-South Africa sees historically large corn crop
-Ukraine corn exports remain ahead of last year, but slowing may be seen
-Brazil soybean/corn harvests keep pace with average
-First notice day for March deliveries Friday
Grains continue to seek some stability after the earlier week sell-off, but new developments are limited. A general demand malaise appears to be taking hold in the grain markets as the lack of export competitiveness, weak/negative ethanol margins and softening soybean crush margins all weigh on the psyche. Friday is first notice day for March contracts. South Africa’s first official estimate of the 2020 corn crop was 14.56 MMT, in line with the average trade estimate of 14.504 MMT (13.7-15.0 MMT range of ideas), but up 29% from last year’s dryness-impacted 11.275 MMT crop. Moreover, the current estimate reflects the highest potential crop in three years and the 4th highest on record (17.55 MMT record in 2017, 14.9 MMT in 2014 and 1981). USDA is currently estimating their crop at 14.5 MMT with exports projected at 2.0 MMT vs 1.1 MMT last year. While not a major player in the global corn area, South Africa can steal some export bushels from traditional exporters in years of large crops. Ukraine corn exports for the 2019/20 marketing year so far (Oct-Feb) reached 15.9 MMT vs last year’s same-period exports of 14.3 MMT and are record-high for the first five months of the year. Based on the USDA’s 31.0 MMT marketing year total export projection, March-Sept exports would need to be 15.1 MMT, below last year’s 17.3 MMT, but still easily the 2nd highest on record. Nonetheless, if the USDA’s annual export target is accurate, modestly lower export competition from Ukraine than last year over the coming months would be implied. Brazilian soybean harvest is 30% complete, rising from 23% a week prior and staying in line with the most-recent 5-year average of 28%. Last year’s harvest was historically fast at 38% complete. Brazil’s 1st corn crop harvest is 31% complete, in line with last year’s pace and slightly ahead of the 5-year average of 27%, while 2nd corn crop (safrinha) planting is 47% complete, well behind last year’s incredibly fast 67% and modestly behind the 5-year average of 52%. South Korea bought 85k tonnes of U.S. wheat overnight (combination of white, DNS and HRW) for May-June shipment. They also bought 67k tonnes of corn for April 10-May 10 shipment, believed to be South American, at $212.48/tonne c&f. Syria tendered for 200k tonnes of Russian wheat with offers due by March 23. No other sources are allowed in the tender. Each of Syria’s previous three wheat tenders (Dec 18, Jan 20, Feb 17) resulted in no purchases being made. USDA reported the sale of 123k tonnes of optional-origin corn sold to South Korea for 2019/20 delivery. A modest portion of this week’s South Korean purchases is believed to possibly be sourced from the U.S., but the majority appears unlikely to be so. Weather The Argentine forecast remains essentially dry through the 10-day forecast window. Brazil remains very active. Rains of .30-1”+ fell across most of RGDS, Santa Catarina and Parana, as well as up into northern Mato Grosso, with things fairly quiet elsewhere. Rains will finish up in northern Parana today and then quiet down from Parana south for the rest of the week and weekend. Hit and miss showers and thunderstorms will bring rains of .50-1.5” to most areas north of Parana in the next 5 days. Rains of 1-2” are expected for most of Mato Grosso, Goias, Minas Gerais and northern Sao Paulo in the 6-10 day period, while being mainly dry elsewhere.