FI Morning Grain Comments 05/16/23

PDF attached

Grains
and the soybean complex are lower. China tossed a wrench into the short-term agriculture bull machine by reporting poor April economic data that rippled into their currency valuation against the USD. Some are doubting the covid recovery has positively impacted
business efforts after a Monday report that showed a rebound in energy consumption by that country. China industrial production for April rose by 5.6% year-on-year, below 10.9% expected, and retail sales increased 18.4%, below 21% trade average. China stock
composites didn’t tank, a good sign, however, market sentiment remains frail, according to market reports.
The USD is 5 points lower, WTI crude oil 22 cents higher and US equity futures lower. US wheat conditions were unchanged after a second rainy week for the first month
of May for parts of the Great Plains, one point below expectations, while summer planting progress is moving along at a rapid pace for corn and soybeans across the US Midwest.

Fund
estimates as of May 15

Weather

A map of the united states

Description automatically generated with low confidence

World
Weather Inc.

WEATHER
TO WATCH

Frost
and Freezes in North America over the next week will have no permanent impact on crops

Ontario
and Quebec will be coldest Wednesday and again this weekend with lows in the 20s and 30s Fahrenheit
Parts
of Canada’s eastern Prairies will see frost and a few light freezes Thursday and Friday with no permanent impact on crops
Patches
of soft frost cannot be ruled out in North Dakota or northern Minnesota Friday either, although the impact will be minimal

Canada’s
Prairies may experience some increase in rainfall during the middle to latter part of next week, although confidence is low on how significant the moisture will be in the drought region

Any
rain would be welcome
Drought
remains serious in east-central and interior southern Alberta and western Saskatchewan with no rain and waves of heat likely in this first week of the outlook

U.S.
hard red winter wheat areas of Kansas, southeastern Colorado, the Texas Panhandle and Oklahoma will have a good chance for scattered showers and thunderstorms Thursday into Friday with a few showers beginning Wednesday night

Rainfall
of 0.30 to 0.90 inch and local totals over 1.25 inches will be possible
Scattered
showers and thunderstorms may resume during the weekend and continue periodically through the last days of May

Northern
U.S. Plains, Canada’s Prairies and much of the northwestern U.S. Corn and Soybean Belt will be drier biased over this first week of the outlook
U.S.
crop weather in general over the next ten days to two weeks will be favorably mixed providing time for planting and moisture for emergence and establishment

This
includes most of the Midwest, the Great Plains, Delta and southeastern states

U.S.
temperatures in the coming week will be very warm in the far western states and near normal in much of the central and east, although the southwestern Plains will be cooler biased for a while

Warmer
biased temperatures are likely many key crop areas except in the southwestern Plains next week

Argentina
weather is still expected to slowly become more active with waves of timely rain to bolster planting moisture in winter wheat areas

The
precipitation will slow late summer crop harvesting, but there will be no quality issues

Brazil’s
center west and center south crop areas will continue seasonably dry biased over the next ten days

Safrinha
crops will continue to develop well, although some rain may be needed soon in Mato Grosso and Goias where the topsoil is becoming quite dry and subsoil moisture is in decline

Early
planted corn and cotton has performed extremely well

Late
planted Safrinha corn in Sao Paulo, Parana and Mato Grosso do Sul is developing well with little change due to adequate soil moisture

Portions
of Rio Grande do Sul and Paraguay will get rain next week for late season crops and winter wheat
Southern
Europe will be plenty wet for a while keeping field progress running a little slow, but long term soil conditions will be good for winter and spring crops
Northern
Europe precipitation will be limited over the next ten days and temperatures will trend a little warmer over time

The
environment will be good for fieldwork and crop development

Russia,
Ukraine, Belarus and Baltic States will see a good mix of weather during the next ten days favoring fieldwork and normal crop development
A
few areas in northern Kazakhstan and neighboring areas of Russia would still benefit from greater rain, although recent rain was welcome

The
region should be closely monitored for drying later this year

China’s
weather remains favorably mixed in the Northeast, North China Plain and Yellow River Basin

