FI Morning Grain Comments 05/10/21

PDF attached

 

Good
morning.

 

CBOT
agriculture futures are mostly lower on improving US weather and profit taking.  Some of the meal and soybean contracts paired losses ahead of the electronic break.  Look for bottom picking. 

 

 

 

Weather

 

Past
24-Hour

 

Past
7-days

 

Next
7 days

 

 

World
Weather, Inc.

NOT
MANY CHANGES OVERNIGHT

• U.S.
  crop weather is mostly looking good for the next two weeks
• Good
  for planting, soil moisture and seed germination as well as plant emergence and establishment
• Gradual
  warming is expected later this week into next week improving crop development potential
  
• Rain
  impacts some hard red winter wheat production areas
• Some
  rain falls in West Texas over the next couple of weeks
• Some
  forecast models are trying to bring some rain to the Canada’s Prairies after some beneficial rain fell in Alberta during the weekend
• Some
  of this predicted rain may be overdone and a close watch on the outlook is warranted
  
• Brazil
  weather will trend a little wetter Tuesday and Wednesday across Parana and some immediate neighboring areas with central and eastern Parana and southern Sao Paulo wettest
• (wettest
  near the coast)
• 0.20
  to 0.80 inch in western Parana and 0.50 to 2.50 inches in eastern Parana and far southern Sao Paulo
  
• Other
  showers occur Sunday through Tuesday of next week with rainfall of a trace to 0.50 inch in other Safrinha crop areas, but most amounts over 0.25 inch will not be as widespread as the 06z GFS model run suggested today
• Wet
  weather is expected to return to western parts of Russia later this week and into next week after a short-term break from rainy weather
  
• Eastern
  Russia New Lands and Kazakhstan spring wheat areas are drying down and will need s some greater rain soon
• China
  rainfall in the Yangtze River Basin will become excessive in the coming week to ten days resulting in some flooding
  
• The
  rain is spread out over multiple days and flooding should not be nearly as serious as that of last year
• China’s
  North China Plain and Yellow River Basin will receive some needed rain Thursday into Saturday easing dryness that has evolved recently and restoring favorable crop and field conditions in both winter and spring production areas
• Northeastern
  China will continue to experience periodic rainfall that will keep spring planting moving along a little sluggishly for a while
• Xinjiang
  China’s cotton areas experienced seasonably warm temperatures and dry conditions Friday and Saturday
  
• Cooling
  is expected this week and scattered showers and thunderstorms will develop in the northeast early to mid-week this week with rainfall of 0.10 to 0.65 inch and locally more
• Showers
  will also develop in southwestern crop areas late this week, but resulting rainfall will be quite brief and light
  
• Temperatures
  will cool to the 60s and 70s northeast this week and the 70s and lower 80s in the southwest with cooling in the southwest occurring mostly late this week
• Crop
  development and additional planting are occurring favorably. Rain will disrupt some farming operations this week, but fieldwork will occur around the precipitation

 

DETAILS

• Weekend
  North Dakota rainfall occurred as expected with rain in the southwest half of the state and moisture totals of 0.30 to 0.92 inch resulting with Morton, Grant and Sioux Counties possibly receiving 1.00 to 2.00 inches, according to Doppler Radar
• Central
  and western South Dakota received 0.20 to 0.80 inch of weekend rain with local totals to 1.23 inches at Mobridge and 1.41 inches at Bear Creek – this was close to expectations as well.
  
• Montana
  weekend rainfall occurred as expected with 0.10 to 0.91 inch and local totals to 1.33 inches
  
• Southeast
  half of Iowa, northeastern Kansas and Missouri through Ohio to western Pennsylvania. Rainfall varied from 0.70 to 2.90 inches during the weekend resulting in a notable boost in topsoil moisture
  
• Northernmost
  Iowa reported no rain in the far northeast to 0.60 inch in the far northwest while the remainder of the west received 0.40 to 0.83 inch along with eastern Nebraska
• None
  of the rainfall was surprising and many crop areas benefited from the moisture
  
