Morning Grain Comments, 02/23/2016

Tuesday, February 23, 2016

It’s not a turnaround Tuesday—that move started yesterday afternoon and the overall market weakness continued at the open last night, actually despite a decent run of production cuts for major global players. The USDA Ag Forum on Thursday/Friday looms—the government will have to find a way to massage ‘16/17 ending stocks to avoid all-out bearishness...

South Korean millers bought 67k tonnes of U.S. milling wheat for May-June shipment, with a variety of prices ranging from $199-300/tonne FOB.

UkrAgroConsult estimated Ukraine’s 2016 grain harvest at 52.2 MMT, down 10% from 2015 due to sharply decreased winter wheat production—17.3 MMT this coming season, compared to 17.8 MMT in Dec and 24.8 MMT LY. Corn output was pegged at 24.5 MMT, up from 23.0 MMT in 2015.

A Bloomberg survey of 32 grain analysts and traders yesterday—ahead of the USDA Ag Forum this week—found 2016 corn planting expectations at 89.7 million acres, up from 88.0 mln in 2015 but below the USDA’s initial 90.5 mln figure. Soybean area came in at 83.35 mln ac, up from 82.7 mln LY and the government’s current 82.0 mln ac, with wheat plantings seen at 52.4 mln ac, down from 54.6 mln ac LY and the 53.0 mln ac USDA starting point. Carryouts for corn, beans, and wheat for 2016/17 were all seen up from last year at 1891 millon, 516 million, and 1005 million, respectively.

Brazilian grain industry association Abiove yesterday cut their 2015/16 soybean production estimate to 98.5 million tonnes, down from 99.4 MMT in December; they also cut ‘15/16 exports from 55.0 to 54.5 MMT—still up from 54.32 MMT last season.

A Reuters trade survey estimated that South Africa’s Crop Estimates Committee will cut their 2016 corn production estimate on Thursday, from 7.44 to 6.87 MMT; that would be down over 30% from last year and the lowest since 2006. Trade estimates ranged from 6.10 to 7.44 MMT. Planted acreage is seen at 1.902 million hectares (4.7 mln acres), down 28% from last season.


Corn export inspections rose to 35.4 million bushels yesterday, up from 27.2 mbu the previous week and the strongest total since the first (half)-week of the marketing year; however, that was still only a wash with the same week last year, as we move into a seasonal period of stronger corn exports. Last year’s comparable inspections moved to 50+ mbu for next week and averaged nearly 40 mbu through August; the 5YA for next week jumps from 27 to 36 mbu.


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