FI Evening Grain Comments 05/21/21

PDF Attached

 

Attached
is our price performance sheet and updated US soybean balance sheets.  There were no 24-hour sales this morning.  Many countries will be on holiday Monday (EU and Argentina for example).  US agriculture futures declined today in another risk off session amid
favorable US and European weather coupled with slowing US soybean demand. 

 

Weather

 

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24-hours

 

 

Last
7-days

 

Next
7 days

 

World
Weather, Inc.

NOT
MUCH CHANGE AROUND THE WORLD OVERNIGHT

• Northeastern
  Xinjiang, China will experience temperatures at frost levels Saturday morning

o  
Low temperatures this morning slipped to the middle and upper 30s Fahrenheit , but frost was not suspected; readings will be slightly colder Saturday

• Cotton
  and other crops produced in northeastern Xinjiang, China have been struggling with cold weather periodically this spring and rainfall has been greater than usual some parts of the province
• Crop
  development is behind the usual pace and some damage may occur to a few minor production areas Saturday

o  
Most of the main cotton production areas in the province are also experiencing cool weather periodically, but the weather has not been nearly as adverse as that in the far northeast and the situation will not change

• The
  coming ten days of weather in the central and southwestern cotton areas should be favorable, although not ideal
• A
  weak tropical disturbance off the lower Vietnam coast this weekend will spread welcome rain through the nation’s Central Highlands coffee areas and into Cambodia and Thailand’s sugarcane and rice production areas this weekend into next week

o  
The moisture will be welcome and quite beneficial after weeks of lighter than usual rain for unirrigated production areas

• A
  tropical cyclone developing in the southeastern Bay of Bengal this weekend will move toward the upper India and Bangladesh coastline next week while intensifying into the viable tropical system

o  
Very heavy rain and strong wind speeds could impact West Bengal, India and Bangladesh during mid-week next week

 

• Rumors
  of frost in southern Brazil for late this month or in early June may be a little exaggerated

o  
No threatening cold will impact coffee or sugarcane production areas, but the time period will be closely monitored for some of the grain areas of Parana

• World
  Weather, Inc. is not expecting threatening cold, but will be watching the situation
• Argentina
  turns colder next week, but the advertised cold is a little overdone.
• Argentina
  weather will remain favorable for future wheat planting and for ongoing summer crop harvesting, although a few brief delays in fieldwork are expected
• Canada’s
  Prairies began receiving rain and snow Thursday and sufficient moisture has occurred to benefit some crop areas with a boost in topsoil moisture.
  

o  
The precipitation was greatest from southern Alberta through the southeastern two-thirds of Saskatchewan into a part of Manitoba

o  
Additional rain and snow will impact eastern Saskatchewan and Manitoba today

• Canada’s
  Prairies will be impacted by a second storm system late Sunday through Tuesday from Alberta to Manitoba further improving soil moisture for wheat, barley, oats, canola, lentils, corn, soybean, flax and sunseed production areas
  

o  
Not all areas will get significant relief, but every drop of rain will be precious and beneficial

• Southern
  and east-central Alberta and some western Saskatchewan locations may be wettest
  
• U.S.
  Northern Plains and upper Midwest will receive some important rainfall during the coming week to ten days, but it will be lighter than that which occurs in Canada

o  
Many crop areas will be in need of additional moisture, but the precipitation will help lift topsoil moisture for better emergence, establishment and development of early season crops

• U.S.
  hard red winter wheat areas will remain moist and warm which may threaten some wet weather disease

o  
Production is still looking good which confirmation coming out of the latest wheat tour that wheat production will be better than expected

• This
  confirms our suspicion that new tillering occurred during the late February and early March period helping to make up for drought and freeze damage earlier in the winter and last autumn
• West
  Texas cotton areas will experience periodic showers and thunderstorms during the next ten days, but resulting rainfall may be a little light at times

o  
World Weather, Inc. is looking for some potentially surprisingly great rain totals during the late weekend and especially early next week, but the heavier rain is not expected to be generalized

