FI Evening Grain Comments 05/25/23

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Lower
trade in soybeans led by weakness in soybean meal. Soybean oil rallied in part to higher palm oil futures. Corn ended mixed with July higher (strong US corn basis) and back months lower. Nearby Chicago wheat fell while KC and MN ended higher on US Great Plains
weather concerns. The USD was sharply higher, up 4 consecutive sessions. USDA export sales were very good for soybean meal. Rest of the commodities were about as expected. China cancelled a good amount of corn, but Mexico stepped up purchases last week.

SX/CZ

Fund
estimates as of May 25

Weather

World
Weather Inc.

WEATHER
TO WATCH

• U.S.
  Midwest will experience another week of dry weather and temperatures will rise above normal for a while with multiple days of 80-degree Fahrenheit highs that will accelerate drying in the topsoil
• Crop
  conditions and fieldwork will remain favorable during the week, but rain will become an increasingly more important need for the region
• Some
  rain will develop during the June 2-8 period, though it is a little unclear how significant that will be
• U.S.
  hard red winter wheat areas will continue to receive periodic showers and thunderstorms over the next week providing late season moisture for more immature crops
• There
  is need for drier weather in parts of Texas and Oklahoma where crops are most advanced, but so far there has not been any serious impact on grain quality
• U.S.
  Delta and southeastern states will continue to experience favorable weather over the next two weeks, despite drying for a while in the Delta
• Heavy
  rain is expected in the Carolinas this weekend as a low pressure center comes inland producing 1.00 to 3.00 inches of rain and local totals near the coast of more than 5.00 inches
• West
  Texas cotton areas benefited greatly from rain this past week with 1.00 to 2.65 inches common and a few amounts pushing up over 3.00 inches
• Friona,
  Texas received 3.06 inches in the past seven days and Andrews, located in the southwest corner of West Texas, reported 3.60 inches
  
• Texas
  Panhandle 7-Day rain totals have varied from 1.50 to more than 5.00 inches raising concern over wheat quality and slowing crop maturation
• The
  moisture has set the stage for a great start to the corn and sorghum season
• U.S.
  Pacific Northwest weather will continued locked into a pattern with the Yakima Valley staying dry over the next ten days to two weeks and frequent, near-daily, showers occurring in the Snake River Valley and areas northeast into Wyoming and Montana sugarbeet
  and dry bean country
• Western
  Alberta, Canada soil moisture has improved greatly from that of last weekend because of early week rainfall varying from 1.00 to more than 3.00 inches
• Saskatchewan
  and Manitoba rainfall will improve sufficiently to boost soil moisture for better canola, wheat, lentil, corn and soybean development, although southeastern Manitoba will miss much of the beneficial moisture
• Ontario
  and Quebec, Canada need more consistent warm temperatures to stimulate better wheat, corn and soybean development
• Some
  improving trends are expected over the next week
• Drought
  in southwestern parts of Canada’s Prairies remains serious and significant rain must fall soon to save canola, wheat and other crops planted and emerged in the region
• Rain
  is possible during the second week of the outlook across a part of the region, but confidence is not high over how significant the rain will be
• Australia’s
  winter crops are establishing favorable in portions of the south, especially in Victoria, southeastern South Australia and southern New South Wales locations
• Greater
  rain is needed in interior parts of Western and South Australia, Queensland and some north-central production areas of New South Wales
• Northern
  Europe will dry out over the next ten days
• The
  region will experience seasonable temperatures which may help to keep the drying rates at a reasonable level, but the region will need to be closely monitored for possible dryness issues later in June
• Southern
  Europe continues to deal with frequent showers and thunderstorms
• Flooding
  occurred recently in northern Italy
• Some
  grain quality concerns may be developing in early maturing winter small grains
• The
  pattern is not likely to change much for at least the next week and possibly ten days
• Russia’s
  eastern New Lands are drying down and will need to be closely monitored over the next few weeks for moisture shortages and crop stress
• Today’s
  forecast models suggest rain will fall in the June 3-9 period, but it is unclear how significant that may or may not be
• Western
  Russia, Belarus and western Ukraine may dry  down for the next ten days while the Volga River Basin and Ural Mountains region get periodic rain along with eastern Ukraine and Russia’s Southern Region
• Northern
  India will get unusually great amounts of rain for this time of year slowing fieldwork and raising some unharvested winter crop quality concerns
• Much
  of the winter crop should be harvested, though
• Rain
  will be good for early season cotton in Punjab, Haryana and parts of Rajasthan as well as in parts of Pakistan
  
• China
  weather will continue favorably mixed except in a small part of eastern Inner Mongolia where drought is prevailing
• Alternating
  periods of rain and sunshine elsewhere in China will be great for long term crop development
• Xinjiang,
  China temperatures will continue cooler than usual over the next ten days
• Northeastern
  Xinjiang will experience highs in the 70s Fahrenheit while other areas in the province experience 80s
• All
  of these temperatures are still not optimum for cotton or corn
• Warming
  is needed to induce the best crop development
• Some
  showers will occur in the northeast.
• An
  improved environment of warmer weather is needed
• The
  persistent cool conditions this spring may lead to a higher potential for crop damage in the autumn if frost and freezes occur prior to crop maturity.
  
• Mainland
  Southeast Asia rainfall will steadily increase later this week into next week bringing relief from early season dryness
• Improved
  rice and corn planting conditions are expected
• Improved
  sugarcane, coffee and other crop development is also likely as well
• Water
  supply in the region is below average and concern is rising over water supply when El Nino kicks in and starts reducing summer rainfall which makes the greater rain forthcoming all the more important
• Indonesia
  and Malaysia rain frequency and intensity is expected to diminish greatly next week and on into the first full week of June
  
• Some
  net drying is expected, but crop conditions will remain favorably rated.
• Philippines
  rainfall will remain well mixed with sunshine over the next ten days
• Super
  Typhoon Mawar was producing sustained wind speeds of 173 mph today and gusts to more than 207 mph at 1500 GMT today.
  
• The
  storm will move west northwesterly toward Taiwan and the northeastern part of Luzon, Philippines, but landfall is not likely through Tuesday
• Taiwan
  may be more vulnerable to the storm than the Philippines and notable weakening is expected prior to the storm getting near those areas