FI Evening Grain Comments 06/07/2022

PDF Attached

 

Please
note I will be out of the office on Wednesday.

 

Weather

QPF
5-day Precipitation

 

            

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 7, 2022

• Additional
  rain fell in parts of interior southern Alberta, Canada Monday and early today further improving topsoil in a region that has been quite dry
• Drought
  remains in east-central Alberta and much of western Saskatchewan, Canada
• Rain
  will eventually fall across most of Canada’s Prairies during the next two weeks, but the drought regions in the west will continue to see less than usual rainfall for a while
• U.S.
  weather will be well balanced during the next two weeks bringing periods of rain and sunshine to many key Midwestern and northern Plains crop areas
• The
  same is true for the central Plains, lower Midwest and Delta, although these areas will experience a drier second week of the outlook due to weak ridge building in the central United States
• Argentina’s
  outlook remains mostly dry during much of the coming ten days and rain is needed in western parts of the nation in particular where soil moisture is lowest
• Brazil
  is still expecting rain in western and southern Mato Grosso and Mato Grosso do Sul Wednesday into Friday offering a little moisture of benefit to cotton, but the moisture comes too late for Safrinha corn
• Southern
  Brazil has been quite wet recently, but will dry down after this week for a while
• Western
  Australia rainfall Wednesday through early next week will be ideal in supporting good to excellent wheat, barley and canola planting and establishment conditions
  
• Eastern
  Australia will dry down for a while, but recent moisture has been great for autumn planting and crop establishment
• India’s
  monsoon is performing a little weaker than usual, but it is just the first week of the rainy season and there is plenty of time for improvement some of which is expected next week and into the second half of this month
• A
  portion of east-central China will continue to receive less than usual rainfall over the next ten days to two weeks, but the region may not be totally dry
• Rain
  is needed in the North China Plain and central Yellow River Basin and some of that need will be partially fulfilled by scattered rain and thunderstorms during the next two weeks, but not all areas will be adequately relieved of recent dryness
• Russia’s
  Southern Region, western Kazakhstan and eastern Ukraine will receive less than usual rainfall for the next ten days leading to a firmer soil and a greater need for rain.
  
• France
  will receive less than usual rainfall over the next ten days, although recent rain has helped ease some of the dryness
• Recent
  storminess in France damaged “some” crops, but the extent of the damage is not truly known
  
• Much
  of Europe has recently received rain and will receive some more periodically keeping soil moisture at favorable levels, but some pockets are expected to dry out again later this month

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Tuesday,
June 7:

• EU
  weekly grain, oilseed import and export data
• Vietnam’s
  customs department releases May export data for coffee, rice and rubber
• Russian
  Grain Union’s International Grain Round conference, Gelendzhik, Russia, day 1
• International
  Grains Council conference, day 1
• Global
  Food Summit in Munich, day 1
• Purdue
  Agriculture Sentiment
• Abares
  agricultural commodities outlook
• New
  Zealand Commodity Price
• New
  Zealand global dairy trade auction
• France
  agriculture ministry releases crop estimates

Wednesday,
June 8:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans
• Russian
  Grain Union’s International Grain Round conference, Gelendzhik, Russia, day 2
• International
  Grains Council conference, day 2
• Global
  Food Summit in Munich, day 2
• France
  AgriMer monthly grain outlook

Thursday,
June 9:

• China’s
  first batch of May trade data, including soybeans, edible oils, rubber and meat imports
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Ecosperity
  sustainability conference, Singapore
• Russian
  Grain Union’s International Grain Round conference, Gelendzhik, Russia, day 3

Friday,
June 10:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• ICE
  Futures Europe weekly commitments of traders report
• Malaysian
  Palm Oil Board’s data for May output, exports and stockpiles
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• Malaysia’s
  June 1-10 palm oil export data
• Brazil’s
  Unica may release cane crush and sugar output data (tentative)

Source:
Bloomberg and FI

 

Macros

US
Trade Balance (USD) Apr: -87.1B (exp -89.5B; R prev -107.7B)

Canadian
International Merchandise Trade (CAD) Apr: 1.50B (exp 2.80B; R prev 2.28B)

 

Due
out June 8

 

 

USDA
S&D estimates

 

 

 

 

Corn

·        
US corn futures finished higher on demand seen from the higher cash markets.  July/Sep and July/Dec spreads were firmer as bull-spreaders were active. 

·        
Weather does look good this week for crops, but the 6-14 day maps show above normal temps and below normal precipitation.  Traders will be monitoring this for any changes.

·        
Also underpinning corn is the doubt that we will see many shipments out of the Black Sea despite Russia saying it would lift its naval blockade.  We have witnessed significant damage to infrastructure that would limit export capacity
even if Russia were to allow shipments.

