FI Evening Grain Comments 07/05/22

PDF Attached

 

We
updated our US wheat by class production estimates (attached). Due to opening calls and markets opening soon, we will update corn and soybeans on Wednesday. 

 

US
Midwest is under a derecho warning https://www.wunderground.com/article/storms/severe/news/2022-07-05-severe-thunderstorm-flood-forecast-early-july

 

In
2020, nearly 38 million acres were impacted by a derecho.  Yield loss was biggest problem, especially for corn.
https://farmpolicynews.illinois.edu/2020/08/derecho-damage-begins-to-unfold-estimated-37-7-million-acres-of-farmland-impacted/

 

Calls:

Corn
up 2-4

Soy
up 2-7

Meal
up 0.50-1.50

SBO
up 0.20 to 0.50

Wheat
down 3-5

KC
Wheat down 4-6

Minny
down 8-12

 

Bearish
wheat led by hi pro off the better spring wheat conditions.  SRW/HRW slower harvest pace.  Corn and soy firmer off the worse-than-expected conditions.  Keep an eye on the storm heading through the WCB tonight.  Talk of derecho weather pattern developing. 
90-100 mph winds and heavy rain in parts. 

 

Limits
expanded for the soybean complex, and other products

https://www.cmegroup.com/trading/price-limits.html

 

A
big decline in mineral oil and equities (earlier-they rebounded) pressured many related commodity markets, including CBOT agriculture markets. Recession concerns and slowing US travel demand was noted. The USD screamed higher, adding to the negative sentiment.
Ag fundamentals were not friendly either. Export inspections were very poor. On a combined basis for the four major commodities, USDA inspections were third lowest since September 2021. StatsCan released an update on acreage and wheat plantings are highest
in a decade. High prices cure high prices. A few export developments were announced, routine. China was said to have washed out US soybean cargoes, taking SA origin due to cheaper prices. The US weather outlook improved for the Midwest. GP and Delta was unchanged.

 

 

https://www150.statcan.gc.ca/n1/en/daily-quotidien/220705/dq220705b-eng.pdf?st=0Pfoi70t

 

US
WINTER WHEAT – 31 PCT CONDITION GOOD/EXCELLENT VS 30 PCT WK AGO (47 PCT YR AGO) -USDA

US
SPRING WHEAT – 66 PCT CONDITION GOOD/EXCELLENT VS 59 PCT WK AGO (16 PCT YR AGO) -USDA

US
RICE – 76 PCT CONDITION GOOD/EXCELLENT VS 73 PCT WK AGO (73 PCT YR AGO) -USDA

US
CORN – 64 PCT CONDITION GOOD/EXCELLENT VS 67 PCT WK AGO (64 PCT YR AGO) -USDA

US
COTTON – 36 PCT CONDITION GOOD/EXCELLENT VS 37 PCT WK AGO (52 PCT YR AGO) -USDA

US
SOYBEAN – 63 PCT CONDITION GOOD/EXCELLENT VS 65 PCT WK AGO (59 PCT YR AGO) -USDA

US
WINTER WHEAT – 54 PCT HARVESTED VS 41 PCT WK AGO (48 PCT 5-YR AVG) -USDA

 

 

 

 

 

 

 

 

 

Weather

 

World
Weather Inc.

US
WEATHER AND WHAT TO WATCH

• Scattered
  showers and thunderstorms occurred during the weekend mostly as expected with the eastern Midwest and northern Delta dry biased during much of the period
• Some
  rain developed Monday in the eastern Midwest, but the best rain in Indiana, Ohio, Illinois and Kentucky is coming up over the next several days
• Southwestern
  U.S. Corn and Soybean Belt and northern and western Delta will be hot and dry over the next several days stressing crops that are already suffering from dryness
• Temperatures
  will be in the 90s to 104 degrees Fahrenheit through Friday with gradual cooling into the weekend without much improved rain potential
• These
  areas will likely receive “some” rain this weekend and next week, but relief may be limited
  
