PDF Attached

 

PDF
attached include updated US soybean complex balances. Feedback welcome.

 

The
US will be on holiday Monday. US recession concerns sent many commodity markets lower. The USD was up more than 100 points as of 2 pm CT. WTI crude oil closed more than 6.8 percent lower. US weather will remain unfavorable for the balance of June and any changes
to the forecast should have influence on prices going forward.

 

Private
exporters reported the following activity:

-144,907
metric tons of corn for delivery to Costa Rica during the 2022/2023 marketing year

-105,664
metric tons of corn for delivery to unknown destinations during the 2021/2022 marketing year

 

 

 

Weather

24-H

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7-day

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Mississippi River at St. Louis

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World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

  • Not
    much change was noted on the European model run for the United States overnight, but the GFS model run had adjusted some of its rainfall for the Midwest with the 06z model run reducing rain in Iowa and the upper Midwest while increasing it in parts of eastern
    Midwest
    • The
      GFS is not the favored model right now
  • Hot
    weather is expected through Monday from the U.S. Plains into the western Corn and Soybean Belt and the northern Plains
    • Some
      of the expected heat will reach into Canada’s Prairies today through Sunday while the hottest weather in the U.S. Plains and western Midwest will be Saturday through Monday
      • Extreme
        highs of 95 to 105 degrees Fahrenheit will be common with a few readings to 108 in the central Plains and at least one location may reach 110
  • U.S.
    heat will retreat to the south early to mid-week next week with highs in the 90s to 105 degrees Fahrenheit in the southern Plains, Delta and southeastern states
  • Cooling
    in the northern U.S. Plains and upper Midwest next week should return a more seasonably warm temperature regime to the region
  • Scattered
    showers and thunderstorms will be possible over a larger part of the northern U.S. Plains, northern and eastern Midwest and southeastern states after June 27, but it is still questionable how significant some of that rain will be
  • U.S.
    Midwest, Great Plains, Delta and southeastern states’ soil moisture will be in decline during much of the coming ten days
    • A
      few showers and thunderstorms will offer some slowing of the drying trend with Iowa, Nebraska and immediate neighboring areas still favored for the greatest rain in this first week of the outlook
  • U.S.
    Plains and western Midwest livestock will be subjected to excessive heat this weekend and early next week raising the potential for animal illness and possible death
    • Livestock
      losses should not be nearly as great as those of last weekend
  • Early
    start to monsoon moisture in the southwestern U.S. is not likely to have much influence on U.S. crops, although some improved soil moisture will occur in eastern Arizona and southwestern New Mexico crop areas
  • Northeastern
    Mexico will remain in a drought probably until a tropical cyclone evolves and impacts the region and there are none anticipated in the near future
  • Texas
    drought conditions are worsening with many dryland crops still suffering moisture stress
    • No
      meaningful rain is expected in West or South Texas, the Coastal Bend or Blacklands through the next ten days to possibly two weeks
      • Any
        showers that pop up will be quickly lost to strong evaporation rates resulting from very warm to hot daily temperatures
  • U.S.
    far western states will experience net drying during much of the next ten days, although some rain will fall in the Cascade Mountains and along the Washington and Oregon coast as well as the far northern Rocky Mountains
  • Canada’s
    Prairies are not advertised to receive nearly as much rain as was predicted in Thursday’s forecast and the reduction was needed
    • Crop
      development will continue to advance relatively well
    • A
      good mix of rain and sunshine is expected for the next ten days
    • Central
      and south-central Saskatchewan has the greatest need for rain
  • Rain
    earlier this week in Alberta and western Saskatchewan was ideal in bolstering topsoil moisture for better spring seed germination, emergence and establishment in the previously driest areas of the Prairies
  • Ontario
    and Quebec weather should be favorably mixed over the next two weeks
    • A
      little drier and warmer bias would be most welcome and that is exactly what is expected
  • Western
    and central Europe will experience net drying conditions through the weekend
    • Showers
      and thunderstorms will slowly increase next week
      • The
        resulting moisture will be extremely important for winter, spring and summer crops after previous days of drying
        • Some
          of the rain will be a little erratic leaving parts of the continent in a net drying mode while other areas get some welcome rain
    • Temperatures
      will be warm during both weeks of the two-week outlook
  • Hot
    temperatures are expected through the weekend in France, Spain and Portugal with extreme highs reaching into the 90s to 105 degrees Fahrenheit
