#Grain #Futures Comments

-Cattle on Feed report trade estimates
-South Korea steps up corn purchases, but not U.S.
-Soybean export sales disappointing, wheat solid
-Malaysian Feb palm oil production seen record high

 

USDA will release the monthly WASDE report tomorrow at 11:00 AM CT. A summary of trade estimates is on the following page. Our pre-report commentary/analysis can be found at https://portal.rjobrien.com/MarketInsights/Blog/Read/35174.

 

 The USDA will release the delayed Cattle on Feed report with January data Friday afternoon at 2:00 PM CT. The average estimate of cattle on feed as of February 1 is 100.2% of last year (99.1-100.6 range of ideas) and would be down from January’s 101.8%. Moreover, the average estimate of 100.2% reflects the lowest monthly year-over-year deviation in on feed since March 2017, while there has not be a decline in monthly on feed relative to the previous year since December 2016. The average estimate of January placements is 93.5 (87.0-95.9 range) and compares to 98.2 in December. Sept-Dec placements were all below year ago levels. January marketings are estimated at 102.4 (101.5-103.0 range) vs 99.4 in December.

 Next Monday, the Malaysian Palm Oil Board will release its monthly report for February data. A wire service poll of industry participants estimates Malaysian palm oil production in February was 1.599 MMT (1.500-1.737 MMT range of ideas), which would obviously be down from January’s 1.737 MMT due to the less number of days, and would be the lowest in four months, but would still be the highest production for the month of February on record going back to 2000. End February palm oil stocks are estimated at 2.952 MMT (2.851-3.098 MMT range), down slightly from January stocks of 3.001 MMT, and would be the lowest in four months, but still notably above last year’s February stocks of 2.478 MMT. February palm oil exports from Malaysia are estimated at 1.438 MMT (1.380-1.509 MMT range) vs 1.676 MMT in January and 1.313 MMT last year February.

 Russia exported 2.417 MMT of wheat in January, nearly unchanged from last year’s Jan exports of 2.478 MMT.

ï‚· China reported its 111th African swine fever case at a hog farm in Guangxi.

ï‚· South Korea feedmills bought around 350-400k tonnes of optional-origin corn in various tenders/private deals overnight, all priced from $192.40-$197.19/tonne c&f and for shipment periods from June through August. Given the values, none is likely to be U.S. origin.

 Please see our post on Market Insights at https://portal.rjobrien.com/MarketInsights/Blog/Read/35183 for more information on today’s USDA Export Sales report.

ï‚· U.S. soybean sales were just 311k tonnes (11.4 million bushels), falling sharply from the previous week’s unexpectedly large 80.7 million bushels (but which likely were still residually large from catch-up sales from the shutdown), were well below market expectations of 600k-1.0 MMT and were among the lowest of the 2018/19 marketing year so far.

ï‚· U.S. corn sales last week of 970k tonnes (38.2 million bushels) were within market expectations of 700k-1.1 MMT, but declined solidly from the previous week’s 48.8 million bushels and were substantially below last year’s same-week sales of 73.1 million bushels. With the notable shortfall in sales relative to last year, total commitments of 1.595 billion bushels reflected the first year-over-year decline of 2018/19, now being down 1.5% from last year’s 1.619 billion.

ï‚· U.S. wheat sales continue to impress with 622k tonnes (22.8 million bushels) sold last week, solidly above market expectations of 200-500k tonnes, rising from the previous week’s 17.5 million bushels and easily beating year ago same-week sales of 14.4 million bushels.

ï‚· Old crop soybean meal sales were solid at 231k tonnes vs expectations of 100-250k tonnes and were well above the roughly 113k tonnes/week needed in order to reach the USDA’s export projection. There were net cancellations in new crop sales, though, of 29k tonnes. Soybean oil sales were just 8.1k tonnes vs expectations of 5-25k