Ag market back and fill after 3 day gains of 7 cents in wheat & soy while corn (including today)
virtually unched on the week. Ag markets opting to ignore too wet Delta/too dry western HRW belt
today in wake of ECB rate cut and increasing estimates of S American production (CONAB ups
CN/BN production each 0.2 mmt from prior forecast while BACE ups Arg soy crop 0.5 mmt to 59
mmt).
Weather leans mixed in US with warm Midwest temps setting stage for early Spring while Delta/W
HRW belt labor under extremes of too wet/too dry. S Africa rains this week fall s hort of
expectations. S American crop weather favorable this week although excess moisture issues could
become a problem again for Arg late month.
Dollar rally today on ECB stimulus is no friend to US wheat which is already struggling to capture
portion of world wheat export trade.
Weekly meal sales of only 47 tmt draws renewed attention on need to slow crush rate—especially
with eroding domestic cash meal market, increasing crusher ownership and ample soy oil supplies
domestically amid reports of cheaper canola working into bio-diesel plants.
Hear reports that southern growers unable to get corn planted may opt to leave area idle rather than
take cut on crop insurance to plant another crop.
Here more chatter that specs prefer to trade from long side given shrinking global stocks updates
yesterday, large managed fund shorts and inevitable planting scare in coming weeks. Agree that
lows are in short term but still unable to identify catalyst that ignites manage fund short covering 30
days before large scale Midwest planting gets underway—especially with undersold US farmer
leaning into modest rallies.
Foreign Markets:
Palm market down 11 ringgits at 2546
• Paris milling wheat up 0.75 eruos at 145.25
• Dalian beans down 0.5 cents/bu, meal down $1.25, soy oil up 45 and corn down 7 cents/bu.
For the week—soy down 18 cents and corn down 20.25 cents/bu
Ag Markets:
• (Reuters) China’s government should release its massive state corn reserves as soon as
possible as the stockpile scheme has dried up domestic supplies and pushed up prices, a
delegate of parliament proposed.
• (Reuters) USDA Attache Report had Post increase its forecast for Brazil’s 2015/16 soybean
production to a record 100 million metric tons (mmt). Favorable rains in January and
February lessened the anxiety on potential yield impacts in the Center-West. Exports for the
2015/16 Marketing Year (MY) are forecast to reach 55.5 mmt due to strong demand in China
and the weak Brazilian Real expected through 2016. Post increased its domestic crush
forecast for 2015/16 MY to 40.5 mmt and its 2014/15 MY estimate to 40.2 mmt, as a result
of higher domestic and export demand.
• (Reuters) Argentina’s Rosario grains exchange raised its soy harvest forecast to 59 million
tons, up from an earlier estimate of 58.5 million tons, citing higher-than-expected yields in
key growing areas; the exchange also raised its corn output forecast slightly to 24.5 million
tons from 24.2 million tons.
• End of Feb Malaysian palm stocks of 2.169 mmt compare with 2.104 mmt expected, 2.309
Jan and 1.736 mmt year ago. Feb production of 1.043 mmt was off 2.4% vs. expectations for
production of 1.085 mmt.
• Bloomberg) — Palm oil inventories in Malaysia dropped to the lowest in eight months after
dry spells triggered by the strongest El Nino in almost two decades cut output in the world’s
second-largest grower. Inventories fell 6.1 percent to 2.17 million tons in February from a
month earlier, the lowest since June, data from the Malaysian Palm Oil Board showed
Thursday. That compares with the 2.11 million tons median estimate in a Bloomberg survey.
Crude palm oil production fell 7.7 percent to 1.04 million tons, the lowest level since February
2007. Production in Sabah, Malaysia’s biggest palm-growing state, slumped 21 percent,
board data show.
• (Reuters) Malaysian palm oil futures reversed gains to fall from a near three-week high due
to sluggish export demand and a stronger ringgit; the ringgit gained 0.8 percent in evening
trade to touch 4.0900 against the dollar; palm oil becomes more expensive for holders of
foreign currencies on a stronger ringgit.
• Deliveries include 49 meal, 137 soy oil, 14 corn, 45 beans and 15 SRW.
• (Bloomberg) –Bayer AG and BASF SE are planning to introduce new genetically modified
soybean seeds this year in Brazil as the companies seek to break Monsanto Co.’s decade-long
dominance in the South American country, the world’s second-largest producer of the crop.
Bayer’s agriculture unit, Bayer CropScience, will begin selling soybean varieties in Brazil that
are resistant to the herbicide glufosinate ammonium for the planting season starting in
October. The seeds will be an alternative to Monsanto’s glyphosate-resistant crops. The move
will mark Bayer’s attempt to return to a market it left more than a decade ago after selling its
soybean and corn seed assets in Brazil.
• Bloomberg) – Conab ups Brazil soy corp to 101.2 mmt. Output forecast compares to 100.9m
mt in Feb., Brazil’s national supply company, known as Conab, says in 6th report for 2015-16
season. Output seen rising from 96.2m mt in past season. Corn output forecast at 83.5m mt
vs 83.3m mt in Feb.; down from 84.7m mt in past season.
• (Reuters) Beijing has stockpiled 88 million tonnes of corn by the end of February under its
2015/16 stockpiling scheme. The programme has taken about 90 percent of the harvest from
China’s main corn growing region in the northeast and local processors are facing an
“embarrassing situation” with less corn available to them, according to Tong’s proposal. On
the other hand, the government is sitting on massive stocks of about 250 million tonnes of
corn at the end of February, as estimated by market analysts, it said. Tong’s proposal was
posted on the NPC website
• (Bloomberg) — India’s wheat crop, the world’s second largest, is at risk from rain and hail
forecast over the next four days after unseasonably wet weather shrunk the previous crop to
the smallest in five years. Northwest and central regions of India, the main wheat- growing
areas, will get thunderstorms accompanied by strong wind and hail over the next three to
four days, the India Meteorological Department said in a statement. The agency advised
farmers to reap matured crops at the earliest and secure already-harvested grain. Harvesting
normally starts in April and ends by June. A smaller Indian crop may help alleviate a global
wheat glut that sent prices to a third annual loss in 2015. Production will be 86.53 million
metric tons this year, down from last month’s forecast of 88.94 million tons, the U.S.
Department of Agriculture said Wednesday. Indian imports may increase if the crop is
damaged, according to Kotak Commodity Services Ltd.
• EXPORT SALES:
Wheat 15/16 331 tmt or 12,147 (1,000 bu); 16/17 103 tmt or 3,781 (1,000 bu)–
Expecting 150-500 tmt
Corn 15/16 1,172 tmt or 46,151 (1,000 bu); 16/17 20 tmt or 787 (1,000 bu)–
Expecting 600-1,200 tmt
Soybeans 15/16 475 tmt or 17,461 (1,000 bu); 16/17 3 tmt or 110 (1,000 bu)–
Expecting 300-700 tmt
Soymeal 15/16 47 tmt; –Expecting 100-250 tmt
Soyoil 15/16 35 tmt; –Expecting 0-10 tmt