NEWS

Please click on the below link to download the FI Morning Grain Comments for 05/24/2018

Weather and crop conditions

  • Not many changes in the US drought monitor. Drought slightly expanded across MN and WI, and showed a minor decrease across the southern Great Plains.
  • 6-10 day is wetter for the north central Midwest and 11-15 day drier for the northwest Midwest.
  • The southern Great Plains turn hot and dry for the remainder of the week for TX, western OK, and southern Kansas.
  • The southeastern US will remain wet over through the end of May. The delta will see erratic rainfall and Midwest will be wet bias southern areas.
  • The US central and northern Great Plains will see rain through the end of this week.
  • The Canada Prairies will frequent rain events through the end of May.
  • The lower Volga River Basin will remain dry this week.
  • Western Australia gets rain late this week, but follow up moisture will be needed, as the coverage appears to be not as widespread as the trade thinks. See the forecast map below.
  • Keep an eye on the June 1-6 weather models that have hinted ridge building across the northern and central US.

Source: World Weather Inc. and FI

Source: World Weather Inc. and FI

Upcoming

THURSDAY, MAY 24:

  • International Grains Council updates forecasts, 8:30am ET (1:30pm London)
  • USDA weekly crop net-export sales, 8:30am
  • U.S. NOAA’s seasonal hurricane forecasts for the Atlantic and eastern Pacific, 11am
  • USDA red meat production for April, 3pm
  • USDA FAS unit’s world sugar report, 3pm
  • Buenos Aires Grain Exchange weekly crop report
  • EU weekly grain, oilseed import and export data
  • Port of Rouen data on French grain exports
  • Bloomberg weekly survey of analysts’ expectations on grain, sugar prices
  • EARNINGS: Tate & Lyle Plc, Hormel Foods Corp., Sanderson Farms Inc.
  • Ros Agro holds investor day

FRIDAY, MAY 25:

  • AmSpec data on Malaysia’s May 1-25 palm oil exports, 11pm ET Thursday (11am Kuala Lumpur Friday); SGS data for same period, 3am ET Friday (3pm local time Friday)
  • ICE Futures Europe commitments of traders weekly report on coffee, cocoa, sugar positions, ~1:30pm ET (~6:30pm London)
  • USDA cattle-on-feed data for April, noon
  • USDA poultry slaughter data for April, 3pm
  • CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • FranceAgriMer weekly updates on French crop conditions

Registrations

  • Rough Rice down 12 to 849

Macros.

  • USD is lower, WTI crude is lower, and gold higher.
  • US Initial Jobless Claims: 234k (est 220k prev R 223k)

US Continuing Claims: 1741k (est 1746k prev R 1712k)

Corn.

  • Corn is higher on optimistic US demand prospects, slow US seedings across the northern Midwest, and higher soybeans.
  • Dry weather in Heilongjiang, China, is starting to raise concern as drought covers about 1.7 million hectares of cropland as of May 23. Some corn replanting and/or shifting to soybeans was noted. More rain is expected May 25-28.
  • Southern Brazil saw patches of frost.
  • USDA export sales report showed China bought US corn.
  • Last trade for June options is Friday.
  • Baltic Dry Index was down 4.6 percent to 1109, or 53 points.
  • Interesting EFR done in CH yesterday 21,706 contracts traded.  Last Friday, there were 19,500 SH done as an EFR. (OMJ)
  • China corn futures were up 17 yuan or 1.0%. China is seeing drought like conditions across a couple main corn producing states.
  • The weekly US EIA report showed ethanol production for the week ending 5/18 down 30,000 barrels per day to 1.028 million, largest weekly decrease since March 9, 2018. A Bloomberg survey called for production to be down 5,000.
  • US ethanol stocks increased 624,000 barrels from the previous week to 22.129 million barrels, largest value in a month. A Bloomberg survey called for stocks to be up 217,000 barrels.
  • The USDA Broiler Report showed eggs set in the US up 3 percent and chicks placed up 3 percent. Cumulative placements from the week ending January 6, 2018 through May 19, 2018 for the United States were 3.65 billion. Cumulative placements were up 1 percent from the same period a year earlier.

