FI Morning Grain Comments 05/12/23

PDF attached

 

Good
morning. 

 

USDA
report day. Reuters convenience table is attached.

 

 

Soybeans
turned mixed before the electronic close. Higher meal supported nearby soybeans. Soybean oil is slightly lower on follow through product spreading. Corn was near unchanged and light technical buying lifted wheat higher. Turkey said the Black Sea grain deal
extension is nearing. Two days of talks in Istanbul ended without an agreement but negotiations will continue online. China in their monthly S&D update increased both corn and soybean 2023-24 production from 2022-23, and lowered corn and soybean imports for
the 2023-24 season from current. Third month Malaysian palm oil futures increased 45 ringgit to 3648, and cash increased $5.00 to $877.50/ton.  Offshore values were leading SBO higher by about 71 points this morning (34 higher for the week to date) and meal
$2.40 short ton higher $0.80 higher for the week). 

 

Rain
will fall across West Texas through the weekend, improving topsoil moisture but don’t discount local flooding. The northern US Plains will trend wetter through the weekend. The central US Great Plains will see net drying to some light rain. Weather is favorable
for much of the Midwest, but a couple light frost events may occur bias north over the next week. Brazil will remain dry over the next 10 days. Europe will experience heavy rain and flooding during the coming week from Italy into the eastern Adriatic Sea region.

 

Fund
estimates as of May 11

 

 

Weather

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 12, 2023

• Somewhat
  greater rain was advertised in North Africa during the week next week and into the following weekend, although some of that moisture is coming a little late to seriously change wheat and barley production
  
• Abundant
  rain will continue to impact south-central Europe during the coming week as well
• Argentina
  is advertised a little wetter beginning late next week and continuing through the following weekend and the moisture may be good for winter wheat planting
• Brazil’s
  center south and center west crop areas will be dry through the next ten days which is not unusual at this time of year, although the ground is firming up
• Rain
  will fall in Rio Grande do Sul and Paraguay late next week and into the following weekend bolstering soil moisture once again
• The
  ECMWF model is promoting rain in West Texas from Saturday through Tuesday of next week with significant amounts expected
• The
  GFS is less wet, but planting moisture will be substantially improved for corn, sorghum and cotton
• Beneficial
  moisture has already brought notable relief to dryness in southwestern Nebraska, northwestern Kansas and northeastern Colorado and it is now raining favorably in the western Dakotas, eastern Montana and southeastern Saskatchewan where a notable boost in precipitation
  is also expected
• U.S.
  Midwest, Delta and southeastern states will see a favorable mix of moisture
• Recent
  rain in Alberta, Canada has brought on pockets of relief and more rain is needed, but not likely for a while
• Canada’s
  Prairies will be dry and unusually warm to hot after rain ends in the southeast Saturday for most of the following week
• Ontario
  and Quebec are warming up beneficially for corn and soybean planting
• India,
  China, Australia and South Africa weather has not changed much from that suggested Thursday
  

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

Monday,
May 15:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• GrainCom
  conference in Geneva, day 1
• US
  winter wheat condition, 4pm
• US
  planting data for corn, cotton, spring wheat and soybeans, 4pm
• Malaysia’s
  May 1-15 palm oil exports

Tuesday,
May 16:

• Future
  Food Asia 2023 conference in Singapore, day 1
• French
  agriculture ministry’s 2023 planting estimates
• EU
  weekly grain, oilseed import and export data
• GrainCom
  conference in Geneva, day 2
• New
  Zealand dairy trade auction

Wednesday,
May 17:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Future
  Food Asia 2023 conference in Singapore, day 2
• GrainCom
  conference in Geneva, day 3

Thursday,
May 18:

• China’s
  2nd batch of April trade data, including agricultural imports
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• EARNINGS:
  Australian Agricultural Co.
• HOLIDAY:
  France, Germany, Indonesia

Friday,
May 19:

• 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
• US
  Cattle on Feed, 3pm

Saturday,
May 20:

• China’s
  3rd batch of April trade data, including country breakdowns for energy and commodities

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

 

 

Macros

US
Import Price Index (M/M) Apr: 0.4% (exp 0.3%; R prev -0.8%)

–   
Import Price Index Ex-Petroleum (M/M) Apr: -0.1% (exp -0.3%; prev -0.6%)-    Import Price Index (Y/Y) Apr: -4.8% (exp -4.8%; R prev -4.8%)-    Export Price Index (M/M) Apr: 0.2% (exp 0.2%; R prev -0.6%)-    Export Price Index (Y/Y) Apr: -5.9% (exp -5.5%; R
prev -5.2%)

 

 

Corn

·        
CBOT corn was
near unchanged at the electronic pause. China cancelled a combined 832,000 tons of corn over the past three weeks. For next year, China will be less dependent on corn imports, pegging 2023-24 arrivals at 17.5 million tons, down from current 18 million. 2023
China corn production is estimated at 282.34 million tons, up from 277.20 for 2022.

·        
Turkey said the Black Sea grain deal extension is nearing. Two days of talks in Istanbul ended without an agreement but negotiations will continue online.

