FI Mid Morning Grain Comments 07/12/22

PDF attached includes daily estimate of funds, CASDE, MPOB, Reuters USDA table estimates

 

Good
morning. 

 

Selling
in commodities related to carnage in WTI crude oil. Fundamentals and world economic outlooks have not changed. USDA on deck soon. Reuters template attached.  US corn crop conditions were up one in the excellent and down one in the good categories, after good
rains fell last week.  US soybean bloomings are running about a week behind normal but conditions were about stable with excellent up 1 point and good down 2. Look for conditions to be down next week for the summer crops, but not by much as subsoil moisture
is ample for now.  US wheat is made, and we see little in the way of production changes.

 

 

 

Weather

 

World
Weather Inc.

WEATHER
TO WATCH AROUND THE WORLD

• Plenty
  of heat coming up in for the U.S. Plains late this week and all of next week
• Daily
  high temperatures in the 90s to 110 degrees will occur with the hottest weather next week
• Livestock
  and crop stress will become widespread from Texas to South Dakota and some heat will also impact eastern Montana and a part of North Dakota, but with less frequency
• After
  the U.S. Plains heat has built up for a while next week there will be potential for it to expand into the western Corn Belt
• High
  temperatures in the middle and upper 90s to 103 degrees are expected near the Missouri River from South Dakota to central Missouri next week and into the following weekend
• Such
  conditions are expected without a significant amount of rainfall resulting in net drying and rising levels of crop stress
• Northern
  U.S. Delta weather will continue stressful over the next couple of weeks, although a few showers and thunderstorms will be possible infrequently
• Pockets
  of dryness will remain a concern in Indiana, Illinois, Michigan and Ohio, although the impact will be lower on crops in those areas relative to the heat and moisture stress expected in the western Corn Belt
• U.S.
  southeastern states and lower Delta will experience the best distribution of rain and temperatures during the next two weeks
• Crop
  development should advance favorably
• Texas
  corn, sorghum and cotton will continue to be seriously stressed by excessive heat and dryness during the next two weeks
• Some
  showers are expected, but the only meaningful rain is likely near the upper Coast
• Temperatures
  will frequently be in the 90s to 110 and that will lead to quick drying
• Most
  of the showers expected will not produce anywhere near enough rain to counter the moisture losses resulting from hot temperatures
• U.S.
  far northern Plains, northern and eastern Midwest and “portions” of Canada’s Prairies will get periodic rainfall to support crop development
  
• Net
  drying is expected in the southwestern Canada Prairies over the next ten days
• Warm
  temperatures in the region will also lead to faster drying rated and rising crop moisture stress in areas with poor soil moisture
• Parts
  of Ontario, Canada need rain while Quebec crops continue to develop favorably
• Europe
  weather is still drier biased through July 22      
• Some
  rain is advertised in the North and Baltic Sea regions, but most of it will be light in crop areas
• Temperatures
  will be warmer than usual during most of the coming ten days to two weeks
• Extreme
  highs in the 90s to over 100 will eventually develop in France and will occur daily in Spain and Portugal.
• Highs
  in the 80s and lower 90s will impact the U.K. and parts of Germany
• Europe
  weather Monday was not very stressful, but the heat was mostly limited to western France, Spain and Portugal
• Rain
  fell mostly in easternmost parts of the continent
• Eastern
  Europe’s rainfall will be more concentrated on areas from northwestern Ukraine into the Baltic States and Belarus as well as eastern Poland
• Net
  drying is expected in most other areas
• Europe’s
  bottom line remains one of concern for much of the west and some local areas in southeastern Europe from Slovakia into Greece because of dryness and warm weather. No relief is expected in this coming week, although some pockets of relief did occur during the
  weekend in the southeastern corner of the continent
• Drought
  in northeastern Mexico and the southern U.S. Plains is unlikely to change in the next two weeks unless the tropical disturbance noted above in the north-central Gulf of Mexico moves to Texas in which there might be some relief from dryness in Texas, but confidence
  is very low
• Most
  likely any rain from such an event as this will not seriously relief drought conditions
• Mexico
  rain will be most abundant in the west and southern parts of the nation
• Argentina
  rainfall will continue restricted during the next ten days except in east-central and northeastern parts of the nation where rain is expected periodically
• Some
  showers will occur in the west-central and southwest late this week and into the weekend, but resulting rainfall is unlikely to seriously change the moisture profile
• Greater
  rain will still be needed throughout the wheat region, but especially in the west where it has been driest for the longest period of time
• South
  America temperatures over the next two weeks will be near to below average in Argentina, Uruguay and far southern Brazil and near to above normal elsewhere in Brazil
• Brazil
  rainfall will be minimal except in Atlantic coastal areas and from the southwest half of Mato Grosso do Sul and southwestern Sao Paulo into Rio Grande do Sul and Paraguay during the next ten days
• Some
  of the advertised rain will be heavy from Uruguay into southern Parana where 1.00 to 3.00 inches are expected
  
