Capitol Commodity Hedging Services on Grain

April 2, 2019 8:28 am
Published by

-USDA reports soybeans sold to China in follow-up reporting from last week
-U.S. weather pattern remains active heading into planting season

 

After Friday’s wild ride following the USDA’s quarterly Grain Stocks report and Prospective Plantings report, weekend news was rather light with markets recovering a bit amid ongoing U.S./China trade deal optimism and continued early U.S. planting season concerns as more snows were seen over the weekend in much of NE and SD, while much of the rest of the belt saw moderate rains. The USDA’s first Crop Progress report of the year will be out this afternoon, providing U.S.-wide winter wheat crop condition ratings, along with usually the first look at the planting situation as progress for oats and sorghum is typically included in the first report of the season. Also this afternoon, USDA will release the monthly Oilseed Crushings report and Grain Crushings report, as well, providing data for February. There is little downtime in USDA reports at this time of the year as the next WASDE supply/demand balance sheet revisions will be released next Tuesday, April 9, as USDA makes adjustments related to Friday’s quarterly Grain Stocks report. Their first official estimates for the 2019/20 marketing year are not published until the May WASDE report.

 

  • Reuters estimated around 1.0 million acres of farmland was flooded from the Dakotas through Missouri when satellite imagery was analyzed during the March 8-21 period, including roughly 474k acres in Iowa and 203k acres in Missouri. USDA estimated total combined corn, soybean, wheat, sorghum, oats and barley planted area this year in the U.S. at 233.4 million acres on Friday.
  • The average trade estimate for February U.S. soybean crush in this afternoon’s Oilseed Crushings report is 165.1 million bushels vs 182.8 million in January and 165.0 million last year February. End February soybean oil stocks are estimated at 2.202 billion pounds (2.104-2.275 bil range of ideas) vs 2.004 billion in January and 2.425 billion last year at the end of February.
  • Friday’s CFTC Disaggregated COT data for futures/options combined for the week ended Tuesday, 3/26/19, showed funds active net buyers in most ag markets as they eased up on some of their short positions heading into last Friday’s USDA reports. Funds were net buyers of 58k contracts in corn, reducing their net short to 203k contracts, as well as 12.6k soybeans (net short 51.4k), 17.8k SBM (net short 12.1k), 9.8k CBOT wheat (net short 63.8k), 2.9k KCBT wheat (net short 48.5k) and 5.8k MPLS wheat (net short 1.5k). Funds were net sellers of 18.7k contracts in soybean oil for the week, moving back to a net short (8.3k contracts) for the first time since mid-January.
  • USDA reported the sale of 828k tonnes of soybeans to China for 2018/19 in what is additional reporting of last week’s sales believed to be around 1.5-2.0 MMT. USDA had reported soybean sales of 816k tonnes to China on Friday, as well.
  • Malaysian palm oil/product exports were strong in March at 1.578 MMT, the highest since September and were up from 1.232 MMT in Feb and compared to 1.395 MMT last year in March.
  • South Korean feedmills bought around 200k tonnes of optional-origin corn over the weekend, priced at around $190-$191.50/tonne c&f for LH Sept-October arrival.
  • Algeria tendered for an unspecified amount of wheat for May 16-31 shipment, with offers due by tomorrow. In their last tender, Algeria bought 450k tonnes of wheat believed to be French origin.
  • The EU Commission sees 2018/19 EU soft wheat exports at 19.0 MMT, up from 18.0 MMT previously estimated, with early ideas on 2019/20 exports held steady from previous ideas at 25.5 MMT. 2019/20 EU corn imports are seen declining to 15.5 MMT from this year’s 21.0 MMT (raised from 20.0 MMT previously).

 

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    This post was written by Louis Rose