·        
A Reuters trade estimate for 2023 US corn production is 15.120 billion bushels, 1.390 billion above 2022-23. Global 2023-24 corn stocks are projected to be up 12.3 million tons from 2022-23 and soybeans could end up 9.0 million
tons above last year.

·        
USDA could lower 2022-23 US corn exports by up to 50 million bushels. A Reuters trade average for 2022-23 corn stocks has a 25-million-bushel reduction, on average.

·        
The Supreme Court upheld California’s Prop 12 Law that would restrict the sale of pork that is produced by breeding pigs that are kept in a space less than 24 square feet. Since California nearly relies on the rest of the country
for pork supplies, this could affect about three fourths of US pig producers. Since most of the meat sold is from a combination of several different producers, it will be hard to track the origin of the meat. Some estimate it may cost the industry up to $350
million, in turn driving up finished prices for the entire country. 

 

Export
developments.

• South
  Korea’s NOFI group brought an estimated 132,000 tons of animal feed corn from South America in two consignments of 66,000 tons. One was bought at $261.79 a ton c&f and $1.5148 a bushel c&f over the December 2023 for Oct. 10 arrival. Another was bought at $260.69
  a ton c&f and $1.4868 a bushel c&f over the December 2023 corn contract for Oct. 20 arrival in Korea.

 

Soybeans

·        
Soybeans are
mixed (bull spreading) with the front months higher from follow through buying in soybean meal. Soybean oil is moderately lower (product spreading). WTI crude oil is higher.

·        
China in their monthly update estimated 2023 soybean production at 21.46 million tons, up from 20.29 million previous, and imports for new-crop at 94.22 million tons, down from 2022-23 imports of 95.20 million tons. China new-crop
vegetable oil imports are expected to be steady at 8.43 million tons.

·        
A Reuters story noted China is increasing the rate to inspect soybean imports which is causing offloading delays. China introduced new procedures for soybean inspections last month. This has increased the cash price of soybean
meal. “About 30 vessels carrying about 1.8 million tonnes of soybeans are currently waiting at anchorage off ports.”

·        
India’s palm oil imports in April fell about 30% from the previous month to 510,094 tons. Soybean oil rose 1.4% to 262,455 tons sunflower oil were up about 68% at 249,122 tons, according to the Solvent Extractors’ Association
of India (SEA). Overall, India vegetable oil imports fell 10.4% to 1.05 million tons.

·        
Egypt’s GASC bought 12,000 tons of soybean oil ($1025/ton c&f) and 22,000 tons of sunflower oil ($950/ton c&f). They are the lowest prices paid by the state buyer in at least the past two and a half years, according to Agricensus
data.

·        
Third month Malaysian palm oil futures increased 45 ringgit to 3648, and cash increased $5.00 to $877.50/ton.

·        
China May soybean futures were up 2.0%, meal up 1.1%, SBO down 0.8% and palm oil futures off 1.7%.

·        
Nearby Rotterdam vegetable oils were unchanged to 5 euros lower from this time yesterday morning and meal 10-17 euros higher.

·        
Offshore values were leading SBO higher by about 71 points this morning (34 higher for the week to date) and meal $2.40 short ton higher $0.80 higher for the week).

·        
A Reuters trade estimate for US 2023-24 soybean production is 4.494 billion, up 218 million from a year ago. World soybean stocks were projected at 108.1 million tons, up 9 million from USDA’s current 2022-23 estimate. 

 

Export
Developments

• Egypt’s
  GASC bought 12,000 tons of soybean oil ($1025/ton c&f) and 22,000 tons of sunflower oil ($950/ton c&f), for June 25 through July 10 arrival. They were 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

·        
Chicago wheat futures are higher on light technical buying and positioning ahead of the USDA report that is expected to show a reduction in 2023-24 global stocks from the current season.

·        
September Paris wheat futures earlier were up 1.00 euro at 233.25 euros.  

·        
French soft wheat conditions as of May 8 were up one point to 94% and compares to 82% a year earlier.

·        
Rain will fall across West Texas through the weekend, improving topsoil moisture but don’t discount local flooding. The northern US Plains will trend wetter through the weekend.

·        
A Reuters trade estimate for 2023 US winter wheat production is 1.789 billion bushels, 139 million above 2022-23.

·        
(Bloomberg) — Ukraine has exported 43.3m tons of grain so far in the season that began last July (down 6.5 percent from same period year ago)

• 14.9m
  tons of wheat, down 20% y/y
• 25.6m
  tons of corn, up 18% y/y
• 2.5m
  tons of barley, down 56% y/y

·        
President Vladimir Putin could speak with Turkey’s President “at short notice if needed” regarding the extension of the Ukraine Black Sea grain deal, according to a Reuters story. Russia again stated it will not extend the deal
beyond May 18 unless a list of demands is met.

·        
Russia’s export tax on wheat for the May 17-23 period is expected to drop a large 10.4% from the previous week.

 

 

Export
Developments.

·        
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.

 

 

Rice/Other

·        
None reported