 

Export Developments

  • China sold 2.884 million tons of corn at auction at an average price of 1498 yuan per ton ($234.35/ton), 75 percent of what was offered.
  • China plans to sell nearly 8 million tons of corn May 31-Jun 1.
  • Under the 24-hour announcement system, US exporters reported cancellations of 132,000 tons of sorghum for unknown during the 2017-18 marketing year.

 

USDA Export Sales Text

  • Corn:  Net sales of 854,300 MT for 2017/2018 were down 13 percent from the previous week, but up 3 percent from the prior 4-week average.  Increases were reported for Japan (326,900 MT, including 60,000 MT switched from unknown destinations and decreases of 3,700 MT), South Korea (223,300 MT, including 150,000 MT switched from unknown destinations), Mexico (150,800 MT, including decreases of 28,200 MT), China (88,200 MT, including 65,000 MT switched from unknown destinations), and Vietnam (68,900 MT, including 65,000 MT switched from unknown destinations).   Reductions were primarily for unknown destinations (318,400 MT).  For 2018/2019, net sales of 273,400 MT were reported for Japan (188,000 MT) and Vietnam (60,000 MT).  Exports of 1,469,300 MT were down 6 percent from the previous week and 9 percent from the prior 4-week average.  The destinations were primarily to Mexico (371,700 MT), South Kora (286,900 MT), Japan (172,300 MT), Egypt (116,600 MT), and China (72,200 MT).  Optional Origin Sales:  For 2017/2018, new optional origin sales 66,000 MT were reported for unknown destinations.  The current optional origin outstanding balance of 600,000 MT is for South Korea (344,000 MT), unknown destinations (141,000 MT), Vietnam (65,000 MT), and Egypt (50,000 MT).
  • Barley:  No net sales were reported for the week.  Exports of 900 MT were to Japan (700 MT) and Taiwan (200 MT).
  • Sorghum:  Net sales of 29,800 MT for 2017/2018 were reported for unknown destinations (20,000 MT), South Africa (9,000 MT, switched from unknown destinations), and Mexico (800 MT).   Exports of 11,100 MT were down 83 percent from the previous week and 89 percent from the prior 4-week average.  The destinations were South Africa (9,000 MT), Vietnam (1,100 MT), Mexico (800 MT), and Taiwan (200 MT).

 

Soybean complex.

  • USDA export sales confirmed the cancellations of old-crop soybeans but the net amount was better than expected. Product sales were good. Look for the soybean complex to remain firm on improving trade relations with China and economic problems in SA.
  • July soybeans are above $10.40/bu and are up 5 consecutive sessions.
  • China bought at least 2 cargoes of US soybeans from the PNW for August loading, according to JCI. They mentioned China needs to fill 6.0-6.5 million tons of soybean needs for the Aug-Sep period.
  • At least 7 cargoes of soybeans may have been sold over the last 48 hours.
  • USDA 24-hour system reported 264,000 tons of soybeans sold to unknown for 2018-19.
  • Argentina dock workers are on a one-day 24-hour strike (Thursday) over better working conditions and protesting recent economic problems.
  • After denying it yesterday, an official from the Argentina AgMin said they are looking at suspending the plan to lower soybean export taxes each month. The tax started the year at 30 percent and was to be reduced by a half percentage point every month for two years. The levy currently stands at 27.5 percent. Farmers had counted on its continued reduction through the end of 2019. (Reuters)
  • China cash crush margins were last running at 23 cents, down from 49 cents per bushel from the previous day, and compares to 44 cents last week and negative 3 cents a year ago.
  • China September soybean futures were unchanged, China September meal up 31 yuan (1.0%), soybean oil unchanged and palm up 4 yuan (0.1%).
  • Rotterdam soybean meal when imported from SA was unchanged to higher and vegetable oils higher.
  • Offshore values were leading the soybean oil 16 points higher and soybean meal $0.10 lower.
  • Malaysia August palm oil futures were up 19 to a 7-week high and cash up $5.00/ton.
  • Indonesia set a 25 percent biodiesel use target starting 2019. Currently it’s at 20 percent.
  • Brazil’s Petrobras lowered its diesel price by 10 percent and froze prices for 15 days to allow time for the government and truck drivers to negotiate. Brazil’s truck strike will last for one more day. Brazil’s oilseed crushing organization ABIOVE noted suspension of crushing operations because of the truck protests, and are asking local soybean processors to advise clients about possible delays on cargos.
  • About a third of the soybean and meal shipments at Brazil’s Paranagua port were suspended because of the truck strike.
  • Brazil’s biodiesel production in March hit a monthly 10-year record at 452 million liters or 119.4 million gallons, up 32 percent year-on-year.

