PDF attached

 

Morning
Several
factors including US weather is slightly pressuring agriculture futures this morning. Unfavorable weather across Canada may limit downward pressure for oilseeds and wheat.  Few export developments announced in wheat and Brazil beat out the US in the Taiwan
corn import tender.  USD stronger and WTI crude weaker. 

 

 

 

 

Weather

UNITED
STATES

  • The
    general theme of increased rainfall for most of the U.S. Midwest, Delta and southeastern states as well as the many areas in the Great Plains remains in place for the next ten days
    • The
      morning model run reduced heavy rain in Kansas, Oklahoma, eastern parts of West Texas and western Missouri, but increased rainfall in central and southern Illinois and eastern South Dakota
  • Drier
    weather is still expected to evolve as early July gets under way
    • A
      new ridge of high pressure is expected to set up and it will return the heat and dryness over time making this next ten days of rain extremely important

 

Rain
that occurs in the balance of July will extremely important and quite beneficial.  The moisture may be a little overdone in some areas, but it would likely ensure good soil moisture as July gets under way and that will help crops endure the drier and warmer
weather that is expected in July much better than without the moisture. The outlook will be closely monitored, although our Trend Model has suggested this advertised scenario has high potential for verification.

 

EUROPE/BLACK
SEA

  • No
    significant change was noted over the coming ten days
    • Rain
      will slowly diminish over the next four to five days across the European Continent
    • Temperatures
      will trend warmer and the weather will be much drier during the weekend through all of next week
    • Faster
      drying rates are expected in many areas and those with the driest soil will experience quick drying and some moisture stress
  • A
    ridge of high pressure that dominates next week will move from west to east out of Europe June 26-July 2 resulting in the development of scattered showers once again beginning in the west and advancing into central parts of the continent

 

Net
drying will occur for a little while longer from the Volga River Basin into Kazakhstan. Some drying is expected in the second week of the outlook with rising temperatures and that will firm the soil in many crop areas, but especially those that have already
been drying out recently. Rain in western Ukraine through the weekend will be ideal in protecting crops, but eastern Ukraine may not see much moisture and could dry down more significantly along with parts of the Volga River Basin.

 

RUSSIA
NEW LANDS

  • No
    significant change was suggested for the first week of the outlook
    • Frost
      is still possible Thursday and Friday mornings this week
      • Only
        a few light freezes are expected and the impact should be low with sunseed far more vulnerable than spring wheat
    • Rain
      follows the cold
  • GFS
    was wetter in southern parts of the Ural Mountains region late next week relative to the previous model run
    • Some
      of the increase may have been overdone

 

The
outlook is still favorable for many crops throughout the New Lands, but dryness is still a concern for crops near the Kazakhstan border. Frost and freezes that occur this week should not induce much permanent crop damage especially since most of the temperatures
will only be in the soft frost range. Sunseed would be more vulnerable to damage than spring wheat

 

CHINA

  • The
    latest soil assessment from Tuesday clearly shows a huge amount of land in east-central through southern China as being too wet
    • Flooding
      continues to occur in various places in the region each day with the most serious flooding of late occurring between the Yellow and Yangtze Rivers
  • This
    week’s big storm exits off the central east coast later today
  • Next
    big storm is expected Tuesday into Thursday of next week generating additional heavy rain and inducing some new flooding in central parts of the nation
  • One
    more storm system is expected Jun 27-28
  • Today’s
    06z GFS model run is wetter from Shandong and eastern Shanxi into Liaoning most of which occurs during mid- to late-week next week
  • The
    European model run is notably wetter over the next ten days from southeastern Sichuan, Hunan and parts of both Guangxi and Guizhou to southern Jiangsu where 7.00 to more than 15.00 inches of rain has been advertised for the next ten days – this seems to be
    a little overdone, but that much rain over the already saturated ground would have a negative impact on crops and property

 

The
bottom line remains one of abundant moisture in China. Crop quality declines and production cuts are suspected in parts of the nation where the greatest rain has occurred and where more heavy rain is expected. The best crop weather continues in the Northeast
Provinces. Dryness remains in Hebei, Shanxi and northern Shandong and these areas may continue driest, although some rain may bring a little relief during mid-week next week

 

SOUTH
AMERICA

  • Rain
    has developed in southwestern Buenos Aires during the predawn hours today with 0.20 to 1.32 inches common and a local total of 2.58 inches in south-central Buenos Aires
  • Little
    change was noted overnight in the ten day forecast
    • Rain
      will overspread all of Buenos Aires today and will reach into eastern La Pampa, eastern Cordoba, central and southern Santa Fe and much of Entre Rios benefiting many wheat and barley production areas
  • Thursday
    and Friday will be dry and then a few showers will return to northeastern Buenos Aires, southern Entre Rios and Uruguay Saturday
  • Showers
    will occur over a larger part of eastern Argentina Sunday into Monday with drier weather the remainder of next week
  • Additional
    rain may fall briefly at the end of this month

 

The
environment will be very good for improving some of the nation’s wheat production region. Some disruption to fieldwork will occur briefly, but the long term impact with far outweigh any concern over field working delays.

