FI Morning Grain Comments 05/18/22

PDF attached

 

 

Good
morning.

 

USDA:
Private exporters reported sales of 229,200 metric tons of soybeans received during the reporting period for delivery to unknown destinations.  Of the total, 10,200 metric tons is for delivery during the 2021/2022 marketing year and 219,000 metric tons is
for delivery during the  2022/2023 marketing year.

 

The
US Great Plains weather forecast is wetter next week bias the central and southern Great Plains. Day 1 of the Wheat Quality Council 2022 Hard Red Winter tour pegged the average yield for the  northern portion of KS at 39.5 bushels per acre, down from 59.2
bushels in 2021. Two consultancies estimated a large new-crop Russian wheat crop, both above USDA’s May estimate. SovEcon pegged Russia to produce 88.6 million tons of wheat and IKAR at 85.0 million tons. This is above USDA’s 80 million ton estimate.
US
corn futures are lower, tracking wheat futures. CBOT soybeans are higher led by old crop, meal mixed with bull spreading and soybean oil lower. The USD was 10 points higher, WTI higher ($113.98) and US equities lower.

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 18, 2022

• No
  crop damaging cold occurred this morning in grain, coffee, citrus or sugarcane areas of Brazil, but temperatures were cool and will be that way again over the next three days
• Dryness
  remains in Mato Grosso and Goias Brazil keeping Safrinha corn stressed
• Argentina
  will be dry for the next ten days, but the GFS model has suggested rain may evolve in Days 11-15 in some of the wheat production region
• Australia’s
  outlook for next week looks very good for rain in key winter wheat, barley and canola areas that should be good for planting 
• Europe
  weather continues to look less threatening in Germany and northeastern France, but other areas in the continent could still dry out raising some concern over winter and spring crop development
• East-central
  China will continue to see limited rainfall for the next ten days raising some concern over North China Plain weather
• The
  Southwest Monsoon is expected to evolve aggressively this weekend through the end of this month in southern India, southern Myanmar, across portions of mainland Southeast Asia and into northwestern parts of the Philippines where some flooding will be possible
  in time
• U.S.
  weather will be well mixed in the Midwest, but still a little too wet in the northern Plains
• West
  Texas rainfall will be greatest early next week, but not necessarily in the high Plains region where dryness may continue
• Rain
  frequency and mild to cool temperatures will remain a concern for Canada’s eastern Prairies and a part of the U.S. Northern Plains while some beneficial rain will fall in the southwestern Canadian Prairies 

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

 

 

 

 

China
selected April commodity imports

Source:
Reuters and FI

 

Macros

US
Housing Starts Apr: 1724K (est 1756K; prev 1793K)

US
Housing Starts (M/M) Apr: -0.2% (est -2.1%; prev 0.3%)

US
Building Permits Apr: 1819K (est 1814K; prev 1873K; prevR 1870K)

US
Building Permits (M/M) Apr: -3.2% (est -3.0%; prev 0.4%; prevR 0.3%)

Canadian
CPI NSA (M/M) Apr: 0.6% (est 0.5%; prev 1.4%)

Canadian
CPI (Y/Y) Apr: 6.8% (est 6.7%; prev 6.7%)

Canadian
CPI Core Common (Y/Y) Apr: 3.2% (est 2.9%; prev 2.8%; prevR 3.0%)

Canadian
CPI Core Median (Y/Y) Apr: 4.4% (est 3.9%; prev 3.8%; prevR 4.8%)

Canadian
CPI Core Trim (Y/Y) Apr: 5.1% (est 4.7%; prev 4.7%; prevR 4.8%)

 

 

Corn

·        
Corn is lower tracking weakness in wheat.

·        
The Midwest is seeing a current rain even that will briefly slow corn planting progress. Brazil will still see frost events later this week across southern Brazil where some of the corn is still pollinating.

·        
China imported 2.21 million tons of corn during the month of April, bringing YTD imports to 9.31 million tons, 8.5% above year earlier.

·        
ANEC – Brazil corn export for May are seen at 1.264 million tons from 927,209 tons previous.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 4,000 barrels to 995 thousand (976-1001 range) from the previous week and stocks down 77,000 barrels to 24.063 million.

