#Grain #Futures Comments

-Brazilian soybean/safrinha corn crop estimates stabilize
-US/China trade talks advance
-Indonesian palm oil stocks tick lower in Feb, solidly below year ago
-USDA Hogs and Pigs report this afternoon
-USDA reports HRW sales to Iraq, SRW to Egypt
-Soybean export sales weak, corn/wheat solid
-Trade estimate summary for tomorrow’s USDA reports

 

USDA’s quarterly Grain Stocks report and Prospective Plantings report will be out tomorrow morning at 11:00 AM CT. Our pre-report commentary/analysis can be found on Market Insights at https://portal.rjobrien.com/MarketInsights/Blog/Read/35396. A summary of the trade estimates is on the following page.

 

 A wire service poll of Brazilian ag industry participants revealed average expectations of the Brazilian soybean crop at 114.2 MMT vs CONAB’s last estimate of 113.5 MMT and USDA’s 116.5 MMT. The range of ideas was 112.1-116.5 MMT, while last year’s crop was 119.3 MMT. The average estimate of the safrinha corn crop was 66.2 MMT vs last year’s crop of 53.9 MMT. CONAB was last at 66.6 MMT. The range of ideas was 61.2-69.9 MMT.

 As US/China trade talks resumed in Beijing today, wire services are reporting a US trade official said China made unprecedented proposals on several factors including forced technology transfer as they continue to work to strike a deal. Progress is clearly being made, even on some of the tougher issues, but the official still said, “We aren’t yet where we want to be.†Additional comments included, “It could go to May, June, no one knows. It could happen in April, we don’t know.†Without providing specifics, an official state U.S. tariffs on some Chinese products will remain in place even when a deal is stuck in order to help ensure compliance with whatever terms are set. After the talks today/tomorrow, in-person talks will resume again next week in Washington.

 A survey of Indonesian palm oil associations/analysts revealed expectations the country’s palm oil production in February was 3.800 MMT, up from 3.600 MMT in January and well above last year’s Feb production of 3.586 MMT. End Feb stocks were estimated at 2.733 MMT, down modestly from 2.853 MMT in January and solidly below year ago Feb stocks of 3.701 MMT, while exports for the month were estimated at 2.880 MMT vs 3.045 MMT in Jan and 2.737 MMT Feb last year. Indonesia does not publish official palm oil data.

ï‚· USDA reported 120k tonnes of SRW wheat sold to Egypt this morning, confirming the results of the recent GASC tender. They also reported 150k tonnes of HRW wheat was sold to Iraq, with only 50k tonnes being for old crop 2018/19 delivery, with 100k tonnes for 2019/20.

ï‚· This afternoon, at 2:00 PM CT, the USDA will release the quarterly Hogs and Pigs report. The average estimate of all hogs and pigs as of March 1 is 102.0% of last year (101.5-102.5 range) at 74.366 million head. Kept for breeding is estimated at 101.9 (100.9-102.3 range) with 6.318 million head and Kept for marketing is estimated at 102.0 (101.5-102.6 range) with 68.042 million head. Further expansion in hog numbers is expected with farrowings/intentions for the Dec-Feb, Mar-May and Jun-Aug periods all up year-over-year.

ï‚· Philippines tendered for 60k tonnes of feed wheat for May-Sept shipment.

 Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/35407 for more details on this week’s Export Sales report.

ï‚· U.S. soybean sales were very weak at just 182k tonnes (6.7 million bushels), falling well below market expectations of 500-800k tonnes, declining from the previous week’s 13.9 million bushels and below last year’s same-week sales of just 11.7 million bushels.

ï‚· U.S. wheat sales last week were solid at 476k tonnes (17.5 million bushels), beating market expectations of 200-450k tonnes, and were above the previous two weeks’ sales of 10.9 million and 9.7 million bushels, as well as last year’s same-week sales of 13.0 million bushels.

ï‚· U.S. corn sales last week were solid at 905k tonnes (35.6 million bushels), in line with market expectations of 700k-1.2 MMT, but littlechanged from the previous week’s 33.8 million bushels and well below last year’s same-week sales of 53.3 million bushels.

ï‚· U.S. SBM sales last week were 84k tonnes, below expectations of 100-300k tonnes and down from the previous week’s 97.4k, while each of the last two weeks’ sales fell below the roughly 110k tonnes/week “needed” pace in order to reach the USDA’s export projection. SBO sales of 11.7k tonnes were within expectations of 5-20k tonnes and were slightly below the roughly 13.7k tonnes/week “needed” to reach the USDA’s export projection. SBO sales over the last five weeks have averaged 10.0k tonnes/week.