FI Evening Grain Comments 05/19/23

PDF Attached

Attached
are our updated US corn & wheat balance sheets. We lowered our corn crop year average for 2022-23 from $6.30 to $6.00.
2023-24
wheat was left unchanged.

Grains
and the soybean traded two-sided on Friday, ending lower. The US weather forecast for the Midwest turned slightly unfavorable from that of yesterday. Limited rains in central areas next week may allow stress to build.
Meanwhile US HRW wheat weather will gradually improve. The US failed to reach a compromise over the debt ceiling. WTI crude oil was 27 cents lower earlier (ended the day only down 6 cents) and USD 40 points lower
as of 1:50 pm CT.

Fund
estimates as of May 19

Weather

A map of the united states

Description automatically generated with medium confidence

World
Weather Inc.

WEATHER
TO WATCH

Frost
and freezes occurred this morning from the western Dakotas and eastern Montana into Saskatchewan

Lows
dropped to 28 Fahrenheit in several areas, although very little crop was emerged or established enough to be permanently damaged

Another
round of frost and freezes are expected in eastern Ontario and Quebec, Canada Sunday into Monday, but the impact should be minimal after the hard freezes that occurred earlier this week
Argentina
rain expected over the next ten days will be more than sufficient to bolster topsoil moisture for wheat planting

Showers
this week have been too brief and light for a serious change to soil moisture, but that was to be expected
Additional
waves of rain in the coming week to ten days will change that situation greatly bring sufficient topsoil moisture for seeding of wheat

Subsoil
moisture will continue lighter than usual

Brazil’s
center south and center west crop areas will continue in a net drying mode for the next two weeks – which is normal for this time of year

Coffee
and sugarcane areas will also experience good maturation and harvest weather
A
few fields of corn and cotton in Mato Grosso and Goias that were planted late may experience a reduction in yield potential, but the bulk of crop has made it through the most moisture sensitive stage without much trouble
Safrinha
corn in Mato Grosso do Sul, Sao Paulo and Parana is much farther behind in their development than areas to the north, but soil moisture is still very well rated which should carry normal crop development into early June without much problem
There
is no risk of crop threatening cold during the next two weeks

U.S
Midwest, Delta and southeastern states will continue to experience a very good mix of weather for aggressive planting and early season crop development

Warmer
temperatures next week will accelerate drying rates and stimulate faster plant growth rates leading to a need for greater rainfall in June, especially while rainfall is lighter than usual as it should be for the next couple of weeks

European
forecast model suggested very little rain would fall in the U.S. Midwest during the next ten days and frequent temperatures in the 70s and 80s would induce some steady drying

The
forecast may be a little too dry, but the GFS is much too wet
June
weather is expected to be dominated by a high pressure ridge in the middle of the nation and its strength will determine how much of the Midwest will be dry

Late
June is still advertised cooler once again – at least in the eastern Midwest

Significant
rain fell in central western Kansas and the Texas Panhandle overnight bolstering topsoil moisture for winter wheat and spring and summer crops

Rainfall
of 1.00 to 2.00 inches occurred often with Doppler radar suggesting some greater amounts
The
moisture comes a little late for some of the wheat crop, but there should be some improvement in yield and grain quality
Summer
crops will benefit most from the precipitation with a much better planting, germinating and emergence environment resulting from recent rain

U.S.
Pacific Northwest will continue warmer and drier than usual for a while longer

Unirrigated
crops are stressed especially in the Yakima Basin of Washington
Relief
from dryness in the Pacific Northwest is not very likely for an extended period of time

West
Texas planting moisture will be favorable, but the region will not get a good soaking to fix poor subsoil moisture in unirrigated crop areas

Showers
and thunderstorms will be in the forecast nightly across the region during the next ten days, but resulting rainfall will be erratic and coverage a little too sporadic

U.S.
temperatures this weekend will be very warm in the far western states and near normal in much of the central and east, although the southwestern Plains will be cooler biased for a while

Warmer
biased temperatures are likely many key crop areas except in the southwestern Plains and Gulf of Mexico Coast States next week

Frequent
highs in the 70s and 80s are likely from the northern Plains into the Midwest