    • Parts
      of Germany will also be impacted by some 90-degree warmth
  • Net
    drying is expected in many interior parts of Russia’s Southern region, parts of south-central and southeastern Ukraine and western Kazakhstan through Tuesday
    • Some
      rain is advertised for Wednesday through Friday of next week
      • Moisture
        totals will be light and yet all of it will be welcome
  • Far
    southern Russia and Georgia will experience frequent rain later this week into early next week resulting in a notable boost in soil moisture favoring long term crop development
  • Western
    and northern parts of the Commonwealth of Independent States will experience frequent rainfall over the next ten days maintaining moisture abundance in the soil and good crop development potential
    • Rain
      in northern Kazakhstan will be great for spring wheat and some sunseed crops
  • South
    Korea rice areas continue critically dry and are in need of rain
    • Some
      rain may begin to fall in the June 23-29 period
  • Far
    southern China will continue to receive too much rain for another week resulting in more flooding and more concern over rice, sugarcane and some minor corn, soybean and groundnut production areas
    • The
      heaviest rain should be about over;  however
    • Drying
      is badly needed and some may occur next week
  • Northeast
    China will continue to see rain routinely which may challenge summer crop planting since much of the region is already wet
    • Drying
      will be most needed in Liaoning and Jilin where the ground is already a little too wet
  • China’s
    Xinjiang province continues to experience relatively good weather, although warm conditions are expected early to mid-week this week before some welcome cooling occurs in the second half of this week and into the weekend
  • China’s
    North China Plain will see limited rainfall for the coming week and then may get some scattered showers offering limited relief in the June 23-29 period
  • India’s
    monsoonal rainfall will slowly increase during the next two weeks with amounts still below average in this first week of the outlook, although the coverage of rain is expected to increase
    • Additional
      increases in rainfall during the June 25-July 1 period should further improve field and crop conditions
  • Southern
    Australia will receive waves of rain over the next ten days maintaining a very good outlook for wheat, barley and canola
  • Western
    Argentina will remain mostly dry through next week raising concern over winter crop planting and establishment
    • A
      few showers may occur briefly in the second half of the week, but much more will be needed
    • At
      least some rain is needed in all wheat areas in the nation, although subsoil moisture is still rated well in the east and more rain is expected there in the second half of next week.  Rain is needed to stimulate seed germination and plant emergence event in
      the areas with good subsoil moisture.
  • Southern
    Brazil will see more rain this weekend into next week
    • Drying
      is needed to support Safrinha crop maturation and harvest progress
  • Mato
    Grosso, Goias, Minas Gerais, Tocantins, Maranhao, Piaui and Bahia, Brazil will be mostly dry except for showers near the Atlantic coast
  • Mexico’s
    monsoonal rainfall will improve in the west and north-central parts of the nation over the next ten days, but northeastern Mexico will remain in a drought of significance
    • Northeastern
      Mexico drought relief may not occur without the help of a tropical cyclone
    • The
      same may be true for southern Texas
  • Southeast
    Asia rainfall will continue abundant in many areas through the next two weeks
    • Local
      flooding will impact parts of the Philippines, Indonesia, Malaysia and western parts of Myanmar
    • Southern
      Thailand and western Cambodia along with some central Vietnam crop areas will be driest, but not too dry for normal crop development
  • East-central
    Africa rainfall will occur sufficiently to improve crop and soil conditions from Uganda and southwestern Kenya northward into western and southern Ethiopia
  • West-central
    Africa rainfall has been and will continue sufficient to support coffee, cocoa, sugarcane, rice and cotton development normally
  • South
    Africa’s rain in western parts of the nation next week will be good for wheat, barley and canola emergence and establishment
  • Central
    America rainfall will be abundant during the next ten days

 

  • Tropical
    Storm Blas was located off the central west coast of Mexico and it will move away from North America this weekend
    • Some
      rain will fall in coastal areas today and Saturday
  • Tropical
    Depression Three-E has evolved off the coast of El Salvador and will parallel the upper west coast of Central America and the southwest coast of Mexico this weekend
    • Some
      rain from the storm will reach coastal areas, but no damaging wind or flooding rain is expected
  • Today’s
    Southern Oscillation Index was +14.89 and it will move erratically over the coming week
  • New
    Zealand rainfall will diminish to infrequent showers over the coming week; recent rain was welcome and beneficial.