• Lowermost
  Midwest was driest with little more than 0.25 inch of rain through dawn today near the Ohio River
• U.S.
  far western states were dry during the weekend
• Weekend
  rainfall in the Texas Panhandle and northwestern counties of West Texas was light varying from a trace to 0.41 inch with a local total of 0.81 inch
• Net
  drying occurred in the southern Tennessee River Basin and southeastern states during the weekend along with the lower Delta
• Showers
  did occur in the northern Delta and northern Tennessee River Basin Sunday afternoon with light to moderate rain resulting
• U.S.
  weekend temperatures were quite warm for a little while in the southern half of the Plains where highs were in the 80s and 90s Fahrenheit with a few extremes over 100 degrees in western Texas
• Temperatures
  were more seasonable in other parts of the nation
• U.S.
  weather over the next seven days will be most restricted in the Great Lakes region and the upper most Midwest where less than 0.30 inch will result with poor coverage
• Rain
  is expected in most other areas with totals of 0.30 to 1.00 inch and local totals of 1.00 to 2.00 inches in the lower Midwest, central Plains, northern Delta and southeastern states
• Heavier
  rain will fall in the lower Delta where totals by Wednesday afternoon will vary from 2.00 to more than 5.00 inches
  
• Rain
  is also expected to be heavy in eastern Colorado, western Kansas and southwestern Nebraska where 1.00 to 2.25 inches will result by Wednesday morning
• Temperatures
  will be cooler than usual in most of the Midwest, the central and southern Plains, Delta and southeastern states while warmer than usual in the western one-third of the nation.
  
• U.S.
  week two weather will be warmer in the central and southern Plains, Delta and southeastern states while precipitation continues to come and go across the northern half to two-thirds of the Midwest and northern Plains
• Much
  needed rain will impact the northern Plains and Canada’s Prairies next week
  
• Not
  general soaking is expected, but enough rain will fall to help ease dryness and improve planting conditions
• No
  rain in the southwestern U.S., including California and the southwestern desert region for the next two weeks
• The
  bottom line for the United States will remain relatively good for spring planting, emergence and establishment of crops in the Midwest, central and northern Plains, Tennessee River Basin and southeastern states. There is still concern over crop and field conditions
  in parts of the Delta because of wet conditions and in the heart of the Midwest because of wet fields and additional moisture, but it will trend warmer so that better drying occurs between rain events. Early planted crops in these wetter areas should “weather”
  the situation well, but unplanted areas may experience more delay to fieldwork. The upper Midwest will have the greatest need for greater volumes of rain. In the meantime, rain expected in the northern Plains and Canada’s Prairies next week should bring some
  much-needed relief to dryness that should translate into better planting and establishment conditions for summer crops as time moves along. Improved winter and early spring crop conditions are also expected in the northern Plains and Canada’s Prairies.
  
• Canada
  Prairies’ weekend precipitation occurred as expected with 0.20 to 1.00 inch of moisture occurring from southwestern Saskatchewan and southern Alberta to central Alberta with the greatest amounts occurring in central parts of Alberta where 1.00 to 2.00-inch
  amounts resulted.
• Northeastern,
  east-central and a few far southwestern Alberta locations were dry during the weekend along with most of Saskatchewan (outside of the far southwest) and most of Manitoba
• Temperatures
  were mild with highs in the 40s and 50s Fahrenheit with a few 60s in south-central parts of the Prairies
• Hard
  freezes occurred in many Saskatchewan and Manitoba locations keeping new crop development on hold and lowered soil temperatures possibly delaying germination and early season crop development for a little while longer
• Rain
  prospects for Canada’s Prairies will slowly improve over the next couple of weeks, but it will be a slow process and on a few areas will get enough moisture to seriously improve topsoil moisture – much more rain will still be needed to fix long term moisture
  deficits in the central and eastern Prairies
• Argentina
  was dry during the weekend and most of it will remain dry during the coming ten days
• Temperatures
  will be a little cooler than usual in the northeast and slightly warmer biased in the far southwest during the coming two weeks
• Argentina’s
  weather will be ideal for summer crop maturation and harvest progress. The environment might also be good for some early season wheat planting later this month
• Brazil
  crop areas were dry with seasonable temperatures during the weekend.
• Rain
  was reported in Rio de Janeiro and Espirito Santo, but other crop areas were unaffected
  
• Brazil
  weather will be dry north of Parana through Monday and into Tuesday, but rain will develop in Parana, Paraguay and southern parts of Mato Grosso do Sul late Tuesday into Wednesday before spreading northeast late Wednesday into Thursday
• Moisture
  totals will vary from 0.10 to 0.80 inch with a few amounts in central and eastern Parana and southern Sao Paulo varying from 1.00 to 2.00 inches with coastal areas wettest
• Another
  round of rain is possible in these same areas Sunday into Tuesday of next week (May 16-18) with 0.05 to 0.50 inch of moisture resulting with a little more cover to the north, but much of the rain is not expected to have much impact on reproducing or filling
  crops for more than a day or two
• The
  bottom line for Brazil is temporary relief in areas that receive rain in Parana and some immediate neighboring areas during the next ten days. Some relief is also expected in eastern Sao Paulo and southeastern Minas Gerais into Zona de Mata coffee areas during
  the coming ten days, but the amount of rain that reaches key Safrinha corn country will be very low. Parana will be the greatest recipient of rain and could experience the greatest dryness relief, but central and eastern parts of the state will be wetter than
  western areas. Temperatures will be near normal except in the far south of Brazil where readings will be cooler biased both this week and next week. Crop moisture stress will continue without significant relief despite a few insignificant showers in Mato Grosso,
  Mato Grosso do Sul, Goias, western Sao Paulo and southwestern Minas Gerais.
  
