Ag markets back & fill awaiting today’s crop report.
Weekly Brazil crop roundup pegs soy crop at 100 mmt (same as USDA) and corn crop up 1 mmt
from last week to 83 mmt (USDA 84 mmt). Soy harvest advancing slightly ahead of last year with
yields running right at expectations. Brisk port loadings despite rain delays with Feb soy lifting’s of
2.3 mmt — more than 3X Feb 2015 pace. Only 1 mmt more corn to load by end of month before
corn exports resume in Aug following safrina corn harvest. 55% of 2016 soy crop sold with next
sales acceleration expected in April after truck freight rates ease. CBOT board price and exchange
rate are key drivers farm selling pace. ¼ of remaining unplanted safrina corn area should be
planted by 3-15-3/20. Soy crushers laboring under low ownership and tight margins that should
improve as harvest/farmer selling advances. Recent rains viewed as highly beneficial for safrina
corn although timely rains need to continue through April/May.
Weekly Argentine crop roundup pegs soy crop at 57-58 mmt (USDA 58.5 mmt) and corn at 25-26
mmt (USDA at 27 mmt). Only 10% of corn production area laboring under excess moisture which is
having greater impact on rural roads and access to early harvested corn. Moisture generally
welcome for soybeans which are flowering/pod-filling stage. Early soy harvest will commence late
March although main harvest thrust will be April/May. Farmer in recent days has accelerated pace of
new crop soy selling. Farm selling spikes on any sign of weaker peso. Continue to expect below
average labor unrest amid pro-active government initiatives to increase wage rates. .
Trade tomorrow looking for 0.200 tmt cut in end of Feb Malaysian palm stocks to 2.1 mm vs. Jan.
Weather leans supportive with 2 week wet pattern for Delta/SE and ongoing dry tone for western ½
of N African wheat. No change in dry 2 week outlook for western 1/3 of US HRW belt. Importantly—
CWG sees Midwest temps reverting to normal during 11-15 day period. Additionally—April Midwest
weather not as wet as early week forecasts.
Trade looking for nominal gains in S American corn and soy crops today with follow-up by Conab
tomorrow on Brazil (prior CN/BN at 83.3 mmt/100.9 mmt respectively).
Suspect limited downside near term with macros firming and ag markets keen on getting accurate
read on LH March Midwest precip pattern.
Crop report today more likely bearish than bullish but trade focus is on new crop.
Palm market down up 29 ringgits at 2557
• Paris milling wheat down 0.75 euros at 143.50
• Dalian beans down 9.5 cents/bu, meal down $2.90/ton, soy oil down 28 and corn down 0.75
cents/bu
• 19 corn, 155 soy a, 158 soy oil and 11 wehat delivered with no stoppers. ABN stopped all 11
meal delivered.
• (Reuters) Russia’s winter grains are in a better condition than at the end of November, the
head of the agricultural department at state weather forecaster Hydromet centre said.
• (Reuters) Farm office FranceAgriMer on Wednesday left its forecast for total French soft
wheat stocks at the end of the 2015/16 season unchanged at 6.0 million tonnes, a 17-year
high. FranceAgriMer also held its forecast of exports outside the European Union at 11.0
million tonnes this season, down from 11.4 million in 2014/15.
• (Reuters) Malaysian palm oil futures will climb nearly 20 percent to around 3,000 ringgit a
tonne as dry conditions brought by the El Nino weather pattern curb output in major
producers Indonesia and Malaysia, said top industry analyst Dorab Mistry.
• (Reuters) – Global palm oil production could fall by over 2 million tonnes this year because of
the drought caused by the El Nino weather event and further declines may occur due to
heavy rains from the La Nina event later this year, a leading industry analyst said. Concerns
of falling palm oil output has lent support to benchmark prices 1FCPOc3 that have risen 1.8
percent this week after hitting a one-month low on Thursday. Palm traded around 2,551
ringgit ($617) per tonne on Wednesday afternoon. “The El Nino will pull world 2016 crude
palm oil output down by over two million tonnes. A Q three to Q four La Nina, with heavy
rains, would reduce 2016 output by a further 0.4 million tonnes,” said James Fry, chairman of
commodities consultancy LMC International, at an industry conference in Kuala Lumpur on
Wednesday.