 

Export Developments

  • Under the 24-hour announcement system, US exporters reported the sale of 264,000 tons of soybeans for unknown during the 2018-19 marketing year.
  • Egypt seeks 30,000 tons of soybean oil and 10,000 tons of sunflower oil on May 24, for LF July arrival. The lowest offer for soybean oil was $752.95 a ton for 30,000 tons, and lowest offer for sunflower oil was at 14,250 Egyptian pounds a ton, or $795.64 a ton, for 5,000 tons. (Reuters)
  • Iran seeks 30,000 tons of sunflower oil on July 10.

 

USDA Export Sales Text

  • Soybeans:  Net sales reductions of 139,500 MT for 2017/2018 were down noticeably from the previous week and from the prior 4-week average.  Increases reported for Pakistan (248,000 MT, all late reporting including decreases of 5,000 MT), Bangladesh (173,100 MT, including 172,500 MT switched from unknown destinations and decreases of 2,300 MT), Indonesia (81,800 MT, including 50,000 MT switched from unknown destinations and decreases of 100 MT), Germany (75,200 MT), and the Netherlands (66,000 MT, switched from unknown destination), were partially offset by decreases of unknown destinations (894,500 MT) and China (52,500 MT).   For 2018/2019, net sales of 6,900 MT were reported for Malaysia (5,000 MT), Thailand (4,800 MT), Indonesia (4,000 MT), and Canada (1,100 MT), were partially offset by decreases for unknown destinations (8,000 MT).  Exports of 903,900 MT were up 56 percent from the previous week and 65 percent from the prior 4-week average.  The destinations were primarily to China (133,200 MT), Mexico (114,500 MT), Bangladesh (113,300 MT), Germany (75,200 MT), and Vietnam (74,400 MT). Export for Own Account:  The current outstanding balance of 12,200 MT is for Canada. Export Adjustments:    Accumulated exports of soybeans to the Netherlands were adjusted down 75,155 MT for week ending May 10th.  The correct destination for this shipment is Germany and is included in this week’s report.
  • Soybean Cake and Meal:  Net sales of 239,500 MT for 2017/2018 were down 36 percent from the previous week, but up 2 percent from the prior 4-week average.  Increases were reported for the Philippines (134,800 MT, including decreases of 2,000 MT), Canada (25,700 MT, including decreases of 300 MT), Mexico (23,700 MT, including decreases of 100 MT), Tunisia (15,000 MT, switched from unknown destinations), and the Dominican Republic (10,800 MT, including decreases of 1,200 MT).  Reductions were primarily for Nicaragua (800 MT) and Guatemala (700 MT).  For 2018/2019, net sales reductions of 42,600 resulted as increases for Japan (1,400 MT) and Canada (1,000 MT), were more than offset by reductions for the Philippines (45,000 MT).  Exports of 257,000 MT were down 1 percent from the previous week and 10 percent from the prior 4-week average.  The primary destinations were Colombia (48,100 MT), the Philippines (34,500 MT), Morocco (30,300 MT), Spain (29,600 MT), and Mexico (22,500 MT).
  • Soybean Oil:  Net sales of 17,700 MT were up 74 percent from the previous week, but down 36 percent from the prior 4-week average.  Increases were reported for South Korea (15,100 MT, including 15,000 MT switched from Malaysia), the Dominican Republic (8,900 MT), Colombia (5,000 MT), Jamaica (3,500 MT), and Nicaragua (1,500 MT).  Reductions were reported for Malaysia (15,000 MT) and Peru (3,200 MT).  Exports of 12,900 MT were down 68 percent from the previous week and 57 percent from the prior 4-week average.  The primary destinations were Guatemala (6,000 MT), Jamaica (3,500 MT), and Mexico (2,700 MT).