·        
Russia said two Ukrainian ports are ready to ship grain, but Kyiv must demine the approaches to its ports for exports to resume.

·        
Ukraine May grain, oilseed, and product exports were 1.743 million tons. Ukraine exported 959,000 tons of corn.

·        
European Commission reported maize 21/22 imports at 15.34 million tons by June 5 compared to 14.16 million tons last year.

 

Export
developments.

·        
None reported 

 

 

 

Updated
6/1/22

July
corn is seen in a $6.75 and $8.00 range

December
corn is seen in a wide $5.50-$8.00 range

 

 

 

Soybeans

·        
CBOT soybean
complex ended higher on strong cash demand and technical buying.  Spreads closed higher today as well which was driven by old-crop demand.

·        
European Commission reported soybean 21/22 imports at 13.56 million tons by June 5 compared to 14.29 million tons last year.

·        
EU Commission reported rapeseed 21/22 imports at 5.06 million tons by June 5 compared to 6.03 million tons last year.

·        
EU Commission reported soymeal 21/22 imports at 15.20 million tons by June 5 compared to 16.12 million tons last year.

·        
EU Commission reported sunflower oil 21/22 imports at 1.79 million tons by June 5 compared to 1.65 million tons last year.

·        
EU Commission reported palm oil 21/22 imports at 4.53 million tons by June 5 compared to 5.02 million tons last year.

·        
The EU Commission lowered its forecast for the 2022/23 EU rapeseed crop to 18.1 million tons from 18.3 million and lowered its EU sunflower seed crop estimate to 10.9 million tons from 11.2 million.

·        
Ukraine May grain, oilseed, and product exports were 1.743 million tons. Sunflower oil accounted for 202,605 tons.

·        
Indonesia plans to lower the maximum palm oil export tax and levy to a combined $488/T – Reuters.  No date was provided. “…the government would raise its maximum crude palm oil export tax to $288 per ton, but lower maximum levy
to $200 per ton, bringing the combined fees down to $488 per ton.

 

 

Export
Developments

·        
Egypt’s GASC seeks local and international vegetable oils on June 8 for Aug 5-25 arrival.

·        
China will offer another 500,000 tons of soybeans out of reserves on June 10.

 

July/
November Soybean 3-day 3-minute Chart (S_N2S_X2)                July/ December Soymeal 3-day 3-minute Chart (SMN2SMZ2)

 

Updated
6/1/22

Soybeans
– July $15.75-$18.00

Soybeans
– November is seen in a wide $12.75-$16.50 range

Soybean
meal – July $375-$465

Soybean
oil – July 76-81

 

 

 

 

 

Wheat

·        
Wheat futures closed lower on profit-taking following Monday’s rally.  Traders are doubting that we will see many wheat cargoes out of Ukraine even though Russia has said they would lift a blockade for exports. 

·        
China is 55 percent complete on winter wheat harvest progress as of June 6, slightly above year ago pace and on track to finish early.

·        
Australia is on track to reach the government’s latest estimate of 30.3 million tons for wheat, about 20 percent above average and if realized, 4^th largest crop in history.

·        
Canada’s Prairies will see drier weather over the next week allowing for planting progress.

·        
The EU Commission increased its estimate of the soft wheat crop from 130.1 to 130.4 million tons. 130.1 million tons was produced in 2021-22.

·        
Tunisia plans to import 1.1 million tons of soft wheat this year. – Reuters 

·        
Kazakhstan expects to harvest between 13.0 million and 13.5 million tons of wheat this year and plans to extend export restrictions until September.

·        
Five percent of the US winter wheat had been harvested as of Sunday, below 6 percent average and one point below expectations.

·        
European Commission reported barley 21/22 exports at 6.78 million tons by June 5 compared to 7.18 million tons last year.

·        
European Commission reported soft wheat 21/22 exports at 25.34 million tons by June 5 compared to 25.00 million tons last year.

 

 

Export
Developments.

·        
Japan seeks 169,250 tons of wheat from the US, Canada and Australia later this week.

·        
Jordan passed on 120,000 tons of wheat and retendered.

·        
Jordan seeks 120,000 tons of barley on June 8 for September/October shipment. 

·        
Jordan seeks 120,000 tons of wheat on June 14 for September/October shipment.

 

Rice/Other

·        
None reported

 

Updated
6/1/22

Chicago
– July $9.50 to $12.00 range, December $8.50-$12.50

KC
– July $10.50 to $12.75 range, December $8.75-$13.50

MN
– July $10.75‐$13.00, December $9.00-$14.00

 

July Wheat Daily