FI Morning Grain Comments 05/10/23

PDF attached

 

Good
morning. 

 

US
CPI was viewed supportive for US equities and selected commodity markets. WTI crude oil was down 11 cents, USD 38 points lower and US equities higher.
Overall
news is light outside palm oil headlines. Traders are waiting for Black Sea grain deal news. Soybeans are lower on good planting US weather, soybean oil lower following weakness in palm, and meal higher on product spreading. US wheat and corn are lower from
follow through selling over improving US weather and expectations talks over the Black Sea grain deal will settle this week. MPOB palm oil April S&D was slightly bullish, but palm oil prices fell Wednesday from slowing exports and technical selling. Malaysia
end of April palm oil stocks hit a 13-month low and were down 10.5% from March. From a year ago, stocks fell 8.8 percent. Stocks of 1.5 million tons were slightly below expectations. Production during April was 1.196 million tons, 103,550 tons below expectations.
Imports were a little less than expected while exports of 1.075 million tons were 125,553 tons below an average trade guess and at a 12-month low.

 

A
Bloomberg poll looks for weekly US ethanol production to be up 11,000 thousand barrels to 987k (980-997 range) from the previous week and stocks up 152,000 barrels to 23.515 million.

 

Fund
estimates as of May 9

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 10, 2023

• Western
  Canada’s Prairies and British Columbia will be facing a new heatwave this weekend into early  next week
  
• A
  large part of the Prairies will need significant rain following the heatwave
• Rain
  in Canada’s Prairies will be restricted over the next ten days with the greatest rain Friday into the weekend in southeastern most Saskatchewan and southern Manitoba
• U.S.
  Northern Plains rainfall is expected to be widespread and significant late this week and into the weekend with field working delays likely for a little while, but the moisture will be good for the western Dakotas and immediate neighboring areas where the soil
  is still a little dry
• Southeastern
  South Dakota and southwestern Minnesota as well as eastern Nebraska will also benefit from some of this rain
• Field
  working delays are likely in eastern North Dakota and Minnesota
• Texas
  rainfall is still advertised to be substantial this weekend with most of West Texas getting significant rain that will bolster soil moisture for improved planting potentials in corn, sorghum and cotton areas
• Lighter
  than usual precipitation is still expected in the lower and eastern Midwest during the next ten days, although sufficient rain will fall to support aggressive planting and a favorable environment for crop emergence and establishment
• Eastern
  parts of the U.S. Delta and the southeastern states will experience a good mix of rain and sunshine with planting to accelerate in many areas that were experiencing slow progress previously
• Argentina
  rainfall is still advertised to be minimal during the next ten days
• Brazil
  weather will continue supporting a general dry down in field conditions in most Safrinha corn and cotton areas which is normal for this time of year, but some timely rain will soon be needed for late planted crops
• Drying
  is expected in portions of Russia over the next ten days, but the impact will be mostly good for crops
• Some
  relief to dryness is expected in northern Kazakhstan and neighboring areas of Russia
• No
  changes in India, China or Australia weather was noted overnight
• Italy
  and the western Balkan Countries of Europe are still expecting heavy rain and some flooding in the next ten days
• Some
  relief from dryness is expected in eastern Spain, northeastern Algeria and northern Tunisia mostly this weekend, but sooner in Tunisia and Algeria

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Wednesday,
May 10:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysian
  Palm Oil Board’s data for May output, exports and stockpiles
• Malaysia’s
  May 1-10 palm oil exports
• Sugar
  production and cane crush data by Brazil’s Unica (tentative)

Thursday,
May 11:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Brazil’s
  Conab issues production, area and yield data for corn and soybeans
• New
  Zealand Food Prices
• EARNINGS:
  GrainCorp

Friday,
May 12:

• USDA’s
  World Agricultural Supply and Demand Estimates (WASDE), 12pm eastern
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• 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

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

 

Macros

U.S.
Apr Cpi +0.4% , Exfood/Energy +0.4%

U.S.
Apr Cpi Year-Over-Year +4.9%, Exfood/Energy +5.5%

U.S.
Apr Unadjusted Cpi Index 303.363 Vs Mar 301.836

U.S.
Apr Real Earnings All Private Workers +0.1% Vs Mar -0.1% (Prev -0.1%)

Cpi
Energy +0.6%

Gasoline
+3.0%

New
Vehicles -0.2%

 Food
0.0%

Housing
+0.2%, Owners’ Equivalent Rent Of Primary Residence +0.5%

U.S.
2-Year/10-Year Treasury Yield Curve Inversion Narrows To Minus 50 Bps After Cpi Data

US
Real Avg Weekly Earnings (Y/Y) Apr: -1.1% (prevR -1.5%)

US
Real Avg Hourly Earning (Y/Y) Apr: -0.5% (prevR -0.6%)

Canadian
Building Permits Apr: 11.3% (est -2.2%; prev 8.6%)

 

Corn

·        
Corn traded
lower overnight on follow through bearish sentiment from good US planting weather and lack of bullish news. US CPI data was neutral to supportive selected commodity and equity markets, and this may slow some of the selling during the day session for corn.

