FI Morning Grain Comments 06/28/23

PDF attached

 

Good
morning.

 

USDA:
Private exporters reported to the U.S. Department of Agriculture export sales of 170,706 metric tons of corn for delivery to Mexico. Of the total, 21,340 metric tons is for delivery during the 2022/2023 marketing year and 149,366 metric tons is for delivery
during the 2023/2024 marketing year.

 

Follow
through selling in US agriculture commodities this morning on improving US weather forecasts and slow US export demand. StatsCan Canada area update was mostly as expected. USD is higher and WTI crude turned higher. August oil share made news highs overnight.
Third month Malaysian palm oil futures increased 80 ringgit to 3855, and cash increased $15.00 to $845/ton. Reuters noted the recent discount of palm olein against US SBO. Offshore values were leading SBO lower by about 82 points this morning and meal $5.80
short ton lower. Malaysia’s markets are closed for holiday June 29. A Bloomberg poll looks for weekly US ethanol production to be down 7,000 thousand barrels to 1045k (1035-1059 range) from the previous week and stocks off 49,000 barrels to 22.755 million.

 

US
Midwest rainfall this weekend will be erratic before increasing mid next week into the following weekend, providing an improvement in topsoil moisture. The US Northern Plains, upper Midwest and eastern Canada’s Prairies will see timely rain. Temperatures will
be seasonable to warmer than average. Europe
and the western CIS will be trending wetter for the balance of the week.

 

Canada
plantings

 

 

 

Fund
estimates as of June 27 (net in 000)

 

Weather

7-day

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 28, 2023

• GFS
  model may be a bit overboard on two week rain amounts in the heart of the Midwest, but all models today continue to produce an outlook that brings relief to driest areas of the Midwest during the next ten days to two weeks.
  
• Canada’s
  central Prairies do not get much moisture over the next ten days and with temperatures near to above normal crop moisture stress will be on the rise with many areas getting too dry
• Southern
  and east-central Alberta and western and Central Saskatchewan have been fighting dryness all season and this pattern will not help the situation
• Mexico’s
  monsoon rains are still expected to increase during the next two weeks, but the amount of moisture that gets entrained to the southwestern United States will be limited for a while longer
• Northern
  U.S. Plains and Manitoba, Canada weather will be favorably mixed with showers and sunshine during the coming ten days
• Europe 
  and western CIS weather continues to be mostly favorable with a mix of rain and sunshine expected throughout the next ten days; Pockets of dryness will remain
  
• China’s
  heat wave and drought environment is not likely to have a big impact on key corn and soybean production areas, despite the media hype.  It is hot and stressful, but the key corn and soybean production areas will be fine
• The
  area impacted will mostly be north of the Yellow River as we have been discussing for a while – that region produces spring wheat, sugar beets and little corn, but is not considered to be a key part of the nation’s corn and soybean production region and relief
  is coming
• Eastern
  Australia rain is still expected next week
• India’s
  central and northwestern Rain will occur as expected Tuesday except with a little less follow up rain next week relative to yesterday’s forecast
• Argentina
  has a little more rain coming in some of its wheat country Sunday and Monday, but the drier areas in the west will still need more

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Wednesday,
June 28:

• Canada’s
  StatsCan to release seeded area data for wheat, barley, canola and soybeans
• EIA
  weekly US ethanol inventories, production, 10:30am
• HOLIDAY:
  India, Indonesia

Thursday,
June 29:

• IGC
  monthly grains report
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Vietnam’s
  coffee, rice and rubber export data for June
• Port
  of Rouen data on French grain exports
• USDA
  hogs and pigs inventory, 3pm
• HOLIDAY:
  Indonesia, Malaysia, Singapore, Pakistan

Friday,
June 30:

• USDA
  quarterly stockpiles data for corn, soybeans, wheat, barley, oat and sorghum, noon
• ICE
  Futures Europe weekly commitments of traders report
• US
  annual acreage data for corn, cotton, wheat and soybeans
• US
  agricultural prices paid, received, 3pm
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• FranceAgriMer’s
  weekly crop condition report
• HOLIDAY:
  Indonesia, Pakistan

Source:
Bloomberg and FI

 

 

 

 

Macros

US
Wholesale Inventories (M/M) May P: -0.1% (est -0.1%; prevR -0.3%)

 

Corn

·        
US corn futures are lower on ongoing technical selling amid improving US weather prospects for the US Midwest and positioning ahead of the USDA report.

