PDF Attached

 

Today
was not an ordinary day at the office.  CBOT agriculture markets tanked, especially in the soybean complex where limits were expanded.  Soybean oil and corn ended limit lower. Today we may have seen some margin problems for some positions as indicated in price
changes for July soybean options.  USD was sharply higher.  Erasing some 2021 CBOT agriculture market gains over a one-week period was on everyone’s mind. • CME RAISES CORN FUTURES (C) MAINTENANCE MARGINS BY 9.4 % TO $2,325 PER CONTRACT FROM $2,125 FOR JULY
2021

CME
RAISES SOYBEAN FUTURES (S) MAINTENANCE MARGINS BY 9.8% TO $4,500 PER CONTRACT FROM $4,100 FOR JULY 2021

 

Below
chart – Jan 2021 = 100 Index

 

 

Corn
& July SBO settles synthetically

Corn
July 630 1/2

Sept
548 1/2

Dec
531

March
539

May22
543 3/4

SBO
July: BON1 syn 55.92

 

Limits
for the soybean complex will remain unchanged for Friday but corn expands to 60.  Lumber and lean hogs expansions are in place as well.
https://www.cmegroup.com/trading/price-limits.html

 

Other
markets had huge moves or saw surprising headlines.   Such as 68 Counterparties taking $755.800 Bln At Fixed-Rate Reverse Repo (prev $520.942 Bln, 53 Bidders). 

 

GFS
weather model was wetter for the US while the European model is not as optimistic as they are much drier.  The trade looks as if they are agreeing with the GFS models that put good rains across the northern half of IA, lower WI, MI and other parts of the upper
Midwest.  Not all the drought areas of the WCB may see soaking rains over the next ten days, if realized.  Weather will continue to drive CBOT price fluctuations for a while.  Other fundamentals have been widely ignored this week. 

 

Weather

1-7
DAY

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World
Weather, Inc.

7-DAY
RAINFALL PREDICTED BY DAWN THURSDAY, JUNE 24, 2021

 

WORLD
WEATHER HIGHLIGHS FOR JUNE 17, 2021

MOST
IMPORTANT WEATHER OF THE DAY

  • Developing
    hot, dry, weather in western Kazakhstan and eastern parts of Russia’s Southern region will be closely monitored over the next few days

o  
Highest temperatures will reach into the upper 80s and 90s Fahrenheit with hotter conditions in non-agricultural areas

o  
The heat and dryness will slowly expand to the west and north during the weekend next week impacting the lower half of the Volga River Basin, the eastern two-thirds of Russia’s southern Region

      • Temperatures
        may eventually rise over 100 degrees Fahrenheit

o  
Dryness could last through a big part of the next two weeks

  • Southeastern
    Russia’s New Lands and northern Kazakhstan spring wheat and sunseed areas will get cooling rainfall over the coming week easing long term dryness
  • Australia
    will experience a good mix of rain and sunshine over the next ten days benefiting wheat, barley and canola establishment and late season planting

o  
The long term outlook for establishment has been and will continue to improve as the drier areas of South Australia, northwestern Victoria, western New South Wales and Queensland gradually receiving improving rainfall

  • Argentina’s
    rainfall the past two days in parts of Cordoba and San Luis helped ease dryness in some winter wheat production areas, but more rain is needed

o  
Wheat in Argentina still in much better condition than last year because of favorable soil moisture outside of the far west.

o  
There is need for a little light rainfall to support recently planted crop germination and emergence

  • Southwestern
    Canada’s Prairies are still dry biased and need significant rain, but the outlook is drier biased for much of the coming week

o  
Some rain “may” evolve in the last week of June

  • Cooling
    in eastern Canada’s Prairies this weekend into early next week could bring some patches of soft frost, but crop damage is not likely unless temperatures get colder than advertised
  • India’s
    weather remains good in the bulk of central and eastern crop areas, but the outlook in the interior west and northwest is not good for much rain for a while

o  
The situation is not a big concern for now, but if rainfall does not improve during July the situation could change