Southern
Europe weather will continue active with frequent bouts of rain expected through the next week and possibly for ten days

The
moisture will delay some planting and could raise a little concern over crop quality in a few areas

Northern
Europe will be drier biased, although not completely dry

The
environment will be good for planting, emergence and establishment

North
Africa will receive greater than usual rainfall over the next week to ten days resulting in a possible crop quality concern for early maturing wheat and barley in Morocco and northwestern Algeria

Crops
in northeastern Algeria and northern Tunisia are expected to benefit from their rain since crops should be in the reproductive and filling stages of development

China
weather will continue a little wetter biased in rapeseed areas of the Yangtze River valley and areas to the south where some drying might be best for maturation and harvesting
East-central
China (between the Yellow and Yangtze Rivers) will experience a good mix of weather during the next ten days favoring crop development and additional planting
Northern
China drying has not presented much of a problem, though some spring wheat and sugarbeet areas in eastern Inner Mongolia are too dry

Some
of this dryness has been expanding to the west and south recently including northern Hebei

Central
parts of Inner Mongolia and portions of the northern Yellow River Basin may become influenced by the drier bias over time, though conditions today are still very good in those areas

Xinjiang,
China remains too cold in the northeast for ideal corn or cotton development

Western
parts of Xinjiang where much of the cotton is produced, has had a few days of very warm temperatures with highs in the upper 80s and lower to a few middle 90s Fahrenheit

The
heat has begun to improve crops in the west and the warmer conditions should prevail for a while

Some
cooling is expected in western cotton areas this weekend and next week

India
weather is quite favorable for this time of year with pre-monsoonal showers occurring in the south and east while drying occurs in many other areas supporting good harvest conditions

Rainfall
was increased in northern India for next week, but some of the precipitation advertised may be overdone on today’s forecast models

Russia’s
eastern New Lands may slowly dry down over the next ten days, but crop conditions should remain mostly favorable during this period of time
Western
Russia and eastern Ukraine will experience timely rainfall during the next ten days supporting good crop conditions
Philippines
and western Indonesia soil moisture firmed up a little during the past week due to more infrequent and light rainfall

The
region is expecting to get more significant rain in this coming week

Western
and northern Alberta, Canada will receive significant rain early next week and that will bolster soil moisture after recent hot and dry weather

The
rain will greatly improve soil moisture, although at the expense of fieldwork for a little while.
Drought
remains serious in east-central and interior southern Alberta and western Saskatchewan with no rain and waves of heat likely in this first week of the outlook

Rain
in northern and western Alberta is not likely to reach the drought areas

South
Africa weather will be trending drier in the coming week

Summer
crop harvesting and winter crop planting will advance swiftly in the next two weeks with some need for greater rain in western wheat areas

West
Africa weather continues to generate timely rainfall for coffee, cocoa, sugarcane and rice

Rainfall
in the most recent 30 days was a little lighter than usual in southeastern Nigeria and western Cameroon as well as from northern Ivory Coast into southwestern Burkina Faso impacting cotton areas
Crop
conditions should remain mostly good, although the drier areas would benefit from greater rain

East-central
Africa rainfall has been favorable for coffee, cocoa and other crops in recent weeks with little change likely
Central
Asia cotton and other crop weather has been relatively good this year with adequate irrigation water and some timely rainfall reported

The
favorable environment will continue

Mexico
rainfall is expected to steadily increase over the central and eastern parts of the nation during the next ten days improving soil moisture for future planting of summer crops

Western
Mexico will continue quite dry

Central
America rainfall is expected to be erratic, although mostly favorable during the next two weeks
Tropical
Cyclone Fabien in the Indian Ocean poses no threat to land
Other
tropical cyclones are expected to develop next week well east of the Philippines and possibly in the South China Sea
Today’s
Southern Oscillation Index was -7.13 and it should move erratically lower over the next several days

Source:
World Weather, INC.