·        
The break in futures prices this week attracted some US export interest.

·        
There is some debate if the USDA will downward revise the US corn yield in the July S&D update before issuing its initial official survey in the August update. This year, based on past and the CPC 3-month future weather outlook,
we think the yield could be lowered 3-4 bushels per acre.

·        
French bird flu wave ends after 10 million birds culled – Reuters News.  22 million were culled in 2021-22.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 7,000 thousand barrels to 1045k (1035-1059 range) from the previous week and stocks off 49,000 barrels to 22.755 million.

 

Export
Developments

• USDA
  reported private exporters bought 170,706 tons of corn for delivery to Mexico. Of the total, 21,340 tons is for delivery during the 2022/2023 marketing year and 149,366 tons is for delivery during the 2023/2024 marketing year.

 

 

 

 

Export
developments.

• None
  reported

 

Soybeans

·        
The US soybean complex is under pressure from weather models suggesting the heart of the US could see its best rain amounts over the next two weeks since early spring.

·        
Abiove: 2022-23 Brazil production 165MMT, up 1MMT from previous. Exports 97 vs. 95.7MMT, crush 53.2 vs. 53.0MMT previous, and soybean meal exports at 21.9 vs. 21.4MMT prior.

·        
August oil share made news highs overnight. Watch for a correction.

·        
Indonesia set its crude palm oil (CPO) reference price at $747.23 per ton for the period of July 1-15. The price is higher than the June 16-30 price of $723.45. CPO export tax will be $18 per metric ton and levy at $75.

·        
Malaysia is on holiday Thursday.

·        
Third month Malaysian palm oil futures increased 80 ringgit to 3855, and cash increased $15.00 to $845/ton. Reuters noted the recent discount of palm olein against US SBO.

·        
China futures were higher with soybeans down 0.1%, meal down 1.2%, SBO off 1.5% and palm up 0.7%.

·        
Nearby Rotterdam vegetable oils were unchanged to 5 euros higher meal 8-15 euros lower.

·        
Offshore values were leading SBO lower by about 82 points this morning and meal $5.80 short ton lower.

 

Export
Developments

• Today
  Iran’s SLAL seeks up to 120,000 tons of soybean meal from Brazil or Argentina, for July and August shipment. They passed last week on meal.
  

 

 

Wheat

·        
Lower follow through trade in US and Paris wheat futures from Black Sea competition and improving US spring wheat production prospects. 

·        
September Paris wheat futures were down 1.50 euros at 2355 per ton, a two-week low.

·        
Global export developments have been slow this week.

·        
Warmer temperatures for the central US Great Plains for the second half of the work week should facilitate harvesting progress for winter wheat. Some disruption from rain is seen Friday through Saturday for the western growing
areas.

·        
Larger than expected Ukraine 2023 grain production is seen. Ukraine’s grain traders body estimated Ukraine’s 2023 wheat harvest may reach at least 24 million tons, above the AgMin17 million ton projection. UGA said the gross could
total 24.4 million tons in bunker weight, or 23.5 to 24 million metric tons in clean weight.

 

Export
Developments.

·        
Thailand buyers passed on 55,000 tons of feed wheat (per month) for Sep through Dec shipment. Lowest price offer was around $275/ton c&f for September and around $285 for November-December.

·        
Morocco seeks up to 2.5 million tons of wheat between July 1 and September 30. Origins include Russia, Ukraine, France, Germany, Argentina, and the United States.

 

Rice/Other

• None reported