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Volatile
week. After Wednesday’s close, we didn’t imagine soybeans, SBO, corn and Chicago wheat would end higher for the week.
Midday
GFS model turned drier for the 7-day for most of the heart of the US Midwest. US agriculture markets rallied by late morning, exception soybean meal which was on the defensive from product spreading. A rally in WTI crude oil added to the positive undertone
for soybean oil and corn. Global export developments were quiet. USDA Export Sales were good for soybean meal and new-crop wheat. China booked 265,000 tons of new-crop soybeans and cancelled 70,800 tons of current crop year corn. No surprises for the other
major commodities. Sorghum sales were 131,000 tons that included 128,000 tons for China.
Majority
of the US Midwest will dry down over the next seven days with temperatures above normal. The Midwest will not be totally dry. Any rain that develops will be bias far WCB and upper northeast. US Great Plains will continue to improve with precipitation over
the next week. China’s largest producing state of Henan is forecast to receive additional rain. China’s southern areas are seeing very hot temperatures. Funds were active with short covering corn positions for the week ending May 30th, per CFTC
COT.
Fund
estimates as of June 2 (net in 000)
Weather
Past
7-days
WEATHER
TO WATCH
-
U.S.
Midwest drying has left topsoil moisture rated short to very short and subsoil moisture marginally adequate to short -
Rain
is needed, but unlikely to occur for another ten days – at least significant rain -
Gulf
of Mexico moisture is still unavailable for to crops in the Midwest because of weather systems near the Gulf of Mexico coast that are preventing moisture inflows from the water to the land -
This
pattern will prevail for another ten days to possibly two weeks which is why the Midwest fails to get a good drink of water -
U.S.
Midwest temperatures will trend cooler after early next week and the milder conditions will prevail for a while helping to keep stress on summer crops as low as possible with the ground staying dry -
World
Weather, Inc. is expecting a return of the 62-day cool cycle in late June and that may perpetuate the cooler bias later this month -
A
short term bout of warming may occur prior to the arrival of the late month cooling -
U.S.
rain will fall frequently from western Texas to Montana for another ten days
-
Some
of the crop areas in this region are becoming too wet and flooding has already occurred in several localized areas -
Some
wheat quality declines are under way in the central and southwestern Plains where drier weather is needed most to protect the quality and overall production of this year’s crop which has already been reduced by drought -
Most
of the bigger rains will soon be ending, though and that will help greatly in improving conditions for many areas.
-
West
Texas cotton, corn and sorghum production areas (including those in the Texas Panhandle) are experiencing delays to planting because of frequent rain and wet field conditions -
These
delays will continue periodically, but the greatest rainfall will soon be diminishing
-
Improved
periods of drier weather should occur between rain events after this weekend -
Temperatures
will be cooler than usual over the next ten days resulting in slower drying rates than usual and fewer degree day accumulations than usual -
U.S.
Delta drying is expected through the next ten days and that will raise the need for rain by the end of this forecast period, but crops are mostly in good shape today -
U.S.