  • U.S.
    Plains and southwestern states experienced hot temperatures Wednesday and the heat will slowly recede to the southwest over the next few days

o  
Extreme highs reached 107 Fahrenheit in western Nebraska and still reached into 100 to 118 degree range in the southwestern desert areas

o  
The hottest conditions will be in the central and southern Plains today and mostly from the southern Plains into the southwestern desert region Friday through the weekend

  • Cooling
    in the central and eastern United States will be most significant this weekend and next week at which time temperatures will be well below average

o  
The cool off will come with some needed rain will be good for summer crops by reducing evaporation, lifting topsoil moisture conserving soil moisture through slower drying rates

o  
Northwestern and west-central parts of the Corn Belt will not get as much rain as other areas in the Midwest and that will leave them vulnerable to returning crop stress in July when temperatures are warmer once again and rainfall
is further diminished

  • U.S.
    rainfall will be greatest this weekend from southern Wisconsin and eastern Iowa to the Ohio River Valley where 0.50 to 1.50 inches and local totals well over 2.00 inches are possible

o  
Rain in the last week of June may be significant in the central and northern parts of the Midwest once again with a similar amount of rain expected

  • U.S.
    Delta weather will continue improve as the developing tropical cyclone in the Gulf of Mexico takes a path more to the east of that predicted Wednesday

o  
Flood damage to crops in southern Arkansas and parts of central and interior northern Mississippi was notable in a few areas last weekend and drier weather is expected to be welcome in the coming week

o  
A few showers will set back the drying trend as frontal system moves into the Delta early next week

  • U.S.
    southeastern states will mostly benefit from the moisture coming from the tropical cyclone and two frontal systems that follow it during the next ten days

o  
Too much rain is expected from southeastern Mississippi, southwestern Alabama and far western parts of the Florida Panhandle into northern Georgia

      • Crop
        damage is not likely to be very great unless the storm become more intense than expected
  • Tropical
    cyclone development  is expected in the southwestern and central Gulf of Mexico late today and tonight, but the system will race inland Friday into Saturday from southeastern Louisiana into southern Alabama producing 3.00 to more than 8.00 inches of rainfall
    and inducing some flooding

o  
Damage from the system is not expected to be very great

o  
Not much damaging wind expected

o  
Flooding will be the greatest concern

  • West
    Texas will not see much precipitation for a while, but there are chances for rain evolving next week that may bring some temporary relief from recent warm to hot temperatures and dry conditions.

 

  • U.S.
    hard red winter wheat areas will not be seriously impacted by showers and thunderstorms that pop up next week when cooling is greatest in the region.

o  
Harvest progress will advance around the precipitation.

 

  • Drought
    in the far western U.S. is not expected to change through the end of June

o  
Monsoonal precipitation from Mexico should begin to stream into the southwestern desert region and southern Rocky Mountains during the second and third weeks in July

  • Rain
    is still needed for unirrigated winter crops in the U.S. Pacific Northwest, although it is quickly getting too late for much benefit

o  
Most spring and summer crops are irrigated and water supply is sufficient for that purpose

  • Brazil
    rain will continue mostly in southern grain areas from Mato Grosso do Sul and parts of Sao Paulo into Rio Grande do Sul during the next two weeks

o  
The precipitation will not harm Safrinha corn, although drying will soon be needed to support maturation and harvest progress

o  
The rain will be very good for wheat production and potential yields are high

  • Temperatures
    will cool down in Argentina over the next few days and again next week with some cooling in southern Brazil during the latter days of June, but there is very little risk of frost or freezes in corn, sugarcane, citrus or coffee areas of Brazil for the coming
    ten days

 

  • India
    rainfall will be lighter than usual in most of the nation over the next ten days except in Bihar, Jharkhand, eastern Madhya Pradesh, northeastern Chhattisgarh and West Bengal where amounts will be greater than usual

o  
Crop conditions and planting prospects will be good in the central and east, but concern about moisture shortages in the interior west will slowly rise

      • Flooding
        rain will occur along the immediate west coast, but will not reach far enough inland to benefit many crop areas
  • Eastern
    France, Germany, Poland and areas south into northern Italy and Slovenia and north to Scandinavia will be warmer than usual for another day or two and then cooling is expected from west to east across the continent

o  
Rain is expected periodically across the continent favoring the west in this first seven days of the outlook and then favoring the east June 23-30

      • The
        situation looks good for most crop areas
  • Rain
    will occur erratically across Southeast Asia during the coming week.

o  
Most areas will get rain at one time or another by June 23.