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Saturday,
June 18:

  • China’s
    second batch of May trade data, including corn, pork and wheat imports

Monday,
June 20:

  • China’s
    third batch of May trade data, including soy, corn and pork imports by country
  • MARS
    monthly EU crop conditions report
  • Malaysia’s
    June 1-20 palm oil export data
  • Olam
    holds extraordinary general meeting
  • HOLIDAY:
    US, Argentina

Tuesday,
June 21:

  • USDA
    export inspections – corn, soybeans, wheat, 11am
  • US
    crop planting data for soybeans and cotton; winter wheat condition and harvesting, 4pm
  • US
    cotton, corn, soybean and spring wheat conditions, 4pm
  • European
    Food Safety Authority’s One Conference on food safety, Brussels and online, June 21-24
  • New
    Zealand global dairy trade auction
  • USDA
    total milk production, 3pm
  • EU
    weekly grain, oilseed import and export data

Wednesday,
June 22:

  • Speciality
    & Fine Food Asia trade show June 22-24 in Singapore

Thursday,
June 23:

  • EIA
    weekly U.S. ethanol inventories, production, 11am
  • US
    cold storage data for beef, pork and poultry, 3pm
  • USDA
    world coffee report
  • International
    Grains Council’s monthly report
  • USDA
    red meat production, 3pm

Friday,
June 24:

  • ICE
    Futures Europe weekly commitments of traders report
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • USDA
    weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
  • FranceAgriMer
    weekly update on crop conditions
  • Brazil’s
    Unica to release cane crush and sugar output data (tentative)
  • US
    cattle on feed, poultry slaughter
  • HOLIDAY:
    New Zealand

Source:
Bloomberg and FI

 

 

 

CFTC
Commitment of Traders

Traditional
funds were more long than expected for soybeans by 23,100 contracts. At 182,700 net long, they added 6,000 from the previous week. The other major commodities also posted more than expected net long positions but were near expectations.

 

 

 

 

 

 

Reuters
table

 SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
192,123      7,677    453,628     -4,138   -599,917     -2,738

Soybeans           
77,630     -5,955    198,624      8,721   -247,712     -3,508

Soyoil             
43,824     -3,434    101,071     -2,899   -158,962      9,003

CBOT
wheat         -41,243       -689    145,720     -2,644   -102,590      1,447

KCBT
wheat           5,635     -1,115     62,894       -877    -66,147      2,935

=================================================================================

 

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
278,185     13,858    275,168       -223   -594,891       -747

Soybeans          
163,146      4,217    106,264     -1,734   -243,400     -1,329

Soymeal            
52,457       -712     87,840       -454   -190,462      2,415

Soyoil             
62,996     -5,829     81,506       -722   -166,890      9,473

CBOT
wheat           6,939     -5,736     56,072      1,170    -74,683      2,251

KCBT
wheat          36,386     -1,113     28,425        152    -59,003      2,516

MGEX
wheat          13,191       -731        297        123    -23,380      1,858

                
———- ———- ———- ———- ———- ———-

Total
wheat         56,516     -7,580     84,794      1,445   -157,066      6,625

 

Live
cattle         31,926     10,576     69,441       -898   -113,635     -5,733

Feeder
cattle       -3,553      1,354      4,431       -122      3,594       -858

Lean
hogs           18,832     -3,641     54,416        135    -63,339      2,939

 

      
               Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
87,372    -12,087    -45,834       -802  2,214,773     -2,902

Soybeans            
2,532     -1,896    -28,542        741    971,426     -7,677

Soymeal            
21,041     -1,644     29,124        396    435,560      5,718

Soyoil              
8,321       -253     14,067     -2,671    453,471    -17,582

CBOT
wheat          13,560        430     -1,887      1,886    465,751      3,288

KCBT
wheat          -3,426       -614     -2,382       -943    202,723     -2,615

