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12 Apr 2019

#Grain #Futures Comments

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-Argentine soybean crop ideas continue to move higher - harvest advancing nicely
-Another record Argentine wheat crop possibly for 2019/20
-China March soybean imports below last year - cumulative import decline expanding
-Egypt tenders for wheat - US not competitive
-China pork demand remains in strong focus
 The Buenos Aires Grains Exchange raised their estimate of the Argentine soybean crop to 55 MMT from 53 MMT previously and follows yesterday’s Rosario exchange’s increase to 56 MMT from 54 MMT. There are ideas further increases are being eyed to around 58 MMT as harvest advances and yields continue to run better than expected. The soybean harvest was estimated at 24% complete vs 6% last week, 17% last year and 15% average. The corn harvest was put at 25% complete vs 17% last week, 21% last year and 19% average. The Buenos Aires Exchange’s early ideas on the coming Argentine wheat crop are a record 20.6 MMT, surpassing this year’s USDA-estimated record crop of 19.5 MMT. Their wheat crop planting gets underway in May, but occurs mostly in June-July with harvest Nov-Jan.
 China imported 4.92 MMT of soybeans in March, up slightly from February imports of 4.45 MMT, but below last year’s March imports of 5.66 MMT and put 2018/19 marketing year to date (Oct-Mar) total imports at 16.8 MMT, down 8.9 MMT from the same period last year.
 Yesterday’s Export Sales report reflected pork sales to China of 77.7k tonnes for the week, the largest single-week U.S. pork purchase by China since USDA began reporting pork export sales data in 2013. Just four weeks prior, China also bought 23.8k tonnes of U.S. pork, in what was their 4th largest ever weekly purchase. While obviously very small in relation to their annual domestic pork production of around 54 MMT, it is very clear there is a rising market for U.S. pork products in China amid the ongoing ASF epidemic, even more impressive in the face of the current 62% import tariff on U.S. pork as part of the trade war. There are ideas China’s total pork imports will rise by roughly 1.5 MMT this year to around 4 MMT. By comparison, the U.S. exported 2.44 MMT in total pork and pork products in 2018.
 French soft wheat conditions slipped to 83% good/excellent this week from 84% g/e a week prior and compares favorably to last year’s crop at this time of 78% g/e. The corn crop is already 16% planted vs 8% last week and 1% last year.
 After the close yesterday, Egypt tendered for an unspecified amount of wheat for May 20-June 5 shipment. The lowest offer was Romanian wheat at $238.57/tonne c&f, followed by Ukrainian at $241.36 and Russian at $241.89. While U.S. SRW was the lowest fob offer at $220.50/tonne, it doesn’t compete with freight included at $247.60/tonne c&f.
 Algeria is believed to have bought around 540k tonnes of optional-origin milling wheat at $238.25-$239.00/tonne c&f for June shipment as a result of their recent tender.
 South Korea bought 63.5k tonnes of optional-origin corn at $190.80/tonne c&f for Nov 15 arrival, very likely to be South American origin based on current price comparisons.

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