FI Morning Grain Comments 05/11/22

PDF attached

 

Good
morning.

 

US
CPI (M/M) Apr: 0.3% (est 0.2%; prev 1.2%)

US
CPI Ex Food And Energy (M/M) Apr: 0.6% (est 0.4%; prev 0.3%)

US
CPI (Y/Y) Apr: 8.3% (est 8.1%; prev 8.5%)

US
CPI Ex Food And Energy (Y/Y) Apr: 6.2% (est 6.0%; prev 6.5%)

 

Follow
through buying is seen this morning for US agriculture markets. WTI was up more than $3.30 at the time this was written and USD up about 7 points. There were no major weather changes from yesterday. Ongoing weather concerns for the southern US winter wheat
crop, China, western EU and India remain a large concern. US weather remains favorable for US planting progress, and we are looking at big jump for this week’s corn and soybean planting progress.

 

 

 

 

Weather

 

World
Weather Inc.

US
from last night:

The
bottom line for the official weather outlook in most production regions is unchanged.

           
Significant warmth for this time of year will continue the rest of this week in the Corn Belt and Delta. The warmth will help continue rapid drying of the topsoil and improve field conditions for planting. Some timely rain will increase in the regions Friday
through this weekend; though, much of it will be erratic and fieldwork will advance around it.

           
Another round of significant rain in the Northern Plains Wednesday through Thursday will cause more fieldwork delays and possibly some more areas of flooding; however, the rain will be beneficial in Montana where greater rain is needed. This evening’s GFS
model run was mostly consistent with this weather disturbance.

    
       This evening’s GFS model run showed a significant increase in precipitation across the Northern Plains May 23 – 25 and showed both rain and snow with it. This weather disturbance and its associated cold air mass were overdone. Below average temperatures
with some shower activity will be possible though.

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

Reuters
estimates for USDA

 

US
production

 

US
wheat production

 

Global
stocks

 

SA
production 2021-22

 

 

 

 

 

 

 

Macros

US
CPI (M/M) Apr: 0.3% (est 0.2%; prev 1.2%)

US
CPI Ex Food And Energy (M/M) Apr: 0.6% (est 0.4%; prev 0.3%)

US
CPI (Y/Y) Apr: 8.3% (est 8.1%; prev 8.5%)

US
CPI Ex Food And Energy (Y/Y) Apr: 6.2% (est 6.0%; prev 6.5%)

US
Real Average Hourly Earnings (Y/Y) Apr: -2.6% (prev 2.7%; prevR -2.6%)

US
Real Average Weekly Earnings (Y/Y) Apr: -3.4% (prev -3.6%; prevR -3.5%)

 

 

Corn

·        
Corn futures are higher on follow through buying. The CPI food price index was higher than expected and may provide strength.

·        
US weather remains favorable for US planting progress, and we are looking at big jump for this week’s corn and soybean planting progress.

·        
China suspended goats, sheep and other animal units from Mongolia after detecting a viral disease.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 7,000 barrels to 976 thousand (972-979 range) from the previous week and stocks down 151,000 barrels to 23.736 million.

 

Export
developments.

·        
(New 5/10) South Korea’s KFA bought 65,000 tons of corn at an estimated $379.95 a ton c&f for arrival in South Korea around Aug. 20.

·        
China plans to buy 40,000 tons of pork for reserves on May 13.

 

 

Soybeans

·        
The soybean complex is mostly higher. Soybean oil continues to gain on meal. Sharply higher WTI crude oil is lending support to SBO and soybeans.

·        
President Biden plans to visit an Illinois family farm and will talk about how the Ukraine/Russia situation impacted global food prices.

·        
Offshore values are leading SBO 18 points lower and meal $1.60 short ton higher.

·        
Rotterdam meal was down mostly 0.50 to 3.00 euros from this time yesterday morning and vegetable oils up 10-45 euros.

·        
Yesterday the Malaysian government said they are considering cutting palm export taxes.

·        
Dorab Mistry said China, the second leading palm importers, are “no longer big bulls” in the commodities markets and will likely slow down its consumption (Reuters). Dorab Mistry pegged Malaysian palm production for 2022 at 19
million tons.

·        
Malaysian palm oil ended 163 ringgit per ton higher to 6,476 and cash was up $10/ton at $1,600 ton.

·        
China September soybean futures were down 0.2%, meal up 0.7%, SBO 0.2% higher and China palm oil up 1.0%.

 

Export
Developments

·        
The USDA seeks 550 tons of vegetable oils under its PL 480 program on May 17 for late June/FH July shipment.

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

 

Wheat

·        
Ongoing concerns over the southern US winter wheat crop, China, western EU and India remains a concern and this is supporting US wheat futures. The far northern Great Plains will see unwanted additional rain later this week.

·        
Videos from China showing producers destroy or cut immature wheat crop have been floating around, leading some to think the crop is in worse shape than expected.

·        
Farm office FranceAgriMer lowered its forecast of French soft wheat exports outside the European Union for 2021-22 to 9.25 million tons from 9.5 million estimated in April. Within the EU-27, they lowered exports to 8.0 million
tons from 8.1 million last month. End of 2021-22 soft wheat stocks are seen at 3.2 million tons from 3.0 million last month.

·        
Drought is expanding in France with two-thirds of the country experiencing very dry conditions.

·        
September Paris wheat futures are up 3.50 euros to 400 at the time this was written.

·        
Tunisia plans to raise the prices of some foods this week in response to producer protests over higher feed and input costs.  Last month they raised the price of fuel by 5%, the third hike this year. But with consumers paying
higher prices, that could also lead to protests, unions have warned. On the brighter side, Tunisia’s grain harvest is expected to increase 30-40% from year ago, according to a Reuters article citing a senior farmers union. That would ease import requirements.
They had an average grain harvest of about 1.5 million tons over the past ten year with consumption around 3.4 million tons.

 

Export
Developments.

·        
Jordan bought about 50,000 tons of wheat.

·        
Japan seeks 70,000 tons of feed wheat and 40,000 tons of barley on May 18 for arrival by October 27.

·        
Jordan seeks 120,000 tons of barley on May 18 for Aug/Sep shipment.

·        
Algeria seeks 50,000 tons of wheat for July shipment.

·        
Bangladesh seeks 50,000 tons of wheat on May 23 for shipment within 40 days of contract signing.

·        
Japan seeks 196,560 tons of food wheat later this week.

·        
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.

 

Rice/Other

·        
South Korea seeks 136,000 tons of rice on May 12 for Sep-Dec arrival.