FI Mid Morning Grain Comments 06/28/21

PDF attached

 

Good
morning.

 

Talk
of warmer and drier July for the US Midwest is setting in, providing support for ag markets.  End of month and quarterly reports (11 in all including weekly) will keep traders busy this week amid positioning.  Corn and soybean import tender announcements were
quiet.  Egypt is in for wheat. Taiwan bought US wheat as expected.  Jordan is back in for feed wheat.  USDA crop progress is expected to show an improvement for US corn, soybeans, and spring wheat conditions, but record breaking heat across the upper Great
Plains may reverse that trend next week into late July. 

 

(Unofficial)
Record-breaking temperature across the Globe

http://coolwx.com/record/usamovie.day.php

 

 

 

Weather

 

1-7
DAY

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLANDS FOR JUNE 28, 2021

• Talk
  in the marketplace has begun about returning warmer and drier weather to the U.S. Midwest during July.
  
• This
  may evolve, but a little caution is advised here because of the abundant moisture that just fallen from Texas to Michigan and there is more rain coming over the next week. There is enough moisture in the soil now to feed back into the atmosphere making a dry
  down in the lower and eastern Midwest a little slower process than in other areas of the Midwest.
  
• Restricted
  rainfall and added heat in the northern U.S. Plains, upper Midwest and Canada’s Prairies in the coming week will worsen crop stress and raise the potential for greater production cuts in those areas.
  
• Chilly
  temperatures are expected in southern Brazil coffee, citrus, sugarcane, wheat and corn production areas Wednesday into Friday
• crop
  damage potentials in soft commodity crop areas is quite low.
• A
  break from hot, dry, weather is expected across parts of Russia this week while that in Kazakhstan will be a little slow in abating. 
• Rumors
  in the marketplace about crop damage in China because of flooding should be played down
• Flooding
  in China is not nearly as widespread and serious as that of last year
• Pockets
  of flooding are occurring similar to that in the U.S., but only a few crop areas will be subjected to damage
• A
  good mix of weather is expected in most of China during the next two weeks
• Australia
  and Europe will see a mix of weather favoring most crops
• Some
  dryness is continuing from the eastern shore of the Adriatic Sea into Hungary and western Slovakia where the ground is dry and temperatures have been warm recently
• Some
  showers will occur, but no general soaking is anticipated
• Hot
  weather has taken a toll on central Asia crops, including cotton, despite irrigation
  
• India’s
  monsoon continues to underperform in the interior west and north
• Greater
  rain should begin in the central and south next week, but the north will stay drier biased through July 7
• Thailand
  rainfall will continue lighter than usual raising concern over water supply and long term crop development in rice, sugarcane, corn and many other crop areas
• Greater
  rain is expected to slowly ramp up next week

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

Monday,
June 28:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions — corn, cotton, soybeans, wheat, 4pm
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals

Tuesday,
June 29:

• Canada
  Statcan data on seeded area for wheat, durum, canola, barley and soybeans
• South
  Africa updates corn production

Wednesday,
June 30:

• EIA
  weekly U.S. ethanol inventories, production
• U.S.
  acreage data for corn, wheat, soybeans and cotton; quarterly grain stockpiles
• Bloomberg
  New Economy Catalyst; climate and agriculture
• Malaysia
  June 1-30 palm oil export data
• U.S.
  agricultural prices paid, received

Thursday,
July 1:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• World
  cotton outlook update from International Cotton Advisory Committee
• Costa
  Rica, Honduras monthly coffee exports
• U.S.
  corn for ethanol, DDGS production, 3pm
• USDA
  soybean crush, 3pm
• Port
  of Rouen data on French grain exports
• Australia
  Commodity Index
• AB
  Sugar trading update
• HOLIDAY:
  Canada, Hong Kong

Friday,
July 2:

• 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
• FranceAgriMer
  weekly update on crop conditions
• Source:
  Bloomberg and FI

Source:
Bloomberg and FI

 

 

 

 

 

 

Macros

 

US
Core CPI Inflation To Rise Further Before Easing In 2022 – Fitch

OPEC+
Data Said To Show 1.7M Bpd Deficit In Oil Market In August

 

Corn

• US
  corn futures turned
  higher during the day session on strength in soybeans and wheat.  Sharply higher soybean oil lent support.  While we look for national US corn conditions to be up 2 points after favorable rains last week, when updated later today, others are looking forward
  at the July temperatures and precipitation forecasts, calling for net drying and heat across the middle of the US, PNW, and Canadian Prairies. 
  
• Expect
  a choppy trade this week.  RIN prices will continue to influence the corn market but expect changes in wheat to dominate trade going forward.  SBO influence over corn may dissipate quickly. 
  
• The
  trade will see 11 key reports this week, starting off with inspections. 
• Bloomberg
  “Freezing temperatures pose risk to second corn crop in northern Parana, western and southern Sao Paulo and central and southern Mato Grosso do Sul states starting June 30.”

 

Export
developments.

• None
  reported

 

 

Soybeans

• Soybeans
  are higher following a sharply higher soybean oil market and limit higher move (early) in Canadian canola.  Excessive heat stretching from the upper Great Plains into Canadian Prairies and US PNW is depleting soil moisture across key canola and outlying soybean
  production areas. 
• Palm
  oil was slightly lower on Monday.  Indonesia finally applied the revised export levy structure allowing them to better be situated to compete with Malaysian for exporting palm oil.  Indonesia set CPO reference price at $1,094/ton for July, and CPO export duty
  at $116/ton (37% below this month), export levies at $175/ton. 
• Malaysian
  palm futures were down 14MYR and cash was $7.50/ton lower. 
• Strategie
  Grains raised its European Union rapeseed crop to 17 million tons, compared with the 16.82 million tons last month, 3.3% above last year.
• Offshore
  values are leading SBO 176 points higher and meal $2.90/short ton higher. 
  
• Rotterdam
  rapeseed and soybean oil prices were 35-45 euros lower, and meal 5-10 euros higher. 
  
• China:
  

• Malaysian
  palm oil:  

 

Export
Developments

• None
  reported

 

Wheat

• US
  wheat futures are higher on spring crop wheat crop stress across the PNW to the upper Great Plains and Canadian Prairies.  MN type wheat is leading KC and Chicago higher. 
  
• Record
  breaking heat was seen across the PNW over the weekend. 
• Meanwhile
  too much rain across the US Midwest is slowing harvest progress. 
• September
  Paris wheat was up 1.25 euros at 202.75.

 

Export
Developments. 

• Egypt
  is in for wheat and Romanian origin was cheapest at $242.93 per ton. 
• Taiwan
  bought 55,000 tons of US million wheat for Aug 12-26 shipment from the PNW.  Reuters: “The purchase involved 26,791 tons of U.S. dark northern spring wheat of 14.5% protein content bought at $350.16 a ton FOB U.S. Pacific Northwest coast, 22,405 tons of hard
  red winter wheat of 12.5% protein bought at $291.47 a ton FOB and 5,804 tons of soft white wheat of 10.5% protein bought at $343.00 a ton FOB.”
• Jordan
  retendered for 120,000 tons of feed barley set to close July 7 for Nov/Dec 2021 shipment. 
  
• Jordan
  retendered for 120,000 tons of wheat set to close July 6 for Jan/Feb 2022 shipment. 
  
• Ethiopia
  seeks 400,000 tons of wheat on July 19. 

 

Rice/Other

• Bangladesh
  seeks 50,000 tons of rice from India.