• Good
  drying conditions are likely elsewhere supporting Safrinha crop maturation and harvest progress
• Russia’s
  Southern Region is advertised to receive scattered showers and thunderstorms over the next ten days resulting in some needed relief from recent dry and warm weather
• Rainfall
  of 0.30 to 0.80 inch is expected which should allow for at least some temporary improvement for parts of the production region
• There
  is potential for a few areas to get more than 1.00 inch, but there will also be some areas that get less than 0.30 inch
• The
  moisture will help induce better crop conditions, although follow up rain will be very important in ensuring dryness does not come back
• Most
  of Russia’s crop regions are forecast to receive frequent bouts of rain through the next ten days
• Sufficient
  rain is expected to bolster soil moisture and induce areas of surplus soil moisture
• Belarus
  and the Baltic States will also be included
• Ukraine
  will receive scattered showers like Russia’s Southern Region with a varying amount of rainfall expected
• South-central
  parts of Ukraine may require more rain for the best crop development in that region
• India’s
  monsoon will continue to perform more aggressively over the next two weeks with widespread rain of significance expected along the west coast and from Odisha and northeastern Andhra Pradesh to Maharashtra, Madhya Pradesh, Gujarat and Rajasthan
• Only
  far southern and some east-central India locations will receive lighter than usual precipitation
• Summer
  crop development will advance well, although flooding is expected to become a problem for a few production areas and replanting may be necessary
• China
  rainfall is expected to be frequent and often abundant from the North China Plain and Yellow River Basin into the northeastern Provinces while the interior southeast drier biased
• Excessive
  rain events should not occur as often as they have been, but the nation will continue very wet and would benefit from some drying
• Parts
  of China need sunnier weather to induce better drying conditions after recent excessive rainfall. Crop damage has occurred in various areas in recent weeks because of too much moisture and serious flooding.
• 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
• Sumatra,
  Indonesia will continue receiving lighter than usual rainfall, although there will be sufficient amounts to support most crop needs
• All
  other Southeast Asian nations will experience an abundance of rainfall during the next few weeks resulting in some flooding
  
• Crop
  damage potentials from flooding will be greatest in Philippines, some mainland areas and New Guinea.
  
• Southern
  Australia will get periodic rainfall southern wheat, barley and canola production areas through the next ten days
• Winter
  crops are establishing well
• South
  Korea rice areas are still dealing with a serious drought, despite some rain that fell recently.
  