• U.S.
  southern Plains (Texas and Oklahoma) will also experience restricted rainfall over the next ten days to two weeks
• Totally
  dry weather is not likely, but the showers that pop up will be too brief and light to counter the day’s evaporation brought on by near to above normal temperatures
• Highs
  in the 90s to around 100 degrees Fahrenheit will evaporate most of the moisture from the region shortly after it falls and there will be very little improvement in crop conditions
• Northern
  U.S. Plains and most of the Midwest will see waves of rain periodically through the weekend with showers next week becoming a little less impressive, but will still occur periodically
• Cooling
  is likely this weekend and especially next week as a reinforcing shot of cooler air arrives
• Significant
  relief is expected to dryness in parts of Illinois, Indiana and Ohio
• Relief
  in southern Michigan and Kentucky is also expected, but to a limited degree of significance
• Southwestern
  and a few central Illinois locations may not get much rain for a while and it will be quite warm over the next few days
• Central
  U.S. high pressure ridge will shift to the interior western states this weekend and next week
• Some
  forecast models leave the ridge out west for an extended period of time offering less heat and periodic showers to the Midwest
• There
  is potential that a part of the western U.S. ridge of high pressure will extend across Texas to the Delta periodically and if that occurs northward moving Gulf of Mexico moisture will be restricted and that may lead to less rainfall in the Midwest even though
  showers and cooling impact the region.
• The
  U.S. Midwest bottom line is one of additional crop and livestock stress through Thursday and into Friday of this week in Kansas, Missouri, southwestern Illinois, the northern and western Delta, Texas and Oklahoma. Relief begins in northern and eastern Illinois,
  Indiana, Ohio and parts of Michigan in the middle to latter part of this week and then it gets perpetuated across much of the Midwest this weekend into next week. Sufficient rainfall and cooling should occur to at least temporarily improve soil moisture and
  crop conditions as corn reproduction gets under full swing. There is potential that the ridge of high pressure is being pushed too far to the west and there may be too much cold air in the eastern part of North America next week, but the trend for cooling
  and some rainfall is correct. Crop development will improve in response to the rain and cooler weather this weekend and next week. Southwestern Corn Belt and Delta crop areas will get “some” relief from this week’s hot and dry weather during the weekend and
  next week, but greater rain may be needed. The high pressure ridge is unlikely to come back into the western Corn Belt and/or Delta for at least ten days.
  
• The
  CFS reduces rainfall next week and in the third week of the outlook in the Midwest, but keeps the mean ridge position far enough to the west to keep the excess heat out of the region
  
• The
  GEFS suggests near to above average precipitation through the next few weeks
• This
  is likely overdone
• EPS
  multi-week loop suggests the ridge stays to the west into August with small disturbances moving across the northern Plains into the Midwest; however, this model allows high pressure to move over the Delta periodically and if that happens Midwest rainfall must
  be more limited, despite the northwesterly wind flow aloft
• Confidence
  in the multi-week forecast models is always low so use this information with caution.  World Weather, Inc. is not endorsing any of the 3-6 week models, but is just sharing the trend with its subscribers
• West
  Texas rainfall will continue restricted over the next ten days, but there will be some occasional showers that will fail to produce enough rain to counter evaporation
• South
  Texas and northeastern Mexico rainfall will be minimal over the next ten days
• Drought
  relief is not very likely without the help of a tropical cyclone
• Texas
  Blacklands and Coastal Bend crop areas will be dry for an extended period
• Western
  U.S. drought is unlikely to be relieved any time soon
• Hotter
  weather is possible next week and later into July as the high pressure ridge shifts to the Rocky Mountain region

 

CHANGES
ELSEWHERE IN THE WORLD

• Tropical
  Storm Chaba moved into southern China during the weekend and occurred as expected producing heavy rain from Guangdong and Guangxi into the North China Plain
• Tropical
  Depression Aere was impacting western Japan today, but it is a  much weaker storm than expected reducing its potential negative impact
  
• Western
  Europe is moving back into a  drier and warmer weather pattern over the next ten days to two weeks
• Eastern
  Europe heatwave is over
• Russia’s
  Southern Region is no longer expected to receive much “significant” rain, although some showers are coming over the next week to ten days with limited benefit expected
• Temperatures
  will turn warmer this week which will accelerate drying rates and raise a little dryland crop stress
• Some
  rain fell in western Kazakhstan as expected during the weekend with a few showers in the lower Volga River Valley as well
• Rainfall
  reached 2.91 inches in northwestern Kazakhstan while varying up to 0.88 inch elsewhere
• No
  more than 0.35 inch of rain fell in the lower Volga River Valley through dawn today

 

