FI Morning Grain Comments 06/23/20

PDF Attached

 

Morning. 

 

The
general US weather theme is unchanged from yesterday.  A short-lived ridge will develop over the US Midwest next week. Before and after that event sporadic rain will occur.  Corn, wheat and soybean prices are mostly lower led by corn. USDA crop progress showed
a 1 point improvement in corn while a 2 point decrease in soybeans are limiting early losses.  Spring wheat ratings declined 6 so look for a possible two-sided traded in MN.  Japan seeks 101,243 tons of food wheat later this week.  China imported 370,000 tons
of pork during May, up 86 percent from the previous year, and 640,000 tons of corn, down 15 percent. China’s Sinograin sold 1.1MMT of corn out of auction (1.7MMT total so far this season). 

 

 

 

Weather
and Crop Progress

 

 

 

 

 

 

 

 

 

 

 

 

 

Source:
World Weather Inc. and FI

 

 

Bloomberg
Ag Calendar

TUESDAY,
June 23:

• China
  cotton, corn, wheat and sugar imports

WEDNESDAY,
June 24:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• U.S.
  poultry slaughter, 3pm

THURSDAY,
June 25:

• 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
• Malaysia’s
  palm oil export data for June 1-25
• USDA
  hogs and pigs inventory, red meat production, 3pm

FRIDAY,
June 26:

• 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

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
613,052                 versus   400000-600000  range

Corn                     
1,295,845             versus   950000-1250000                range

Soybeans           
254,929                 versus   300000-500000  range

 

 

Macros

 

 

Corn.

·        
Corn futures hit a three-week low on improving corn conditions, a surprise to us, and more importantly negative developments in China/US trade relations. 
https://www.reuters.com/article/us-usa-trade-china-navarro/white-house-adviser-navarro-says-china-trade-deal-is-over-idUSKBN23U02Q

·        
The general US weather theme is unchanged from yesterday.  A short-lived ridge will develop over the US Midwest next week. Before and after that event sporadic rain will occur. 

·        
US corn conditions increased one point to 72 percent,  The trade was looking for a one-point decline.  2 percent of the US corn is silking, same as average. 

·        
Funds sold an estimated net 13,000 corn contracts on Monday. 

·        
China imported 370,000 tons of pork during May, up 86 percent from the previous year, and 640,000 tons of corn, down 15 percent.

·        
China’s Sinograin sold 1.1MMT of corn out of auction (1.7MMT total so far this season). 

·        
The EU lowered their import tariff on corn to 4.65/euros per ton, a 55 percent decrease, after it was increased in April from depressed landed import corn prices. 

 

Corn
Export Developments

• None
  reported

 

 

Soybean
complex.

• CBOT
  soybeans are lower are a good weather forecast for the US.  President Trump mentioned the Phase One trade deal was still intact, creating some volatility in soybean and corn prices overnight.  This comes after Peter Navarro said the deal was off. 
  https://www.reuters.com/article/us-usa-trade-china-navarro/white-house-adviser-navarro-says-china-trade-deal-is-over-idUSKBN23U02Q
  
• BRL
  is a little firmer. 
• China
  state owned crushers price checked UUS PNW soybeans on Monday while it was thought a private crusher covered 3 cargoes for Q4 shipment-2 US and 1 Brazil. 
  

·        
US soybean conditions fell 2 points to 70 percent, one point below trade expectations.  96 percent of the soybean crop had been planted. 

·        
Funds sold an estimated net 1,000 soybeans contracts on Monday, sold 2,00 meal and sold 2,000 soybean oil.  

• Rotterdam
  values this morning showed soybean oil were down 5 euros from this time previous session, rapeseed oil up 8 in the nearby, and soybean meal when imported from South America unchanged. 
  
• Offshore
  values this morning was leading CBOT soybean oil 36 point higher and meal $0.90 higher. 
  

·        
China:

·        
China cash crush margins as of this morning, using our calculation, were 48 cents per bushel (43 previous) and compares to 40 cents a week ago and 65 cents around this time last year.

·        
There are rumors China is asking US soybean shippers to provide papers that state their product is free of coronavirus, similar to what they did with the meat industry. 

·        
Malaysia: 

 

Oilseeds
Export Developments

• 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

·        
Quiet start to the US wheat markets despite the sharp decline in US spring wheat ratings. 

·        
US winter wheat conditions increased 2 points to 52 percent versus unchanged by the trade guess. US winter wheat harvesting progress advanced 14 points to 29 percent, three points above average.  Spring wheat conditions fell 6
points to 75 percent versus a one-point decline by the trade. 

·        
Funds bought an estimated net 3,000 Chicago wheat contracts on Monday. 

• Paris
  December wheat was down 0.25 euros at 180.75 at the time this was written.
  

 

Export
Developments.

·        
50,000 tons of US soft white wheat was sold to the Philippines and Indonesia at $245/ton c&f. 

·        
Japan seeks 101,243 tons of food wheat later this week. 

• Japan
  seeks 80,000 tons of feed wheat and 100,000 tons of feed barley on June 24 for arrival by November 26. 
  
• Ethiopia
  seeks 400,000 tons of wheat on July 10 for shipment within two months.    
  

 

Rice/Other

None reported