·        
Canada  – Manitoba Crop Report

“Provincial
seeding progress sits at about 4% completion, behind the 5-year average of 50% for Week 19 (Figure 1). Pockets of the Central and Southwest regions are further ahead, while other parts of the Interlake and Northwest region, and the Red River Valley nearest
the river remain underwater.”

Corn
has begun in the Red River Valley, with 10 percent of the crop sowed.

 

Export
developments.

·        
Taiwan’s MFIG bought 55,000 tons of South African corn at 248.39 cents over the December contract for shipment between Aug. 16 and Sept. 4.

 

 

 

Soybeans

·        
Soybeans are seeing follow through buying in the nearby contracts. Same with soybean meal despite lower corn. Bull spreading is a feature. Soybean oil is lower despite a higher trade in WTI although offshore values are leading
SBO lower this morning.

·        
USDA announced private exporters reported sales of 229,200 tons of soybeans received during the reporting period to unknown destinations.  (10,200 tons old crop and 219,000 new).

·        
Covid restrictions are starting to loosen up in China.

·        
India April oilmeal exports increased 38% from last month to 333,972 tons from 242,043 tons from March, and up from 303,705 tons in April last year.  Rapeseed meal shipments were 229,207 tons in April compared to 93,984 tons in
March. 

·        
Argentina grain and financial markets are closed Wednesday for a local holiday.

·        
ANEC – Brazil soybean exports for May are seen at 11.483 million tons from 10.615 previous.  Brazil soybean meal exports are seen at 2.009 million tons from 1.919 previous. 

·        
Offshore values were leading SBO 104 points lower and meal $1.440 short ton higher. 

·        
Rotterdam vegetable oil prices were 10-13 euros lower from this time yesterday morning and meal unchanged to mixed.  

·        
No word on Indonesia lifting their palm oil export ban.

·        
Malaysian palm oil ended 18 ringgit per ton higher at 6,134 and cash was up $5/ton at $1,480 ton.

·        
China September soybean futures were unchanged, meal up 0.4%, SBO 0.1% lower and China palm oil up 0.2%.

 

Export
Developments

·        
Private exporters reported sales of 229,200 metric tons of soybeans received during the reporting period for delivery to unknown destinations.  Of the total, 10,200 metric tons is for delivery during the 2021/2022 marketing year
and 219,000 metric tons is for delivery during the  2022/2023 marketing year.

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

 

U
of I – Production from Double-Crop Soybean Rotations

Schnitkey,
G., C. Zulauf, J. Coppess, N. Paulson and J. Blatz. “Production from Double-Crop Soybean Rotations.”
farmdoc daily (12):71, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 17, 2022.

https://farmdocdaily.illinois.edu/2022/05/production-from-double-crop-soybean-rotations.html

 

Wheat

·        
Wheat futures are lower after a 2-day rally. All three US July contracts hit highs on Tuesday.

·        
The US Great Plains weather forecast is wetter next week bias the central and southern Great Plains. These rains are too late for some of the winter wheat crop.

·        
Two consultancies estimated a large new-crop Russian wheat crop, both above USDA’s May estimate. SovEcon pegged Russia to produce 88.6 million tons of wheat and IKAR at 85.0 million tons. This is above USDA’s 80 million ton estimate.
Russian wheat exports could exceed USDA’s current 39 million ton estimate. IKAR is at 39 million tons for exports. SovEcon shows Russia produced 76 million tons of wheat in 2021-22 (USDA 75.16).

·        
Day 1 of the Wheat Quality Council 2022 Hard Red Winter Wheat Tour pegged the average yield for the  northern portion at 39.5 bushels per acre, down from 59.2 bushels in 2021 and compares to a five year average of 46.9 bushels
per acre. There was no tour in 2021. (#wheattour22 on Twitter).

·        
Separately, CO was estimated at 28.6 bu/ac and production at 40.1 million bushels (USDA @ 49.6 million), and NE was privately projected at 36.9 million bushels (no yield provided).

·        
September Paris wheat was down 3.25 at 435 euros a ton.

·        
Iraq said their wheat reserves are sufficient for 4 months.

 

Export
Developments.

·        
Japan passed on 70,000 tons of feed wheat and bought only 440 tons of barley (40k sought) for arrival by October 27.

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

·        
Bangladesh seeks 50,000 tons of wheat on May 29 for shipment within 40 days.

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

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

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

 

Rice/Other

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