• Western
  CIS weekend rainfall was sufficient to minimize fieldwork and to maintain wet field conditions
  
• This
  week’s weather will begin with less frequent and less significant precipitation, but the wetter bias will resume again late this week and last through all of next week
• Fieldwork
  will continue limited through the next two weeks, despite some short-term weather improvement
• Southern
  and eastern portions of the CIS will encounter a good mix of rain and sunshine over the next two weeks
• The
  best field working conditions are expected in Russia’s Southern Region, the eastern New Lands and the Ural Mountains region. There is some growing concern over decreasing soil moisture in the eastern New Lands and northern Kazakhstan, so, while fieldwork increases
  due to limited rain and warm temperatures the ground will begin to firm up as well raising need for rain later this month.
  
• Temperatures
  will be cooler than usual in Ukraine and warmer than usual east of the Ural Mountain region while near normal in the northwestern parts of Russia, the Baltic States and Belarus
• China
  weekend rainfall was greatest in the Northeast Provinces and in the interior far south
• Rainfall
  of 1.00 to 3.50 inches occurred in the middle two-thirds of Heilongjiang while 0.40 to 1.81 inches fell from eastern Liaoning through Jilin
  
• Rain
  in southern Jiangxi and Fujian was excessive resulting in flooding after up to 11.14 inches resulted
• Many
  areas from Guizhou to Fujian reported 2.50 to more than 5.00 inches
• Net
  drying occurred elsewhere and temperatures turned quite warm in central China with highs in the 80s and lower to middle 90s Fahrenheit
• China’s
  Yangtze River Basin will be inundated by frequent rain through the next ten days raising the potential for flooding periodically and delays in farming activity
• Rainfall
  may vary from 3.00 to 9.00 inches during the next ten days with locally more
• Flooding
  is expected, but it will not be as damaging as last year
• Much
  needed rain will fall in a part of the Yellow River Basin and North China Plains late this week through the weekend with 0.20 to 0.75 inch and locally more will occur
  
• Alternating
  periods of rain and sunshine will occur in other areas in the nation favoring crop development and some fieldwork around the expected precipitation
• Temperatures
  should be in a mostly seasonable range
• The
  bottom line for China remains one of concern for the wetter areas in the Yangtze River Basin where crop development will not advance as well as it could and where fieldwork will be disrupted frequently. Rain in the Yellow River Basin and North China Plain
  will bring relief from recent dryness to a part of the region while other areas will need more rain. Better weather is expected in the far Northeast Provinces in the next two weeks in which less frequent and less significant rain and warmer temperatures will
  evolve over the next couple of weeks improving planting, emergence and establishment conditions for spring and summer crops.
  
• Mexico
  drought remains quite serious, but there is some rain and thunderstorms advertised for southern and eastern parts of the nation during the next two weeks
• The
  precipitation will begin erratically and then increase over time this week and then decrease again next week
• Water
  supply is quite low and winter crops in a few areas have not performed well
• The
  moisture will help improve planting, emergence and establishment conditions for most summer crops in the wetter areas, but the west-central and northwest parts of the nation will continue quite dry.
  

 

• Europe
  will receive waves of rain this week bolstering soil moisture for many areas including France, Italy, Germany and the U.K. which have been driest
• Temperatures
  will be near to below average for a while with the west and southeast coldest relative to normal while northeastern Europe is warmest
• Some
  flooding is possible in the Alps this week and some immediate neighboring crop areas
  
• Australia
  precipitation will be restricted over the coming week to nearly ten days
• Temperatures
  will be close to normal
• Weekend
  precipitation was erratic and mostly quite light failing to change soil moisture in a significant manner
• The
  bottom line supports aggressive planting in Western Australia where significant rain fell last week, but most other areas will wait on significant rain to bolster soil moisture for improved autumn planting and germination conditions in unirrigated areas
  
• South
  Africa received a few showers during the weekend, but resulting rainfall was a little too light and sporadic for a serious change in soil moisture
• The
  coming two weeks will produce restricted amounts of rain and result in net drying conditions
• Temperatures
  will be warmer than usual
• The
  environment will be good for harvesting and late season crop maturation
• Production
  this year has been very good for nearly all crops
• Winter
  wheat and barley planting should be under way and would benefit from additional rain
  
• India
  weather during the weekend was greatest in eastern Madhya Pradesh and Chhattisgarh into Odisha and from Bihar into the far Eastern States where rainfall varied from 0.60 to 2.64 inches
  
• Temperatures
  were very warm to hot in the heart of the nation which is not unusual at this time of year
• Winter
  crop harvesting advanced well in the dry areas, but may have been hindered by some of the rain in the wetter areas of the east.
  