MGEX
wheat           3,851       -217      6,041     -1,034     73,779        611

                
———- ———- ———- ———- ———- ———-

Total
wheat         13,985       -401      1,772        -91    742,253      1,284

 

 

Live
cattle         18,938     -2,500     -6,670     -1,445    332,773    -16,645

Feeder
cattle          432       -589     -4,906        215     55,684     -1,784

Lean
hogs           -1,354        791     -8,556       -224    259,639     -5,193

 

Macros

US
Industrial Production (M/M) May: 0.2% (est 0.4%; prev 1.1%)

US
Capacity Utilisation May: 79.0% (est 79.2%; prev 79.0%)

US
Manufacturing (SIC) Production May: -0.1% (est 0.3%; prev 0.8%)

Canada
Industrial Product Price (M/M) May: 1.7% (est0.1%; prev 0.8%)

103
Counterparties Take $2.229 Tln At Fed Reverse Repo Op (prev $2.178 Tln, 97 Bids)

US
Crude Oil Futures Settle At $109.56/Bbl, Down $8.03 Or 6.83%

 

Corn

·        
US corn futures traded two-sided. Initially it led the ag markets higher from unfavorable US weather but sold off to close lower on weakness in WTI crude oil, wheat, and soybeans. Energy markets were a big driver today for many
of the commodities.

·        
Funds sold an estimated net 1,000 corn contracts.

·        
US recession concerns hit many commodity markets.

·        
July corn hit a session high of $8.00, then sold off. Note the July contract absolute contract high is $8.2450.

·        
WTI crude oil settled $8.03 lower or 6.8%.

·        
During the day, RBOB nearby futures fell to its lowest level since May 24, when Chicago regular reformulated retail gasoline prices were about 13 percent below last week’s average (last week Chicago retail gasoline prices were
up 79 percent from year ago).

·        
We look for a 1 point decline, revised from previous 2 point decline, in US corn and soybean ratings when updated Tuesday afternoon, and for wheat ratings to be unchanged for winter wheat and spring wheat to improve one point.

·        
On Thursday the US House passed a vote on the Lower Food and Fuel Cost Act that includes year round E15 ethanol blending and $200 million in additional funding for higher blends infrastructure.

·        
There were no notable export developments on Friday.

 

We
look for the July / September corn spread to potentially soften over the next week on fund rolling and a potential long build (some Sep and most Dec) if the US weather forecast remains unfavorable. In 2012, the July / September spread collapsed about
60 cents around the third/fourth week of June, ahead of FND delivery, in part to a start of a large build in the net long futures and options position.

 

2012
July/September

Chart

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2022
July/September  – 46.50 cents

Chart, histogram

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Export
developments.

·        
Private exporters reported the following activity:

-144,907
metric tons of corn for delivery to Costa Rica during the 2022/2023 marketing yea

-105,664
metric tons of corn for delivery to unknown destinations during the 2021/2022 marketing year

·        
China seeks to buy 40,000 tons of frozen pork for reserves on June 17.

 

 

Updated
6/14/22

July
corn is seen in a $7.00 and $8.25 range

December
corn is seen in a wide $5.75-$8.25 range

 

Soybeans

·        
CBOT soybeans traded two-side, ending lower following weakness in soybean oil and lower wheat. Soybean meal futures extended their rally Friday in part to firm US basis and product spreading. Soybean oil was 255 points lower for
the July position. Malaysian palm oil futures were down 8 percent for the week.

·        
Funds sold an estimated net 2,000 soybeans, bought 3,000 meal and sold 9,000 soybean oil.

·        
Interior soybean meal basis was very strong for some US locations on Friday as lack of producer selling drove up local soybean costs. US soybean meal interior basis firmed by $10/short ton at Chicago, Decatur (IL), and Fostoria
(OH). Gulf was unchanged.

·        
We heard US soybean meal export business was conducted at the PNW.

·        
Argentina was closed Friday and will also be on holiday Monday.

·        
Malaysia will leave its CPO export tax unchanged at 8 percent for July. The government has set a reference price of 6,732.26 ringgit.

·        
Spot Gulf FOB soybean oil was running at over $300/ton premium to RBD palm oil. Below graph is the second month SBO and third month palm futures below overlaid with Brent crude oil futures.

