FI Morning Grain Comments 05/02/23

PDF attached

 

Good
morning. 

 

USD
was higher, WTI crude oil mostly lower and US equities lower. Light buying is seen for soybeans and soybean oil. Meal traded two-sided and corn was mixed. US wheat traded two-sided and are currently mostly lower after US winter wheat ratings improved from
the previous week. The combined G/E categories were up two points to 28 percent. US corn plantings were 26 percent, one point below expectations. With a quarter of the corn crop in the ground, look for the trade to focus more on germination and development
this month. Soybean plantings were 19 percent, 2 points above expectations. Jordan bought 60,000 tons of wheat at $288.50/ton c&f for FH October shipment. Egypt’s lowest offer for wheat was $260/ton fob, Russian origin. Look for Black Sea headlines to move
the grain markets this week as the expiration of the deal is a about a week away. Don’t discount additional US corn cancelations by China later this week.

 

 

 

Fund
estimates as of May 1

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 1, 2023

• Eastern
  U.S. Midwest precipitation is expected to be lighter than usual for a while
• Rain
  is expected to evolve in the U.S. southern Plains especially this weekend and next week that will raise soil moisture for cotton, sorghum and corn east of the High Plains
• West
  Texas rainfall is still expected to be sporadic and light over the next couple of weeks
• Greater
  rainfall is expected again this weekend into early next week across the eastern Dakotas and Minnesota to Manitoba, Canada that will maintain wet field conditions
• Warming
  in Canada’s Prairies and the northern U.S. will be good for a few days of net drying, but rain will fall soon thereafter slowing fieldwork
• Drought
  relief is still not very likely in Alberta of western Saskatchewan, Canada
• U.S.
  hard red winter wheat areas will continue to receive sporadic rainfall for the next ten days, although every drop of rain will be welcome
• Spain,
  Portugal and northwestern Africa are still expected to be dry or mostly dry in the coming week
• Kazakhstan
  and southern parts of Russia’s eastern New Lands will remain dry for another week with temperatures near to above normal
• Western
  Australia rain potentials are improving for this weekend and next week and that should lead to better planting and emergence conditions for wheat, barley and canola
• India
  will remain wetter biased into the weekend, although daily rainfall should not be as disruptive to farming activity as it was during the weekend; some concern over unharvested winter crop conditions will prevail
• Brazil’s
  center south and center west crop areas will continue to dry down seasonably through the next couple of weeks, although Safrinha crops will remain in good condition
• Argentina
  rainfall will continue limited over the next ten days
• Positive
  Indian Ocean Dipole is expected to evolve over the next few weeks

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Tuesday,
May 2:

• US
  Purdue Agriculture Sentiment
• Malaysia’s
  April 1-30 palm oil exports
• New
  Zealand global dairy trade auction
• HOLIDAY:
  China,
  Vietnam

Wednesday,
May 3:

• EIA
  weekly US ethanol inventories, production, 10:30am
• HOLIDAY:
  China,
  Japan, Vietnam

Thursday,
May 4:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• New
  Zealand Commodity Price
• HOLIDAY:
  Japan, Malaysia, Thailand, Bangladesh

Friday,
May 5:

• FAO
  World Food Price Index
• Malaysia’s
  May 1-5 palm oil export data
• 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
• HOLIDAY:
  Japan, South Korea, Thailand

Source:
Bloomberg and FI

 

 

 

 

 

 

 

Macros

 

Corn

·        
CBOT
corn traded mixed for the July position and currently the non-expiring months are trading mostly lower in part to lower wheat and competition out of Brazil. US corn shipments to China are starting to slow per USDA export inspections. Don’t discount additional
corn cancelations this week.

·        
US weather looks good over the next week for fieldwork progress.

·        
IA was 29 percent complete for corn plantings and IL 40 percent.

·        
US corn use for ethanol production for the month of March came in below expectations.  We left unchanged our corn for ethanol use at 5.225 billion bushels, 25 million below USDA and compares to 5.326 billion for 2021-22.

 

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
Soybeans, meal and oil were higher earlier (soybean meal traded mixed after the open) after USDA’s March US crush came in slightly above an average trade guess and soybean oil stocks of 2.388 billion pounds coming in 29 million
below expectations. Palm oil snapped a 6 session losing streak.

·        
Look for US soybean planting progress to accelerate this week.  IL is already 39 percent done and IA 16 percent.

·        
Malaysia palm futures increased 83 ringgit to 3421, and cash increased $15.00 to $832.50/ton.

·        
China is on holiday.

·        
Nearby Rotterdam vegetable oils were unchanged to 15 euros higher from this time
Friday morning and meal 9.00-12.50 euros higher.

·        
Offshore values were leading SBO higher by about 16 points this morning and meal $6.80 short ton higher.

·        
Malaysian palm oil shipments:

• ITS:
  1,176,432 (-261,642 or down 18.19%) vs 1,438,074 previous month
• AmSpec:
  1,104,726 (-297,416 or down 21.21%) vs 1,402,142 previous month

·        
USDA NASS March US soybean crush was near expectations and a record for the month, as expected.  Implied soybean oil use was a little better than expected.

 

 

Export
Developments

• USDA
  seeks 860 tons of vegetable oil in 4 liter cans for use in export programs. Shipment was scheduled for Jun 1-30 (June 16 to July 15 for plants located at ports). All offers are due by early May 2.
  

 

Wheat

·        
US wheat futures are lower in part to improving North American weather but multi year lows in Chicago may limit losses from bottom picking.

·        
Look for Black Sea headlines to move the grain markets this week as the expiration of the grain export deal is a about a week away.

·        
September Paris wheat futures are 7.75 euros lower at 228.75 euros, a fresh multi-month low.

·        
April Ukraine grain exports totaled 3.62 million tons compared with 923,000 tons year earlier. 2022/23 season stood at 41.6 million tons as of May 1, including about 14.4 million tons of wheat, 24.4 million tons of corn and about
2.5 million tons of barley.

·        
SovEcon sees 2022-23 Russian wheat exports at 44.4 million tons, 100,000 tons below previous.

 

Export
Developments.

·        
Jordan bought 60,000 tons of wheat at $288.50/ton c&f for FH October shipment.

·        
Egypt’s lowest offer for wheat was $260/ton fob, Russian origin.

·        
Jordan seeks 120,000 tons of feed barley May 3 for October through FH November shipment.

 

Rice/Other

·        
Rice registrations fell 10 lots.

·        
(Reuters) – Vietnam’s rice exports in the January-April period are estimated to have risen about 43.6% from a year earlier to 2.96 million tons, government data showed on Saturday. Revenue from rice exports in the period is seen
up 54.5% at $1.6 billion. April rice exports from Vietnam, one of the world’s leading shippers of the grain, were estimated at 1.1 million tons, worth $574 million.