-Corn used for ethanol production in Feb higher than expected – sorghum share continues to rise
-Ukraine wheat crop seen down 35% from last year
-USDA winter wheat crop condition updates start this afternoon
-Southern Plains forecast remains dry
-Brazilian soybean exports jump sharply in March
Soy posts yet another new high on heels of further gains in palm oil, lack of Arg soy oil offers and
bullish weekend Oil World assessment on palm oil. Malaysian March palm S/D on 4/11 will be of
keen interest to soy complex which is heavily focused on palm oil.
Grains sag in part on IGC Friday update looking for 22 mmt gain in16/17 global corn production
offset by 21 mmt decline in global wheat crop leaving global grain stocks unched. IGC sees only
nominal cut in 16/17 record global soy stocks amid 3 mmt cut in production and 6 mmt gain in offtake.
Weather leans supportive with cooler lean to Midwest maps through FH April and dry outlook for B
PRC wheat belt along with safrina corn. Argentina and Ohio Valley/SE/Delta getting too much rain.
Trade looking for 55% G/E on national winter wheat rating today vs. 44% last fall and 58% YA.
Notable that Midwest maps for April have trended cooler over last 2 weeks—a potentially supportive
factor this week following fire-hose of negative news last week. Corn upside limited however with
massive new crop acreage overhang that will be difficult to challenge until late April at the earliest.
Soy market driven largely by grain shorts hedging trades with long soybean positions and uncertain
Asian palm production prospects. Significant that soy oil rally today dismissive of bearish Census
report Friday showing larger than expected US soy oil stocks.
Trade rumors that PRC may announce this week specific s of corn auction policy (talk 20 mmt
eventually for sale).
Nothing bullish about soft crude market and equity recovery which is drawing capital away from
commodities. All eyes on the dollar this week to determine if March free-fall persists into April.
Sinking dollar doing little for corn or energy markets. Cash traders report little Gulf interest in
summer US corn.
Passage of March 31 crop report will find market shifting attention to weather. Eastern/southern
Midwest getting bulk of rains now that CWG thinks will shift to KS/NE/IA/N MO/N IL LH April—all
areas with below normal 90 day rains. Hopes by bulls for 2016 planting delays—as of today—are
nothing more than wishful thinking.
Foreign Markets:
Palm market up 22 ringgits at 2770
• Paris milling wheat up 1 euro at 155.00
• Dalian beans on holiday
Ag Markets:
• Last week corn down 16.5 cents, beans up 8.25 cents, wheat up 10 cents, meal down $2.50
and soy oil up 122. Both the CRB and dollar traded lower last week (dollar below 50 DMA).
• Oil World reports Malaysian palm oil production outlook deteriorates further after partly
severe drought in Jan/March 2016. Palm oil prices are likely to increase further.
• US corn export sales down 5.8 mmt (USDA off 5.35 mmt), soy sales down 4.4 mmt (USDA
off 4.16 mmt) and wheat sales off 3.6 mmt (USDA off 2.15 mmt) .
• Brazil exports record 8.4 mmt soy during March—up 2 mmt from 3/14 record—and 2 mmt
corn—up 1.4 mmt from 3/13 record.
• (Update from ND IB) Spring will be early in North Dakota and Minnesota this year. There has
been wheat planting for a couple of weeks in southwest ND. Scattered field work and fertilizer
applications are happening throughout different areas of the tristate area. Moisture
is good to excellent, with the exception of SW North Dakota.
• (Update from AK IB) Delta moisture varies widely from adquate to saturated. Heavy spring
rains forcing replanting of corn in N LA where farmers prefer to have seeding completed in
March. Producer state of mind characterized as “grim†amid 2nd year of low prices. USDA
may be overstating AK all crop area—especially in wake of excess March precip. Look for
some switch from corn to soy with condition of early crops rated as “poorâ€. N Delta in better
shape than S Delta. Whitnessed active MS planting prior to late week rains. Only 25-30% of
new crop soy sold—even less corn.
• Trade awaiting 4/11 update on Malaysian March palm production and stocks. Palm oi up
$40/ton last week to $717.20. Analog years when low Feb Malaysian palm production
continued into March include 1997, 2000 and 2012 with low produciton persisting into April
and May in 2012.
• (FT) Intercontinental Exchange launched world cotton futures five months ago to reflect the
global nature of production. The contract has struggled to catch on with investors
• (Reuters) Chinese feed mills bought a record volume of foreign feed grains in 2015, which
together with corn imports, replaced more than 42 million tonnes of domestic corn
production, about a quarter of annual consumption.
• IGC Friday projected 16/17 world corn production at 993 million tonnes vs. 972 mmt YA.
World wheat production pegged at 713 mmt vs.734 mmt YA. 16/17. Global Grain 1 stocks
are forecast to total 466 million tonnes, unchanged vs. YA. 15/17 world soybean production
pegged at 320 mmt vs. record 323 mmt YA while consumption climbs to 327 million from 321
million, leading to a drawdown in stocks that would still be at comfortable levels.
• (Bloomberg) –The risk India will suffer below-average monsoon rain for a third year, a oncein-
a-century event, probably means the central bank has room for just one interest-rate cut
before an extended pause. Two years of back-to-back drought have meant India’s reservoirs
are three-quarters of the past decade’s average. Water scarcity could hurt crops, worsen
price pressures and dent growth in Asia’s third-biggest economy. RBI Governor Raghuram
Rajan would also be wary of the recent recovery in oil prices that could imperil inflation
targets.
• (Bloomberg) –After a terrible 2015, some commodities have started to recover this year. Yet
while money poured into precious metals and energy exchange-traded funds in January
through March, agriculture ETFs saw an outflow for a third straight quarter. Investors pulled
about $11 million from ETFs tracking crops in the first quarter, a 0.9 percent decline in their
market capitalization, data compiled by Bloomberg show. Livestock, industrial metals and
broad-based commodity ETFs also saw outflows. Agriculture prices gained in the first quarter.
The Bloomberg Agriculture Subindex, which tracks futures of eight crops from cotton to corn,
rose 0.6 percent during the period, snapping a two-quarter slump. PowerShares DB
Agriculture Fund, the largest agriculture ETF, has allocated 7 percent of its holdings to sugar,
more than any other agricultural product. Sugar prices touched a 16-month high in late
March amid stalling output growth and posted a fourth straight quarterly advance. The price
of the ETF was little changed during the quarter.
• Cash sources report competitive US corn offering attracting more business.
• Ag Rural says 60% of 2016 Brazil soy crop sold vs. 53% YA with 76% of crop harvested.
Brisk S American soy sales Friday. US farmer active soy seller last week as well.
• US FOB soy vales Friday at K+36 are lowest since 2007
• Board crush Friday off 0.5-1.5 cetns/bu to 59.75-70.25 cents May thru Jan.
• Funds Friday buy 8K beans , 4.5K corn and 1.5K wheat.
• SK Friday posts highest weekly close since 8/14/15 and above 50 week moving average of
$9.15
• Weekly Ag Scorecard: Managed funds trim corn short 47K to -108K (a 6 week low), up soy
long 21K to +75K, reduce wheat short 12K to -70K and add 7K to soy oil long to record 106K
long. Managed funds short in C/B/W/ML/Oiil only -10K vs. -105 K last week.