WORLD
WEATHER DETAILS

• Canada’s
  Prairies will experience periodic rain and thunderstorms during the next couple of weeks
• Argentina
  rainfall will be limited during the next ten days to two weeks
• Some
  showers will occur Sunday into Monday of next week and again late next week into the following weekend
• Resulting
  rainfall will be welcome for improved wheat establishment, but the greatest precipitation is expected in the northern and eastern Buenos Aires, Entre Rios and Rio Grande do Sul leaving Cordoba and La Pampa with the least potential for dryness relief
  
• Recent
  cold temperatures in Argentina may be limiting winter crop establishment and dryness could be doing the same
• Brazil
  periodic rainfall will be confined to Atlantic coastal areas and from Rio Grande do Sul to Parana and southern Paraguay during the next ten days
• There
  is no risk of crop threatening cold in Brazil grain, coffee, sugarcane or citrus areas for the next two weeks
• Dry
  weather in Safrinha corn and cotton areas of Brazil will be good for maturation and harvest progress
• Tropical
  Depression Aere will move through Shikoku, Japan today and then move south of the Honshu coast Wednesday before moving farther out to sea Thursday and Friday.
  
• The
  storm will produce some heavy rain, but very little damage to crops or property
• Tropical
  Storm Chaba moved into western Guangdong during the weekend bringing strong wind speeds and torrential rain to western and southern Guangdong and eastern Guangxi
  
• Rain
  totals varied from 6.00 to more than 10.00 inches
• One
  location in northern Guangdong reported more than 22.00 inches of rain
• Some
  locally heavy rain continued to the northeast through Hunan to parts of Henan, Shandong, Hebei and Liaoning
• Local
  totals of 4.00 to more than 10.00 inches occurred in some of these areas as well
• Europe
  rainfall was restricted during the weekend especially in the west
• Eastern
  Europe reported some showers and thunderstorms, but the precipitation was erratic and mostly light limiting the benefit
• Temperatures
  continued very warm to hot for a little while during the weekend in eastern Europe where extreme highs in the 90s to 102 degrees Fahrenheit resulted
• Europe
  temperatures will be more seasonable this week, but may trend hotter in the west and central parts of the continent next week
• Western
  Europe rainfall will be minimal over the next ten days to two weeks and with hotter temperatures next week the situation is expected to deteriorate crop conditions once again
• Crop
  moisture stress will evolve again raising worry over summer crop conditions
• Eastern
  Europe rainfall during the coming week will offer some temporary relief to some of the drier biased areas, but a more generalized soaking of rain will be needed to change soil and crop conditions more significantly.
  
• Russia’s
  Southern Region and neighboring areas will only get brief bouts of rainfall during the coming week to ten days.
  
• Temperatures
  will be a little warmer than usual this week
• Rain
  will fall more routinely across far western Russia, Poland, western Ukraine, Romania, the Baltic States and Belarus during the next ten days
• Scattered
  showers producing lighter will occur elsewhere
• Temperatures
  will be a little warmer biased in the interior western part of Russia and the Russian New Lands
• Eastern
  China crop areas will experience a good mix of weather during the next two weeks supporting improved crop development after a dry late May and early to mid-June
  
• Some
  locally heavy rain and flooding will be possible in the North China Plain and northeastern provinces
• China’s
  Xinjiang province continues to experience relatively good weather
• A
  few showers and thunderstorms are expected, but most of the region will be dry with temperatures varying greatly over the week to ten days
• Some
  cooler biased conditions may briefly evolve in northern parts of the region
• Central
  and eastern Queensland and parts of New South Wales, Australia received rain as expected during the weekend
• Central
  and eastern parts of the state were wettest with rainfall of 0.80 to 1.86 inches resulting
• South-central
  parts of Queensland failed to get much more than 0.50 inch
• Central
  Queensland coastal areas reported 3.00 to more than 6.00 inches of rain
• New
  South Wales received 0.20 to 2.00 inches with central and northeastern areas wettest
  
• Some
  torrential rain fell in urban areas along the central east coast where more than 15.00 inches resulted
  
• Southern
  Australia weather will trend a little wetter this week bringing back some welcome moisture to the region after a brief break
• The
  precipitation will be great for winter crop establishment
• India’s
  monsoonal rainfall increased as expected during the weekend
• Rain
  was widespread from northwestern Odisha through Chhattisgarh to parts of Gujarat and Rajasthan
• Rainfall
  in Rajasthan varied from 0.72 to nearly 2.00 inches  while that in Gujarat varied from 0.40 to nearly 3.00 inches with northwestern areas driest
• This
  moisture was important since it was the first seasonal rainfall and it helped to improve seed germination and emergence conditions for previously planted crops and improves the outlook for planting
• These
  states are key cotton and groundnut producing areas, although soybeans, corn, sorghum and other areas received rain as well
• More
  rain is needed in northwestern India
• Additional
  waves of rain are expected in India through the next ten days and sufficient rain will fall to support summer crops in a more favorable manner relative to that which occurred earlier this season
• South
  Korea rice areas are still dealing with a serious drought, despite some rain that fell last week.
  
