Global Ag News For Mar 17

TODAY—WEEKLY ETHANOL STATS—

Overnight trade has SRW Wheat down roughly 5 cents, HRW down 5; HRS Wheat down 3, Corn is down 1 to 2 cents; Soybeans down 6; Soymeal down $3.50, and Soyoil up 10 points.

Chinese Ag futures (May) settled down 77 yuan in soybeans, up 8 in Corn, up 45 in Soymeal, down 186 in Soyoil, and down 218 in Palm Oil.

Malaysian palm oil prices were down 13 ringgit at 3,882 (basis June) at midsession with a better export outlook supporting prices amid higher output forecasts.

In Argentina, today’s rain and the additional occasional periods of shower and thunderstorm activity in the next ten days will continue to reduce crop stress and stop the decline in crop conditions.

In Brazil, last evening’s GFS model run was similar to the midday GFS model in showing rain intensity and coverage declining in Mato Grosso, Goias, and Tocantins after Friday which will help support greater fieldwork and help stop the decline in crop conditions.

A weather disturbance will promote significant precipitation from central and southern parts of the Hard Red Winter Wheat Region through the Delta, central and southern Corn Belt, and southeastern states tonight through Thursday.

The player sheet had funds net buyers of 1,000 contracts of SRW Wheat; bought 10,000 Corn; net bought 2,000 Soybeans; sold 1,000 lots of Soymeal, and; were net even in Soyoil.

We estimate Managed Money net long 20,000 contracts of SRW Wheat; long 378,000 Corn; net long 155,000 Soybeans; net long 55,000 lots of Soymeal, and; long 107,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 1,200 contracts; HRW Wheat up 2,300; Corn up 500; Soybeans down 1,400 contracts; Soymeal up 1,300 lots, and; Soyoil up 1,900.

There were changes in registrations (SRW Wheat down 5, Corn down 132)—Registrations total 40 contracts for SRW Wheat; ZERO Oats; Corn 11; Soybeans 60; Soyoil 1,248 lots; Soymeal 175; Rice 1,013; HRW Wheat 1,291, and; HRS 710. 

Tender Activity—Tunisia seeks 42,000t durum wheat, 117,000t optional-origin soft wheat—Taiwan bought 65,000t Argentine corn—

China booked its largest purchase of U.S. corn since January, the USDA said on Tuesday. The USDA confirmed that private exporters sold 1.156 million tonnes of U.S. corn to China, the biggest sale announced through the USDA’s daily reporting system since Jan. 29, when China bought 2.1 million tonnes of the grain in the second-largest U.S. corn sale on record.

—The USDA has projected that China will import a historically large 24 million tonnes of corn globally in the 2020/21 marketing year, in addition to other feed grains including barley, sorghum and wheat, as the country strives to rebuild its massive hog herd that has been hit by diseases

—China purchased 18.7 million tonnes of U.S. corn through March 4, USDA export sales data showed, although the Asian country had shipped less than 40% of the total

—China’s pork production is forecast to increase by 14% in 2021, the USDA’s Foreign Agricultural Service post in Beijing said

Analysts surveyed by Dow Jones expect US production of ethanol to continue its rebound in this week’s report from the EIA, with estimates for weekly ethanol production seen anywhere between 939,000 barrels a day-954,000 barrels a day.

If production approaches the high end of analyst expectations, it’ll be the highest that ethanol production has been since mid-December, and a possible sign that drivers are returning to the roads as vaccinations proliferate the US.

Meanwhile, analysts are mixed in their forecasts about ethanol inventories, with figures ranging anywhere from 21.9M barrels to 23M barrels expected. In last week’s report, inventories totaled 22.1M barrels.

U.S. renewable fuel credits this week hit fresh multi-year highs, while an oil refining trade group urged the Biden administration to use its authority to help stabilize the market. Prices for so-called Renewable Identification Numbers, or RINs, have climbed all year as costs for feedstocks such as soybean oil increase and as market participants bet on reduced exemptions granted to oil refiners that would waive them from U.S. biofuel blending requirements. Under the U.S. Renewable Fuel Standard, refiners must blend billions of gallons of biofuels into their fuel mix, or buy tradable RINs from those that do. Refiners can apply for exemptions if they can prove the requirements do them harm.

