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12 Mar 2019

#Grain #Futures Comments

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#Grain #Futures Comments

-Brazil lowers soybean crop estimate, raises corn
-KS/OK wheat conditions improve, TX declines
-Chinese hog numbers down substantially from year ago
-TX corn planting a bit slow

 CONAB lowered their estimate of the Brazilian soybean crop to 113.5 MMT from 115.3 MMT previously and is moderately below the
USDA’s last estimate of 116.5 MMT and down from last year’s record 119.3 MMT crop. Most ideas in the market of late seem to have
been centering around a crop of 114-115 MMT, so today’s reduction may have been a bit lower than generally anticipated. With the
lower crop, CONAB also lowered their estimate of this year’s Brazilian soybean exports (local Feb-Jan marketing year) to 70.0 MMT from
71.5 MMT previously and would be down a rather solid 13.6 MMT from last year’s 83.6 MMT record. We would note, though, USDA is
already estimating their soybean exports this year at 69.5 MMT. On the flip side of the lower soybean outlook, though, CONAB
continues to raise corn production ideas, with 2nd crop (safrinha) planted area raised to 12.05 million hectares (29.8 mil acres) from
11.81 mil hectares (29.2 mil acres) previously and up more than 4% from last year’s 11.53 mil hectares (28.5 mil acres). Accordingly,
they raised the safrinha corn crop estimate to 66.6 MMT from 65.2 MMT previously and now reflects a nearly 24% increase from last
year’s 53.9 MMT. Their estimate of the 1st crop was revised marginally lower to 26.2 MMT from 26.5 MMT previously (26.8 MMT last
year), putting the total crop at 92.8 MMT vs 91.7 MMT previously, USDA at 94.5 MMT and last year’s 80.7 MMT (USDA 82.0). CONAB
left their estimate of Brazilian corn exports for the coming year unchanged for the time being at 31.0 MMT, which would be up from last
year’s 24.8 MMT, while USDA is last at 29.0 MMT.
 AgRural marginally bumped their estimate of Brazilian soybean crop higher to 112.9 MMT from 112.5 MMT previously.
 Several major winter wheat producing states have begun providing weekly winter wheat crop condition updates ahead of the USDA’s
start of nationwide condition reports, which get underway the first week of April. Kansas wheat is rated 51% g/e, up 2% from last week
and obviously remains substantially better than last year’s 12% g/e at this time. OK improved to 56% g/e from 53% the week prior
(7% good last year), but TX conditions declined solidly to 28% g/e (30% p/vp) from 36% g/e (24% p/vp) the week prior and compares
to last year’s 13% g/e (53% p/vp) at this time. The first update of Arkansas’ winter wheat crop showed 25% g/e (31% p/vp) vs 51%
g/e (6% p) at the end of November and 59% g/e (13% p/vp) last year in early March.
 The Texas corn crop is 11% planted vs 5% last week, 24% last year and 16% average.
 China’s Ministry of Agriculture said the country’s total pig herd was down 13% from last year as of January, with breeding sows down
15% year-over-year. While only around 1 million head have been officially culled as a result of the African swine fever outbreak, it is
apparent the impact is proving to be much more significant as there has been an overall notable cutback in animal numbers as many
simply exit the industry, with obvious negative ramifications for soybean meal demand moving forward.
 SovEcon estimates Russia will export 2.1 MMT of wheat in March, little changed from 2.204 MMT in February, but well below year ago
Feb exports of 3.854 MMT. If accurate, their 2018/19 marketing year to date (Jul-Mar) wheat exports would be 31.3 MMT vs last year’s
31.0 MMT, as the recent slowdown in exports has allowed the previous year-over-year gain to be whittled away.
 The lowest offer in Turkey’s recent tender to import 300k tonnes of corn was $179.87/tonne c&f for April 25-May 13 shipment and
should come out of the Black Sea region.
 South Korea bought 68k tonnes of optional origin corn at $189.49/tonne c&f for early October arrival as their active involvement in corn
buying continues.
 Tunisia tendered for 92k tonnes of soft wheat (Apr-May shipment), 42k tonnes of durum and 75k tonnes of feed barley with offers due
by tomorrow.
 The EPA said they will decide on the 7 remaining small refinery biofuel waivers for calendar year 2017 in the next week and will then
move on to considering the 37+ waiver requests for 2018, po


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