• Some
  rain is expected over the next couple of weeks, but resulting amounts will continue lighter than usual at least over the coming week to nearly ten days
• Mexico’s
  monsoonal rainfall will be good in the west, south and north-central parts of the nation during the coming two weeks
• Northeastern
  Mexico drought relief may not occur without the help of a tropical cyclone
• The
  same may be true for far southern Texas
• Southeast
  Asia rainfall will continue abundant in many areas through the next two weeks
• Local
  flooding is possible in the Philippines, New Guinea and Myanmar
• Mainland
  areas of Southeast Asia will continue to get lighter than usual rainfall, but sufficient amounts will occur to support crops
• There
  is need for greater rain to improve water supply later in the year
• Sumatra
  rainfall and parts of peninsular Malaysia will experience lighter than usual precipitation in this coming week to ten days
• East-central
  Africa rainfall will be greatest in central and western Ethiopia and lightest in parts of Uganda.
  
• Tanzania
  is normal dry at this time of year and it should be that way for the next few of weeks
• West-central
  Africa rainfall has been and will continue sufficient to support coffee, cocoa, sugarcane, rice and cotton development normally
• Some
  greater rain would still be welcome in the drier areas of Ivory Coast
• South
  Africa’s crop moisture situation is favorable for winter crop emergence, although some additional rain might be welcome
• Some
  rain will fall in the southwestern crop areas into Wednesday followed by some drying until early next week at which time additional rain is expected
• Winter
  crops will continue to establish well.
• Central
  America rainfall will be abundant during the next ten days
• Today’s
  Southern Oscillation Index was +16.90 and it will move erratically lower during the coming week
• New
  Zealand rainfall will trend wetter this week

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS:  U.S. weather continues moving in a positive direction for relief to crops later this week and next week. Some crop stress will be significant for the next few days in the southwestern Corn Belt and Delta, but the market
will likely be more interested in the heart of the Midwest where conditions will improve later this week as rain falls across the region as the ridge of high pressure responsible for limited rain recently shifts to the west.

           
Concern over western Europe turning too dry and warm again may rise, but that impact against the potential for U.S. crops to do better will probably not be enough to counter the bearish bias resulting from improving U.S. weather. The same can be said for Russia’s
Southern Region where relief from dryness is expected to be limited this week and then it will be dry again in the following week.

           
China’s weather still looks good and India’s weather has already improved with more waves of rain coming. Southeast Asia oil palm production areas will continue to experience mostly good weather as will canola, corn and soybeans in Canada and canola in Australia.
The harvest weather in Brazil Safrinha crop areas should advance favorably.

           
Overall, the impact of weather on market mentality is likely to be bearish.

 

MARKET
WEATHER MENTALITY FOR WHEAT AND OTHER SMALL GRAINS:  Wheat harvest weather in the U.S. Plains is likely advancing well, although the soft wheat harvest in the Midwest could be delayed by rain later this week. Spring cereals in the northern U.S. Plains and
Canada’s Prairies have been improving after a rough start this spring and weather looks to be very supportive of its development going forward through the next couple of weeks.

           
Cereal production in Europe has improved due to timely precipitation, although production may not be ideal. Some countries struggled with dryness at times. Russia’s wheat and barley crop is suspected of being good and the same can be said of Ukraine’s crop
which may be better than expected given the war.

           
China’s spring wheat needs drier weather, but conditions across Australia are very good and winter crops should be establishing well.

           
South Africa’s wheat is also established well this year while that in Argentina continues to struggle due to limited moisture and cold temperatures.

           
Overall, weather today may contribute a mixed influence on market mentality with a bearish bias prevailing.