 

Wheat.

  • US wheat futures are higher on adverse weather across some of the main growing areas of the world, higher EU wheat futures and technical buying.
  • SovEcon estimated Russia wheat exports for 2018-19 at 38 million tons.
  • EU wheat futures were up sharply this morning by 1.25-2.25 euros. Algeria bought nearly 700,000 tons of soft wheat.
  • China wheat futures were up 3 yuan per ton or 0.1%.
  • Yesterday there was chatter China was in for US Gulf SRW. China could use good quality to blend with some of their poor-quality wheat.

 

Export Developments.

  • Algeria reportedly bought about 680,000 tons of soft wheat. Prices were reported at $227.50-228.50 per ton CFR for August shipment.
  • Jordan Silos passed on 50,000 tons of wheat.
  • Zimbabwe seeks to import 150,000 tons of wheat.
  • Japan bought 96,870 tons of wheat from the US and Canada on Thursday.

  • Ethiopia seeks 200,000 tons (lowered from 400k) of wheat on May 25 (originally May 18).
  • Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on May 30 for arrival by October 31.

 

Rice/Other

  • Thailand seeks to sell 120,000 tons of raw sugar on June 4.
  • Iran seeks 20,000 tons of rice from Pakistan on June 12.

 

USDA Export Sales Text

  • Wheat:  Net sales of 112,300 metric tons for delivery in marketing year 2017/2018 were up 78 percent from the previous week, but down 29 percent from the prior 4-week average.  Increases were primarily for South Korea (75,200 MT), Guatemala (22,000 MT, including 19,500 MT switched from unknown destinations and decreases of 100 MT), Ghana (18,500 MT, including 16,900 MT switched from unknown destinations), Nigeria (13,700 MT, including 13,100 MT switched from unknown destinations), and El Salvador (8,200 MT, including 6,800 MT switched from unknown destinations and decreases of 100 MT).  Reductions were primarily reported for unknown destinations (32,300 MT).  For 2018/2019, net sales of 340,000 MT were primarily reported for Taiwan (85,800 MT), Japan (55,400 MT), and Iraq (50,000 MT).  Exports of 362,200 MT were down 12 percent from the previous week and 10 percent from the prior 4-week average.  The primary destinations were to South Korea (83,300 MT), the Philippines (79,200 MT), Mexico (37,200 MT), Guatemala (32,300 MT), and Venezuela (30,000 MT).
  • Rice:  Net sales of 29,600 MT for 2017/2018 were down 18 percent from the previous week and from the prior 4-week average.  Increases were reported for Haiti (15,500 MT), Mexico (10,700 MT, including decreases of 500 MT), Canada (1,200 MT), Saudi Arabia (1,000 MT), and Honduras (700 MT).  Reductions were reported for Taiwan (400 MT).  For 2018/2019, net sales of 5,100 MT were reported for Honduras (5,000 MT) and Kuwait (100 MT).  Exports of 63,800 MT were up 24 percent from the previous week and 9 percent from the prior 4-week average.  The destinations were Japan (25,400 MT), Haiti (14,300 MT), Mexico (13,900 MT), Colombia (3,400 MT), and Canada (2,000 MT).
  • Cotton:  Net sales of 50,700 running bales for 2017/2018–a marketing-year low–were down 67 percent from the previous week and 76 percent from the prior 4-week average.  Increases were reported for China (17,800 RB, including decreases of 2,400 RB), Mexico (15,200 RB, including decreases of 3,200 RB), Taiwan (3,800 RB, including decreases of 400 RB), Indonesia (3,300 RB, including 400 RB switched from Japan and decreases of 2,000 RB), and Ecuador (3,100 RB).  Reductions were primarily reported for Thailand (2,600 RB), Japan (1,700 RB), and the Philippines (1,100 RB).   For 2018/2019, net sales of 152,200 RB were primarily for Thailand (60,300 RB), China (35,200 RB), Vietnam (18,300 RB), and Indonesia (17,500 RB).  Exports of 403,000 RB were down 5 percent from the previous week and 10 percent from the prior 4-week average.  The primary destinations were Vietnam (67,000 RB), Turkey (62,800 RB), Pakistan (47,200 RB), China (45,000 RB), and Bangladesh (36,900 RB).  Net sales of Pima totaling 900 RB for 2017/2018 were down 54 percent from the previous week and 83 percent from the prior 4-week average.  Increases primarily reported for Pakistan (300 RB), China (300 RB), and India (300 RB), were partially offset by decreases for Egypt (200 RB) and Honduras (100 RB).  Exports of 18,000 RB were up 54 percent from the previous week and 76 percent from the prior 4-week average.  The primary destinations were China (11,300 RB), India (3,200 RB), and Peru (2,400 RB). Optional Origin Sales:  For 2017/2018, options were exercised to export 1,200 RB to Indonesia from the United Sates.  The current optional origin outstanding balance is 8,400 RB, all Indonesia.  Exports for Own Account:  New exports for own account totaling 100 RB were reported to Thailand.  Exports to Thailand (100 RB) were applied to new or outstanding sales.  Decreases totaling 100 RB were reported for Indonesia.  The current outstanding balance of 15,600 RB is for Vietnam (6,200 RB), Indonesia (5,000 RB), China (3,900 RB), and Bangladesh (500 RB).

