FI Morning Grain Comments 05/15/23

PDF attached

 

Good
morning. 

 

USDA:
Private exporters reported sales of 100,000 metric tons of soybean meal for delivery to Poland during the 2022/2023 marketing year.

 

US
debt ceiling talks are progressing, and more meeting will take place this week. The USD is 24 points lower, WTI 33 cents higher and US equity futures higher.

 

US
weather was good over the weekend, but some drought areas of the Great Plains missed out of on rain (KS). Rain fell the most in southwestern Minnesota, northern Iowa, northern Nebraska, central Oklahoma and central and southern Texas. The European model and
lessor extend GFS model, removed rain from the West Texas for this week. On Friday there might be some light frosts across the Dakota’s.  All US. crop areas will get rain at one time or another in the next ten days.
Canada’s
western Saskatchewan and east-central Alberta will remain mostly dry over the next 7-10 days. Brazil’s center west and center south crop areas will remain mostly dry. Australia will see net drying
this week.

 

Grains
are higher led by KC wheat after USDA reported a very large abandonment for the US crop on Friday. The 2023 Hard Winter Wheat Quality Tour starts today (May 15-18). The tour will cover Kansas and parts of Oklahoma. Soybeans are higher led by soybean meal from
ongoing Argentina crop concerns. Meal is gaining over soybean oil. NOPA crush is due out today and the trade looks for 174.2 million bushels, up from 169.8 million year ago. Malaysia palm futures decreased 32 ringgit to 3616, and cash decreased $12.50 to $865.00/ton.
Offshore values were leading SBO higher by about 45 points this morning and meal $1.40 short ton higher.

 

 

Fund
estimates as of May 12

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 15, 2023

• Rain
  was removed for West Texas this week as the European model which was so insistent that rain was going to fall heavily in this coming week backed off the outlook during the weekend. The GFS model also backed out of some of its rain predicted
• Opportunities
  for rain will return to the southwestern Plains late this week and next week
  
• Weekend
  precipitation was heavy in southwestern Minnesota, northern Iowa, northern Nebraska, central Oklahoma and central and southern Texas; many areas that had been a little too dry got relief
• Kansas
  was left dry during the weekend, but should get rain this week – first in the east early this week and then in the west late this week and into the weekend
• Canada’s
  Prairies in western Saskatchewan and east-central Alberta will remain in a drought for the next ten days with little to no rain and warm temperatures prevailing
• Other
  areas in the Prairies will also dry down, but soil moisture is better in those areas
• There
  is potential for frost and a light freeze or two in the eastern Canada Prairies late this week and frost would be possible in a few counties in North Dakota and northern Minnesota, although the impact should be low in all areas
• All
  U.S. crop areas will get rain at one time or another in the next ten days supporting early season crop development and yet enough dry weather will support planting at times
• Argentina
  wheat areas will get rain periodically starting in the second half of this week and continuing through next week
• Brazil’s
  center west and center south crop areas will be dry biased for the next ten days which is normal for this time of year
• South-central
  Europe will continue to receive too much rain too often during the next week to ten days
• Australia
  wheat, barley and canola areas will be left drier than usual in the next ten days
• Tropical
  Cyclone Mocha moved into northwestern Myanmar Sunday morning producing 122 mph wind speeds, torrential rain and flooding

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

 

 

 

 

CFTC
Commitment of Traders

No
surprises

 

 

 

Macros

US
Empire Manufacturing May: -31.8 (est -4.0; prev 10.8)

Canadian
Housing Starts Apr: 261.6K (est 220.0K; prev 213.9K)

Canadian
Wholesale Trade Sales (M/M) Mar: -0.1% (est -0.4%; prevR -1.4%)

 

Corn

·        
CBOT corn futures
are higher in large part to higher wheat futures. Lack of producer selling keeping WBC basis at a high level is supporting the July/September spread.

·        
There were no major tender announcements over the weekend.

·        
Some analysts are looking for additional corn cancellations by China as they may shop for additional Brazilian corn.

·        
Ukraine exported 2.5 million tons of agricultural goods during the month of April through the Black Sea export corridor. About 1.4 million tons of goods were export through the Danube river ports.

·        
Ukraine exported 43.6MMT tons of grain as of May 15, down from 46.3MMT for the same period year ago.

 

Export
developments.

