FI Morning Grain Comments 04/29/22

PDF attached

 

Good
morning.

 

End
of the month so expect some positioning, especially ahead of a holiday for many countries (Monday). Countries are starting to cut back on biodiesel (vegetable oil feedstock) mandates to cool rising prices for food end users. The USD eased after hitting a 20-year
high and that is lending support for commodities. WTI crude oil is higher. Cool and wet weather for the US may continue to hinder plantings through the first week of May.

 

 

 

 

 

 

 

 

 

 

Weather

Past
7-day

 

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 29, 2022

• Expanding
  flood potentials will occur across North Dakota, northern South Dakota and southern Manitoba, Canada this weekend as 1.00 to 3.00 inches of rain fall over saturated or nearly saturated land. Some flooding is already present
• Today’s
  Canada’s Prairies outlook still suggests a strong ridge of high pressure for the latter part of next week into the following weekend resulting in temperatures well above normal and limited rainfall
  
• Immediately
  following the mini-heatwave will be a good chance for rain in the southwestern Prairies which should translate into improved planting, germination and emergence conditions “if” the rain event occurs as advertised in about 10-12 days
• Too
  much rain will impact key U.S. Midwestern crop areas over the next ten days
  
• the
  heart of the Midwest corn and soybean production region will be impacted by frequent rain that will be well above average at times
  
• some
  areas in the Midwest are already too wet and flooding is expected to become an issue
• mild
  to cool temperatures will occur at times in much of the ten-day period limiting drying rates on the rain-free days
• Portions
  of the Delta and southeastern states will also be included in the wetter biased pattern in early to mid-May, although rain totals in the southeastern states will be more beneficial than detrimental and the same is true for the lower Delta
• West
  Texas will have opportunities for rain periodically in the next ten days 
• no
  general soaking of rain is expected, but some locally significant amounts are expected
• relief
  from absolute dryness is expected, but subsoil moisture will not be recharged
• South
  Texas and the Texas Coastal Bend will remain dry biased
• Mato
  Grosso, Goias and a part of Mato Grosso do Sul will experience restricted rainfall for a while, but showers and thunderstorms during mid-week next week will help to bring a little relief to recent drying
  
• rainfall
  has been and will continue quite varied resulting in some Safrinha crops still performing well while many others are stress by dryness and will continue to see that stress for a while reducing yields
• Argentina’s
  west and south will be dry for a while, but concern about the dryness should be minor until wheat planting season begins in mid- to late May and June at which time rain will be imperative in the west where it will be and is driest

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Friday,
April 29:

• 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
• Vietnam’s
  General Statistics Office releases coffee, rice and rubber export data
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  agricultural prices paid, received, 3pm
• HOLIDAY:
  Japan, Indonesia

Monday,
May 2:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Cotton
  market outlook by International Cotton Advisory Committee
• U.S.
  crop progress and planting data for corn, soybeans and cotton; winter wheat condition, 4pm
• USDA
  soybean crush, corn for ethanol, DDGS output, 3pm
• Honduras,
  Costa Rica monthly coffee exports
• Australia
  commodity index
• HOLIDAY:
  China, Malaysia, Indonesia, Hong Kong, Singapore, Thailand, Vietnam, Pakistan, Bangladesh, U.K.

Tuesday,
May 3:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• Purdue
  Agriculture Sentiment
• HOLIDAY:
  China, India, Malaysia, Indonesia, Singapore, Japan, Vietnam, Pakistan, Bangladesh

Wednesday,
May 4:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• New
  Zealand commodity prices
• HOLIDAY:
  China, Japan, Malaysia, Indonesia, Thailand, Bangladesh, Pakistan

Thursday,
May 5:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• HOLIDAY:
  Japan, Indonesia, South Korea, Pakistan

Friday,
May 6:

• FAO
  World Food Price Index
• 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
• Statistics
  Canada releases stockpiles data for barley, canola and wheat
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  Indonesia

Source:
Bloomberg and FI

 

 

 

 

 

Macros

US
Employment Cost Index Q1: 1.4% (exp 1.1%; prev 1.0%)

US
Personal Income Mar: 0.5% (exp 0.4%; prev 0.5%)

–             
Personal Spending Mar: 1.1% (exp 0.6%; prev 0.2%)