 

U.S. EXPORT SALES FOR WEEK ENDING 5/17/2018

  CURRENT MARKETING YEAR NEXT MARKETING YEAR
COMMODITY NET SALES OUTSTANDING SALES WEEKLY EXPORTS ACCUMULATED EXPORTS NET SALES OUTSTANDING SALES
CURRENT YEAR YEAR
AGO
CURRENT YEAR YEAR
AGO
  THOUSAND METRIC TONS
WHEAT                
   HRW 22.2 395.6 999.3 91.8 8,895.8 10,923.4 140.5 605.0
   SRW 18.6 288.9 305.6 40.4 2,249.2 2,241.0 24.6 380.9
   HRS 34.5 730.8 852.8 151.3 5,432.2 7,718.4 112.6 815.5
   WHITE 36.0 531.6 699.1 77.7 4,784.3 4,133.5 62.3 515.7
   DURUM 1.0 21.8 83.2 1.0 383.6 442.1 0.0 80.8
     TOTAL 112.3 1,968.7 2,940.0 362.2 21,745.1 25,458.3 340.0 2,397.7
BARLEY 0.0 2.0 7.8 0.9 31.1 17.7 0.0 46.5
CORN 854.3 17,809.0 12,724.1 1,469.3 35,662.6 40,531.7 273.4 2,503.6
SORGHUM 29.8 637.1 604.3 11.1 4,751.9 3,703.0 0.0 38.0
SOYBEANS -139.5 9,751.5 7,017.5 903.9 45,440.4 50,810.4 6.9 5,556.2
SOY MEAL 239.5 3,093.5 2,534.0 257.0 7,673.7 6,924.1 -42.6 280.7
SOY OIL 17.7 256.1 87.5 12.9 615.9 799.0 0.0 1.8
RICE                
   L G RGH 9.4 147.1 146.7 16.8 919.9 1,121.9 5.0 15.0
   M S RGH 0.0 4.7 8.3 0.7 47.4 186.4 0.0 0.0
   L G BRN 0.1 3.4 5.6 0.2 12.9 15.2 0.0 0.0
   M&S BR 0.1 0.3 34.4 0.1 66.0 157.8 0.0 0.0
   L G MLD 19.4 117.7 141.2 18.0 748.0 662.9 0.0 0.0
   M S MLD 0.6 133.6 101.8 28.0 472.4 683.6 0.1 1.3
     TOTAL 29.6 406.8 438.0 63.8 2,266.6 2,827.7 5.1 16.3
COTTON   THOUSAND RUNNING BALES
   UPLAND 50.7 5,220.3 2,762.2 403.0 11,021.1 10,911.6 152.2 4,250.0
   PIMA 0.9 98.8 97.1 18.0 492.9 509.0 0.0 44.2

 

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