southeastern states are expecting a mix of rain and sunshine during the next ten days with more sun than rain -
Northern
Europe’s soil moisture continues in decline, but temperatures have not been excessively warm which has kept most crops still in favorable condition -
Rain
will continue to elude the region for ten more days and temperatures may rise slightly, but crops will likely stay in favorable condition for a while longer -
Near
to above normal temperatures in northern Europe will exacerbate the stress on crops in the drier areas of the North and Baltic Sea regions, although no extreme heat is expected -
Rainfall
has been lacking for two weeks in the North Sea region and for three weeks in the Baltic Plain
-
Another
ten days of dry weather is still coming -
Southern
Europe continues to experience frequent rain and thunderstorm activity maintaining wetter biased soil conditions -
There
is a risk of local flooding in many areas and some flooding has already occurred periodically in a few areas -
The
next ten days do not offer a serious change in the moisture situation -
Eastern
CIS New Lands soil conditions have dried out more notably in the past week with topsoil moisture now rated short to very short east of the Ural Mountains and into northern Kazakhstan
-
The
heat and dryness will last through Monday and then the opportunity for scattered showers and thunderstorms and gradual cooling is expected -
Relief
will evolve, but it is still questionable how significant that will be -
China’s
wheat harvest area is drying out after last weekend’s heavy rainfall -
The
production area was impacted by significant rain during the weekend of May 22 and this past weekend resulting in some wheat quality declines -
The
weather is expected to be much improved over the next ten days which should help to dry out the crop and limit grain quality losses -
Some
of east-central China’s summer crops may have to be replanted after the recent bout of extreme rainfall -
Eastern
and southern Alberta, Canada us still chronically dry and must get rain soon to keep crops alive in the driest areas -
Some
showers will evolve next week, but it is doubtful that the rain will be as great as needed to offer relief from recent weeks of dryness -
Saskatchewan,
Canada will receive frequent rain over the next week resulting in wetter biased field conditions -
The
exception will be in the far southeast of the province and in neighboring areas of southern Manitoba where it will remain dry -
Relief
from drought is expected, albeit temporarily and more rain will be needed.
-
Other
areas in the Prairies will experience some timely rainfall during the next ten days and the resulting precipitation will be welcome, although briefly disrupting to farming activity.
-
Portions
of southern Manitoba have been trending a little dry recently and greater rain is needed, despite the fact that some rain occurred earlier this week -
Ontario
and Quebec weather has improved with warmer temperatures and limited rainfall in recent days -
A
trend change back to cooler conditions and some periodic rain is needed and expected this weekend and especially next week that will maintain favorable crop and field conditions -
Tropical
Depression Two in the Gulf of Mexico will move to western Cuba this weekend where it will likely dissipate -
The
system may help bring some rain to Florida and will produce it in western Cuba as well, but no damaging wind or flooding rain is expected in either region -
U.S.
Pacific Northwest will continue to dry out with the Yakima Valley of Washington and neighboring areas of north-central Oregon in need of rain -
Irrigation
is used extensively in the region and will support many crops -
Temperatures
will rise above normal next week and that will accelerate the need for irrigation and raise crop stress for unirrigated areas -
Idaho
and Wyoming will experience frequent showers and thunderstorms during the coming week to ten days favoring dry bean, sugarbeets and some corn development -
Mexico’s
drought is not likely to improve for the next two weeks -
Rain
will occur periodically in eastern and far southern portions of the nation, but seasonal rains are expected to be delayed starting by at least two more weeks -
Seasonal
rains in India will also be delayed during the first half of June -
The
lack of rain will raise much worry over the general performance of the summer monsoon on India -
Northern
India and northern Pakistan will continue to receive infrequent showers and thunderstorms for a little while longer, but most of the greatest rainfall is winding down -
The
precipitation reported in the past week was greater than usual and an anomaly resulting from a more southward extent of the mid-latitude westerly winds aloft -
North
Africa will continue to receive periodic rain through the next week to ten days -
The
rain comes late in the growing season and may be threatening durum wheat quality in Morocco and northwestern Algeria while crop areas to the east may have benefited from recent rain.