 

AUSTRALIA

  • No
    significant changes were noted overnight through the next ten days
    • Some
      light rainfall will occur in southern portions of the nation over the next couple of days with the best distribution of rain expected in Victoria and eastern New South Wales crop areas Friday into Sunday; some rain will reach southeastern Queensland during
      the weekend
      • The
        moisture will further help establish wheat, barley and canola, but greater rain will still be needed in interior parts of both Western and South Australia

 

The
bottom line remains one that is favorable for many winter wheat, barley and canola areas, although greater rain will still be needed in interior South Australia, interior Western Australia and much of interior southern Queensland. Winter crop conditions are
many time better than in recent past years, despite the need for more moisture.

Source:
World Weather Inc. and FI

 

 

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

 

 

Corn.

·        
Corn

was lower this morning on weather, light profit taking, Taiwan buying Brazilian corn, lower WTI and higher USD.  The second week of the US weather forecast shows an increase in rain potential. 

·        
EIA ethanol data is due out later. 

·        
CBOT corn open interest was up 22,618 contracts on Tuesday. 

·        
China corn futures remain near a 5-year high despite corn reserve sales, a signal large imports from Ukraine and potentially from the US could be on deck during the 2020-21 marketing year, dependent on the size of this year’s
domestic crop. 

·        
China looks to sell 4 million tons of mostly 2015 crop-year corn from reserves on Thursday.  Sinograin will offer 663,000 tons from the 2016 harvest. 

·        
China fertilizer production was seen at 4.97 million tons, down 2 percent year over year. 

·        
Uzbekistan plans to buy over 3 million tons of grain for state reserves.  This will be bought from the domestic market. 

·        
USDA Cattle on Feed is due out at the end of the week. 

·        
Japan imported 2.105 million tons of grain during May, 3.6 percent higher than year earlier. 

 

Corn
Export Developments

  • Taiwan’s
    MFIG bought 65,000 tons of Brazilian corn at 141.77 cents over the December contract for October 2-21 shipment.

 

Bloomberg
Survey for EIA Ethanol Report






Survey
Results

EIA

Avg

Low

High

Prev.
Week

Production
(k bpd)

876

843

905

837

Stockpiles
(m bbl)

21.748

21.502

22.000

21.802

Source:
Bloomberg and FI

 

 

 

 

 

 

 

Soybean
complex
.

·        
China:

·        
China cash crush margins as of this morning, using our calculation, were 45 cents per bushel (50 previous), and compares to 50 cents a week ago and 72 cents around this time last year.

·        
Indonesia will push back its biodiesel target targets to 2026 due to slowing consumption and production of the fuel.  Indonesia 2020 biodiesel consumption is seen around 8 million kiloliters, below
a target of 9.6 million KL. 

·        
Malaysia

Higher following China palm oil amid Covid-19 concerns.  June 1-15 palm shipments to China were 233,388 tons, large, IMO. 

  • SGS
    reported June 1-15 palm oil shipments at 916,871 tons, up 67.2 percent from the previous month. 
  • Brazil’s
    oil regulator, ANP, announced a reduction in biodiesel blending mandates to B10 from B12 until June 21 to keep the supply chain moving as the feedstock may not be sufficient to meet the previous blending levels to diesel B, which has been widely consumed,
    despite the current pandemic situation.

 

Oilseeds
Export Developments

 

Major
oilseeds

Source:
Reuters and FI

 

Wheat

 

Export
Developments.

  • Three
    offers: Jordan seeks 120,000 tons of wheat for November-December shipment.
  • Thailand
    seeks 240,000 tons of feed wheat, optional origin, for Aug-Oct shipment. They are also in for feed barley. 
  • Tunisia
    seeks 176,000 tons of optional origin soft wheat on Thursday for August shipment. 
  • Ethiopia
    seeks 400,000 tons of wheat on July 10 for shipment within two months.    
  • Japan
    received no offers for 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival by November 26.  They will retender on the 24th
  • Japan
    seeks 80,000 tons of feed wheat and 100,000 tons of feed barley on June 24 for arrival by November 26. 
  • Japan
    seeks 76,143 tons of food wheat from the US and Australia this week. 

  • Taiwan
    Flour Millers’ Association seeks 88,815 tons of US milling wheat on June 19.  One consignment of 39,300 tons is sought for shipment between Aug. 10 and Aug. 24 while a second of 49,515 tons is sought for shipment between Aug. 26 and Sept. 9. (Reuters)

 

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

 

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International │190 S LaSalle St., Suite 410│Chicago, IL  60603

W: 312.604.1366

treilly@futures-int.com

AIM: fi_treilly

ICE IM: 
treilly1

Skype: fi.treilly

 

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