PDF attached

 

Morning.

Today
and Monday expect positioning ahead of USDA’s Acreage and Grain Stocks reports.  Hogs and Pigs report was viewed supportive for corn and soybean meal, bearish for hogs. 
Weather
remains a key driver which is pressuring soybeans and wheat, limiting gains in corn.  Malaysian palm oil futures slid 4 percent this week on weaker mineral oil, rising palm production, and slowing of palm exports.  France reported softy wheat ratings unchanged
from the previous week, but they remain at well below average levels.  News is very light with China on holiday.  CBOT corn open interest rose over 27,000 contracts on Thursday in part to new shorts and surge in option plays.  The funds sold an estimated net
58,000 corn contracts over the combined four days.  Later we get CFTC COT data as of Tuesday evening. 

 

 

 

 

Weather
and Crop Progress

 

UNITED
STATES

• Rain
  was reduced from southeastern Iowa into central and southwestern Illinois and eastern Missouri while increased in southern Minnesota and western Wisconsin during mid-week next week
  
• Some
  of the change was needed
• Some
  reduction in rainfall was suggested for next week western Manitoba, Canada with 2.00 to 4.50 inches suggested previously and now amounts are 1.00 to 3.00 inches
• The
  reduction was needed
• GFS
  increased rainfall from the Delta into the Tennessee River Basin and a part of the eastern Midwest July 3-5
• Some
  of the increase in rainfall was overdone
• GFS
  removed rain from the central Midwest July 6-8
• Some
  of this reduction was needed
• Rain
  was also shifted to the north from a region from South Dakota and northern Nebraska to Wisconsin and far northern Illinois to the region from North Dakota to northern Minnesota and northern Wisconsin July 6-8
• Some
  of this change was needed and may verify
• GFS
  increased rainfall from North Dakota and northeastern Montana to northwestern Iowa July 9-10
• Some
  of this increase was overdone
• GFS
  rain in the southeastern states was reduced July 9-10
• Some
  of the reduction was needed
• The
  tropical disturbance previously advertised this week to come into the Gulf of Mexico and eventually move inland over the Gulf of Mexico coastal region has been minimized to an ill-defined tropical wave today in both the 00z and 06z GFS model runs which is
  more consistent with the European and Canadian forecast models of most days this week.

 

The
bottom line for the next two weeks will change from scattered showers and thunderstorms in many Midwestern, northern Plains, Delta and southeastern states in this first week of the outlook to rain that is mostly confined to the northern Plains, upper Midwest
and Great Lakes region and in the Gulf of Mexico coast states in week two. Areas in between and in the southern Plains will likely experience a more limited rainfall pattern during the second week of the outlook and these second week trends could prevail into
week three.  The bottom line should be good for crops in the northern Plains, Canada’s Prairies, the northern Midwest and some areas in the Gulf Coast States while some net drying may eventually develop in the lower Midwest and in the south half of the Plains.

 

EUROPE/BLACK
SEA

• No
  general theme changes were noted in the first week of the outlook, although the GFS has removed some rain to many areas in northern Europe
• The
  lighter rainfall was needed
• GFS
  reduced rain in the Balkan Countries July 3-5
• Some
  of this change was needed, but the model may have removed too much moisture
• GFS
  increased rainfall from the eastern Balkan Countries into western Ukraine and Belarus July 6-8
• Some
  of the increase may have been a little overdone, but a little boost might have been needed
• GFS
  reduced rain from eastern Europe into northwestern Russia July 9-10
• Some
  of the reduction was needed, but too much rain may have been removed

 

Concern
about France will continue as the GFS and Canadian Models downplay rainfall for the next ten days. The GFS keeps rain limited in northwestern Europe through the entire two-week period with some expansion of the drying trend into Germany and Poland during the
second week of the outlook. The GFS has likely taken too much moisture out of northern Europe in the second week, the region will need to be closely monitored – especially France. The European model is a little more generous with rain in France and areas east
into Poland, but it may be a little too wet. World Weather, Inc. expects drying in France to be most significant, but there will be pockets of limited rainfall a little farther to the east, but the region should not be as dry as the GFS suggests. In the meantime,
conditions in eastern Ukraine and Russia’s Southern Region looks to be quite dry which may promote quick winter wheat maturation and eventual good harvest conditions, but summer crops in the region will become more seriously stressed over time.

