From: Terry Reilly
Sent: Wednesday, May 20, 2020 6:52:40 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 05/20/20

PDF attached

 

Morning

 

 

 

Weather

Threat
of La Nina occurring during the Northern Hemisphere summer growing season remains low. 

SST’s
were near zero by the beginning of May. 

 

UNITED
STATES

  • No
    significant change occurred in the first week of the outlook
  • A
    small increase in rain was suggested from the central Plains into Wisconsin late next week

    • The
      change may verify
  • Some
    rain was reduced in southern Canada’s Prairies and the northern U.S. Plains May 30-June 1

    • Some
      of this reduction was needed
  • Rain
    was increased from Tennessee and northern Alabama into the western Carolinas and southwestern Virginia May 30-June 1

    • Some
      of this increase was overdone
  • A
    boost in rainfall suggested for Florida May 30-June 1 was also overdone
  • A
    decrease in South Texas rainfall May 30-June was needed
  • Reduced
    June 2-3 rainfall in the Great Lakes region and northern Plains was needed
  • Increased
    rainfall in the southeastern states June 2-3 was not expected to verify

 

The
bottom line remains favorably mixed for many key U.S. crop areas with alternating periods of rain and sunshine over the next two weeks. The environment will support late season planting and early season crop development. A little too much rain may fall in
a few areas causing some delay to farming activity at times. Some dryness will continue to be a concern in the southwestern U.S. Plains and a part of the interior southeastern states will likely dry down over time.

 

 

SOUTH
AMERICA

  • No
    significant changes occurred in the first week of the outlook
  • GFS
    model reduced rain in southern and far western Brazil crop areas late next week

    • The
      change was needed, but rain will fall from Rio Grande do Sul northward to Parana and from that region to parts of western and southern Mato Grosso
  • Rain
    was increased from Mato Grosso to southern Minas Gerais and Sao Paulo May 30-June 1

    • This
      increase was much too great and not likely to verify

 

The
bottom line did not change much for South America.  Argentina gets rain today and Thursday with dry weather during the following ten days to two weeks. The environment will be mostly good for summer crop harvesting and wheat planting, but rain is needed in
western and southern Argentina to improve soil moisture for wheat emergence and establishment. In Brazil, the same general theme is prevailing with rain occurring Thursday into Saturday from Rio Grande do Sul through western and southern Parana and Paraguay
to southwestern Mato Grosso and much of this same region will get rain again a week later. The moisture will be good for wheat and western Safrinha crops, but eastern Safrinha crops will have an ongoing need for greater rain.

 

 

EUROPE/BLACK
SEA

  • Very
    little change was noted in the first week of the outlook; western Europe experiences little to no rain and warmer temperatures while rain will be greatest in southeastern Europe where the central and southern Balkan Countries will receive some significant
    rain over the next few days
  • Rain
    was increased in central and eastern Europe late next week and again in eastern Europe in the May 30-June 1 period

    • Some
      of the increase will verify
  • Rain
    was reduced in northwestern Russia late next week and increased in the May 30-June 1 period

    • These
      changes may verify
  • GFS
    increased rainfall in the Balkan region and western Ukraine into Belarus, far northwestern Russia and the Baltic States June 2-3

    • Some
      of this was overdone

 

Western
Europe will experience net drying during much of the coming ten days and some models suggest it for two weeks.
The area of greatest concern will be in the United Kingdom, northern France, northwestern Germany, Belgium and Netherlands where net drying is already occurring and the ground may become too dry soon especially with temperatures
rising
above normal
.
Periodic showers and thunderstorms from the Balkan Countries across Ukraine into portions of western and southern Russia will prove to be helpful in maintaining status quo crop and field conditions especially while temperatures are a little cooler than usual.
The environment will be mostly good for crop develop in the western CIS and will improve with greater rain in southeastern Europe during the next week to ten days.

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

Seven-day
outlook:

 

Bloomberg
Ag Calendar

WEDNESDAY,
May 20:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • EU
    set to present its Farm to Fork strategy for sustainable food
  • New
    Zealand food prices, 6:45pm ET Tuesday
  • Malaysia’s
    palm oil export data for May 1-20
  • USDA
    milk production, 3pm

THURSDAY,
May 21:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
  • Port
    of Rouen data on French grain exports
  • USDA
    red meat production, 3 pm
  • U.S.
    cold storage – pork, beef, poultry
  • HOLIDAY:
    France, Germany, Belgium, Indonesia

FRIDAY,
May 22:

  • ICE
    Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions
  • 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, poultry slaughter, 3 pm
  • Shanghai
    exchange’s weekly commodities inventory, 15.30
  • EARNINGS:
    Sime Darby Plantation

SATURDAY,
May 23:

  • China
    May trade data, including agricultural imports

Source:
Bloomberg and FI

 

USDA
announced their Coronavirus Food Assistance Program

https://www.farmers.gov/cfap

https://www.farmers.gov/cfap/non-specialty

 

 

 

 

 

 

EPA
to make a biofuel target recommendation announcement soon?

Bloomberg
reported the Environmental Protection Agency has drafted a plan to increase the US 2021 biofuel-blending targets.  It would require the use of 5.17 billion gallons of advanced biofuels in 2021 by refiners, up from 5.09 billion gallons for 2020; including 670
million gallons of cellulosic from 590 million this year.  Conventual ethanol was not noted in the article but for 2022 biodiesel, it was thought the initial target of 2.76 billion gallons would be recommended, up from 2.43 billion gallons in 2021.  Note the
EPA has until the end of November to make a final decision, so anything can change. 

 

Macros

 

 

Corn.

·        
Corn futures are lower on technical selling after futures rose higher over the previous three sessions.  Argentina and Ukraine were active in selling corn over the past day.  EIA is out later today, and the trade is looking for another
jump in output and consumption. 

·        
China corn futures fell to their lowest level since early March on talk of increasing import quotas and an upcoming corn sale out of reserves.

·        
AgRural lowered their outlook for the safrinha crop to 66.7 million tons,  amounting to a total corn crop of 97.7 million tons. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 54,000 at 671,000 barrels (621-762 range) from the previous week and stocks to decrease 275,000 barrels to 23.915 million.

·        
US corn basis again firmed at selected locations across the western Corn Belt on Monday.  Blair, NE, was up 5 cents from Monday. China corn processors were up 5 cents to bid 5 under. 

·        
Some sections of the northern IL river are closed due to flooding. 

·        
China plans to sell 4 million tons of corn from state reserves on 28.  This would be the first auction of the season.  3.66 million tons of corn is from 2015. 

·        
China seeks to sell 10,000 tons of pork from state reserves on May 22.  320,000 tons have been sold this year. 

·        
Ukraine grain exports are up by 18 percent this season. 

·        
Kazakhstan is considering lifting their ban on grain and flour exports, with a target date of June 1. 

 

 

Corn
Export Developments

  • None
    reported

 

 

Soybean
complex
.