• Some
  rain is expected over the next couple of weeks
• 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
• Some
  areas in Kenya are expected to trend wetter in the next ten days
• 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 periodically over the next couple of weeks maintaining good soil moisture for winter crop establishment
• Central
  America rainfall will continue to be abundant to excessive and drying is needed
• Rain
  in the Greater Antilles will occur periodically, but no excessive amounts are likely
• Today’s
  Southern Oscillation Index was +15.04 and it will move erratically lower during the coming week
• New
  Zealand weather will be wet-biased the remainder of this week
• Temperatures
  are expected to be a little milder than usual

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
July 11:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for spring and winter wheat, corn, soybeans and cotton, 4pm
• Brazil’s
  Unica to release cane crushing and sugar output data (tentative)
• HOLIDAY:
  Singapore, Malaysia, Pakistan, Bangladesh

Tuesday,
July 12:

• USDA’s
  monthly World Agricultural Supply and Demand Estimates (WASDE), 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• The
  Malaysian Palm Oil Board releases palm oil stockpiles, output and export data for June
• World
  Coffee Producers Forum (virtual session)
• France
  agriculture ministry 2022 crop production estimates
• EU
  weekly grain, oilseed import and export data

Wednesday,
July 13:

• China’s
  first batch of June trade data, incl. soybean, edible oil, rubber and meat imports
• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• France
  AgriMer monthly grains outlook
• New
  Zealand food prices
• HOLIDAY:
  Thailand

Thursday,
July 14:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• HOLIDAY:
  France

Friday,
July 15:

• 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
• China’s
  1H pork output and hog inventory
• Malaysia’s
  July 1-15 palm oil export data
• FranceAgriMer
  weekly update on crop conditions
• The
  Cocoa Association of Asia releases 2Q cocoa grind data

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
309,802                 versus   250000-450000 

Corn                     
933,725                 versus   725000-1100000               

Soybeans           
356,716                 versus   375000-575000

 

Macros

 

Corn

·        
CBOT corn is trending lower ahead of the USDA reports after US crop conditions showed little guidance in downgrading yields.

·        
In this month’s China S&D update, the ministry made no changes to last month’s estimates on corn production, consumption or imports

 

Export
developments.

·        
South Korea’s MFG bought 68,000 tons of corn at $3333.75/ton c&f from either South Africa or South America for arrival around November 14. 

 

 

Soybeans

·        
CBOT soybean complex is lower in a risk off early trading session ahead of the USDA report. US crop conditions were slightly lower but not enough to move the yield needle. Today’s report is an observation, not a survey for soybeans.

·        
AmSpec reported July 1-10 palm oil exports fell 15.2 percent to 308,290 tons from 363,732 tons from month earlier.

·        
Malaysia is back from holiday and futures were 41 MYR lower.

 

·        
China soybean futures were down 1.2%, meal 0.4% higher, soybean oil 0.3% higher and palm down 1.4%.

·        
Rotterdam vegetable oils were higher
and oil mixed.

·        
Offshore values were leading SBO about 49 points higher earlier this morning and meal $10.60 short ton higher.

 

Export
Developments

·        
China looks to sell a half a million tons of soybeans out of reserves on July 15.

 

Due
out July 12.

 

Wheat

·        
US wheat futures are lower, again, on follow through selling after USDA posted a non-threatening crop condition report Monday afternoon.

·        
Paris wheat is down a large 8.50 euros as of 9:15 am CT, but well up from a week ago.

·        
European weather remains a large concern for the west and southwestern areas with no rain relief seen over the next seven days.

 

 

Export
Developments.

·        
Taiwan seeks 44,725 tons of wheat from the US on July 13 for Aug 31-Sep 14 shipment.

·        
Jordan AgMin seeks 120,000 tons of wheat.

·        
Japan seeks 70,000 tons of feed wheat and 40,000 tons of barley on July 13 for arrival by December 22.

·        
Jordan seeks 120,000 tons of barley on July 14 for Nov/Dec shipment. They bought 60,000 tons on July 6.

·        
Pakistan issued a new import tender for 300,000 tons of wheat, set to close July 18 for Aug 1-25 shipment.

 

Rice/Other

·        
(Bloomberg) — World 2022-23 cotton production seen 776,000 bales lower than USDA’s previous estimate, according to the avg in a Bloomberg survey of ten analysts.

Estimates range from 119m to 122m bales

World ending stocks seen down 321,000 bales to 82.45m bales

US production seen 471,000 bales lower, and US ending stocks seen 31,000 bales lower