 

RUSSIA
NEW LANDS

• Very
  little change occurred in the first week of the outlook
• The
  second week of the outlook has moved around some of the wetter and drier biased areas with some net increase in rainfall for central parts of the New Lands
• Some
  of the increase in rainfall may have been overdone
• The
  second week of the outlook will trend warmer after several more days of very cool conditions this weekend into early next week

 

The
bottom line remains favorable for much of the New Lands during the next two weeks. Partial relief to dryness near the Kazakhstan border is expected. Warming that occurs in the second week of the outlook should stimulate faster crop development which is needed
after the recent extended period of cool conditions. The warmer weather will accelerate drying rates and that will boost the demand for rain later in July. Rain in this next week to ten days will be welcome and should prevent dryness problems from evolving
for a while, but it is still unclear how significant the rainfall will be for some areas.

 

CHINA

China’s
weather has not changed much with rain expected in most of the nation. Some of the rain will be excessive in east-central and some interior southern locations resulting in more flooding and additional crop problems. Rain in the north will be best for the lingering
dry areas north of the Yellow River, but sufficient moisture in the northeastern provinces will be good for corn, soybeans, sugarbeets and spring wheat. Some drying might be welcome for a little while in Heilongjiang where it has been a little too wet at times.

 

AUSTRALIA

• No
  change was noted in the first week of the outlook with showers mostly brief and light in each of the crop areas
• Some
  increase in rainfall was suggested in the July 4-5 weekend in Western Australia
• Some
  increase in rainfall was possible at that time

 

The
bottom line for Australia remains very good for wheat, barley and canola establishment in Western Australia, Victoria and New South Wales. Greater rain is still needed in Queensland and interior South Australia

 

SOUTH
AMERICA

• No
  significant change was suggested for the coming ten days

Source:
World Weather Inc. and FI

 

Bloomberg
Ag Calendar

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

MONDAY,
June 29:

• Canada
  Statcan data on seeded area for wheat, durum, canola, barley, soybeans, 8:30am
• USDA
  weekly corn, soybean, wheat export inspections, 11am
• U.S.
  crop progress, conditions — soybeans, wheat, cotton, 4pm
• Vietnam’s
  General Statistics data on coffee, rice, rubber exports
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• EARNINGS:
  Biosev

TUESDAY,
June 30:

• U.S.
  annual acreage planted – soybeans, wheat, cotton, corn
• USDA
  quarterly stocks of corn, wheat, barley, oat, sorghum and soybeans
• OECD
  annual agricultural policy monitoring and evaluation report
• U.S.
  agricultural prices paid, received, 3pm
• Malaysia’s
  palm oil export data for June 1-30

WEDNESDAY,
July 1:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• Brazil
  soybean exports
• Australia
  commodity index
• U.S.
  soybean crush, DDGS output, corn for ethanol, 3pm
• Holiday:
  Canada, Hong Kong

THURSDAY,
July 2:

• UN
  FAO world food price index, 4am
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• AB
  Foods trading update

FRIDAY,
July 3:

• U.S.
  Independence Day Holiday
• 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

 

 

 

 

 

 

 

 

TABLE-Canadian
crop planting trade estimates
– Reuters News

(Reuters)
– Statistics
Canada is scheduled to release its estimates of Canadian crop plantings on Monday, June 29 at 7:30 a.m. CDT (1230 GMT)

The
following are trade estimates from 16 analysts and traders:

	Average estimate	Lowest estimate	Highest estimate	Statscan April 2020	Statscan 2019
	(mln acres)
All wheat	25.2	24.2	25.8	25.4	24.6
Durum	5.5	5.0	5.8	5.2	4.9
Canola	20.7	20.1	21.3	20.6	21.0
Oats	3.9	3.7	4.2	3.8	3.6
Barley	7.2	6.7	7.4	7.2	7.4
Corn	3.6	3.5	3.9	3.8	3.7
Soybeans	5.3	5.2	5.4	5.2	5.7
Lentils	4.2	4.0	4.7	3.7	3.8
Flax	1.04	0.880	1.4	0.942	0.937
Peas	4.2	3.8	4.4	4.3	4.3

Source:
Reuters and FI

 

Macros

 

 

 

Corn.