 

MARKET
WEATHER MENTALITY FOR COTTON:  There is still not much reason to expect significant rain in Texas crop areas over the next couple of weeks. The northern Delta cotton region continues to dry out, but rain is expected along with cooling this weekend into next
week. The U.S. southeastern states will see a good mix of weather for a while. California will remain dry while monsoonal showers and thunderstorms are expected to decrease this weekend into next week as a high pressure system moves over the region.

           
Cotton conditions in Brazil are still rated favorably, although dryness likely reduced the crop this year. Bahia, Brazil production should be good and conditions in Africa are varied and mostly favorable. Xinjiang, China crop development is likely advancing
well, although the crop will deal with cooler temperatures in the northeast this week. Eastern China cotton development is advancing favorably, although weather conditions have been a little too wet at times and a little too dry at times.

           
Central Asia cotton is developing normally and the improved rainfall in Rajasthan and Gujarat India during the weekend will translate into better planting, emergence and establishment conditions.

           
Overall, weather today will likely maintain a mixed influence on market mentality.

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Tuesday,
July 5:

• USDA
  export inspections – corn, soybeans, wheat, 11am

• US
  crop condition for spring and winter wheat, corn, soybeans and cotton; crop progress for winter wheat, 4pm
• Canada’s
  Statcan publishes data on seeded area for wheat, durum, canola, barley and soybeans
• New
  Zealand commodity price
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• US
  Purdue agriculture sentiment
• Malaysia’s
  July 1-5 palm oil export data

Wednesday,
July 6:

• UN
  annual state of food security report

Thursday,
July 7:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• EIA
  weekly U.S. ethanol inventories, production, 11am
• Vietnam’s
  customs department releases coffee, rice and rubber export data for June
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans

Friday,
July 8:

• FAO
  world food price index, grains supply and demand outlook
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

Friday
below

 

Due
out Thursday

 

USDA
inspections versus Reuters trade range

Wheat                 
111,830                 versus   300000-500000  range

Corn                     
676,824                 versus   900000-1200000                range

Soybeans           
354,987                 versus   400000-500000  range

 

 

 

GRAINS
INSPECTED AND/OR WEIGHED FOR EXPORT

                 
REPORTED IN WEEK ENDING JUN 30, 2022

                           
— METRIC TONS —

————————————————————————-

                                     
             CURRENT     PREVIOUS 

             ———–
WEEK ENDING ———-  MARKET YEAR  MARKET YEAR

 
GRAIN      06/30/2022  06/23/2022  07/01/2021    TO DATE     TO DATE  

 

BARLEY             
0          49         744           49        1,919 

CORN         
676,824   1,246,950   1,251,583   48,094,166   58,291,790 

FLAXSEED           
0           0           0            0            0 

MIXED              
0           0           0            0            0 

OATS           
1,497       1,297         100        2,794          100 

RYE                
0           0           0            0            0 

SORGHUM       
10,228     148,696       4,397    6,699,359    6,482,901 

SOYBEANS     
354,987     475,556     219,235   51,735,043   57,584,542 

SUNFLOWER          
0           0           0        2,260          240 

WHEAT        
111,830     352,894     368,279    1,451,658    1,908,464 

Total      
1,155,366   2,225,442   1,844,338  107,985,329  124,269,956 

————————————————————————-

CROP
MARKETING YEARS BEGIN JUNE 1 FOR WHEAT, RYE, OATS, BARLEY AND

FLAXSEED; 
SEPTEMBER 1 FOR CORN, SORGHUM, SOYBEANS AND SUNFLOWER SEEDS.

INCLUDES
WATERWAY SHIPMENTS TO CANADA.

 

Macros

US
Crude Futures Below $100, First Time Since May 11th

ICE
Brent Crude Oil Futures Margins Cut By 12.5%

U.S.
MAY FACTORY ORDERS +1.6 PCT (CONSENSUS +0.5 PCT) VS APRIL +0.7 PCT (PREV +0.3 PCT)

Expect
markets to remain volatile this week.

US
jobs report is due out Friday.

96
Counterparties Take $2.138 Tln At Fed Reverse Repo Op (prev $2.167 Tln, 99 Bids)

US
Crude Oil Futures Settle At $99.50/Bbl, Down $8.93 Or 8.24%

Brent
Crude Futures Settle At $102.77/Bbl, Down $10.73 Or 9.45%

 

Corn

·        
Corn futures
are sharply lower as widespread commodity selling is hitting all sectors.  We think corn and soybean oil markets should be monitored as they are currently being heavily influenced by the energy markets. Look for import tenders to increase this week, but SA
origin will likely be more favorable due to US/Brazil price differentials. The USD was up sharply today, another deterrent for US exports. Inspections for corn were poor last week.

