Morning Grain Comments, 04/20/2016

Wednesday, April 20, 2016

Crazy trade volume continued overnight, with soybeans surging to fresh highs before taking some profits since the evening hours; that gives the feed grains a chance to recover some ground with Dec corn keeping that SX/CZ ratio right on 2.5-to-1 despite post-March-31-acreage fluctuations

Japanese customs data reported March grain imports at 2.17 MMT, down 5% from last year, with grain imports from the U.S. making up 951k of that, which was down 38% from last March. Soybean imports fell 10% year-overyear to 332k, with just shy of 300k of that from the U.S. (-7% YoY).

The Brazilian government officially decided to eliminate their corn imports tax on shipments from countries outside the Mercosur; shipments will exempt from that 8-10% tax for six months, up to a max 1 MMT. The move makes corn imports from the U.S. into northeastern Brazil competitive price-wise

A Reuters survey found traders expecting South Africa’s Crop Estimates Committee (CEC) to cut their 2016 corn production estimate again this month, down another 5.5% from 7.1 to 6.7 MMT. That would remain above the USDA’s current 6.5 MMT figure, but compares to 9.95 MMT last year. The CEC will issue their fourth production forecast on Tuesday. In addition, South Africa reported their first white corn imports from the U.S. since 2004, with a small shipment (1,330 tonnes) to check quality and genetics; however, 38k tonnes more were reported in Monday’s USDA export inspections report, and the country has already imported white corn from Mexico and Zambia.

Friday’s USDA Cattle on Feed Report is expected to show all U.S. cattle on feed as of April 1 at 100.9% of last year, with March placements at 106.4% of last year and marketings at 106.1% of last March.

In USDA attaché reports yesterday, Poland’s 2016/17 grain production was seen rising 6% from last year to 29.5 MMT; separately, an attaché in Egypt called for record ‘16/17 bean imports of 2.42 MMT, up from 2.0 MMT LY.


Today’s chart is an update on the November soybean seasonal, finally seeing some action after a dreadfully boring six months up through February. SX6 placed a low at 868 on 3/2/16 and had already picked up a dollar from there before yesterday’s rally. Of the most comparable seasonal years at this point, SX6 is now above SX9 (which nearly hit $11/bu in June), SX0 (which hit $13/bu before expiration), and SX5 (which peaked a nickel shy of $10.50/bu last July)


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