PDF Attached

 

Attached
are our US soybean complex balance sheets.

 

USDA:
Private exporters reported sales of 197,000 metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year.

 

US
mandate update

A
late afternoon Bloomberg article reported that the Biden Administration is expected to roll out biodiesel quotas short of what the industry was pushing for after a “lobbying crush.”
https://www.bloomberg.com/news/articles/2023-06-09/biden-plans-modest-biodiesel-quota-boost-after-lobbying-crush

The
EPA has up until the June 14th deadline to release mandates. “While the final targets are expected to be higher than the 2.82 billion gallon requirement originally proposed for this year, they are unlikely to hit the much higher volumes sought by
biodiesel producers…”

Final
results when released will be posted here:
https://www.epa.gov/renewable-fuel-standard-program/news-notices-and-announcements-renewable-fuel-standard

December
proposed below

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The
neutral USDA report did little for initial price reaction to CBOT soybean complex and grains. Traders today were focused on spot US soybean demand, technical breakout in soybean oil, product spreading, US weather, slow corn export demand, and USDA’s outlook
for ample global wheat supplies. Technical buying entered the Chicago wheat market post USDA report.

 

 

USDA
June S&D report

Neutral
overall with exception of global wheat supplies increasing 10.4 million tons from the previous month to 800.2 million tons, 11.7 million tons above 2022-23. This is one of the most uneventful USDA monthly reports we have seen in a while. Prices were little
changed after the report hit the wires, but soybeans and soybean oil rallied thereafter and grains remain mostly under pressure. The trade is already back to trading weather and demand. Next major report will be the June 1 stocks report which should give the
trade a glimpse if USDA overstated the 2022 US soybean and corn crops.

 

USDA
NASS briefing

https://www.nass.usda.gov/Newsroom/Executive_Briefings/index.php

USDA
OCE Secretary’s Briefing

https://www.usda.gov/oce/commodity-markets/wasde/secretary-briefing

 

there
were no changes in US soybean supply, as expected. Same goes with corn. All wheat production increased 6 million bushels from May with HRW up 11 million, partially offset by a reduction in SRW by 4 million and WW by 1 million. USDA made no changes to any other
wheat supply and demand categories for the old and new crop balance sheets.  US all-wheat ending stocks were raised 6 million bushels. The trade was looking for a 7-million-bushel decrease. Look for minor adjustments to old crop all-wheat after the next round
of trade balance data and food use is released.  The US old crop corn carryout was increased 35 million bushels due to a 15-million-bushel reduction in imports that was more than offset by a 50 million decrease in exports. The 50 million drop in exports was
more than we expected. USDA did not address the US corn for ethanol use of 5.250 billion bushels. We think they are still overstating this by at least 25 million, so we look for another increase in US 2022-23 corn stocks by at least that amount in the July
update, assuming USDA does not deviate much from actual June 1 corn stocks when updated at the end of this month.  New-crop US corn carryout increased 35 million tons to 2.257 billion, 55 percent greater than 2022-23.  Look for new-crop prices to continue
to grind lower if US weather improves. USDA lowered 2022-23 US soybean exports by 15 million bushels despite a higher-than-expected April Census export figure. With old crop commitments drying up, this could be justified, but it will all come down to how much
of the  current crop year commitments will be rolled into new-crop.  USDA made no changes to its new-crop US soybean balance sheet. Overall US ending stocks for wheat, corn, and soybeans for both old and new crop came in near trade expectations.

 

The
world balance sheets for 2022-23 reflected several minor changes to production and stocks. The carryout for all three major commodities came in near expectations as production estimates for Argentina corn and soybeans were near trade expectations. 2022-23
Argentina corn production was lowered 2 million tons to 35 million and soybeans lowered 2 million tons to 25 million tons. With nearly all the Argentina soybean crop collected, we think USDA has room to lower output next month by 2-3 million tons, based on
much of the trade penciling in a 21-million-ton estimate. For corn, Argentina collected a third of its crop, so the outcome of the size of the crop is yet to be determined.  What was interesting in this report was 2023-24 global wheat production. At 800.2
million tons, that is 10.4 million above May, and 11.7 million above year ago. Global wheat stocks were upward revised 6.4 million tons to 270.7 million, a 1.5% increase from 2022-23. The question remains how much of that 2023 global wheat production will
be food grade wheat. JCI via Bloomberg article mentioned China could lose 10 million tons of food grade wheat from recent heavy rains, that will be used for feed. China wheat imports were raised 1.5 MMT to 12.0 MMT. USDA will likely address some of the global
supply issues in their upcoming reports over the summer. Note there was no change to Australian wheat production of 29 million tons, which could be overstated 3-3.5 million tons. Russia wheat output was raised to 85 MMT from 81.5 previous.