·        
US weather looks good over the next two weeks but there is a chance for two light frost events next week for parts of the Northern Plains and Midwest.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 11,000 thousand barrels to 987k (980-997 range) from the previous week and stocks up 152,000 barrels to 23.515 million.

 

Export
developments.

• Taiwan’s
  MFIG group bought about 65,000 tons of feed corn from Brazil at 195.90 cents over the September contract ($286.86/ton) for July 3-22 shipment.
  

 

 

Soybeans

·        
Soybeans are lower on favorable US Midwest weather and a slowdown in China soybean arrivals as noted yesterday. Outside palm oil headlines, news was light. Soybean oil is lower and meal higher (product spreading). WTI crude oil
is slightly lower recovering from a positive US CPI report.

·        
MPOB palm oil April S&D was slightly bullish, but palm oil prices fell Wednesday from slowing exports and technical selling.

·        
Malaysia palm futures increased 98 ringgit to 3709, and cash decreased $7.50 to $902.50/ton.

·        
Malaysia end of April palm oil stocks hit a 13-month low and were down 10.5% from March. From a year ago, stocks fell 8.8 percent. Stocks of 1.5 million tons were slightly below expectations. Production during April was 1.196
million tons, 103,550 tons below expectations. Imports were a little less than expected while exports of 1.075 million tons were 125,553 tons below an average trade guess, and at a 12-month low.

·        
Dorab Mistry estimated the price of Malaysian palm oil futures could range between 3400 and 4000 ringgit (3,756 last) if the Black Sea corridor remains open but rise above 4000 if a weather problem arises.  The analyst looks for
palm oil stocks to start recovering (11-month low currently). Malaysian crude oil production for 2023 is seen at 18.50 million tons, up 50,000 from previous, and Indonesia crude oil production up 1.5 million tons from 2022.

·        
ITS reported Malaysian May 1-10 palm oil exports at 355,380 tons, up 10 percent from the April 1-10 period. AmSpec reported a 1.7 percent increase to 333,779 tons from 328,133 tons during April 1-10.

·        
China May soybean futures were down 2.1%, meal down 1.3%, SBO down 0.5% and palm oil futures up 0.3%.

·        
Nearby Rotterdam vegetable oils were mixed from this time yesterday morning and meal $2.00 to $8.00 euros lower.

·        
Offshore values were leading SBO higher by about 40 points this morning and meal $3.90 short ton lower.

 

Export
Developments

• Egypt
  seeks vegetable oils on May 11 for June 25 through July 10 shipment. They are also in for local vegetable oils.
  
• USDA
  seeks 120 tons of packaged vegetable oil for various export programs on May 16 for June 16-July 5 shipment.
  

 

 

Wheat

·        
US wheat futures are lower as rain develops across the dry areas of the US Great Plains. Traders are waiting for an update on Black Sea grain deal negotiations.

·        
Russia said the views over the Black Sea grain deal are understood by all parties but declined to comment how talks are progressing. They are looking for their demands to be met.

·        
Egypt bought more than 1.6 million tons of wheat from local producers so far this season.

·        
September Paris wheat futures earlier were 0.25 euro higher at 233.75 euros.

 

 

Export
Developments.

·        
Jordan bought 50,000 tons of feed barley at $257.50/ton c&f for October 16-31 and November 1-15 shipment.

·        
Japan in a SBS import tender seeks 60,000 tons of feed wheat and 20,000 tons of barley on May 17 for arrival in Japan by October 26.

·        
Algeria seeks at least 50,000 tons of soft milling wheat, optional origin, on May 10/11^th, for July shipment.  Earlier shipment if from SA and/or Australia.

·        
Japan seeks 125,974 tons of milling wheat on Thursday.

 

Rice/Other

·        
(Reuters) – Vietnam’s rice exports in April rose 8.5% from the previous month to 1.04 million tons, government customs data showed on Tuesday. Rice shipments from Vietnam were valued at $545.8 million in the month, up 7.2% from
March, it said.