FI Morning Grain Comments 05/06/22

PDF attached

 

Good
morning.

 

The
soybean complex and corn are lower from end of week positioning. Palm oil fell another 5 percent overnight and that is weighing on soybean oil. Wheat is higher on follow through global production concerns and a lower USD. WTI crude oil is extending its rally
while US equities are lower. StatsCan Canadian March 31 stocks were less than expected for all wheat and canola. All Canadian agriculture stocks are down sharply from a year ago indicating exports could be thin for the summer months until new crop comes online. 
South Korea bought corn overnight (SA origin) and Taiwan is back in for US wheat.

 

 

 

 

Weather

Past
7 days

 

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• U.S.
  Midwest planting weather will be improving this weekend and especially next week
• Rain
  will end in the eastern Midwest today and early Saturday
• Central
  and lower parts of the Midwest will experience net drying from Sunday through Friday with some drying beginning in the western and central parts of the region Saturday
• U.S.
  Midwest temperatures will be rising into the 80s and a few lower 90s Fahrenheit next week stimulating faster drying rates after becoming too wet recently
• U.S.
  Midwest best planting weather is expected Wednesday through Friday of next week, but some areas that have not been quite as wet will see aggressive fieldwork a little sooner
  
• A
  more normal precipitation and temperature regime is expected for the Midwest in the second week of the outlook producing a few showers, but having enough warm weather around to support favorable drying conditions between  precipitation events
• Upper
  U.S. Midwest weather will not be quite as favorable for drying and fieldwork as the middle and lower parts of the Midwest
• Waves
  of rain will come and go a little more often resulting in smaller windows of opportunity for drying and field progress, but the situation should improve during the middle part of this month
• Northern
  U.S. Plains and Canada’s eastern Prairies will see rain a little too often to support favorable drying conditions and fieldwork will remain on hold for a while
• This
  is especially true for North Dakota, Manitoba and eastern Saskatchewan
• Southwestern
  Canada’s Prairies will continue to struggle with dryness, although a few brief bouts of light rain will fall sporadically to support “some” fieldwork
• Hotter
  temperatures in the southern U.S. Plains this weekend and early next week will accelerate evaporation, stress livestock and stress unirrigated wheat that has not seen much moisture recently
• West
  Texas cotton areas may experience daily showers and thunderstorms in the afternoon and evenings from Tuesday through Friday of next week, but resulting rainfall will be sporadic and mostly too light to seriously change crop of field conditions
• Most
  of West Texas will continue to miss meaningful rain and temperatures will be hot enough that when rain falls the moisture will evaporate within a short period of time
• Temperature
  extremes in the 90s and lower 100s will occur this weekend and next week in the U.S. southern Plains
• Europe
  is expected to dry down significantly during the coming ten days
• Below
  average precipitation and warmer than usual temperatures will combine to result in steady drying conditions
• France,
  Spain, Germany and southern parts of the United Kingdom will see the greatest loss in soil moisture and the highest potential for developing winter and spring crop stress
• Eastern
  Australia will experience excessive rain near the Queensland and upper New South Wales coasts next week with Tuesday into Friday wettest
• Damage
  to sugarcane is possible
• Some
  unharvested cotton and sorghum may be negatively impacted with cotton possibly impacted by too much rain and suffering a quality decline
• Most
  of the Queensland crop should already be harvested
• New
  South Wales cotton areas may be a little threatened by rain due to some of the crop still waiting to be harvested after frequent rainfall recently
• 06z
  GFS model run reduced rain in Bolivia, Paraguay, western Mato Grosso and Mato Grosso do Sul for the second week of the outlook after previous runs of the GFS and European forecast model runs had much greater rainfall advertised
• This
  change was badly needed
• Mato
  Grosso and Goias, Brazil will continue to experience inadequate rainfall and soil moisture to support Safrinha corn normally
• Rain
  is needed, but may not occur significantly anytime soon
• Southern
  Brazil will experience net drying for a while
• The
  change will be good after too much rain fell earlier this month and in late April
• Northeastern
  Brazil will continue dry supporting summer crop maturation and harvest progress
• Argentina
  is still advertised to be dry for the next ten days, but model changes overnight suggest rain will be possible in the south after May 19
• The
  moisture is not needed for summer crop maturation or harvesting, but it is needed for winter wheat and barley planting
• Southwestern
  parts of Canada’s Prairies will continue to struggle for moisture through the next week to ten days, although a few showers of light intensity are expected infrequently
• Ontario
  and Quebec, Canada will experience dry weather over the coming ten days inducing a much improved outlook for the start of spring planting
• Winter
  wheat development should be more aggressive as well
• Temperatures
  will turn much warmer
• India
  will continue seasonably warm to hot and dry through the next ten days in central and northern parts of the nation
• No
  further loss to winter crop production is likely
• Northern
  cotton areas are benefiting from less oppressive heat
• Mexico
  dryness will continue in the west and north into early next week which is not unusual for this time of year
• Drought
  has expanded  in Mexico in recent weeks due to La Nina and a general lack of rain
• Recent
  rain in the east was welcome
• Temperatures
  have been very warm as well
• Rain
  will develop in central and eastern areas this weekend and prevail next week
• Central
  areas will be wettest next week
• A
  tropical cyclone will form in the Bay of Bengal near the Andaman Islands today and Saturday before moving toward the upper east India and Bangladesh coasts with landfall possible during mid-week next week
• Heavy
  rainfall will be possible near the point of landfall, but the storm should be weak and its impact should be low
• Temperatures
  in western Russia will be cooler than usual through the next week
• Frost
  and freezes will return to some areas and lower soil temperatures may evolve over time
• Western
  Commonwealth of Independent States weather will include periodic bouts of rain, drizzle and some wet snow during the next ten days
• Soil
  moisture will continue rated adequate to excessive with areas from southern Belarus and northwestern Ukraine into the middle Ural Mountains region wettest and carrying the greatest need for drier weather
• Net
  drying is possible in the eastern Russia New Lands and in northern Kazakhstan into the weekend, but some rain will evolve next week
  