 

For
the rest of the month look for the trade to be sensitive to spot US demand and changes in the Northern Hemisphere weather outlooks.

 

Fund
estimates as of June 9 (net in 000)

 

 

Weather

Past
7-days

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World
Weather Inc.

WEATHER
TO WATCH

  • Frost
    and freezes are expected in northwestern Russia Sunday and Monday, although the impact on production should be low
    • Most
      crops in the region will handle the cool weather without experiencing any serious damage to production potential
      • Wheat
        is not as far advanced in northwestern Russia as it is in southern areas where there is no risk of frost
  • Tropical
    Cyclone Biparjoy remains over the central Arabian Sea today and continues to disrupt the normal southwest monsoon flow across the region keeping India drier than usual in the south and eastern parts of the nation
    • The
      cyclone is expected to drift slowly to the north during the weekend and early next week staying over open water in the northern Arabian Sea by Tuesday
  • Typhoon
    Guchol remains over open water in the East Philippines Sea with very little potential for land impact
    • The
      storm will turn to the northeast this weekend and continue in that direction next week staying well to the southeast of Japan’s main islands
  • Tropical
    Cyclone 03B was located over the northern Bay of Bengal today and will drift into northwestern Myanmar this weekend with a low impact of moderate to heavy rain and no damaging wind
    • Rice
      and sugarcane will be impacted, but no crop damage is expected
  • A
    tropical disturbance moving into southwestern China produced torrential rain and serious flooding over the past two days with roughly 42 inches of rain being reported at one location in southern Guangxi
  • There
    are no tropical disturbances that have potential for development in the eastern Pacific Ocean, Caribbean Sea, Gulf of Mexico or Atlantic Ocean during the coming week
  • U.S.
    Midwest will experience cooler temperatures this weekend with a short term bout of reinforcing coolness early next week
    • High
      temperatures may come down to the upper 60s and 70s for a few days reducing crop stress, but rain does not fall significantly enough to bolster soil moisture in a major way leaving concern about the long term outlook
  • West
    Texas weather will trend warmer with only a few showers expected for a while
    • This
      trend will favor great planting and early season crop development potential after recent rain
      • Southwestern
        parts of West Texas never received heavy rainfall, but enough fell for dryland crop planting
        • Follow
          up rain will be needed especially with temperatures reaching the 90s and getting closer to 100 next week
  • Southeastern
    U.S. and Delta are expecting periodic rain and seasonable temperatures during the next two weeks supporting good summer crop development
  • U.S.
    hard red winter wheat areas and other crops in the central Plains will experience a good mix of weather during the next ten days to two weeks
    • Summer
      crops will thrive in this environment
    • Winter
      crop filling, maturation and harvesting should advance well
  • High
    pressure ridge over western Canada this weekend and early next week will induce another five days of very warm temperatures and limited rainfall in the Prairies and across a part of the northern U.S. Plains
    • High
      temperatures in the 80s and lower to a few middle 90s are expected
  • High
    pressure ridge in western Canada breaks down during the middle part of next week and a trough of low pressure comes into to replace it
    • This
      situation raises the potential for cooling in much of Canada’s Prairies
    • Showers
      and thunderstorms should increase in the Prairies during the middle to latter part of next week, although atmospheric moisture in the region will be restricted
    • Alberta
      will get some needed rain during the middle to latter part of next week resulting in the potential for temporary relief from chronic dryness
  • Sufficient
    rain will fall in Alberta, Canada’s driest region during the second half of next week to stop the decline in crop conditions and induce a short term bout of crop improvement
    • Follow
      up rain will be very important