·        
Just about all the gains in grain prices for 2022 were erased.

·        
AgriCensus:

·        
USDA US corn export inspections as of June 30, 2022 were 676,824 tons, below a range of trade expectations, below 1,246,950 tons previous week and compares to 1,251,583 tons year ago. Major countries included Mexico for 314,933
tons, Japan for 169,502 tons, and China for 67,434 tons.

·        
Brazil’s second corn harvest progress ramped up last week, with nearly 56 percent of the crop collected, up about 20 points from the previous week.  AgRural noted a couple states planted a little later than normal, but the rapid
harvest is expected to boost upcoming exports this summer, limiting US exports. South Korea has been a good buyer of SA corn over the past couple of months.

·        
Deral: Brazil Parana 10 percent complete on second corn harvest progress.

·        
Anec: Brazil corn exports for July seen at 5.381 million tons.

·        
US DDGS cash prices were under pressure last week, down $7 ton to around $224/ton.

·        
USDA’s S&D’s are around the corner – July 12.  We will issue estimates on Wednesday and/or Thursday, post USDA crop progress report. 

 

Export
developments.

·        
South Korea’s MFG seeks up to 140,000 tons of corn on July 6 for arrival around October 27.

 

USDA
Attaché: Grain and Feed Update

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Brasilia_Brazil_BR2022-0044.pdf

 

EIA
statement on upcoming data releases—July 5, 2022

Following
a hardware failure, the U.S. Energy Information Administration (EIA) has restored most of its data publications. This week, we will publish our June monthly data report updates, U.S. average gasoline prices, and our state-level data from the Residential Energy
Consumption Survey (RECS). A full list of releases for this week is below.

We
will not be able to publish our U.S. on-highway diesel prices today. We are currently running additional systems testing for the collection and calculation of the data. We will publish data for U.S. and regional average diesel prices for June 20, June 27,
and July 4, as soon as we can. We are also working to restore the Hourly Electric Grid Monitor.

Here
are the reports that we will publish this week:

·    
Coal Markets Report

·    
Company Level Imports

·    
Crude Imports Browsers

·    
Electric Power Monthly

·    
Electricity Monthly Update

·    
Natural Gas Weekly Update

·    
Petroleum Supply Monthly

·    
RECS State-level Data

·    
This Week in Petroleum

·    
U.S. Movements of Crude Oil by Rail

·    
Weekly Coal Production (with data for two weeks)

·    
Weekly Natural Gas Storage Report

·    
Weekly Petroleum Status Report

 

Basis
is attached

Updated
7/1/22

September
corn is seen in a $5.50 and $7.50 range

December
corn is seen in a wide $5.00-$8.00 range (lowered 75 front end and 25 on back end)

 

Soybeans

·        
CBOT soybeans, meal and oil were lower on widespread commodity selling. Soybean oil was a highlight with WTI crude more than $10 lower. Palm oil supplies are rising, adding to the negative undertone in global vegetable oils. Indonesia
expanded palm oil exports. The USD was up sharply, adding to the negative undertone.

·        
Midwestern US rains were good over the weekend and should be favorable this week.

·        
US and China trade negotiators will hold a call this week to discuss tariffs. We don’t expect any deals to surface, but a rollback on some US tariffs could be beneficial over the long-term.

·        
We are hearing China washed out at least 5 US soybean cargoes. AgriCensus noted the move might have been related to prices.

·        
USDA US soybean export inspections as of June 30, 2022 were 354,987 tons, below a range of trade expectations, below 475,556 tons previous week and compares to 219,235 tons year ago. Major countries included Mexico for 129,180
tons, Egypt for 51,683 tons, and Colombia for 27,015 tons.

·        
China will see good rains across the northeastern regions over the next 10 days that could cause localized flooding, but in general should be very beneficial for the soybean and corn crops.

·        
Anec: Brazil soybean exports for July seen at 6.536 million tons.

·        
EU soybean imports were down 6 percent in 2021-22 from the previous year to 14.54 million tons. EU rapeseed imports in 2021-22 reached 5.52 million tons, down 15% from last season.

·        
Indonesia raised their palm oil export quota to 3.4 million tons. A total of 2.4 MMT of export permits have already been issued.

