still look very good as do yields in Pakistan. Southern Australia’s long range outlook is also improving for planting conditions late this month and especially in May and June, but the next ten days will be dry biased.

in South Africa may get off to a better than usual start this year because of recent precipitation and that which is coming. Planting usually begins in May.

areas in southern Brazil will need rain soon for planting and establishing its winter wheat.

weather today will have a mixed influence on market mentality.

World Weather Inc. and FI


World Weather Inc. and FI


World Weather Inc. and FI




Ag Calendar

April 15:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • AmSpec,
    Intertek palm oil export data for April 1-15
  • FranceAgriMer
    monthly cereals balance sheet
  • New
    Zealand food prices
  • Malaysia
    CPO export tax
  • India
    monsoon forecast (tentative)

April 16:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
  • Port
    of Rouen data on French grain exports
    Barry Callebaut half-yearly results

April 17:

  • 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

Bloomberg and FI


changes in registrations






US MBA Mortgage Applications Apr 10: 7.3% (prev -17.9%)

Goldman Sachs Q1 Earnings:

-Revenue: $8.74B (est $7.85B)-FICC Revenue: $2.97B (est $2.31B)-Equities Sales, Trading Revenue: $2.19B (est $2.05B)-Trading Revenue: $5.16B (est $4.36B)-EPS: $3.11 (est $3.28)

US Bancorp Q1 Earnings: 

Revenue: $5.58B (est $5.58B)-Adj EPS: $0.72 (est $0.77)-Net Interest Margin: 2.91% (vs. 3.16% Y/Y)

Bank Of America Q1 Earnings

Revenue: $22.8B (est 22.66B)

PNC Financial Q1 Earnings:

$4.5B (est $4.38B)

US Retail Sales Advance (M/M) Mar: -8.7% (est -8.0%; prev -0.5%)

Retail Sales Ex Auto (M/M) Mar: -4.5% (est -5.0%; prev -0.4%)

US Retail Sales Ex Auto, Gas Mar: -3.1% (est -5.2%; prev -0.2%)

Retail Sales Control Group Apr: 1.7% (est -2.0%; prevR -0.20%; prev 0.0%)

US Empire Manufacturing Apr: -78.2 (est -35.0; prev -21.5)




Corn futures are lower on firmer USD and lower WTI crude.  Overnight US WTI hit its lowest level since 2002. 

One of the largest single corn option trade in years occurred yesterday as nearly 10k of the CK 335c were bot and 10k of the CN 320p sold (OI was up on both).  

A Bloomberg poll looks for another large decline in US ethanol production when updated on Wednesday.  The poll looks for weekly US ethanol production to be down 63,000 at 672,000 barrels (569-642 range) from the previous week and stocks
to increase 464,000 barrels to 27.555 million.

USD was more than 100 points higher and WTI below $20. 

While US corn futures have been beaten down over the past month, export commitments from the US could be better.  Ukraine’s lineup shows a good amount of corn headed to China, Iran and Egypt and we heard around 3 million tons of corn could
be shipped this month. 

The National Pork Producers Council asked the Trump administration to purchase more than $1 billion in pork to help food banks facing increasing demand during the coronavirus outbreak. 


Export Developments

  • Results
    awaited: Syria seeks 50,000 tons of soybean meal in a combo with 50,000 tons of corn on May 12.




  • CBOT
    are lower this morning while meal rebounded after trading 11 consecutive sessions lower.  Soybean oil is lower is lower following WTI crude. 
  • Argentina
    reported its first port worker case of coronavirus. 

The BRL has strengthened this morning to around 5.26.

China bought at least five cargos over the last two days.  One for new crop. 

ANEC-Brazil April soybean exports seen at record 14.5 million tons. 

China is tightening border checks to prevent the spread of coronavirus specifically with the Russian border. China and Russia agreed last week to close the Suifen River port on the border, preventing some soybeans from entering the country. 

The NOPA crush is due out at 11am today with the trade expecting a crush of 175.2MM bushels and oil stocks of 2.067BB lbs. The Trump Administration may announce their coronavirus phase one farm aid of $15.5 billion this week. 

There was talk yesterday of SBO storage shortages in the WCB, widening spreads out to full carry.

Offshore values are leading CBOT soybean oil 2 points higher and meal $1.10 higher. 

Rotterdam vegetable oils this morning  were unchanged to 5 euros lower and Rotterdam meal when imported from SA were mixed from this time yesterday morning. 


China cash crush margins as of this morning, using our calculation, were 202 cents per bushel (201 previous session) and compares to 214 cents a week ago and negative 55 cents around this time last year. 

ITS reported April 1-15 palm shipments at 472,085 tons, down 3.6 percent from the previous month.  AmSpec reported 471,437 tons, down 6.1 percent. 

Malaysian palm markets:


Export Developments




  • US
    wheat futures
    lower on easing drought concerns for the US and southern Russia. 
  • The US is under a cold snap, but no crop damage is seen for HRW wheat. 
  • Southern Russia may see rain over the next few days. 
  • Ukraine’s deputy minister warned they may ban wheat exports if the volume exceeds 20.2-million-ton exportable threshold set
    for 2019-20.  2020 grain production could decline to 60-67 million tons from 75MMT in 2019.  Wheat was seen between 12 and 15MMT from 20 in 2019.
  • Kyrgyzstan is looking to secure additional flour from Kazakhstan.
  • EU wheat futures were 0.50 euro lower as of earlier this morning. 
  • FranceAgriMer increased its forecast of French soft wheat exports outside the European Union to a record 13.2 million tons,
    from 12.7 million estimated last month, 36.5% above last season.
  • EU 2019-20 soft wheat exports as of April 12 were 26.71 million tons, up from 15.86 million tons during the same period year
    ago.  Barley exports hit 5.95 million tons, up 63 percent from year ago.  Corn exports are down 16 percent at 16.30 million tons. 
  • US weather for the northern Great Plains is set to improve by the end of April and after ample soil moisture fell this past
    week across high protein wheat country, we think other spring wheat seedings could end up higher than USDA’s 12.590 million acres.  We are at 13.0 million, above 12.660 million for 2019. 



Export Developments.

  • Japan seeks 132,277 tons of food wheat from the US, Canada and Australia for June loading.
  • In an SBS import tender, Japan bought 380 tons of barley for arrival by Sept. 24.
  • Japan in an SBS import tender seeks 120,000 tons of feed wheat and 100,000 tons of feed barley on April 22 for arrival by Sept. 24.
  • Yesterday Egypt bought 120,000 tons of Russian wheat.  The Tender was held on an FOB basis with a separate tender for freight. 

60,000 tons at $239.95 FOB and $9.50 freight equating to $249.45 C&F for shipment May 15-25

60,000 tons at $243.00 FOB and $9.50 freight equating to $252.50 C&F for shipment May 26-June 5

  • Ethiopia postponed their import tender for 400,000 tons of wheat until April 23. 
  • Ethiopia postponed their import tender for 200,000 tons until April 30 in a separate tender. 




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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