• U.S.
  Delta and lower Midwest weather will be favorably mixed over the next ten days supporting good crop and field conditions
• U.S.
  southeastern states will experience some significant drying over the next ten days

o  
Georgia, Alabama, Florida and South Carolina will be driest and warmest

o  
North Carolina and Virginia already have need for rain and may get a little break from dryness next week, but they will need more moisture in time

• Oregon
  and a few Idaho crop areas may get some beneficial moisture soon, but the Yakima Valley in Washington will continue quite dry

o  
Irrigated crops are in favorable condition

o  
Dryland winter crops need moisture and some of that which occurs in Oregon will benefit those dryland crops

• Southeast
  Canada corn, soybean and wheat production areas are experiencing good crop weather
• Southern
  China continues to deal with frequent bouts of excessive rain and flooding
  

o  
Most of the heaviest rainfall has become confined to a relatively narrow band recently limiting the extent of impact on crops and personal property

• Some
  rice and other crops near and south of the Yangtze River have been too wet
  

o  
Late season rapeseed harvesting has likely been negatively impacted, although it is unknown how much of the crop remains to be harvested

• Rapeseed
  production has been reduced this year because of wet weather in the south, but the losses are not as great as those of last year
• Northern
  rapeseed production should have been much more successful
• Warmer
  temperatures in the North China Plain, Yellow River Basin and northeastern provinces over the coming week to ten days will promote greater crop development and faster drying between rain events improving planting rates for many spring and summer crops
• Russia’s
  New Lands continue to deal with warm to hot temperatures and little to no rain

o  
Daily highs in the 80s and lower to a few middle 90s have been occurring from the lower Volga River Valley through Kazakhstan and north into southern parts of the Russian New Lands

• This
  pattern will prevail for another week and then some cooling is expected

o  
A few showers may pop up randomly over the next few days and then a more favorable period for rain may evolve north and west of Kazakhstan in the last days of May and early June

o  
Poor germination, emergence and establishment of wheat, sunseed and other crops is likely occurring and will continue until rain and cooling evolves

• Western
  Russia continues plenty moist along with Belarus, the Baltic States and areas south and west into other parts of eastern Europe

o  
Drier weather is needed and will evolve in the last days of May and early June

o  
Delays in farming activity and slow crop development is expected for a while

• Most
  of India is are seeing good crop weather for this time of year with its winter crop harvest advancing well around shower activity

o  
Not much change is expected

o  
Recent rain along the west coast and in the northern part of the nation was disruptive to fieldwork and benefited early season cotton

• Australia
  is still waiting on greater rainfall to stimulate more aggressive autumn planting of wheat, barley and canola

o  
Fieldwork has been advancing, though

o  
Greater rain is advertised in the second week of the forecast

• Mexico
  drought remains quite serious, but there are some rain and thunderstorms occurring periodically in southern and eastern parts of the nation offering a little relief and the pattern will continue for a while

o  
The precipitation will be erratic, but beneficial

o  
Water supply is quite low and winter crops in a few areas have not performed well

o  
The moisture will help improve planting, emergence and establishment conditions for most early season crops in the wetter areas, but the west-central and northwest parts of the nation will continue quite dry.

• South
  Africa will be dry and warm biased over the coming two weeks
• Southern
  Oscillation Index is mostly neutral at +6.72 and the index is expected to move erratically while drifting lower over the coming week
• North
  Africa rainfall is expected to be erratic and mostly light during the next ten days

o  
Temperatures will be warmer than usual

o  
Winter small grains will be rushed toward maturation faster than usual without much moisture

• West-central
  Africa will see a mix of rain and sunshine through the coming week.

o  
Temperatures will be near to above average and rainfall will be below average in this coming week

• A
  boost in precipitation will be needed later this month to ensure soil moisture stays as good as possible and crop development continues normally
• A
  boost in rainfall is expected for some areas next week
• East-central
  Africa rainfall will be erratic over the next two weeks.

o  
Net drying is expected

o  
Crop conditions are rated favorably, but greater rain will be needed in late May and June to maintain the best possible crop environment

• Southeast
  Asia rainfall will be favorably distributed in Indonesia, Malaysia and most of the mainland areas during the next two weeks

o  
However, the mainland areas are reporting below to well below average rainfall recently and a boost in rain is needed in Vietnam’s Central Highlands and neighboring areas