·        
Sharply lower energy markets are slamming global vegetable oil prices.

·        
Over a two day period, September Malaysian palm oil futures were down 534MYR and cash was down $115 to $1,100.

 

Due
out July 12. Big production/stocks expected

 

·        
Over the Monday-Tuesday period, China soybean complex futures were lower, with soybean oil 4.9% lower and palm down 5.2%.

·        
Rotterdam vegetable oils were mixed and meal sharply lower.

·        
Offshore values were leading SBO about 85 points lower earlier this morning and meal $1.60 short ton lower.

 

Source:
Reuters and FI

 

Export
Developments

·        
Turkey bought 18,000 tons of sunflower oil at $1,489.80/ton for delivery between July 20 and August 29.

·        
Egypt’s GASC seeks 3000 tons of soybean oil and 1000 tons of sunflower oil on July 6.

·        
China looks to sell a half a million tons of soybeans out of reserves on July 8.

 

Updated
7/1/22

Soybeans
– August $13.90-$16.00

Soybeans
– November is seen in a wide $12.75-$16.50 range

Soybean
meal – August $370-$440

Soybean
oil – August 59.00-65.00

 

Wheat

·        
US wheat futures are lower on widespread commodity selling and good US weather. StatsCan raised their all-wheat Canadian wheat area estimate by 400,000 hectares to 25.395 million, highest in a decade (9-year actually). There were
no major surprises in the Canadian area for other crops.

·        
US SRW Gulf wheat is getting cheap, but exports remain slow.

·        
USDA US all-wheat export inspections as of June 30, 2022, were 111,830 tons, below a range of trade expectations, below 352,894 tons previous week and compares to 368,279 tons year ago. Major countries included Mexico for 68,159
tons, Colombia for 16,638 tons, and Venezuela for 12,554 tons.

·        
Egypt’s GASC seeks wheat in a private tender for September / October shipment. We heard about 444,000 tons of wheat was secured, a large amount given their import dependency of about 11 million tons for the 2022-23 season. Russia
and the EU were thought to be the origin.

·        
Russia exported 38.1 million tons of grain in 2021-22, including 30.7 million tons of wheat. This compares to 49 million tons of grain previous season (38.4 wheat).

·        
Russian wheat prices were under pressure last week. 12.5% protein content Black Sea wheat fell by $25 to $375 per ton free on board (FOB) at the end of last week, according to IKAR.

·        
Turkey is investigating the origin of grain that was found on a Russian ship after Ukraine said the cargo was stolen. 

·        
Meanwhile Turkey continued talks with Russia and Ukraine and hopes to find a shipping solution within 10 days.  Hard to imagine the invasion is over 130 days old.

·        
EU soft wheat exports were up 6.8 percent in 2021-22 from the previous year to 27.47 million tons.

·        
Paris September wheat was down 12.25 euros at 331.76 euros per ton, lowest level since April 4.

·        
We look for US winter wheat harvest progress to advance 14 points to 55 percent, when updated by USDA on Tuesday.

·        
IHS Markit will issue its July US and world crop reports Wednesday.

·        
Japan donated 17 million to the FOA (UN) for Ukraine grain storage.  Food security is still running high.

·        
Manitoba, Canada: Spring wheat crops are rated as 65% in excellent condition, 25% in good condition, and the remaining 10% in poor condition.

 

 

 

Export
Developments.

·        
Jordan bought 120,000 tons of wheat for Oct/Nov shipment at $427.50/ton c&f.

·        
Bangladesh saw one offer for 50,000 tons of wheat on July 5, at $448.38/ton c&f. They will be in again July 14 for shipment within 40 days.

·        
South Korea’s NOFI seeks up to 130,000 tons of feed wheat on July 6 for arrival around October 5.

·        
Japan seeks 122,420 tons of food wheat later this week for September loading.

·        
Jordan seeks 120,000 tons of barley on July 6 for Oct/Nov shipment.

 

Rice/Other

·        
Coffee hit a 10-month low in London.

·        
India extended their deadline to import cotton without paying taxes until October 31.

 

Updated
7/1/22

Chicago
– September $7.75 to $9.50 range, December $8.00-$11.00

KC
– September $8.00 to $10.50 range, December $8.50-$12.00

MN
– September $8.50‐$11.00, December $8.00-$12.50

 

Basis
is attached