FI Morning Grain Comments 05/26/21

PDF attached

 

Good
morning.

 

US
rainfall was about expected across the Great Plains.  The US central and southern Great Plains & Midwest is still slated to get rain over the next 5 days.  Traders should monitor cold temperatures for the Canadian Prairies this week as frost might be in play
for Manitoba.  Brazil will see rain in the central and southern corn areas Friday through the end of the weekend. 

 

CBOT
corn is rebounding in the spot position while the back months remain on the defensive from favorable US weather. 
South
Korea’s NOFI group bought about 137,000 tons of corn, according to AgriCensus for arrival by end of September, at about $307/ton. 
CBOT
soybean complex is lower on follow through selling.  Malaysia is on holiday. 
Wheat
is lower on lack of US export developments, recent rain that fell across the Great Plains benefiting crop development, and competitive EU & Black Sea supplies.  Results are awaited on Algeria’s import tender for wheat. 
EIA
weekly ethanol report is due out later this morning. 

 

 

 

Weather

Last
24-hours

 

Next
7 days

 

World
Weather, Inc.

WORLD
WEATHER HIGHLIGHTS

• Cold
  weather returned to Canada’s Prairies this morning with frost and freezes in many areas.
  
• The
  coldest conditions occurred where some frost sensitive early season crops may not have been very far advanced limiting any negative impact on crops.
  
• No
  damaging cold occurred in the northern U.S. Plains this morning.
• The
  U.S. outlook is still favorably moist during the next ten days in most key crop areas.
  
• West
  Texas cotton, corn and sorghum areas will get some significant rain next week
  
• The
  U.S. southeastern states continue to dry down for a while, but week two precipitation will bring some relief.
  
• No
  changes were noted for weather in South America were noted overnight
• Europe’s
  weather may be a little drier biased for a while, but soil conditions rated favorably.
  
• Southern
  parts of Russia’s New Lands, Kazakhstan and China’s Yellow River Basin will continue to dry down for a while. 
• Western
  Australia will receive some rain in the coming week to ten days benefiting autumn planting of wheat, barley and canola
• Tropical
  Cyclone Yaas moved into northeastern Odisha, India overnight and will dissipate in the next couple of days with remnant moisture moving toward Uttar Pradesh and Jharkhand

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macro

 

Corn

• CBOT
  corn is rebounding in the spot position while the back months remain on the defensive from favorable US weather, uncertainty over Mexico phasing out imports of US GMO corn (92 percent of the US corn production was GMO in 2020), absence of Chinese corn buying,
  and possibility of old-crop cancellations. 
• July
  corn is about $1.10 off its absolute high made a couple weeks ago.  We see support in July corn around $6.05.
• Yesterday
  Reuters reported a Mexican federal judge ruled against a request by the National Farm Council to freeze a government plan to ban genetically modified (GMO) corn and herbicide glyphosate by 2024.  We don’t think its practical Mexico to ban GMO corn imports
  for animal feed. 
• UkrAgroConsult
  projects Ukraine could ship a record 11 million tons of corn to China during the 2021-22 crop year, up from 8.5 to 9.0 million tons forecast for the current marketing year. 
  
• A
  Bloomberg poll looks for weekly US ethanol production to be down 4,000 barrels (985-1054 range) from the previous week and stocks up 225,000 barrels to 19.658 million.
  
• US
  Senate Committee on Finance will be reviewing US clean energy tax credits this afternoon. 
  https://www.finance.senate.gov/hearings/open-executive-session-to-consider-an-original-bill-entitled-the-clean-energy-for-america-act  
  

 

Export
developments.

• South
  Korea’s NOFI group bought about 137,000 tons of corn, according to AgriCensus for arrival by end of September, at about $307/ton. 
  

 

 

Soybeans

• CBOT
  soybean complex is lower on follow through selling and good US weather.  Malaysia is on holiday.   
  
• Anec
  sees Brazil soybean exports during May at 14.9 million tons while other groups are putting that number closer to 15 to 16 million tons, which would be a record and up from 14.1 million year ago.
  
• Argentina
  barges stuck in the Parana river due to low water levels carrying soybeans might be able to be dislodged soon as Argentina and Paraguay agreed to release water from an upriver dam. (AgriCensus)  
  
• Offshore
  values were leading CBOT SBO 120 points lower and meal $4.20 higher. 
• Rotterdam
  vegetable oil prices for soybean oil and rapeseed oil were mixed.  Rotterdam meal was about 8-15 euros lower. 
  
• China:
  

• Malaysian
  palm oil: (uses settle price). 
  

HOLIDAY

 

Export
Developments

• None
  reported

 

 

Wheat

• Wheat
  is lower on lack of US export developments, recent rain that fell across the Great Plains benefiting crop development, and competitive EU & Black Sea supplies.  Spot fob prices suggest French wheat is about $3-$5 cheaper than Black Sea origin. 
  
• The
  recent dip in US and EU wheat futures are attracting routine buyers. Tunisia and Japan announced import tenders.  Results are awaited on Algeria’s import tender for wheat. 
  
• We
  see support at $6.35 for July Chicago wheat. 
• September
  Paris wheat market basis September was up 0.25 euro at 205.50.
• MARS
  in their monthly EU update increased their EU wheat yield to 5.91 tons/hectare from 5.86 projected in April, above a 5-year average. 
  

 

Export
Developments.

• Tunisia
  seeks 92,000 tons of wheat, optional origin, on Thursday for June 15 through July 25 shipment. 
  
• In
  its weekly SBS import tender, Japan on June 2 seeks 80,000 tons of feed wheat and 100,000 tons of barley for arrival by November 25. 
  

• Jordan
  cancelled their 120,000-ton barley import tender for Oct-Nov shipment. 

• Results
  awaited: Algeria seeks 50,000 tons of durum wheat on Wednesday, valid until Thursday, for shipment between July 1-31. 
  
• Japan
  seeks 124,620 tons of food wheat from the US and Canada later this week.

 

• 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