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11 Mar 2019

#Grain #Futures Comments

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-USDA reports soybean sales to China
-CFTC COT data reveals sizable fund net short in corn - record KCBT wheat short
-Malaysia Feb palm oil stocks larger than expected
-Algeria tenders for wheat
-Wet week ahead for the U.S.
 
 Malaysia reported end of February palm oil stocks were 3.045 MMT, above the average trade estimate of 2.952 MMT, up from January’s 3.001 MMT and solidly above year ago February stocks of 2.476 MMT. Palm oil futures were modestly lower overnight on the higher than expected stocks data. February palm oil production of 1.545 MMT was below average expectations of 1.599 MMT and down seasonally from 1.737 MMT in January, but was still well above year ago February production of 1.343 MMT. February palm oil exports of 1.321 MMT were well below average expectations of 1.438 MMT and January’s 1.676 MMT, but above year ago February exports of 1.244 MMT.
 USDA reported the sale of 926k tonnes of soybeans to China this morning for 2018/19 delivery and puts their recent total buying at 1.6 MMT following Friday’s sales announcement of 664k tonnes. China’s total commitments are now at roughly 11.0 MMT vs 28.2 MMT at this time last year.
 Friday’s CFTC Disaggregated COT data was the first report since the government shutdown to reflect “current” market positions as they were as of Tuesday, 3/05/19. Funds were shown to hold a sizable net short in corn, standing at 177k contracts and an increase in their net short over just the last week of 72k contracts. Only one in the last 10+ years have funds held a comparably large net short at this time of the year, being 2016 when they were net short 204k contracts. Funds are net short 50k contracts in soybeans, adding 14k in new net shorts over the last week, and is also uncharacteristically short for this time of the year. Like in corn, the only other noteworthy net short in soybeans in early March was in 2016 at 81k contracts. Funds are net short 72k contracts in CBOT wheat, an increase of 14k for the week, while funds have been net short in early March of varying degrees in all but one of the last 11 years. Funds are net short 45k contracts in KCBT wheat (up 3k last week) and net short 8k MPLS wheat (net even for the week). Funds are net short 42k contracts in SBM, reflecting net buying on the week of 6k contracts, and are net long 21k contracts in SBO, with net selling of 2k being seen for the week. With the focus of late being on the degree of fund short positions, for reference, the all-time record fund net short positions by commodity are: corn 230.6k contracts, CBOT wheat 162.3k, soybeans 118.7k, SBM 55.2k, SBO 110.0k, KCBT wheat 44.9k (current position), MPLS wheat 12.9k.
 Algeria tendered for a minimum 50k tonnes of milling wheat with offers due by Wednesday. In their last tender, Algeria bought roughly 600k tonnes of wheat. Most of Algeria’s wheat is typically sourced from France. Bangladesh tendered for 12.5% protein optional-origin milling wheat with offers due by March 25.
 Iraq bought 50k tonnes of U.S. wheat and 50k tonnes of Canadian wheat as a result of their latest tender. Syria bought 200k tonnes of Black Sea-origin wheat.
 Egypt rejected a cargo of Romanian wheat due to low milling quality factors, in what is viewed as a one-off situation, with both sides working to resolve the issue. 
 

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