Export Sales Announcement
Private exporters reported to the U.S. Department of Agriculture export sales of 567,000 metric tons of corn for delivery to China. Of the total, 63,000 metric tons is for delivery during the 2019/2020 marketing year and 504,000 metric tons is for delivery during the 2020/2021 marketing year.
Russia Sets Grain Export Quota
- Russia’s government approved the Agriculture Ministry’s recommendation to establish a 7 million tonne grain export quota for April-June.
- Waiting for details on the implementation, especially regarding wheat.
- The customs union of Russia and former states also decided to restrict exports of sunflower seeds, rye and soybeans until June 30.
- Russia plans to sell up to 1.5 million tonnes of grain from its state stockpile.
- The state stockpile consists of grain bought in 2008-2016, located far from Russia's main export ports on the Black Sea.
FBN’s Take On What It Means: The increase in sales from the stockpiles seems to be an attempt to relieve tension and to moderate prices for flour and bakery products. Some analysts believe the move is unlikely to be a step towards tougher grain export restrictions. However, expect some renewed support on uncertainty about Black Sea logistics and potential export restrictions with a number of countries concerned about coronavirus related food security issues. At FBN we believe near term strength can be used to catch up on sales.
Buenos Aires Grains Exchange Cuts Soy Crop Estimate
- The soy crop estimate is now at 49.5 million tonnes vs its last forecast of 52 million tonnes, and USDA’s last projection of 54 million tonnes.
- The Exchange cited bad weather and lower-than-expected yields as the reasons.
- Their estimate is down 5 million tonnes from their peak crop projection of 54.5 million tonnes in February, ahead of the hot/dry weather during pod fill.
- Recently, producers have had to contend with unusually rainy conditions that have made some roads impassable and soils too wet for harvest.
- Harvest was reported 8.1% complete vs the average harvest pace of 9.7%.
FBN’s Take On What It Means : We believe as the Argentine crop is trimmed further it could make farmers even more stubborn sellers, couple that with record high inflation and a new government that has infuriated the farmer, and FOB meal offers can be expected to remain firm even as Argentine harvest progresses. It’s likely meal will soon resume leadership in the soy complex, which should be positive for US producers.
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