FI Morning Grain Comments 05/24/21

PDF attached

 

Good
morning.

 

Favorable
weather for many parts of the world are dragging CBOT agriculture futures lower.  Note many countries are on holiday so we look for a slower trade.  News was very thin. Egypt over the weekend launched a wheat import tender for August 8-22 shipment.  Egypt
has enough wheat reserves to last 5.9 months. Cash wheat prices across the Black Sea eased about $6-12/ton over the previous week.  Palm futures fell over 100 points after dropping 11 percent last week, despite higher energy futures.  The US 6-10 day precipitation
outlook calls for rain to fall across the ECB, which is welcome.  US weather over the weekend was as expected. 
Brazil
is finally seeing rain relief but for some of the corn it’s too late.  Canada saw welcome rain relief over the past week, easing concerns for wheat and canola plantings.  Rain will occur across the central and northern US Great Plains this week. 

 

 

Weather

 

Last
24-hours

 

Last
7-days

 

Next
7 days

 

World
Weather, Inc.

Source:
World Weather, Inc.

 

World
Weather, Inc.

MARKET
WEATHER HIGHLIGHTS FOR MAY 24, 2021

• Tropical
  Cyclone Yaas has evolved in the northern Bay of Bengal raising potential for damage in West Bengal and Odisha, India as it comes inland Tuesday and Wednesday.
  
• rain
  fell during the weekend as expected in Safrinha corn and cotton areas of Brazil
  
• Australia’s
  wheat, barley and canola areas will get some welcome rain this week after getting some moisture in the west during the weekend
• In
  North America, the outlook is favoring rain for nearly all crop areas at one time or another this week.
  
• The
  North America precipitation includes the Northern Plains, Canada’s Prairies, the U.S. Midwest, U.S. Delta and eventually the southeastern states.
• U.S.
  southeastern states will be hot and dry for most of this week before relief comes along and the relief may be limited for some areas
•  West
  Texas will get some rain as well.
• Russia’s
  southern New Lands and northern Kazakhstan may get some relief from their dryness this weekend into next week. 

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

Monday,
May 24:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop plantings – soybeans, cotton; winter wheat condition, 4pm
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• U.S.
  cold storage data — pork, beef, poultry, 3pm
• HOLIDAY:
  France, Germany, Argentina, Canada

Tuesday,
May 25:

• Monthly
  MARS bulletin on crop conditions in Europe
• Malaysia
  May 1-25 palm oil export data

Wednesday,
May 26:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Unica releases cane crush, sugar output data
• HOLIDAY:
  Malaysia, Indonesia, Singapore, Thailand

Thursday,
May 27:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports
• Brazil
  orange crop forecast for 2021-22

Friday,
May 28:

• 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
• U.S.
  agricultural prices paid, received

Source:
Bloomberg and FI

 

 

 

 

CFTC
Commitment of Traders

Fund
estimates for the net long corn position were way off the target with traditional funds net long 76,600 contracts more than expected.  Note producers/end users were heavy net buyers for the week ending 5/18.  Funds were also more long than expected in wheat,
and less long than projected for soybean oil.  

 

 

 

 

 

 

Macro

 

Corn

• CBOT
  corn is lower on improving weather and US plantings nearing an end.   
• News
  is light with many countries on holiday.
• We
  see support in July corn around $6.21, then $6.05. 
• USDA
  cattle on feed showed no surprises for on feed, but high grain prices likely triggered good marketings last month and placements were 4.7 percentage points above a year ago.  A year ago, the pandemic shifted the state of business operations, but this year
  we think the dry and arid areas of pasture country forced animals into controlled feeding environments. 
  

 

Export
developments.

• None
  reported

 

 

Soybeans

• CBOT
  soybean complex is lower on favorable US weather.  The 6-10 day precipitation outlook calls for rain to fall across the ECB, which is welcome.   Palm futures fell over 100 points after dropping 11 percent last week, despite higher energy futures. 
  
• Support
  for July soybeans is seen at $14.8750, then $14.725. 
• November
  soybeans are near a one month lower, below $13.50.  this contract could easily test $13.00 by early June if we see US rains pickup across the ECB. 
  
• APK-Inform:
  Ukraine sunflower oil prices declined $20/ton to $1,535-$1,555 a ton FOB Black Sea. 
  
• Safras
  & Mercado raised their estimate of the Brazil soybean crop from 134.09 million tons to 137.19 million tons, largest private jump in Brazil’s current crop year estimate we have seen in a while.  Brazil is nearly complete on soybean harvest. 
  
• Offshore
  values were leading CBOT SBO 78 points lower and mean $1.00 lower. 
• Europe
  is on holiday.   
• China:
  

• Malaysian
  palm oil: (uses settle price). 
  

 

Export
Developments

• None
  reported

 

Wheat

• Sharply
  lower trade in wheat on improving US and Black Sea weather.  Chicago is at a one-month low and July is near its 100-day MA.  We see support at $6.35 from current, around $6.57 as of early this morning. 
  
• Egypt
  seeks wheat and lowest offer was $254/ton for Romanian wheat.  They have enough wheat reserves to last 5.9 months. 
  
• USDA
  will report initial spring wheat ratings this afternoon and we look for 67 G/E versus 73 average. 
  
• September
  Paris wheat market basis September was down 4.25 euros at 208.50.
• Ukraine’s
  AgMin sees 2020-21 barley exports at 4.15 million tons from previous 4.0 million.  They increased their grain export outlook to 45.817 million tons from 45.667 million tons.  Wheat was unchanged at 17.5 million tons and corn at 23.5 million tons.
• APK-Inform:
  FOB Black Sea port wheat down $6 from previous week to $263-$270/ton.
• IKAR:
  Russian export prices for wheat down $12/ton to $260/ton. 

 

Export
Developments.

• Egypt
  seeks wheat for August 8-22 shipment and lowest offer was $254/ton for Romanian wheat
• Saudi
  Arabia’s Salic bought 60,000 tons of Australian wheat for delivery in June.
  
• Jordan
  seeks 120,000 tons of feed wheat on May 26 for Oct-Nov shipment. 
• Bangladesh
  seeks 50,000 tons of milling wheat on May 30. 
• USDA
  seeks 83,000 tons of hard red winter wheat for Africa on May 25 for July 6-16 shipment. 
  

 

Rice/Other

·        
None reported