-Malaysian palm oil stocks expected to remain low throughout 2021 despite higher production
-Expectations for record Brazilian corn crop hold despite planting delays
-EIA data expected to reflect notable weekly ethanol production decline
The soycomplex continued to rally overnight, providing support to corn and wheat, as well. Malaysian palm oil futures made new highs overnight before settling back to modest losses for the session. This morning’s EIA ethanol data is expected to show a considerable decline in production for the week as a result of the recent severe cold/natgas price spike. Friday is first notice day for March deliveries.
ï‚· The Malaysian Palm Oil Council sees monthly Malaysian palm oil stocks remaining below 1.5 MMT through much of 2021,
maintaining the structure for continued elevated prices through at least the first half of the year and possibly most of the year. For reference, stocks at the end of January were 1.324 MMT and averaged 1.723 MMT/month in 2020 and 2.522 MMT/month in The Council estimates 2021 Malaysian palm oil production at 19.6 MMT, up modestly from 19.1 MMT in 2020, with Indonesian production posting a stronger increase to 45.0 MMT in 2021 from 42.3 MMT last year. They also see Malaysian palm oil exports rising by around 10% in 2021 to 4.8 MMT, while Indonesian exports are expected to decline 10% given their new export tax/levy structure putting them at a disadvantage to Malaysian supplies.
 A wire service poll of Brazilian ag industry participants indicated average expectations for this year’s corn crop at 108.2 MMT vs USDA last at 109.0 MMT and CONAB at 105.5 MMT, reflecting a solid increase from last year’s 102.5 MMT and a new record.
Total planted area is seen up roughly 1 million hectares (2.47 mil acres) from last year at 19.44 million hectares (47.9 mil acres). The obvious risk to the crop is the historically slow planting pace so far given the severely delayed soybean harvest as only 14% of the safrinha crop was planted as of 2/19/21 vs 50% average. The last two years saw the safrinha crop account for 73% of total corn production, with CONAB currently estimating this year’s crop to account for 76% of total production. The expected increase in planted area is seen offsetting the potentially detrimental yield impact of the late planting as at least 25% of the safrinha crop is likely to be planted beyond the ideal timeframe, increasing late season dryness risk.
ï‚· South Korea bought 60k tonnes of corn overnight, believed to be U.S. origin, at $309/tonne c&f for March 25-April 15 shipment.
Weather
Rains of .20-.70†fell across most of RGDS and Santa Catarina, with .25-1†falling in around 70% of Mato Grosso, Goias and western Minas Gerais yesterday. Over the next 5 days, 1-2â€+ will fall in most areas north of Parana, while all other growing areas see .25-.85â€+ range with 50% coverage. This forecast is similar previous ideas. In the 6-10 day period, 2-4†is still expected in Mato Grosso, Goias, MGDS, Sao Paulo and most of Parana, while totals across Santa Catarina and RGDS look to be in the .25-.75†range and little to no rains are seen for Minas Gerais.
Argentina saw .20-.70†across the northern ½ of Santa Fe and into most of Corrientes yesterday, with conditions dry elsewhere. Most of the next five days looks dry with the exception of La Pampa where .30-1†is expected. The 6-10 day period shows .50-1†across La Pampa and Cordoba, but dry elsewhere.