Some
drought conditions remain in Inner Mongolia and northern Hebei
Excessive
soil moisture is expected again in areas near and south of the Yangtze River over the next couple of weeks

The
precipitation may disrupt rapeseed maturation and harvesting
Some
rapeseed quality declines are possible

India’s
weather will be normal for this time of year over the balance of this month
Thailand,
Vietnam, Laos and Cambodia will experience net drying over the next several days and then rain will resume again during the weekend and next week

The
region would benefit from greater precipitation

Indonesia
and Malaysia rainfall is becoming more erratic and next week’s precipitation may be light enough to induce net drying

Crop
moisture should remain favorable for a while, but developing El Nino conditions will impact these nations soon with lighter than usual rainfall and net drying

Philippines
weather will be favorably mixed for a while, but a tropical disturbance near the west coast of Luzon may eventually enhance rainfall across the island while other areas experience a more favorable mix of rain and sunshine
Australia
rainfall will be mostly confined to coastal areas for the next ten days

Planting
will proceed, but some greater precipitation may be needed in the next few weeks to induce the best possible stands

Australia
rainfall Monday in southeastern Queensland and far northeastern New South Wales was good for future wheat and barley emergence and establishment

Fieldwork
was disrupted in the region briefly, but should accelerate as net drying develops

South
Africa weather will be trending drier in the coming week to ten days after rain fell Monday and will linger in the northeast today

Summer
crop harvesting and winter crop planting will advance swiftly in the next two weeks with some need for greater rain in western wheat areas

West
Africa weather continues to generate timely rainfall for coffee, cocoa, sugarcane and rice

Rainfall
in the most recent 30 days was a little lighter than usual in southeastern Nigeria and western Cameroon as well as from northern Ivory Coast into southwestern Burkina Faso impacting cotton areas
Crop
conditions should remain mostly good, although the drier areas would benefit from greater rain

East-central
Africa rainfall has been favorable for coffee, cocoa and other crops in recent weeks with little change likely
Central
Asia cotton and other crop weather has been relatively good this year with adequate irrigation water and some timely rainfall reported

The
favorable environment will continue

Mexico
rainfall is expected to steadily increase over the next ten days improving soil moisture for future planting of summer crops

Western
Mexico will continue quite dry

Central
America rainfall is expected to be erratic, although mostly favorable during the next two weeks
Tropical
Cyclone Fabien in the India Ocean poses no threat to land
Today’s
Southern Oscillation Index was -6.24 and it should move erratically lower over the next several days

Source:
World Weather, INC.

Bloomberg
Ag calendar

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

OI
per below has been a little off from CBOT’s preliminary report. Link to actual
https://www.cmegroup.com/daily_bulletin/current/Section03_Agricultural_Futures.pdf

USDA
inspections versus Reuters trade range

Wheat
242,269 versus 125000-350000 range

Corn
1,173,783 versus 700000-1200000 range

Soybeans
147,897 versus 150000-500000 range

Macros

US
Plans To Buy 3 Million Barrels Of Oil For Emergency Reserve

China
Industrial Production (Y/Y) Apr: 5.6% (est 10.9%; prev 3.9%)

–
Industrial Production YTD (Y/Y) Apr: 3.6% (est 4.9%; prev 3.0%)

China
Retail Sales (Y/Y) Apr: 18.4% (est 21.9%; prev 10.6%)

–
Retail Sales YTD (Y/Y) Apr: 8.5% (est 8.2%; prev 5.8%)

China
Fixed Assets Ex Rural YTD (Y/Y) Apr: 4.7% (est 5.7%; prev 5.1%)

–
Property Investment YTD (Y/Y) Apr: -6.2% (est -5.7%; prev -5.8%)

–
Residential Property Sales YTD (Y/Y) Apr: 11.8% (prev 7.1%)

China
Surveyed Jobless Rate Apr: 5.2% (est 5.3%; prev 5.3%)

China
NBS Economy Report, April 2023 – Full Report

China
Jan-Apr Crude Oil Throughput Up 8.3% Y/Y – Stats Bureau

–
April Crude Oil Throughput Up 18.9% Y/Y

–
April Crude Oil Production Up 1.4% Y/Y

–
Jan-Apr Crude Oil Production Up 1.8% Y/Y

POLL:
ECB To Hike Deposit Rate To 3.75% By End-Q3 Said 37 Of 62 Economists, 20 Said 3.50%, 5 Said 4.00% – RTRS

–
To Hike Deposit Rate By 25 Bps On June 15 To 3.50%, Said All 62 Economists

Corn

·
CBOT corn futures
are lower following wheat, soybeans, US energy markets, and rapid US corn planting progress.