 

·        
On Friday September Malaysia palm oil was down 19 points to 5454 and cash was down $15/ton to $1345.00 per ton.

·        
(Bloomberg) — Indonesia’s Palm Oil Exports Fall 66% M/m in May: Intertek…Palm oil exports dropped to 574,882 tons in May, a 65.9% fall from 1.69m tons a month earlier, according to cargo surveyor Intertek Testing Services.

 

July
soybean oil share

Source:
Reuters and FI

 

Export
Developments

·        
China will be back next week selling a half a million tons of soybeans out of reserves but note over the past few weeks only a handful have been sold.

·        
China sold 90,000 to 100,000 tons of soybeans from reserves on Friday, at a price less than what was sold the

 

Updated
6/17/22

Soybeans
– July $16.00-$17.75

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

Soybean
meal – July $400-$450 (higher)

Soybean
oil – July 71.00-76.00 (lower)

 

Wheat

·        
US wheat fell more than 40 cents in Chicago and KC and was nearly 40 cents lower for Minneapolis, in part to a higher USD, US harvest pressure, heavy selling in outside commodity markets, and the EU taking a step forward with
Ukraine’s application to join the European Union. Funds sold an estimate net 17,000 SRW wheat contracts.

·        
Russia will allow ships loaded with grain and metals to leave the Azov Sea port of Mariupol soon. The Kremlin is still in talks with Turkey to export grain from Ukraine. Meanwhile western leaders remain pessimistic exports from
key Ukraine Black Sea ports will resume over the short term.

·        
The USD was up over 100 points as of 2:17 pm CT, a rebound from a sharply lower trade on Thursday.

·        
Volatility in currency and equity markets are expected to continue to spill over into commodities when trading resumes next week.

·        
Hot and dry conditions for the US wheat areas may limit downside risk over the short term, but this was not the case on Friday.

·        
French wheat ratings for the soft wheat crop declined for the seventh consecutive week, by 1 point to 65 percent good/excellent for the week ending June 13, well below 81 year ago. Winter barley was also down on point to 63.

·        
Paris September wheat was down 5.75 euro at 391.50 euros per ton. It traded two-sided.

·        
Ukraine June 1-16 grain exports were 695,000 tons (AgMin), down 43.5 percent from same period year ago.

·        
Russia raised the export duty on wheat to $131.60 per ton on June 16 from $129.20 per ton in the previous period.

·        
(Bloomberg) — China’s Wheat Imports Seen Shrinking 10% on High Global Prices…China’s wheat buying on the world market is set to decline in the coming year because of elevated prices and less demand for livestock feed after hog
producers cut capacity because of a market slump. Wheat imports may fall about 10% in the 2022-23 season, said Rosa Wang, a grain market analyst at consultancy Shanghai JC Intelligence Co.

 

US
Wheat Associates
: “The HRW harvest is expected to accelerate as temperatures trend hot. SRW harvest pace is picking up with combines rolling in seven states. The first analysis of 23 HRW and 25 SRW samples are available this week. HRS and northern durum
planting is wrapped up, but development is lagging in North Dakota and Minnesota. The SW crop is 2 to 3 weeks delayed but in good condition. USDA estimates winter wheat production at 1.18 billion bushels (32.2 MMT), a decrease of 7% from last year; spring
and durum wheat production estimates are expected in July.”

Chart, bar chart, histogram

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Export
Developments.

·        
None reported

 

Rice/Other

·        
(Reuters) – China’s food reserves bureau said it will implement a minimum purchase price for early indica rice ahead of schedule, though did not specify an exact date. The National Food and Strategic Reserves Administration said
in a statement on Friday that it would implement the minimum purchase price ahead of the original start date of August 1.

 

Updated
6/14/22

Chicago
– July $9.75 to $11.50 range, December $8.50-$12.50

KC
– July $10.75 to $12.50 range, December $8.75-$13.50

MN
– July $11.00‐$12.75, December $9.00-$14.00

 

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International
One Lincoln Center
18 W 140 Butterfield Rd.

Oakbrook Terrace, Il. 60181

W: 312.604.1366

treilly@futures-int.com

ICE IM: 
treilly1

Skype: fi.treilly

 

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