FI Morning Grain Comments 06/15/20

PDF attached includes COT

 

Morning. 

 

USDA
inspections estimates via Reuters

Wheat                 
400000-600000

Corn                     
950000-1250000

Soybeans           
300000-500000

 

 

 

 

 

Weather

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS:  U.S. crop weather remains mostly good and should stay that way through the next ten days. Southeastern Canada’s frost and freezes during the weekend may have damaged some corn and soybeans, but the impact should have
been low. Canola in Canada’s Prairies varies from being too wet in the west to too dry in the east. Some relief to the Prairies weather will occur over the next two weeks.

            India’s
planting weather for coarse grain and oilseeds is advancing well.

Relief
to dryness in east-central China last week has improved summer crop prospects in some areas. However, net drying in parts of the North China Plain and northern Yellow River Basin this week will raise unirrigated crop stress. Flooding in rapeseed areas during
the weekend may have reduced crop quality and certainly delayed harvesting.

            Australia’s
weekend rain was good for canola areas and additional showers are expected over the next ten days to maintain that trend.

            South
Africa’s western canola benefited from some rain during the weekend, but more is needed.

            Argentina’s
harvest has advanced well recently and will continue to move forward around periods of rain. Brazil’s Safrinha corn is maturing, although some late season filling occurred while dryness prevailed resulting in greater worry over late season yield and quality
declines. Brazil’s weather has not been seriously impacting late season crops, but some small impact is expected.

           
South Africa’s harvest is advancing relatively well.

            Europe
weather is trending sufficiently wet to improve many crops. Net drying from the Volga River Basin into Kazakhstan could harm some summer coarse grain and oilseed crops if the trends last deeply into the summer.

            Overall,
weather will likely have a mixed influence on market mentality today.

 

MARKET
WEATHER MENTALITY FOR WHEAT:  Rain moving through a part of Saskatchewan Canada Sunday was benefiting some very dry areas in the province, but there are other areas in the Prairies that still need relief. Eastern and far south-central Saskatchewan and parts
of Manitoba are still quite dry. Additional opportunity for rain will evolve later this week for some of the drier areas. In the meantime, parts of Alberta are still too wet and will stay that way for a while this week.

            Frost
and freezes in Quebec and eastern Ontario during the weekend may have negatively impacts a small amount of wheat, but the impact is not known.

            Northern
U.S. Plains will be another area dealing with pockets of dryness during the next ten days while other areas are sufficiently moist.

            Good
harvest weather is expected in U.S. hard red winter wheat areas and a favorable environment for late season filling will occur in Nebraska, northern Kansas as well as across the Midwest.

            Europe
weather will be mostly good for winter crops, although there may be some need for drier weather in early maturing crop areas to protect small grains from wet weather disease. Drying from the Volga River Basin into Kazakhstan may be a threat to unirrigated
winter crops, but most of the region’s crops are still rated favorably today. Spring wheat areas in the eastern Russia New Lands are also experiencing mostly favorable conditions, but some rain is needed near the Kazakhstan border.

            China’s
southern wheat quality may be slipping because of recent heavy rainfall. Drier weather will be slow to return and that may prolong harvest delays and concern over grain quality.

            Australia’s
recent rain was good for improving establishment for wheat and barley across the nation, although more rain is still needed in many areas.

            South
Africa recent rain in the far west was welcome, but rain is needed in other winter crop production areas. Rain coming up in Argentina during mid-week this week will be a tremendous help for wheat germination and emergence.

            Overall,
weather today will likely provide a mixed influence on market mentality with a slight bearish bias.

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

MONDAY,
June 15:

• Monthly
  MARS bulletin on crop conditions in Europe
• USDA
  weekly corn, soybean, wheat export inspections, 11am
• USSEC’s
  Asia Trade Exchange 2020, day 1
• U.S.
  crop progress — corn, soybean plantings, winter wheat conditions, 4pm
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• Malaysia’s
  palm oil export data for June 1-15

TUESDAY,
June 16:

• New
  Zealand global dairy trade auction
• Abares
  agricultural commodities report for June quarter 2020
• Asia
  Trade Exchange 2020, day 2

WEDNESDAY,
June 17:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• Asia
  Trade Exchange 2020, day 3

THURSDAY,
June 18:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
• Brazil
  Conab releases 2nd estimate for 2020 coffee crop, Sao Paulo
• Port
  of Rouen data on French grain exports
• USDA
  total milk production, 3 pm

FRIDAY,
June 19:

• ICE
  Futures Europe weekly commitments of traders report, 1:30pm (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.
  Cattle on Feed, 3pm

SATURDAY,
June 20:

• Malaysia’s
  palm oil export data for June 1-20

Source:
Bloomberg and FI

 

 

 

 

CFTC
COT

 

 

 

 

 

 

 

Macros

 

 

Corn.