• Scattered
  showers will occur this week in far northern, southern and extreme eastern India resulting in near to above average amounts of rain
• The
  moisture coming could disrupt farming activity from time to time, but the greatest rain will be in West Bengal into the far Eastern States and in and small part of southwestern India leaving most other areas to experience a mostly favorable environment for
  crops.
• No
  tropical cyclones are present in the western tropical Pacific Ocean
• A
  tropical disturbance will evolve southeast of the Philippines late this week into the weekend and it may bring rain to parts of the nation during the weekend and early next week
  
• Tropical
  Storm Andres was located well to the west of Mexico moving away from land and weakening. The storm poses no threat to land
• Southern
  Oscillation Index is mostly neutral at +2.71 and the index is expected to move erratically this week
• North
  Africa rainfall weekend rainfall occurred was concentrated on northern Morocco where rainfall varied up to 0.57 inch while other areas were dry
  
• Temperatures
  were trending warmer than usual
• Not
  much rain and seasonable temperatures will occur over the next ten days
• West-central
  Africa will see an erratic mix of rain and sunshine this week.
• Temperatures
  will be near to above average and rainfall will be below average
• A
  boost in precipitation will be needed later this month to ensure soil moisture stays as good as possible and crop development continues normally
• East-central
  Africa rainfall has been erratic in recent weeks and a boost in rainfall is coming to Kenya, Ethiopia and northern Tanzania during the coming week
• Southeast
  Asia rainfall will be favorably distributed in Indonesia, Malaysia and most of the mainland areas during the next two weeks
• However,
  the mainland areas will report below to well below average rainfall and a boost in rain is already needed in Vietnam’s Central Highlands
• Greater
  rain is also needed in the northern and western Philippines
• Sulawesi
  also needs a boost in rainfall
• New
  Zealand precipitation for the next two weeks will be increasing across North Island while staying wet in western portions of South Island
  
• Temperatures
  will trend cooler with the increasing rainfall

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

Monday,
May 10:

• Malaysian
  Palm Oil Board data on April stockpiles, output, exports, 12:30pm local
• Malaysia
  May 1-10 palm oil export data
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• USDA
  export inspections – corn, soy and wheat, 11am
• U.S.
  crop plantings – corn, wheat, cotton; winter wheat condition, 4pm
• HOLIDAY:
  Russia

Tuesday,
May 11:

• Agrana
  full-year earnings
• France
  agriculture ministry monthly crops outlook

Wednesday,
May 12:

• China
  farm ministry’s CASDE outlook report
• FranceAgriMer
  monthly grains report
• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• EIA
  weekly U.S. ethanol inventories, production
• Conab’s
  data on yield, area and output of corn and soybeans in Brazil
• Brazil’s
  Unica data on cane crush and sugar output (tentative)

Thursday,
May 13:

• New
  Zealand April food prices, 10:45am local
• Port
  of Rouen data on French grain exports
• USDA
  net-export sales for corn, soy, wheat, cotton, pork, beef, 8:30am
• HOLIDAY:
  Indonesia, Malaysia, Singapore, India, Dubai, France, Germany

Friday,
May 14:

• ICE
  Futures Europe weekly commitments of traders report, 6:30pm London
• FranceAgriMer
  weekly update on crop conditions
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• HOLIDAY:
  Indonesia, Malaysia, Dubai

Source:
Bloomberg and FI

 

 

 

 

 

CFTC
Commitment of Traders

No
records as of Tuesday and it looks like there is room for more longs to enter the market by the investment funds.  We are pleased the net positions came in near expectations as over the past two weeks the estimated fund position for corn was well from what
was reported by CFTC.   Estimates were less long in corn and soybean oil, but that can be overlooked after three solid days of higher prices.  Current position estimates below.

 

 

 

 

Macro

 

Corn

• CBOT
  corn is trading lower but July is pairing losses ahead of the electronic close.  US weather looks good for fieldwork progress over the next week.  Brazil’s weather outlook looks dry over the next seven days. 
  