• Thailand
  may receive the least rain over the next ten days

o  
Greater rain is also needed in the northern and western Philippines

• Luzon
  Island, Philippines will be last to get significant rain
• A
  developing tropical cyclone will bring heavy rain to Vietnam’s Central Highlands and neighboring areas of Cambodia and Thailand late this weekend into next week
• New
  Zealand precipitation for the next week to ten days will be sporadic and lighter than usual with many areas to experience net drying
• Central
  and western Europe weather is expected to include some periodic rainfall and cooler than usual temperatures during the coming week

o  
Spain and Portugal have been driest and need rain most significantly

• Some
  rain will fall in a part of the drier region soon
  

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

Friday,
May 21:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• Black
  Sea Grain conference
• U.S.
  Cattle on Feed, 3pm

Monday,
May 24:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop plantings – soybeans, cotton; winter wheat condition, 4pm
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• U.S.
  cold storage data — pork, beef, poultry, 3pm
• HOLIDAY:
  France, Germany, Argentina, Canada

Tuesday,
May 25:

• Monthly
  MARS bulletin on crop conditions in Europe
• Malaysia
  May 1-25 palm oil export data

Wednesday,
May 26:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Unica releases cane crush, sugar output data
• HOLIDAY:
  Malaysia, Indonesia, Singapore, Thailand

Thursday,
May 27:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports
• Brazil
  orange crop forecast for 2021-22

Friday,
May 28:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• 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.
  agricultural prices paid, received

Source:
Bloomberg and FI

 

 

CFTC
Commitment of Traders

Fund
estimates for the net long corn position were way off the target with traditional funds net long 76,600 contracts more than expected.  Note producers/end users were heavy net buyers for the week ending 5/18.  Funds were also more long than expected in wheat,
and less long than projected for soybean oil.  

 

 

 

 

 

Macro

Canada
Retail Sales (MM) Mar: 3.6% (est 2.3%, prev 4.8%) 

Canada
Retail Sales Ex Auto (M/M) Mar: 4.3% (est 2.3%, prev 4.8%)

IMF
Backs $50Bln Plan To Help World Escape COVID Crises

 

Corn

• CBOT
  corn closed 5-6 cents lower following a higher Thursday trade.  For the week July was up 1.1%. China was absent from the USDA 24-hour system, but prices were lower prior to the day session as soybeans, soybean oil, and wheat pulled prices lower.   
  
• Funds
  sold an estimated 20,000 corn contracts. 
• Rains
  for the US over the past workweek benefited the WCB the most while parts of the ECB were left without rain. 
  
• Selected
  parts of Brazil should see rain Friday through Sunday.
• USDA
  cattle on feed showed no surprises for on feed, but high grain prices likely triggered good marketings last month and placements were 4.7 percentage points above a year ago.  A year ago, the pandemic shifted the state of business operations, but this year
  we think the dry and arid areas of pasture country forced animals into controlled feeding environments. 
  

 

 

 

Export
developments.

• None
  reported

 

https://www.eia.gov/todayinenergy/detail.php?id=48056&src=email

 

Updated
5/7/21

July
is seen in a $6.00 and $7.75 range

December
corn is seen in a $4.75-$7.00 range.

 

Soybeans

• July
  soybeans ended down 3.9% this week, July meal off 4.7% and July soybean oil down 3.1%.  The soybean complex ended lower Friday on favorable US planting progress weather, slow US export demand and crush downtime.  The slowing US crush underpinned meal futures
  early but prices paired gains to close lower.  Soybean oil was under pressure for the majority of the week but tighter stocks projected by private firms for 2021-22 could slow the selling for new-crop December over the coming days.  Note we added out US soybean
  complex S&D’s after the text. 
• Funds
  sold an estimated net 4,000 soybeans, 3,000 meal and 2,000 soybean oil. 
• ICE
  canola fell for the 5^th consecutive session to $706.80/ton, down $10.90 basis the November position. 
  