·        
Corn
is lower on bearish outside markets and good weather for the US.  Weather should be in focus this week.  Warmer and drier weather may stress some of the crop that missed rain across the far western Corn Belt.  Therefore, we see limited downside on corn prices. 
Weather models between the GFS and European (wetter) differ for precipitation for the US during the 6-10 timeframe.  Precipitation should be monitored with the noon and am models over the next few days. 

·        
China corn futures hit a 5-year high. 

·        
We look for soybean and corn crop conditions to improve, but with dry weather on horizon, they could decline the following two to three weeks.  Conditions are already at high levels for this time of year for both crops. 

 

Corn
Export Developments

• Taiwan’s
  MFIG seeks 65,000 tons of corn on Wednesday for October 2-21 shipment.

 

Soybean
complex.

• CBOT
  soybeans is lower led by new crop despite USDA confirming additional sales to China. 
  
• Argentina
  is on holiday. 
• NOPA
  is due out later, see table below for estimates. 
• Rotterdam
  values this morning showed soybean oil were around 5 euros higher from this time previous session, rapeseed oil down 3 in the nearby, and soybean meal when imported from South America 3-8 euros lower. 
  
• Offshore
  values this morning was leading CBOT soybean oil 19 points lower and meal $2.10 lower. 
  

·        
China:

·        
China cash crush margins as of this morning, using our calculation, were 49 cents per bushel, and compares to 50 cents a week ago and 72 cents around this time last year.

·        
AmSpec June 1-15 palm exports were 922,251 tons, up from 504,928 tons month earlier.  ITS was at 914,120 tons, up 82.5%. 

·        
Indonesia 2020 biodiesel consumption is seen around 8 million kiloliters, below a target of 9.6 million KL.  B30 will likely not be achieved. 

·        
Malaysia: 

 

 

Oilseeds
Export Developments

• Under
  the 24-hour announcement system, US exporters sold 390,000 tons of soybeans to China for 2020-21 delivery.
  
• Egypt
  seeks 30,000 tons of soybean oil and 10,000 tons of sunflower oil for Aug – Sep 5 shipment.
  

• Syria
  will retender for 50,000 tons of soymeal and 50,000 tons of corn on June 24 for delivery within four months of contract.

 

Wheat

• US
  wheat is mixed with MN higher and Chicago & KC lower.  The pressure in KC is likely related to US harvest pressure. 
  
• The
  EU Crop Monitor lowered their estimate of the 2020 soft wheat yield to 5.60 tons per hectare from 5.72 tons in May. 
  
• Paris
  December wheat was down 1.00 euros at 182.50 at the time this was written.
  
• We
  look for no change in the US spring (very high rating) and winter wheat rating.
  

 

Export
Developments.

• Saudi
  Arabia bought about 1.08 million tons of barley for arrival between August and September at an average price of $198.81/ton. 
  
• Japan
  seeks 80,000 tons of feed wheat and 100,000 tons of feed barley on June 17 for arrival by November 26. 
  
• Jordan
  seeks 120,000 tons of wheat on June 17 for November-December shipment. 

Rice/Other

• South Korea’s Agro-Fisheries
  and Food Corp seeks 80,605 tons of non-glutinous rice for October 2020 and March 2021 shipment.
  

    TONNES(M/T)   
GRAIN TYPE    ORIGIN    ARRIVAL/PORT

           
90     Milled Long   Thailand  Oct 31,2020/Busan

        
1,410     Milled Long   Thailand  Oct 31,2020/Busan

       
20,000     Brown Short   China     Jan 31,2021/Gunsan

       
20,000     Brown Short   China     Jan 31,2021/Ulsan

       
20,000     Brown Short   China     March 31,2021/Donghae

       
19,105     Brown Short   China     March 31,2021/Mokpo