• Good
  rain fell across the upper and central Midwest over the weekend. 
• The
  USD was down about 16 points as of 7:40 am CT. 
• AgRural
  sees the Brazil second corn crop at 69.6 million tons, down from 77.5 million tons estimated in April and compares to 75.1 million tons a year ago. 
  
• Buenos
  Aires Grains Exchange – Argentina corn collected +3 points to 23%.

 

Export
developments.

• None
  reported

 

Trade
News Service US meat stats

 

Soybeans

• The
  CBOT soybean complex is lower on profit taking and improving US weather for planting progress this week.  
  
• US
  soybean oil basis eased across the ECB and Gulf late last week from the previous week. 
  
• Brazil
  2020-21 soybean sales were 71.4% as of May 7, up from about 67% early April, down from 85% a year earlier and a 5-year average of 64%, according to Safras & Mercado. Using their production of 134 million tons, it equates to around 95.8 million tons.  New-crop
  2021-22 sales were 16.7% vs. 32% year ago. 
• Malaysian
  palm oil futures fell 59 MRY and cash was down $17.50 to $1,095/ton.
• Offshore
  values were leading CBOT SBO 42 points lower and meal $8.30 short ton lower. 
  
• Rotterdam
  vegetable oil values were 5 to 30 euros lower and Rotterdam meal mostly 8-12 euros higher. 
  
• China
  cash crush margins on our analysis were 214 cents vs. 214 cents late last week and compares to 77 cents year earlier. 
  
• China:
  

• Malaysia’s
  palm oil stocks at the end of April rose 7.1% from the previous month to 1.55 million tons as production grew 7 percent to 1.52 million tons.  Exports were up 13 percent to 1.34 million tons. 
  

 

• Cargo
  surveyor AmSpec reported Malaysian May 1-10 palm exports at 469,975 tons, up 37 percent from the same period a month ago.
  
• Cargo
  surveyor ITS reported Malaysian palm exports at 447.225 tons, up 30 percent from the same period a month ago.
  
• Malaysian
  palm futures are due for a small break in prices after a three-month rebound in stocks, but note inventories are still lagging behind year ago. 
  
• Malaysian
  palm oil: (uses settle price).
  

• In
  a Reuters poll, US 2021-22 soybean ending stocks were seen at 138 million bushels, and 2020-21 stocks at 117 million bushels from 120 million last month.
  
• Buenos
  Aires Grains Exchange – Argentina soybeans collected +20 points to 53%.
• Ciara
  – Argentina to crush 40.5 MMT of soybeans this year, up from 36 MMT last year.  That leaves about 10 percent left for export. 
  

 

Export
Developments

• Egypt’s
  state GASC on May 11 seeks at least 30,000 tons of soyoil and 10,000 tons of sunflower oil for arrival July 11-31.  Traders should submit bids for payment with 180-day letters of credit and at sight.  They are also in for at least 3,000 tons of domestic soyoil
  and 1,000 tons of sunflower oil for arrival between July 16-August 5.
• The
  USDA last week bought 470 tons of packaged veg oil for use in the Title II, PL480 export program.  Prices ranged from $2,030.04 to $2620.37 per ton. 
  
• On
  May 18 USDA seeks a total of 4,770 tons of packaged oil for use in Title II, PL480 and the McGovern-Dole Food for Education export programs. Shipment was set for June 16-July 15 (July 1-31 for plants at ports).

 

 

MPOB
SND

 

 

Wheat

• Lower
  trade in US wheat futures in part to widespread selling in global agriculture futures.
  
• China
  sold 142,659 tons of wheat, or 3.56% of the total offered, at auction last week at an average price of 2,401 yuan ($373.41) per ton.  Nearly 28 million tons has been sold since the beginning of the year. 
  
• September
  Paris wheat was down 6 euros to 226 as of around 6:30 am CT.
• A
  Reuters poll looks for the 2021-22 US all-wheat carryout to end up near 730 million bushels and 2020-21 stocks at 846 million bushels from 852 million in April. 
  

 

Export
Developments.

• South
  Korea’s FLC bought 60,000 tons of Black Sea feed wheat at $329.90/ton c&f for June 1-July 5 shipment. 
  
• Taiwan
  Flour Millers’ Association seeks 89,425 tons US milling wheat on May 13.  One consignment of 42,505 tons is sought for shipment between July 2 and July 16. A second consignment of 46,920 tons is sought for shipment between July 19 and Aug. 2.

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade Corp seeks 134,994 tons of rice from Vietnam, China, the United States and Australia, on May 13, for arrival between September 2021 and January 2022.