·
The Ukrainian Grain Association (UGA) estimated a 30 percent drop in Ukraine corn exports for 2023-24 to 19 million tons, taking into account a predicted 21.1 million ton harvest, a drop from 27.3 million from last year. The corn
area was already forecast to drop, so this is not surprising.

·
There were no major tender announcements.

·
USDA US corn export inspections as of May 11, 2023, were 1,173,783 tons, within a range of trade expectations, above 974,450 tons previous week and compares to 1,060,575 tons year ago. Major countries included China for 471,866
tons, Mexico for 352,694 tons, and Japan for 98,701 tons.

·
(Bloomberg) — Exports of most Russian fertilizers are climbing back to pre-war levels just as President Vladimir Putin’s negotiators make removing obstacles to the trade a key priority in talks to extend a Black Sea grain-passage
deal this week.

·
France corn plantings can end up 7.6 percent down from 2022 due to ongoing drought, to 1.25 million hectares.

Export
developments.

None
reported

Soybeans

·
Soybeans are
lower over China demand concerns, spilling over into the product markets. Malaysian palm oil closed near a two week low.

US
April NOPA crush came in 900,000 bushels below expectations, was off 3.7% from March, on a daily adjusted basis, and up 2.0% from April 2022. April crush was a record for the month. The soybean oil yield was also a record for the month at 11.94 pounds per
bushel, up from 11.85 for March. This boosted production to 2.068 billion pounds, 2.5% above April 2022. Soybean oil stocks of 1.957 billion pounds, up from 1.851 billion at the end of March and 129 million above the average trade estimate. The soybean meal
yield slipped to 47.60 from 47.70 during March.

·
USDA US soybean export inspections as of May 11, 2023, were 147,897 tons, below a range of trade expectations, below 397,791 tons previous week and compares to 804,142 tons year ago. Major countries included Mexico for 56,426
tons, Indonesia for 23,535 tons, and Philippines for 11,622 tons.

·
Third month (Aug) Malaysia palm futures decreased 54 ringgit to 3557, and Aug. cash decreased $10.00 to $845.00/ton.

·
China May soybean futures were down 0.6%, meal up 1.2%, SBO down 0.1% and palm oil futures up 0.1%.

·
Nearby Rotterdam vegetable oils were unchanged to 10 euros lower from this time yesterday morning and meal 1.00-7.00 euros lower.

·
Offshore values were leading SBO higher by about 116 points this morning and meal $1.70 short ton higher.

Export
Developments

Today
the USDA seeks 120 tons of packaged vegetable oil for various export programs for June 16-July 5 shipment.

Wheat

·
Wheat futures are lower from light profit taking following poor Chinese economic data influencing outside commodity/related markets.

·
The 2023 Hard Winter Wheat Quality Tour will start to give some insight on the winter wheat crop today, lasting through May 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.

·
(Reuters) – The Kremlin said on Tuesday that questions still remained about Russia’s part of the Black Sea grain deal, and that it would have to make a decision about whether to renew it.

·
USDA US all-wheat export inspections as of May 11, 2023, were 242,269 tons, within a range of trade expectations, above 214,538 tons previous week and compares to 348,937 tons year ago. Major countries included Mexico for 49,549
tons, Japan for 48,267 tons, and Philippines for 47,259 tons.

·
This upcoming 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.

·
Indian monsoons may start a little later than average, according to the local state weather office, starting June 4, +/- 4 days. What matters is how much the reservoirs and farmland absurd by early September.