FI Morning Grain Comments 05/17/22

PDF attached

 

Good
morning.

 

Turnaround
Tuesday. Wheat futures saw a wide trading range overnight. India announced they will allow wheat shipments awaiting customs clearance, freeing up some of the potential 1.8 million tons of wheat at ports that could have stuck due to the export ban. A total
of 2.2 million tons could be shipped over the near term. The USD is sharply lower and that could limit losses. WTI is higher and US equities higher. The soybean complex is mixed. Corn is lower following wheat. Corn is lower in the nearby positions. Japan seeks
174,744 tons of food wheat from the US, Canada and Australia later this week. Jordan passed on 120,000 tons of wheat. Winter wheat conditions declined 2 points to 27 percent for the combined good and excellent conditions and were three points below expectations.
US spring wheat plantings were 4 points below expectations, corn at expectations and soybeans one point above expectations.

 

CME
price limits https://www.cmegroup.com/trading/price-limits.html

MGEX
expanded (90 cents) for Hard Red Spring Wheat.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 17, 2022

• Frost
  is still possible in southern Brazil late this week and into the weekend, but only a very small part of Safrinha corn country will be impacted and that impact is expected to be low
• No
  damaging cold will occur in Brazil coffee, citrus or sugarcane areas despite temperatures getting very near to the frost threshold late this week
• Some
  rain is still being advertised for parts of Europe during the coming ten days which should help curb a serious bout of crop moisture stress from occurring, but the distribution of that rain will have to be closely monitored
• Eastern
  China’s dry biased region is expecting to remain in a drying mode for at least ten days, but today’s forecast model runs offered a little relief toward the end of this month in Hebei, Liaoning and Shandong while areas to the west were left in a net drying
  mode
• India’s
  excessive heat will continue in the north for a while longer
• Australia’s
  rainfall is expected to be sporadic for a while and a genera boost in rain will soon be needed across the south to suffice the needs for autumn and winter crop planting
• Canada’s
  southern Prairies and a part of the northern U.S. Plains will get some rain Thursday and Friday as colder air arrives, but no serious drought busting rain is expected
  
• once
  the colder air is in place in Canada’s Prairies there will be an opportunity for some drier biased conditions for a little while which may eventually improve spring planting conditions in eastern Saskatchewan and Manitoba, but this will be a slow process
• West
  Texas rain potentials may improve for late this weekend into early next week
  
• rain
  in parts of the region overnight were not very significant
• A
  good mix of rain and sunshine is expected in the U.S. Midwest Corn and Soybean Belt supporting planting and early crop development, although drier weather would be great for promoting faster planting
• Russia
  will continue plenty moist over the next two weeks
• Argentina
  will remain dry bias and in need of rain. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Tuesday,
May 17:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• GrainCom
  conference in Geneva, May 17-19

Wednesday,
May 18:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• China’s
  second batch of April trade data, incl. corn, wheat, sugar and pork imports
• USDA
  total milk production, 3pm
• HOLIDAY:
  Argentina

Thursday,
May 19:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  red meat production, 3pm
• International
  Grains Council’s monthly report

Friday,
May 20:

• 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
• China’s
  third batch of April trade data, including soy, corn and pork imports by country
• FranceAgriMer
  weekly update on crop conditions
• Malaysia’s
  May 1-20 palm oil export data
• U.S.
  cattle on feed
• EARNINGS:
  IOI Corp

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
348,048                 versus   100000-400000  range

Corn                     
1,036,549             versus   750000-1750000                range

Soybeans           
784,187                 versus   250000-800000  range

 

Soybean
and Corn Advisor

2022
Brazil Corn Estimate Unchanged at 107.0 Million Tons

2022
Brazil Soybean Estimate Unchanged at 122.0 Million Tons

2022
Argentina Soybean Estimate Unchanged at 40.0 Million Tons

2021/22
Argentina Corn Estimate Unchanged at 49.0 Million Tons

 

CME
price limits

https://www.cmegroup.com/trading/price-limits.html

 

Macros

US
TO EXTEND COVID PUBLIC HEALTH EMERGENCY BEYOND JULY

US
Retail Sales Advance (M/M) Apr: 0.9% (est 1.0%; prev 0.5%; prevR 1.4%)

US
Retail Sales Ex Auto (M/M) Apr: 0.6% (est 0.4%; prev 1.1%; prevR 2.1%)

US
Retail Sales Ex Auto And Gas Apr: 1.0% (est 0.7%; prev 0.2%; prevR 1.2%)

US
Retail Sales Control Group Apr: 1.0% (est 0.7%; prev -0.1%; prevR 1.1%)

 

 

Corn

·        
Nearby corn are
futures are lower tracking weakness in wheat. Back months are higher. Inflation concerns are supporting corn. US planting progress improved.

·        
Frost is still expected later this week across parts of southern Brazil.

·        
US corn plantings were 49 percent, as expected.  This compares to 78 year ago and 67 average. 