–             
PCE Core Deflator (M/M) Mar: 0.3% (exp 0.3%; prev 0.4%)

–             
PCE Core Deflator (Y/Y) Mar: 5.2% (exp 5.3%; prev 5.4%)

–             
PCE Deflator (M/M) Mar: 0.9% (exp 0.9%; prev 0.6%)

–             
PCE Deflator (Y/Y) Mar: 6.6% (exp 6.7%; prev 6.4%)

–             
Real Personal Spending Mar: 0.2% (exp -0.1%; prev -0.4%)

Canadian
GDP (M/M) Feb: 1.1% (exp 0.8%; prev 0.2%)

–             
GDP (Y/Y) Feb: 4.5% (exp 4.1%; prev 3.5%)

 

 

Corn

·        
Corn futures are mixed with nearby moderately higher and back months lower following weakness in wheat despite a lower USD and higher WTI crude oil trade. End of month positioning is expected. 

·        
The USD eased after hitting a 20-year high and that is lending support for commodities.

·        
WTI crude oil was up about $1.00 at the time this was written.

·        
Cool and wet weather for the US may continue to hinder plantings through the first week of May.

·        
China’s end of March sow herd contracted 3.3 percent from February and is down 3.1 percent from year ago, in part to negative margins from rising feed costs. China had 422.53 million head of pigs at the end of March, down 5.9
percent from February.

·        
22 US states have reported bird flu cases so far this year.

·        
Bulgaria reported a case resulting in the culling of 160,000 birds.

·        
(Reuters) – The U.S. Environmental Protection Agency is expected to send biofuel blending mandates for 2020, 2021 and 2022 to the White House for final review by early next week. 

·        
(Reuters) – U.S. governors from eight Midwest states, many of which are major corn producers, asked the Biden administration on Thursday to apply rules that would allow gasoline blended with a higher level of ethanol to be sold
year-round in their states. Governors from Iowa, Illinois and Minnesota said in a letter to the Environmental Protection Agency that allowing the blend, known as E15, year-round would help lower gasoline prices, which have risen to over $4 per gallon after
Russia’s invasion of Ukraine.

 

 

 

Export
developments.

·        
None reported

 

Soybeans

·        
Soybeans and soybean meal are higher on technical buying. Soybean oil sold off after seeing higher prices this week. Some countries are starting to cut back on biodiesel (vegetable oil feedstock) mandates to cool rising prices
for food end users. Germany, the largest EU biofuel market, is the latest country looking at cutting back on feedstock to ensure food security.

·        
Look for end of the month positioning ahead of a holiday for many countries.

·        
Malaysian palm oil ended 230 ringgit per ton higher to 7,597, a record high, and cash was up $50/ton at $1,790/ton. Malaysian palm futures are up 24.5 percent for the month of April.

·        
Offshore values are leading SBO 89 points lower (and a large 745 points lower for the week due to a large market swing) and meal $2.20 short ton higher ($10.90 higher for the week).

·        
China September soybean futures were up 0.9%, meal up 0.5%, SBO 0.9% higher and China palm oil up 2.0%.

·        
Rotterdam meal was down 5-22 euros from this time yesterday and vegetable oils 10-25 euros higher.

 

Export
Developments

·        
China looks to sell another 500,000 tons of soybeans from reserves on May 6. Results of today’s auction were not released by the government.

 

 

 

Wheat

·        
US wheat futures are mostly lower on light technical selling. The North American weather forecast has not improved with flooding potentials running high for the far northern Great Plains and southern Manitoba, Canada.

·        
The euro is higher this morning.

·        
Wheat ratings in France were stable from the previous week at 91 percent G/E condition.

·        
September Paris wheat futures are down 3.25 euros, off from a record high, to 381.25 at the time this was written.

·        
Russia’s wheat export tax will increase to $120.10/ton from $119.10 for the May 6-12 period. Corn increased to $58.30 from $54.90.

 

Export
Developments.

·        
Turkey bought 210,000 tons of wheat at around $409 a ton ex warehouse. They are also in for 210,000 tons of international red milling wheat for delivery between May 17 and August 10.

·        
Jordan seeks 120,000 tons of feed barley on May 10 for Aug/Sep shipment.

·        
Jordan seeks 120,000 tons of wheat on May 11 for Jun/Aug shipment.

 

Rice/Other

·        
None reported