Morning Grain Comments, 03/02/2016

Wednesday, March 02, 2016


The grains spent most of the overnight session in the green but contract lows still loom; we’ll expect trade estimates for the March S&D today but bullish help is extremely unlikely to arrive this time around either.

South Korea bought 60k tonnes of corn from South America (in a tender for up to 130k) for July 30 arrival, priced at just under $178/tonne C&F.

Egypt is looking for wheat again this morning, for April 5-14 shipment; they got six offers this time around, the lowest at $177/tonne FOB from Ukraine.

COFCO sees China’s soybean imports up 6% in 2015/16 (Sept-Aug) to 83.0 MMT, compared to 78.35 MMT LY, and up from the USDA’s 80.5 MMT.

South Africa’s largest grain producer group says their government’s 7.2 MMT corn production estimate is too high—they see the “optimistic” number bring revised down in coming months due to continued drought.

Brazil’s Trade Ministry reported February soybean exports at 2.04 million tonnes, up from 394k tonnes in January and 870k tonnes last February; corn exports of 5.37 MMT were up from 4.46 MMT last month and 1.10 MMT last
year—that was a Feb record and the third-highest monthly total ever, with the highest being December 2015 at 6.3 MMT. Feb ethanol exports of 306 million liters beat out 120 mln liters in January and 71 million in February 2015. Meanwhile, Brazilian trading house CGG yesterday said they expect the country’s main ports to start shifting grain exports away from corn and into soybeans starting this month as harvest picks up in the interior

The USDA reported January census soybean crush at 4.81 million tonnes yesterday afternoon, or 160.5 million bushels; that was down from 167.0 mbu in December but above the average 159.8 mbu trade estimate, and matching the high estimate in that trade range. Their Grain Crushings report showed total corn used for ethanol in January at 441.3 million bushels, down from 451.3 mbu in December and 443.9 mbu in Jan ‘15, with total DDG production at
1.87 million tons in Jan, versus 1.94 mln last month and 1.83 mln last year.

Russia’s First Deputy Ag Minister said yesterday that the country should have “no less than” 5-10 million tonnes of grain in its state intervention stocks— the interventions fund currently contains just 2.97 MMT of grain.

 

Today’s charts show price action of the most-traded May corn and bean contracts for the first half of March, since 1991. CK activity has been a mixed bag over the past decade with five gains and five losses during that time, including last year when CK5 placed a high at $3.95/bu on the first trading day of March and a low at $3.67/bu just after mid-month. SK5 also had its spring high on the first trading day of March at $10.39 (then a mid-month low at $9.53).

 

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