-
China’s
excessive rain between the Yellow and Yangtze Rivers during the weekend ended earlier this week -
Drier
weather is expected for a while -
Fieldwork
was delayed, but the moisture should prove to be good for summer crop development in areas that were not flooded -
Wheat
areas need to dry down to protect grain quality -
Some
wheat quality has already declined with head sprouting confirmed in Henan -
Some
of the flooded areas likely had recently planted crops damaged and replanting is necessary -
Xinjiang,
China will continue cooler than usual -
Degree
day accumulations are well below normal and cotton, corn and other crops are not developing normally -
Warming
is needed -
The
next ten days will continue cooler than usual -
Thailand,
Cambodia and Laos rainfall in this coming week will be lighter than usual, although it is expected in all production areas -
Tropical
Storm Mawar will stay south of Japan’s main islands this weekend early next week as it move out of the region -
The
Ryukyu Islands will experience heavy rain and some windy conditions as the storm passes by -
Australia
weather during the next ten days should be unsettled enough to produce rain in some of the more important winter crop areas to help get winter crops better established -
Resulting
rainfall will be light, though, leaving need for much more away from the coast
-
Western
Australia received some needed rain overnight with moderate to heavy rain in southern production areas -
South
Africa rainfall in the coming week will not be very great, though winter crops will continue to germinate, emerge and establish on previous rainfall -
Some
summer crop harvest delays are likely and some interruption to late season winter crop planting is also expected -
The
moisture will help winter crops become better established -
Argentina
rainfall will be restricted in this next ten days, but last week’s rain has soil moisture looking very good for planting from Santa Fe and Entre Rios into central and eastern Buenos Aires -
Western
Buenos Aires and Cordoba still have a big need for rain and they may have to wait for a while -
Brazil
weather will be mild to warm and mostly dry for a while -
The
environment will be good for coffee, citrus and sugarcane harvesting as well as supportive of Safrinha corn and cotton development -
Some
of the early corn is beginning to mature with harvesting not too far away -
Brazil
sugarcane, citrus and coffee harvest delays are over and drier biased conditions will prove to be beneficial for crop maturation and harvest progress -
Central
America rainfall is expected frequently over the next ten days supporting improved soil moisture and some better runoff after a slow start to the rainy season -
Indonesia
and Malaysia rain frequency and intensity has been and is expected to continue better than advertised last week -
The
pattern will perpetuate favorable crop conditions from rice and sugarcane to oil palm, coconut and rubber development -
Philippines
rainfall will remain well mixed with sunshine over the next ten days -
West-central
Africa will continue to receive periodic rainfall over the next two weeks and that will prove favorable for main season coffee, cocoa and sugarcane -
Some
cotton areas would benefit from greater rain, though the precipitation that has occurred has been welcome -
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 -
Today’s
Southern Oscillation Index was -17.41 and it should continue moving lower for a while
Source:
World Weather, INC.
Monday,
June 5:
- USDA
export inspections – corn, soybeans, wheat, 11am - US
cotton, corn, spring wheat and winter wheat condition, 4pm - US
planting data for corn, cotton, spring wheat and soybeans, 4pm - HOLIDAY:
Malaysia, New Zealand, Thailand
Tuesday,
June 6:
- Russia
grain union conference in Gelendzhik, day 1 - EU
weekly grain, oilseed import and export data - New
Zealand global dairy trade auction - New
Zealand commodity prices - Malaysia’s
June 1-5 palm oil export data - US
Purdue Agriculture Sentiment
Wednesday,
June 7:
- China’s
1st batch of May trade data, including soybean, edible oil, rubber and meat & offal imports - EIA
weekly US ethanol inventories, production, 10:30am - Russia
grain union conference in Gelendzhik, day 2
Thursday,
June 8:
- USDA
weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am - Port
of Rouen data on French grain exports - Russia
grain union conference in Gelendzhik, day 3 - HOLIDAY:
Brazil
Friday,
June 9:
- USDA’s
World Agricultural Supply & Demand Estimates (WASDE), 12pm - China’s
agriculture ministry (CASDE) releases monthly supply and demand report - Sustainable
World Resources conference in Singapore - 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 - Russia
grain union conference in Gelendzhik, day 4
Source:
Bloomberg and FI
USDA
Export Sales
All
within. Most notable was good soybean meal sales of 405,400 tons, up from 341,300 tons previous week. The Philippines booked 235,900 tons of soybean meal. Old crop soybean sales were within expectations and new crop improved to 301,000 tons that included 265,000
tons booked by China. Soybean oil sales were as expected. Corn export sales were 186,700 tons. Major countries included Mexico and Columbia. China canceled 70,800 tons of 2022-23 corn. 312,600 tons of new crop corn were mainly for Mexico, Japan and unknown.