      • Rainfall
        will be lighter than usual in the mainland areas of Southeast Asia and in parts of Philippines
  • West-central
    Africa rainfall will remain supportive of coffee, cocoa, sugarcane, rice and cotton development

o  
Some increase in rainfall frequency and intensity is expected especially near the coast

  • East-central
    Africa rainfall continues lighter than usual in Uganda, and parts of Ethiopia and changes are not likely to come anytime soon

o  
Any precipitation will be welcome, but greater amounts are desired

  • Mexico
    rainfall will continue in southern parts of the nation over the coming week while some rain expands into the interior far west

o  
Rain should increase and advance to the north during the June 23-29 period

  • Nicaragua
    and Honduras have been drier biased for the past month still have need greater rain

o  
Some improvement is occurring and will continue over the next week

  • North
    Africa rainfall will be sporadic and light for another few days and then drier conditions are expected

o  
The precipitation is not likely to have a big impact on unharvested winter crops

  • Southern
    Oscillation Index is mostly neutral at -1.411and the index is expected to continue rising into the weekend
  • South
    Africa weather was mostly dry Tuesday and little change was expected over the next ten days

o  
Winter crop establishment has been favorable in the southwest, but unirrigated areas in Free State has been a little dry and rain is needed

  • New
    Zealand rainfall during the coming week to ten days will be a little lighter than usual in South Island and near to above normal in the north

o  
Temperatures will be near to above average

Source:
World Weather, Inc.

 

NOAA
OUTLOOK

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Bloomberg
Ag Calendar

Thursday,
June 17:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • Port
    of Rouen data on French grain exports
  • Itau
    webinar on agribusiness outlook, Sao Paulo, Brazil
  • CNGOIC
    oilseed conference, Chengdu, China, Day 2

Friday,
June 18:

  • ICE
    Futures Europe weekly commitments of traders report (6:30pm London)
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • China
    customs to publish trade data, including imports of corn, wheat, sugar and pork
  • World
    coffee market report by USDA’s Foreign Agricultural Service, 3pm
  • FranceAgriMer
    weekly update on crop conditions
  • USDA
    Total Milk Production

Source:
Bloomberg and FI

 

USDA
Export Sales

USDA
export sales were on the low side for many of the major commodities, but good meal shipments may provide a positive undertone for that commodity coupled by unwinding of oil/meal spreads.  Soybean sales were only 65,300 tons, within expectations, and not a
surprise as commitments is running 99 percent of USDA’s projection.  Corn sales of 18,000 old crop and 276,100 tons new crop were poor.  All-wheat sales cooled last week to 287,100 tons from 325,900 tons, negative in our opinion.  Soybean meal sales improved
to 177,300 tons and shipments were 199,000.  Soybean oil commitments were only 2,300 tons and shipments were off from the previous week at 8,000 tons.  We look for sales to improve next week amid break in futures prices. 

 

 

 

Macros

68
Counterparties taking $755.800 Bln At Fixed-Rate Reverse Repo (prev $520.942 Bln, 53 Bidders). 

 

US
Initial Jobless Claims Jun 12: 412K (est 360K; prevR 375K; prev 376K)

US
Continuing Claims Jun 5: 3518K (est 3425K; prevR 3517K; prev 3499K)

US
Philadelphia Fed Business Outlook Jun: 30.7 (est 31.0; prev 31.5)

Canadian
International Security Transactions Apr: 9.95B (prevR 4.12B; prev 3.25B)

 

Corn

 

 

Export
developments.