·        
Corn futures earlier were unchanged to higher but turned lower bias nearby positions by the electronic pause.  Bear spreading was in play from positioning/short covering.  The quarterly US hogs and pigs report was viewed as bullish
for corn. 

·        
US weather forecast was shows favorable rain for much of the rowing areas over the next week, then net drying for the lower and central Midwest, and part of the central and southern Great Plains for the second week of the forecast. 
Soil moisture levels should be sufficient enough to ride out a net drying period early July. 

·        
Funds sold an estimated net 25,000 corn contracts on Thursday.  Previous three days they sold 33,000 contracts, or 58,000 contracts over the combined four days. 

·        
South Africa’s CEC estimated the 2019-20 SAf corn crop at 15.5 million tons, slightly below 15.6 million previous and compares to 11.275 million tons in 2019. 

·        
The USDA hogs and pigs report showed all hogs as of June 1 increased 5.2 percent from a year ago, compared to the trade looking for an increase 3.0 percent from a year ago.  Kept for breeding was 2.9 percentage points below expectations. 
Kept for market came in 2.7 points above trade expectations.

 

 

Corn
Export Developments

• None
  reported

 

Soybean
complex.

• CBOT
  soybeans are
  lower on available weather and lower outside markets and slightly firmer USD.  The trade expects USDA to report an increase in US soybean planted area when updated on Tuesday.  News is lacking so the trade is taking ques from offshore values which are leading
  the products lower this morning. 
• US
  coronavirus cases surged on Thursday, a negative undertone for outside markets influencing CBOT ags. 
  
• China
  is on holiday and will be back on Monday. 

·        
Funds sold an estimated net 3,000 soybeans contracts on Thursday, sold 2,000 meal and sold 2,000 soybean oil.  

• Anec
  said Brazilian exporters can not promise China that the soybeans will be coronavirus free. 
  
• Dorab
  Mistry looks for India vegetable oil demand to return to normal in Q1 2021.  We agree global wide. 
  
• Rotterdam
  values this morning showed soybean oil for the August/September position was down 6 euros from this time previous session, rapeseed oil down 10 in the nearby, and soybean meal when imported from South America mixed. 
  
• Offshore
  values this morning was leading CBOT soybean oil 26 points lower (27 lower for the week to date) and meal $0.20 lower ($0.10 lower for the week). 
  

·        
China cash crush margins as of this morning, using our calculation, were 47 cents per bushel and compares to 40 cents a week ago and 65 cents around this time last year.

·        
Malaysia: 

 

Oilseeds
Export Developments

• Results
  awaited:  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

• Harvest
  pressure and improving Northern Hemisphere weather continue to pressure wheat.  MN is not following Chicago or KC despite forecasts for improving weather (rain) for the northern Great Plains and Canadian Prairies.  Yesterdays close favored Chicago wheat so
  today we might be seeing a reversal in direction for the three wheat markets amid positioning. 
  
• Export
  developments were light. 
• StatsCan
  is due out next week and traders are looking for about a 300,000 to 500,000-acre reduction in plantings for all-wheat, depending on which survey you follow.  Reuters estimates are above. 
  
• French
  soft wheat conditions were unchanged from the previous week at 56 percent.  Conditions remain well below average.  Rain across France was too late to boost crop prospects but at least production did stabilize.  Summer crop conditions look favorable. 
  
• Paris
  December wheat was unchanged at 180.00 at the time this was written.

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

 

 

Export
Developments.

• Ethiopia
  seeks 400,000 tons of wheat on July 10 for shipment within two months.    
  

 

Rice/Other

• None reported