A resurgence of a lethal pig disease is putting new strain on China’s efforts to rebuild its herds — a threat to U.S. farmers’ hopes to sell more soybeans there this year. A new outbreak of African swine fever in the world’s leading hog-producing nation is killing increasing numbers of Chinese pigs, with the sow herd falling 3% to 5% each month since December, according to a report from Rabobank. Chinese officials had forecast that the country would return to pre-disease hog herds this year. The new outbreaks could delay that until 2023, Rabobank found. African swine fever, a disease harmless to humans but nearly always fatal to pigs, has taken a huge bite out of China’s hog supplies in recent years. In 2019, the spread of the disease cut China’s hog herd by roughly 40% to 260 million head, according to Rabobank.

U.S. February cattle placements seen down 2.4% from year ago – analysts – Reuters News

Pressure to prevent and control armyworm in China this year is significantly higher than last year, the country’s agriculture ministry said. The climate conditions in Mekong river area is favorable for reproduction of the pest, and there will be sufficient armyworm to migrate to China later.

China soybean imports continue to fall in March amid delayed Brazilian soybeans – Refinitiv Commodities Research

—China soybean imports slumped by 32% to 5.7 million tons in February and all soybeans were sailed from the U.S. Refinitiv’s trade flows tracked little soybean imports from South America over the past month.

—In March, China soybean imports will continue to decline as U.S. soybean arrivals decrease. We estimate China March soybean imports at 4.8 million tons, the lowest since March 2020. The U.S. remains the dominant origin, accounting for 95% of China’s total imports in March. Only 0.2 million tons of Brazilian soybeans will arrive in March compared to 2.8 million tons for March 2020. The slashed Brazilian soybean imports are attributed to significantly delayed soybean harvest and weather-related logistics issues in Brazil.

—In April, China soybean imports from the U.S. will drop to 0.7 million tons due to the seasonality of U.S. soybean exports and depletion of U.S. soybean stocks. On the contrary, 6.2 million tons of Brazil soybeans are heading for China and will arrive in April. China soybean imports in April will be at least 6.9 million tons, above last year’s 5.4 million tons during the time.

• BRAZIL’S ABIOVE SEES 2021 SOYBEAN HARVEST AT RECORD 134.8 MILLION TNS
• BRAZIL’S ABIOVE SEES 2021 SOYBEAN EXPORTS AT RECORD 84 MILLION TNS

Euronext wheat fell to a one-month low on Tuesday as improved U.S. crop ratings and a lull in export demand for French wheat weighed on the market. Front-month May milling wheat was down 1.50 euros, or 0.7%, at 221.50 euros ($263.34) a tonne. The contract earlier fell to 220 euros a tonne, its weakest since Feb. 15 and just below a previous one-month low touched on Monday. Chicago wheat also slipped to a fresh one-month low after higher weekly crop ratings for winter wheat in some U.S. states,

Australian wheat farmers double down after record harvest – Reuters News

• Farmers betting on second strong year for wheat crop
• Farms in strong cash position after bumper harvest – Rabobank
• Global grain prices trading near 7-year highs
• Sentiment buoyed by broad economic upturn in Australia
• Govt forecaster warns drier conditions may cut yield

Australian wheat farmers are scouring the market for crop-planting machinery, fertilizer and other farm products, weeks out from the country’s main wheat-planting window as suppliers struggle to keep pace with strong demand. After harvesting their biggest-ever wheat crop in 2020, many farmers are betting on back-to-back bumper seasons, buoyed by good moisture levels in some of the country’s main grain-growing areas.

Egypt expects to procure 3.5 million tonnes of wheat from farmers in the local harvest season which begins April 15, state news agency MENA reported. Current strategic wheat stocks stood at 4.7 months.

Exports of palm oil from Indonesia rose nearly 20% on annual basis in January, the country’s biggest palm group said, but output was disrupted by flood and stock fell to a six-month low.

—Indonesia exported 2.86 million tonnes of palm oil and its products in January, up 19.6% from the same month last year

—On a monthly basis, however, shipments dropped 18% amid lower demand from China, Malaysia and India compared to December

—Meanwhile, in January, Indonesia produced 3.76 million tonnes of crude palm oil and kernel oil, down from 4.04 million tonnes in December and was the lowest monthly output since May

—The lower output brought the end-January stock to 4.25 million tonnes, the lowest end-of-month stock since July last year. That compared to end-2020 stocks of 4.87 million tonnes

Malaysia has kept its April export tax for crude palm oil at 8%. The palm exporter calculated a reference price of 4,331.48 ringgit per tonne for April. The export tax structure starts at 3% for crude palm oil in a 2,250 to 2,400 ringgit-per-tonne range. The maximum tax rate is set at 8% when prices exceed 3,450 ringgit a tonne.