·        
USDA announced $6 billion in emergency relief payments for US producers impacted by natural disasters in 2020 and 2021.

 

U
of I – Early Export Sales Commitments and New-Crop Balance Sheets for Corn, Soybeans, and Wheat

Janzen,
J. “Early Export Sales Commitments and New-Crop Balance Sheets for Corn, Soybeans, and Wheat.”
farmdoc
daily
(12):70, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 16, 2022.

https://farmdocdaily.illinois.edu/2022/05/early-export-sales-commitments-and-new-crop-balance-sheets-for-corn-soybeans-and-wheat.html

 

Export
developments.

·        
Taiwan’s MFIG seeks up to 65,000 tons of corn from the US and/or SA on May 18 for August shipment.

 

 

Soybeans

·        
The soybean complex is mixed. Outside related markets are lending some strength. 

·        
US soybean plantings were 30 percent complete, 1 point above expectations.  This compares to 58 percent year ago, 58 year ago and 39 average. 

·        
US weather calls for rain this week that could slow US Midwest plantings, but fieldwork should still get done.

·        
Offshore values are leading SBO 88 points higher and meal $2.80 short ton higher. 

·        
Rotterdam meal was mixed from this time yesterday morning and vegetable oils unchanged to 20 euros lower. 

·        
Some traders are looking for Indonesia to soon lift their palm oil export ban. Indonesian farmer protests against the policy have increased across the country. Some mills are slowing or stopped buying palm fruit.

·        
AmSpec reported Malaysian palm oil exports during the May 1-15 period at 563,633 tons, up from 436,548 tons during the same period month earlier.

·        
After a one day holiday, Malaysian palm oil ended 23 ringgit per ton lower at 6,116 and cash was down $25/ton at $1,475 ton.

·        
China September soybean futures were down 0.6%, meal up 0.5%, SBO 0.4% lower and China palm oil down 1.2%.

·        
NOPA reported the April US crush at 169.8 million bushels, 2.6 million bushels below an average trade guess of 172.4 million, down from 181.8 million during March and up from 160.3 million year ago. For the month of April, crush
was second largest, behind 171.8 million reported for April 2020. The daily crush rate fell 3.5% from March but is up 5.9% from April 2021. End of April soybean oil stocks were 1.814 billion pounds, 25 million pounds below the 1.839 billion average trade guess.
At 1.814 billion, stocks are lowest since November 2021, down from 1.908 billion at the end of March (down 93 million) and up from 1.702 billion year earlier (up 112 million). The April oil yield increased to 11.88 pounds per bushel from 11.83 for March. 
The meal yield was down from the previous month to 47.07 (47.24 March). 

 

 

Export
Developments

·        
China plans to sell another 500,000 tons of soybeans from reserves on May 20.

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

 

Wheat

·        
Wide trading ranges were posted in the US wheat markets overnight. Chicago July saw a 74.25 cent range and KC July 80.75 cent range. Futures are lower in part to profit taking but a large decline in the US dollar may limit losses.
Also planting progress is expected to remain slow across the US northern Great Plains.

·        
India announced they will allow wheat shipments awaiting customs clearance, freeing up some of the potential 1.8 million tons of wheat at ports that could have stuck due to the export ban. A total of 2.2 million tons could be
shipped over the near term. It’s unlikely the country will end up exporting the earlier projected 10 million tons of wheat during the April-February 2023 period. Traders have contracted to export 4.5 million tons so far in 2022-23, according to the food ministry
(Bloomberg). Yesterday India announced they will allow wheat shipments to Egypt, and this was backed up again overnight by several news outlets. Indian local wheat prices have dropped more than 4% since the ban was announced, according to Reuters.

·        
The Wheat Quality Council 2022 Hard Red Winter Wheat Tour will take place May 16-19 (#wheattour22 on Twitter).

·        
Matif wheat option volume on Monday was extremely heavy with 61844 lots trading hands. 

·        
September Paris wheat was down 7.00 euros earlier at 431.25.

·        
Reuters noted about 300,000 tons of wheat bought by Egypt is stranded in Ukraine.  It was for Feb/Mar delivery.

·        
Ukraine is looking to boost grain exports through Poland.

·        
US winter wheat ratings this afternoon of 27 percent good/excellent are worst since 1989 for this comparable week. They were also 3 points below expectations and compare to 48 percent year ago and 50 percent average.

·        
US spring wheat plantings were 39 percent, 4 points below expectations.  This compares to 83 percent year ago and 67 average. 

 

 

Export
Developments.

·        
Japan seeks 174,744 tons of food wheat from the US, Canada and Australia later this week.

·        
Jordan passed on 120,000 tons of wheat.

·        
Pakistan seeks 500,000 tons of wheat on May 25. Bulk shipment is sought to Pakistan in June to July 2022.

·        
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.

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

 

Rice/Other

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

·        
Egypt’s GASC seeks at least 25,000 tons of white rice for July and August arrival.