• Safras
  & Mercado raised their estimate of the Brazil soybean crop from 134.09 million tons to 137.19 million tons, largest private jump in Brazil’s current crop year estimate we have seen in a while.  Brazil is nearly complete on soybean harvest. 
  
• China
  is expected to wind down their recent buying spree of new-crop US corn soon and they may turn their attention to securing new-crop soybeans but at the moment should have sufficient oilseed stocks for crush after intaking a large number of Brazilian soybeans
  and canola last month into FH May.  Brazil premiums are currently more attractive versus US soybeans and should stay that way until mid-September when US new-crop becomes available.
  
• There
  is new US legislation to introduce a tax credit for sustainable aviation fuel of up to $2.00 for every gallon produced.  The credit would expire at the end of 2031. 
  
• Cargo
  surveyor SGS reported month to date May 20 Malaysian palm exports at 865,236 tons, 38,328 tons above the same period a month ago or up 4.6%, and 52,924 tons above the same period a year ago or up 6.5%. Note May 1-15 were up 22%. 
  

 

Export
Developments

None
reported

 

Updated
5/19/21

July
soybeans are seen in a $15.00-$16.50; November $12.75-$15.00

Soybean
meal – July $380-$440; December $380-$460

Soybean
oil – July 64-70; December 48-60 cent range

 

Wheat

• US
  wheat futures traded lower on Friday in part to the favorable yield survey for the US state of KS and unchanged French wheat conditions after France saw rain over the past couple of weeks.  July Chicago wheat ended lower 5 consecutive sessions and hit a one-month
  low.  Some of the weakness in global wheat futures markets could attract business next week.  The Philippines bought 40,000 tons of Australian feed wheat over the past week. 
  
• Both
  Chicago July and KC July are nearing the lower end of our trading ranges. 
  
• Funds
  sold an estimated net 2,000 SRW wheat contracts. 
• French
  soft wheat conditions were 79% good/excellent for the week ending May 17, unchanged over the previous two weeks.  Winter and spring barley were down one point from previous week. 
  
• September
  Paris wheat market basis September was down 1.00 euros at 212.75.
• Russia’s
  Grain Exporters Union looks for 2021 grain production at 127.4 million tons, including 80.7 million tons of wheat, down from 133.5 million tons year ago (including 85.9 million tons of wheat).
• Russia’s
  AgMin sees grain exports at 51 million tons for 2021-22, up from 48MMT this season. 
  
• (Reuters)
  – Ukrainian grain exports have fallen by about 23.3% to 40.85 million tons so far this season, which runs from July 2020 to June 2021, agriculture ministry data showed on Friday.  The exports include 15.6 million tons of wheat, 20.4 million tons of corn and
  4.14 million tons of barley, the data showed.
• On
  Thursday Wheat Quality Council’s annual Kansas tour pegged the KS wheat yield at 58.1 bushels per acre (bpa), a record high for the state if realized (using USDA data), and well above USDA’s working 48 bushels per acre for 2021.  Production was pegged at 365
  million bushels, above USDA’s 331.2 million working estimate and 281.3 million in 2020.
  

 

Export
Developments.

• The
  Philippines bought 25,000 tons of Australian animal feed wheat and 15,000 tons of Australian feed barley.  The wheat was bought at $323 a ton c&f for shipment in the second half of August.
  
• Jordan
  seeks 120,000 tons of feed wheat on May 26 for Oct-Nov shipment. 
• Bangladesh
  seeks 50,000 tons of milling wheat on May 30. 
• USDA
  seeks 83,000 tons of hard red winter wheat for Africa on May 25 for July 6-16 shipment. 
  

 

Rice/Other

·        
Mauritius seeks 4,000 tons of rice, optional, origin, for delivery Aug – Sep, on June 1. 

·        
Results awaited: 
South
Korea’s Agro-Fisheries & Food Trade Corp seeks 134,994 tons of rice from Vietnam, China, the United States and Australia, on May 13, for arrival between September 2021 and January 2022.

 

Updated
5/17/21

July
Chicago wheat is seen in a $6.60-$8.00 range

July
KC wheat is seen in a $6.20-$7.25

July
MN wheat is seen in a $6.75-$7.50
(NA rains are breaking the MN market)