• None
  reported

 

Soybeans

·        
Soybeans are
higher form ongoing crop concerns, higher wheat, recovery in WTI crude oil, and higher soybean meal. Soybean oil is catching a bid but losing ground against soybean meal. Palm oil futures closed lower. Brazil soybean basis was unchanged to firmer this morning
by 10 cents.

• Under
  the 24-hour reporting system, private exporters reported sales of 100,000 tons of soybean meal for delivery to Poland during the 2022-23 marketing year. Last time they bought meal under the 24-H system was August 2022.
  

·        
NOPA crush is due out today and the trade looks for 174.2 million bushels, up from 169.8 million year ago. Oil stocks are expected to stay relatively high at 1.950BB lbs. as the yield at 11.83 remains consistent.

·        
European Union countries will soon approve a new renewable energy target of 42.5% by 2030, a final version of the law showed. A review will be held Wednesday and if approved, will be sent to the European Parliament at the end
of March. The current target is 32 percent by 2030. Transports will be set at 29%. For industry, the target may be as high as 60 percent. Hydrogen produced by nuclear maybe included.

·        
Cargo surveyor ITS reported Malaysian May 1-15 palm oil exports up 4.0 percent to 557,090 tons from 535,905 tons during the April 1-10 period. AmSpec reported a 5.2% increase to 523,042 tons from 497,353 tons previous period month
earlier.

·        
Malaysian palm oil futures fell Monday on talk of rising Indonesia palm oil production, recent decline in energy markets, and expectations for Indonesia to increase exports after that country Indonesia set its crude palm oil reference
price at $893.23 per ton for May 16-31, lower than the May 1-15 period of $955.53/ton (export tax $74 from $95/ton).

·        
Third month (July) Malaysia palm futures decreased 32 ringgit to 3616, and cash decreased $12.50 to $865.00/ton.

·        
China May soybean futures were up 1.2%, meal up 0.4%, SBO down 0.2% and palm oil futures off 0.2%.

·        
Nearby Rotterdam vegetable oils were down 5-10 euros from this time Friday morning and meal mixed (nearby higher and Oct/Dec lower).

·        
Offshore values were leading SBO higher by about 45 points this morning and meal $1.40 short ton higher.

 

 

Export
Developments

• Under
  the 24-hour reporting system, private exporters reported sales of 100,000 tons of soybean meal for delivery to Poland during the 2022-23 marketing year.
• USDA
  seeks 120 tons of packaged vegetable oil for various export programs on May 16 for June 16-July 5 shipment.
  

 

 

Wheat

·        
Wheat futures are higher on follow through buying after USDA reported a very large abandonment for the US crop on Friday. The USDA issued winter wheat harvested area, and after breaking down the area by class, HRW abandonment
could end at 38.3 percent, highest in our recorded history going back to 1983. Bloomberg noted all wheat abandonment is worst since 1917 with only 67 percent of area expected to be harvested. Look for US producers to switch to other crops this spring. This
means US corn, hay, barley and sorghum acres could be up from March Intentions.

·        
The 2023 Hard Winter Wheat Quality Tour starts today (May 15-18). The tour will cover Kansas and parts of Oklahoma. KS good/excellent ratings for winter wheat were only 11 percent as of the first week of May. Field reports during
the tour could add more fuel to the fire.

·        
On Friday there might be some light frosts across the Dakota’s.

·        
Argentina has an opportunity for rain across their wheat production areas second half of this week into next week. This will be important to monitor as wheat plantings are projected to be down from earlier estimates from ongoing
drought conditions. 

·        
After some positive news developed late last week over the Black Sea grain deal, a Ukraine foreign official told reporters today that there were no more talks planned on the Black Sea grain deal this week. The deal was thought
to be extended for 60 days. It expires May 18.

·        
September Paris wheat futures earlier were up 2.00 euros at 235.00 euros. 

·        
Egypt said they have enough wheat to last 5 months after the government bought 2 million tons of local wheat. 

·        
Australia’s Minister for Trade and Tourism said he was “pleased” with the recent talks with China during a visit in Beijing.

 

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

·        
Last week China sold 52,913 tons of rice at auction or 5.85 percent of the total offered at an average price of 2,534 yuan per ton.

·        
Egypt said they have enough rice to last 3.1 months, sugar for 7 months and vegetable oils for 4 months.

·        
Bloomberg – Philippines’ Marcos Approves Sugar Import of Up to 150,000