All-wheat sales for the current marketing year were net reduction of 210,400 tons, typical for this time of year. New-crop all-wheat sales were 466,500 tons, slightly above a range of expectations (HRS and White categories top bookings). Sorghum sales were
131,000 tons that included 128,000 tons for China.
Funds
were active with short covering corn positions for the week ending May 30th.
Fund
estimates as of June 2 (net in 000)
Reuters
table
SUPPLEMENTAL
Non-Comm Indexes Comm
Net
Chg Net Chg Net Chg
Corn
-112,046 37,591 291,443 9,975 -127,167 -49,317
Soybeans
-10,960 -6,271 109,874 315 -70,458 3,886
Soyoil
-53,896 114 96,788 2,281 -41,949 -1,095
CBOT
wheat -110,215 -7,059 68,177 -50 35,573 7,827
KCBT
wheat -6,999 -3,625 40,139 -1,691 -26,716 6,271
FUTURES
+ OPTS Managed Swaps Producer
Net Chg Net Chg Net Chg
Corn
-51,065 46,962 246,292 -951 -147,843 -45,697
Soybeans
529 -3,616 84,601 -6,326 -73,825 5,448
Soymeal
59,676 -14,113 96,867 2,937 -190,427 10,460
Soyoil
-37,449 -573 113,424 1,467 -70,931 -470
CBOT
wheat -126,998 -8,210 67,635 -328 33,388 7,912
KCBT
wheat 9,628 -6,993 31,873 1,046 -29,461 5,784
MGEX
wheat -7,703 -1,301 1,557 316 3,360 1,061
———- ———- ———- ———- ———- ———-
Total
wheat -125,073 -16,504 101,065 1,034 7,287 14,757
Live
cattle 107,835 5,845 50,319 216 -169,230 -6,186
Feeder
cattle 17,432 661 950 3 -5,766 -1,823
Lean
hogs -31,110 -6,981 50,387 -249 -25,505 4,740
Other NonReport Open
Net Chg Net Chg Interest Chg
Corn
4,848 -2,066 -52,230 1,752 1,761,882 -12,577
Soybeans
17,152 2,425 -28,458 2,070 847,867 5,425
Soymeal
18,676 -2,319 15,209 3,034 538,779 -373
Soyoil
-4,100 875 -943 -1,300 613,532 2,880
CBOT
wheat 19,510 1,344 6,464 -717 475,870 -1,890
KCBT
wheat -5,617 1,118 -6,424 -955 204,606 -5,769
MGEX
wheat 2,351 -520 435 444 61,646 -3,006
———- ———- ———- ———- ———- ———-
Total
wheat 16,244 1,942 475 -1,228 742,122 -10,665
Live
cattle 28,525 -821 -17,449 948 411,741 5,564
Feeder
cattle 610 871 -13,226 290 79,717 -3,567
Lean
hogs 1,945 2,958 4,282 -466 339,064 8,587
FUTURES
ONLY Managed Swaps Producer
Net Chg Net Chg Net Chg
Corn
-46,846 50,803 244,826 -343 -172,616 -43,279
Soybeans
2,238 1,528 80,957 -6,042 -85,119 4,284
Soymeal
59,329
Macros
US
Change In Nonfarm Payrolls May: 339K (exp 195K; prevR 294K)
Unemployment
Rate May: 3.7% (exp 3.5%; prev 3.4%)
Average
Hourly Earnings (M/M) May: 0.3% (exp 0.3%; prevR 0.4%)
Average
Hourly Earnings (Y/Y) May: 4.3% (exp 4.4%; prev 4.4%)
US
Change In Manufacturing Payrolls May: -2K (exp 5K; prevR 10K)
Change
In Private Payrolls May: 283K (exp 165K; prevR 253K)
Underemployment
Rate May: 6.7% (prev 6.6%)
Labor
Force Participation Rate Feb: 62.6% (exp 62.6%; prev 62.6%)
US
Short-Term Interest-Rate Futures Add Slightly To Losses After Jobs Report, Traders Still Betting On Fed’s June Hold
104
Counterparties Take $2.142 Tln At Fed Reverse Repo Op.