• Moisture
  is needed in this region
• Fieldwork
  will advance a little slower than usual in some western areas because of wet field conditions and some occasional precipitation. Drier and warmer weather would be best in promoting fieldwork, but big changes are not very likely for a while
• Southern
  portions of Russia’s Southern Region are getting some needed rain and it will continue into the weekend
  
• Rainfall
  will vary from 1.00 to 2.00 inches over that which has already occurred
• Western
  Kazakhstan will receive some dryness easing rainfall this weekend and early next week
  
• Most
  of Kazakhstan and immediate neighboring areas of Russia are dry and need moisture
• North-central
  Kazakhstan may remain dry until possibly the second week of the forecast when some rain may fall
• North
  Africa rainfall over the next week will be most significant in northeastern Algeria and northern Tunisia today into the weekend and it should diminish after being most significant this weekend
  
• Morocco
  will be left mostly dry
• Showers
  will return to parts of northern Africa during the latter part of next week
  
• Rain
  will be good for late filling winter crops, but drying is important for the mature crop and its harvest later this month and next
  
• West-central
  Africa rainfall is expected to be frequent over the next ten days maintaining a very good environment for coffee, cocoa, sugarcane, citrus and some cotton
• A
  boost in rainfall would be welcome in cotton areas
• South
  Africa rainfall should be infrequent and light over this coming week to ten days resulting in net drying conditions
• Too
  much moisture in recent weeks delayed harvesting and reduced cotton and some oilseed quality, but the situation has been and will continue improving
• Crop
  maturation and harvest conditions should improve
• China
  weather is expected to be relatively normal for this time of year, during the next ten days to two weeks
• Rain
  frequency will be greatest near and south of the Yangtze River
• Precipitation
  in the Yellow River Basin and North China Plain will be most limited, but some beneficial moisture is expected
  
• Heilongjiang
  will also be wetter biased with precipitation both early this week and again during the weekend
• Soil
  temperatures are warm enough to plant spring wheat and sugarbeets in the northeast of China and warm enough for some corn planting across east-central parts of the nation. Fieldwork should advance around anticipated rainfall.
  
• China’s
  rapeseed crops is in mostly good condition, but a close watch on rainfall is warranted because of the threat frequent rain might have on crop quality and harvest progress next month
• Xinjiang,
  China precipitation is expected to continue mostly in the mountains, but the precipitation will improve spring runoff potentials in support of better irrigation water supply
• Eastern
  Turkey, northern Iran and Turkmenistan and will be the wettest Middle East countries over the next ten days
• Rain
  is still needed in Syria, Iraq and neighboring areas to the south, although it is too late to turn around wheat production
• Southeast
  Asia rainfall is expected to be abundant in Indonesia, Malaysia and Philippines
  
• Overall,
  crop conditions will remain favorable
• Rain
  is also expected to occur routinely in mainland areas of the Southeast Asia
• Central
  America precipitation will occur routinely during the next couple of weeks
  
• The
  moisture will be good for most crops
• Today’s
  Southern Oscillation Index was +18.85 and it has likely peaked and will slowly decline over the coming week
  
• New
  Zealand weather will be drier than usual during the coming week. Some rain will fall in the north next week
  

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

Monday,
May 9:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• China’s
  first batch of April trade data, including soybeans, edible oil, rubber and meat imports
• U.S.
  crop progress and planting data for corn, soybeans and cotton; winter wheat condition, 4pm
• Vietnam’s
  customs dept releases April coffee, rice and rubber export data
• Globoil
  International 2022 conference on vegetable oils and oilseeds in Dubai, day 1
• HOLIDAY:
  Hong Kong, Russia