• (Reuters) – South Africa, which needs to import millions of tonnes of maize this year because
of drought, will source hundreds of thousands of tonnes of white maize in the coming months
from Mexico, likely beginning in May, local and foreign traders said. White maize is the staple
source of calories for most South African households but shortages are looming, driving up
domestic food prices and inflation. Africa’s most advanced economy is also set to receive
228,400 tonnes of the yellow variety of the grain in the coming days, according to Thomson
Reuters’ interactive shipping map.
• (Bloomberg) Nine out of 13 analysts, planters and traders in a Bloomberg survey were bullish
on prices to the end of the first half. Futures may climb to 2,700 ringgit by June 30,
according to the median estimate of bullish respondents. Prices rallied to a 21-month high of
2,648 ringgit last month. Prices are seen in a range of 2,700-3,000 ringgit until June as
output drops and as Indonesia and Malaysia fail to meet their biodiesel usage targets, said
Thomas Mielke, executive director at Oil World, an industry researcher. Production losses to
dry weather may be further exacerbated if La Nina later this year triggers heavy rains, James
Fry, chairman of LMC International Ltd., told the conference.
• (Reuters) – The U.S. Department of Agriculture’s statistics agency on Monday released the
first weekly crop summaries for Kansas and Oklahoma, which together produce half of the
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Special Report United States’ hard red winter (HRW) wheat. At this point, the outlook for this year’s HRW
crop is about as good as it has been in recent years, though the recent lack of rainfall in the
Southern Plains has added a slight wrinkle. The “poor” and “very poor” ratings by USDA’s
National Agricultural Statistics Service are at the lowest levels since at least 2010 in Kansas
and Oklahoma. Wheat in Texas, which produces 10 percent of the HRW crop, is slightly worse
off than last year, but far ahead of other recent years, where up to half of the crop entered
spring in bad shape. March through May is the critical period for southern HRW wheat yield,
and although it has only just begun, early March condition scores can inform final yield. But
they can also be misleading without more background knowledge. Between 2010 and 2012,
the percentage of winter wheat in “good” or “excellent” shape seemingly guided final winter
wheat yield in the Southern states. But in the following two years, that trend did not hold.
• Reuters) – Cargill Inc, a top U.S. meat processor, is trimming the use of antibiotics in its
cattle supply amid concerns among some doctors and consumers about risks to humans from
antibiotic-resistant bacteria. The company on Feb. 26 started eliminating 20 percent of
antibiotics deemed important for human medicine and farm animals from its four feed yards
in Texas, Kansas and Colorado, according to the company. It is making the same reductions
at four feed yards operated by Friona Industries, which supplies Cargill with cattle. The
changes affect about 1.2 million cattle annually, which represents about 18 percent of the
cattle Cargill processes, according to the company
• (Bloomberg) –Imagine picking up a pack of chicken drumsticks at the supermarket and
scanning it with your iPhone to see exactly where the bird was slaughtered and when the
meat arrived in the store cooler. For Chinese shoppers, chastened by years of food-safety
scares, that’s now a reality. Tyson Foods Inc. has added to some of its chicken products a
quick-response code that can be scanned with a smartphone. The U.S. company, which
supplies one of every five pounds of meat eaten at home, has international ambitions and in
China that means trying to entice consumers for whom the provenance of their food matters
a great deal.
World Grain stocks
2015-16
Wheat Corn Soybeans
Average trade estimate 238.77 209.08 80.89
Highest trade estimate 240.00 210.00 82.00
Lowest trade estimate 236.00 207.15 80.00
USDA February 238.87 208.81 80.42
US Ending Stocks:
Wheat Corn Soybeans
Average trade estimate 0.975 1.854 0.452
Highest trade estimate 0.991 1.887 0.466
Lowest trade estimate 0.951 1.812 0.440
USDA February 0.966 1.837 0.450
S American Production:
Argentina Brazil
Corn Soy Corn Soy
Average trade estimate 27.23 58.85 84.50 100.13
Highest trade estimate 28.00 59.75 87.00 101.00
Lowest trade estimate 26.50 58.50 82.50 98.60
USDA February 27.00 58.50 84.00 100.00