From: Terry Reilly
Sent: Wednesday, June 03, 2020 8:17:00 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments

PDF attached

 

Morning
FI export sales estimates are attached.  Soybean complex continues to gain on strength in global vegetable oils, US export demand for meal and China buying of US soybeans.  The USD is weaker.  BRL continues to rally. Rains are improving in southern France.

 

 

 

Weather

UNITED
STATES

  • No
    general theme changes were noted overnight

    • Tropical
      Storm Cristobal will reach the central Louisiana coast Sunday and it moves from there into Missouri and Illinois during mid-week next week as a mid-latitude frontal system moves across the Midwest enhancing rainfall
    • Cooler
      air follows the storm and frontal system into the eastern U.S. briefly during the second half of next week with becoming more limited once again
    • Temperatures
      are very warm to hot into this weekend in the Plains and warmer than usual in the Midwest and then the cooling occurs from the northern Plains into the Midwest while warm weather is still prevailing in the southwestern Plains
  • The
    06z GFS model run shifted some of its western Corn Belt rainfall slightly to the east as Tropical Storm Cristobal’s path was shifted a little to the right of its previous advertised track

 

The
bottom line remains quite favorable for crops in the Midwest where a good mix of rain, sunshine, warm and cool weather is expected over the next two weeks. A mix of rain and sunshine is also expected in the Delta and southeastern states with the Delta getting
a little more rain from the tropical storm making it wetter biased relative to that of the interior southeastern states where net drying may occur, despite some showers. The southern Plains will continue drier biased (especially in the southwest) during the
coming ten days along with much of the southwestern United States and in some of the valleys in the Pacific Northwest. The northern Plains will experience a good mix of rain while a part of Canada’s western Prairies will become a little too wet.

 

SOUTH
AMERICA

  • Not
    much change occurred in Argentina or Brazil weather overnight

 

EUROPE/BLACK
SEA

  • Net
    drying is still expected in southeastern Ukraine and parts of Russia’s Southern Region over the next ten days
  • Temperatures
    will trend a little warmer especially in the second week of the outlook when drying is expected to become more significant
  • Western
    and central Europe will experience frequent showers and thunderstorms during the next ten days along with northwestern Russia and northwestern Ukraine where soil and crop conditions will either remain good or improve
  • Temperatures
    may be a little cooler than usual in parts of northwestern and central Europe

 

The
change toward drier weather in the black Sea region was a needed change and will prove beneficial for those areas that have seen significant rain recently. Portions of southeastern Europe and the western CIS have been cooler than usual long enough that summer
crop development has not likely advanced very well and this period of warmer and drier weather (especially next week) will stimulate more aggressive development. The need for rain is expected to rise for the second half of this month in some of these areas
where soil moisture is a little light, like southeastern Ukraine and parts of Russia’s Southern Region. These drier areas will be closely monitored as time moves along to make sure that timely rain returns before the region gets too dry.

 

EASTERN
CIS NEW LANDS

  • Today’s
    ten-day outlook maps are still limiting rainfall from the Ural Mountains east toward West Siberia, although some showers are expected

    • The
      outlook did not change much overnight
  • Temperatures
    are advertised to be seasonable

 

There
is some ongoing concern about soil moisture in southern portions of the eastern New Lands. The region continues to dry down and the outlook does not provide a significant amount of rainfall for a while. Crop moisture stress could raise production concerns
later this summer if the recent warm and dry trend prevails too long. The driest areas have been mostly near the Kazakhstan border from eastern portions of Russia’s Southern region through southern portions of some important spring wheat and sunseed areas
in the eastern New Lands.

 

CHINA

  • Scattered
    showers and thunderstorms are still advertised for the North China Plain and Yellow River Basin during mid-week next week

    • The
      precipitation is advertised to be erratic with the 06z GFS model run wetter today from Shaanxi and Shanxi into parts of Henan for early next week relative to the 00z model run; Shandong , northern Jiangsu and northeastern Henan do not get much moisture through
      this time next week
    • Canadian
      model run is also not as generous with rainfall in the dry areas of Henan, Shandong, northern Anhui, northern Jiangsu or Hebei in this first week of the outlook.
    • The
      European model run is a good compromise between the GFS and Canadian runs with “some” scattered showers reaching the driest areas
  • A
    second wave of scattered showers moves through China’s driest areas during the latter part of next week in the Yellow River Basin and parts of the North China Plain adding a little more relief for the driest areas

    • World
      Weather, Inc. is not convinced that the rainfall expected next week will be good enough for a full restoration in soil moisture, but some short term benefit to crops and field conditions will be possible
  • Not
    much follow up rain occurs in the dry region suggesting  the area from Henan, northern Anhui and northwestern Jiangsu to western Inner Mongolia may experience a return of dryness in the June 13-17 period
  • Temperatures
    are still advertised to be warmer than usual in most of the dry biased region

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,
June 3:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • China’s
    CNGOIC to publish monthly forecast on crop output, supply and demand
  • EARNINGS:
    Tereos

THURSDAY,
June 4:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
  • FAO
    world food price index, 4am
  • Port
    of Rouen data on French grain exports
  • New
    Zealand commodity price

FRIDAY,
June 5:

  • 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
  • Malaysia’s
    palm oil export data for June 1-5

Source:
Bloomberg and FI

 

 

 

 

Macros

US
ADP Employment Change May: -2760K (est -9000K; prev -20236K)

;
prevR -19557K; prev -20236K)

 

 

 

Corn.

·        
Corn futures

eased on good US weather prospects. Heat followed by rain  later this week for the US Midwest is seen ideal for early development. 

·        
CBOT corn open interest was up 15,663 contracts on Tuesday.  Yesterday funds bought 2,000 lots.  Corn OI is up about 53,200 contracts since last Tuesday.

·        
Newswires are collecting information for the USDA June S&D update.  

·        
Temperatures will warm up to above normal this week across the Corn Belt this week which is what the corn crop needs for establishment and growth. 

·        
USDA’s Broiler Hatchery Report will be out after the close. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 60,000 at 784,000 barrels (744-802 range) from the previous week and stocks to decrease 130,000 barrels to 23.176 million.

 

Corn
Export Developments

  • Taiwan’s
    MFIG bought 65,000 tons of optional origin corn (US, Brazil, Argentina or South Africa) for Sep shipment at 124.57 cents over the December CBOT contract.

  • 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.

 

 

Soybean
complex
.

  • The
    July soybean oil contract traded up to 24.14, its April high. If it breaks above that level today, it will trade at early March levels and look technically bullish. 
  • CNGOIC
    estimated China 2019-20 soybean imports at 91MMT, up 1MMT from previous and compares to 82.5MMT in 2018-19.  2020-21 was estimated at 92MMT. 
  • The
    US will see a drier bias in many areas over the coming week with temperatures warmer than usual.
  • Rotterdam
    values this morning showed soybean oil up 10 euros, rapeseed oil up 5-10, and soybean meal when imported from South America mixed. 
  • Offshore
    values this morning were leading CBOT soybean oil 13 points higher and meal $0.30 lower. 

·        
China

·        
China cash crush margins as of this morning, using our calculation, were 64 cents per bushel (76 previous session) and compares to 67 cents a week ago and 79 cents around this time last year.

·        
Malaysian palm
:
2-month high. Smaller than expected May production estimates.