Tuesday,
May 10:

• Malaysian
  Palm Oil Board’s data for April output, exports and stockpiles
• EU
  weekly grain, oilseed import and export data
• Globoil
  International 2022 in Dubai, day 2
• Innovation
  Forum’s virtual Future of Food conference, May 10-12
• New
  York sugar seminar hosted by StoneX Financial
• France
  agriculture ministry’s monthly grains report
• Brazil’s
  Unica may release cane crush and sugar output data during the week (tentative)
• Holiday:
  Russia

Wednesday,
May 11:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Globoil
  International 2022 in Dubai, day 3
• France
  AgriMer monthly grains outlook
• Annual
  New York Sugar Conference, hosted by Datagro and International Sugar Organization

Thursday,
May 12:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans
• New
  Zealand food prices

Friday,
May 13:

• 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

 

 

 

 

 

Macros

US
Change In Nonfarm Payrolls Apr: 428K (est 380K; prev 431K)

US
Unemployment Rate Apr: 3.6% (est 3.5%; prev 3.6%)

US
Change In Private Payrolls Apr: 406K (est 390K; prev 426K; prevR 424K)

US
Change In Manufacturing Payrolls Apr: 55K (est 35K; prev 38K; prevR 43K)

US
Average Hourly Earnings (M/M) Apr: 0.3% (est 0.4%; prev 0.4%)

US
Average Hourly Earnings (Y/Y) Apr: 5.5% (est 5.5%; prev 5.6%)

US
Average Weekly Hours All Employees Apr: 34.6 (est 34.7; prev 34.6)

US
Labour Force Participation Rate Apr: 62.2% (est 62.5%; prev 62.4%)

 

 

Corn

·        
Corn futures are sharply lower on end of week profit taking and improving US weather forecasts. South Korea bought corn from South America, a disappointment for US bull traders. 

·        
WTI crude oil was up $0.60 at the time this was written (8:54 am CT), and USD was down 30 points.

 

Export
developments.

·        
South Korea’s FLC bought 65,000 tons of corn at an estimated $384.39 a ton c&f for arrival in South Korea around Aug. 30.

·        
South Korea’s MFG bought 137,000 tons of corn from South America. One cargo was for arrival around Aug. 10 at an estimated $385.49 a ton c&f. A second consignment of 69,000 tons for arrival in Korea around Aug. 20 was bought at
$383.49 a ton c&f. Another 34,500 tons was bought at a premium of 227.60 U.S. cents a bushel c&f over the Chicago September corn contract.

 

Soybeans

·        
The soybean complex is lower in large part to weakness in palm oil weighing on soybean oil.  Improvement in US weather is weighing on soybeans.

·        
Offshore values are leading SBO 146 points lower (110 lower for the week to date) and meal $3.90 short ton lower ($7.20 lower for the week).

·        
Rotterdam meal was down mostly 3-5 euros from this time yesterday morning and vegetable oils 15-20 euros lower.

·        
Malaysian palm oil ended 352 ringgit per ton higher to 6,400, or 5.2%, and cash was down $130/ton at $1,652 ton.

·        
China September soybean futures were up 0.5%, meal up 0.1%, SBO 1.1% lower and China palm oil down 1.6%.

 

Export
Developments

·        
5/6 – China looks to sell 314,000 tons of soybeans from reserves on May 13.

·        
South Korea’s NOFI group bought an estimated 61,000 tons of soymeal from South America at about $557 a ton c&f for 51,000 tons plus 10,000 tons bought at a premium estimated at $102.30 over the Chicago September contract for arrival
in South Korea around Oct. 1.

 

Wheat

·        
US wheat futures saw through buying at the open but turned lower from a higher USD and lower trade in soybeans.

·        
An additional 48 CBOT SRW wheat registrations were cancelled in Ohio last night.

·        
Hot temperatures are still in the near term forecast for the southern US Great Plains with limited precipitation.

·        
September Paris wheat futures are up 1.00 euros to 398.50 at the time this was written.

·        
SovEcon raised their Russian 2021-22 wheat export forecast by 0.2 million tons to 34.1 tons. 

·        
Ukraine is looking to increase export capacity by 50% in the next few months by expanding facilities on its western border.

·        
Ukraine planted 6.1 million hectares of spring grains so far this season, about 50 percent of the planned 11.45 million area.  UGA noted that included 1.98 million hectares of corn, 2.4 million hectares of sunflower, 854,000 hectares
of barley, 336,000 hectares of soybeans and 186,000 hectares of spring wheat.

·        
India will continue to see heat waves over the next few days across parts of the western state of Maharashtra and other wheat growing areas.

 

Export
Developments.

·        
Taiwan Flour Millers’ Association seeks 40,000 tons of US milling wheat on May 13 for shipment from the U.S. Pacific Northwest coast between June 26 and July 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