Bloomberg
Ag calendar

Friday,
May 19:

ICE
Futures Europe weekly commitments of traders report
CFTC
commitments of traders weekly report on positions for various US futures and options, 3:30pm
FranceAgriMer’s
weekly crop condition report
US
Cattle on Feed, 3pm

Saturday,
May 20:

China’s
3rd batch of April trade data, including country breakdowns for energy and commodities

Monday,
May 22:

Monthly
MARS report on EU crop conditions
USDA
export inspections – corn, soybeans, wheat, 11am
US
winter wheat condition, 4pm
US
planting data for corn, cotton, spring wheat and soybeans, 4pm
Holiday:
Canada

Tuesday,
May 23:

EU
weekly grain, oilseed import and export data
Cane
crush and sugar production data by Brazil’s Unica (tentative)

Wednesday,
May 24:

EIA
weekly US ethanol inventories, production, 10:30am
US
cold storage data for beef, pork and poultry
EARNINGS:
Sime Darby Plantation

Thursday,
May 25:

USDA
weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
Port
of Rouen data on French grain exports
Malaysia’s
May 1-25 palm oil exports
US
poultry slaughter, red meat output, 3pm
EARNINGS:
IOI
HOLIDAY:
Argentina

Friday,
May 26:

ICE
Futures Europe weekly commitments of traders report
CFTC
commitments of traders weekly report on positions for various US futures and options, 3:30pm
FranceAgriMer’s
weekly crop condition report
EARNINGS:
Select Harvests
HOLIDAY:
Hong Kong

Source:
Bloomberg and FI

CFTC
Commitment of Traders

Funds
were less long than expected for corn and more long for soybean meal.

Fund
estimated as of Friday

Reuters
table

SUPPLEMENTAL
Non-Comm Indexes Comm

Net Chg Net Chg Net Chg

Corn
-126,915 17,444 277,531 -960 -92,293 -1,426

Soybeans
3,094 -23,933 119,225 -5,496 -91,166 31,667

Soyoil
-53,776 -23,421 94,488 -3,521 -41,458 26,251

CBOT
wheat -98,382 4,126 71,437 -630 20,038 -4,858

KCBT
wheat -5,366 3,848 42,177 2,848 -33,074 -6,182

FUTURES
+ OPTS Managed Swaps Producer

Net Chg Net Chg Net Chg

Corn
-91,985 17,657 250,471 3,592 -117,725 -4,503

Soybeans
23,942 -24,517 96,450 -2,002 -97,755 32,167

Soymeal
80,287 18,024 92,366 -1,873 -209,096 -22,207

Soyoil
-36,381 -22,897 110,212 4,831 -69,698 23,149

CBOT
wheat -112,769 4,136 68,212 -437 17,826 -3,266

KCBT
wheat 16,593 9,146 30,720 -217 -34,854 -7,009

MGEX
wheat -4,838 3,480 1,432 63 -1,728 -4,795

———- ———- ———- ———- ———- ———-

Total
wheat -101,014 16,762 100,364 -591 -18,756 -15,070

Live
cattle 100,272 4,994 50,800 197 -164,518 -2,419

Feeder
cattle 14,618 2,252 913 -13 -2,447 340

Lean
hogs -19,398 -1,727 50,651 1,438 -34,221 -2,353

Other NonReport Open

Net Chg Net Chg Interest Chg

Corn
17,562 -1,688 -58,324 -15,059 1,754,792 74,617

Soybeans
8,518 -3,411 -31,154 -2,238 815,277 52,611

Soymeal
19,560 4,826 16,884 1,229 519,702 18,178

Soyoil
-4,877 -5,773 746 692 576,435 52,259

CBOT
wheat 19,823 -1,795 6,908 1,362 471,227 9,699

KCBT
wheat -8,720 -1,406 -3,738 -513 210,458 2,604

MGEX
wheat 3,720 809 1,414 443 64,211 4,508

———- ———- ———- ———- ———- ———-

Total
wheat 14,823 -2,392 4,584 1,292 745,896 16,811

Live
cattle 29,120 -653 -15,675 -2,119 397,074 4,088

Feeder
cattle -879 -659 -12,205 -1,920 79,056 3,368

Lean
hogs -615 2,720 3,583 -79 319,469 1,371

Macros

US
Interest Rate Futures Traders Slash Bets On June Fed Hike, Add To Bets On Cuts Later In Year

GOP
Debt Limit Negotiator Graves: Debt Ceiling Talks ‘Are At A Pause’

106
Counterparties Take $2.227 Tln At Fed Reverse Repo Op. (prev 102 Counterparties, $2.238 Tln)

Canadian
Retail Sales (M/M) Mar: -1.4% (est -1.4%; prev -0.2%)

Canadian
Retail Sales Ex Auto (M/M) Mar: -0.3% (est -0.8%; prev -0.7%)

Corn

·
Wide range in corn futures today. CBOT corn
futures
turned lower during the trade after short covering dried. Losses were limited as parts of the US Midwest will remain dry over the next 7-10 days.

·
US corn emerged was 30 percent as of last Monday. Initial 2023 US corn crop conditions should be out a week from Monday.

·
The UK is adding on sanctions against Russia (metal exports) and cracking down on illegal Ukraine grain exports.

USDA
Chicken and Eggs report:

April
Egg Production Up 1 Percent

Egg-Type
Chicks Hatched Down 8 Percent

Broiler-Type
Chicks Hatched Down Slightly

USDA
Cattle on Feed reported showed higher than expected inventories.

ECB
versus WBC corn spot processor basis versus nearby rolling corn futures

Export
developments.

South
Korea’s KFA bought 65,000 tons of South America or South Africa origin corn at $248.76/ton c&f for arrival around October 20. Earlier in the week they bought 68,000 tons of corn at $258.75 for same arrival period.
Yesterday
South Korea’s MFG group bought 66,000 tons of South American corn for arrival around October 20 at an estimated $247.69 a ton c&f.
Iran
seeks 120,000 tons of South American corn on May 22 for June 1 and July 15 shipment.

Updated
05/17/23

July
corn $5.00-$6.50

September
$4.35-$4.45 low end

December
corn $4.25-$6.00

Soybeans

·
Soybeans attempted to rebound today but negative outside sentiment sent the complex lower. Soybean oil saw limited losses from product spreading against soybean meal, despite a lower trade in WTI crude oil.

·
Soybean export premiums fell this week and US Gulf is now competitive against Brazil for October delivery, by about $10/ton.

·
Palm oil futures snapped a 3-day losing streak on talk of Chinese demand. August futures lost 4.6 percent this week. Prior to the overnight trade, US crude degummed soybean oil fob Gulf widened out yesterday to $323/ton versus
RBD palm oil.

·
Indonesia plans to launch futures trading of CPO on a local exchange by the end of the year. The country aims to have a domestic reference price not only for exporters, but also domestic end users.

Export
Developments

None
reported

Updated
05/17/23

Soybeans
– July $12.50-$14.25, November $11.00-$14.50

Soybean
meal – July $375-$475, December $290-$450

Soybean
oil – wide July 42-50 with bias to downside, December 43-53, with bias to upside

Wheat

·
US nearby wheat futures also traded two-sided, but prices became under pressure from widespread commodity and technical selling. The US weather forecast will be favorable for US HRW wheat country over the next 7-10 days. Alberta,
Canada, has a chance for rain next week, but some noted amounts could be questionable. Parts of the northern US Great Plains could see net drying through next week, favorable for spring wheat seeding progress. The central areas of the US will see rain through
this weekend. Argentina’s weather outlook will improve over the next month with rain picking up across the weather growing areas.

·
HRW harvest is off to a slow start in Texas due to rain delays, according to US Wheat Associates.

·
French soft wheat crop ratings as of May 15 fell one point to 93% from 94% from the previous week, above 73% year earlier. Winter barley was 90%, down 2 points.

·
Germany’s national statistics agency sees the 2023 winter wheat area down 1.4% to 2.85 million hectares. The winter rapeseed area grew 7.6% to 1.16 million hectares. Winter barley is up 5.2 percent to 1.27 million.

·
Ukraine may allow Russia to transport ammonia through Ukraine for Black Sea shipment if the grain deal is expanded to include additional Ukraine ports.

·
Russia will increase the base price for calculating Russia’s wheat export duty to 17,000 rubles per ton ($218.73) from 15,000 rubles currently. This could boost producer selling.