FI Morning Grain Comments 05/18/23

PDF attached

 

Good
morning. 

 

WTI
crude was 58 cents lower earlier and USD higher by about 44 points. US wheat and corn are lower on follow through selling after an agreement was reached to extend the Black Sea grain deal by 60 days. Russia said the deal was a “a qualified result.” The next
issue that will be worked on will be easing restrictions on Russia’s state agricultural bank, and lifting restrictions on agricultural machinery & parts, insurance, and reinsurance. Day 2 of the Kansas wheat crop tour showed the average yield at 27.5 bu/ac,
below 37 year ago. USDA is at 29.0 bu/ac for the entire state. Oil Share is seeing a reversal. Offshore values were leading SBO higher by about 57 points this morning and meal $0.60 short ton lower. Japan bought 113,555 tons of food wheat. Netherlands and
other EU countries are on holiday today for Ascension Day. Palm oil futures closed at 20-day low, down for the third consecutive session.

 

 

Fund
estimates as of May 17

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 18, 2023

• U.S.
  High Plains region will receive periodic rainfall through the next ten days from West Texas to western Nebraska
• Much
  of the moisture will come late for winter wheat, but it will be good for summer crops
• Favorable
  U.S. Midwest, Delta and southeastern states weather will continue over the next ten days favoring fieldwork and crop development
• Warming
  in late May and early June will accelerate drying rates in some areas and that should be monitored
• Canada’s
  drought area of east-central and interior southern Alberta and western Saskatchewan will get no significant relief for the next ten days
• Western
  and northern Alberta will receive heavy rainfall next week easing dryness in those areas, but the moisture should stay out of the drought region
• Argentina’s
  rain potential for late this week and next week is still very good and wheat planting should proceed normally
• No
  change in Brazil’s weather outlook was noted overnight with Safrinha crop areas drying down normally
• There
  is no risk of frost or freezes in the next two weeks in any grain, coffee or sugarcane production area
• China’s
  dryness in Inner Mongolia will remain in place with some potential expansion to the southwest into Shanxi over time, but for now only northern Hebei is included in the dry bias associated with the Inner Mongolia dryness
• Russia
  and Ukraine weather is still expected to be favorable over the next ten days to two weeks with timely rain expected
  
• Russia’s
  eastern New Lands and a part of northern Kazakhstan may dry down again as time moves along, though it will be gradual
• Thailand
  and immediate neighboring areas are back into a net drying mode for the next several days with rain resuming late in the weekend and especially next week
  
• Water
  supply is low and concern about El Nino reducing rainfall during the monsoon this year continues to be a key concern
• Indonesia
  and Malaysia rainfall and soil moisture are still supporting crops favorably
• Ontario
  and Quebec were impacted by some frost and freezes today, but permanent damage to wheat was not suspected and most of the corn and soybean crops are just beginning to be planted
• Frost
  is expected from western North Dakota to southwestern Saskatchewan, Canada tonight with a few light freezes expected as well; the impact on crops should be minimal
• Some
  frost and light freezes occurred this morning in interior eastern Alberta without permanently damaging crops

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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
Initial Jobless Claims May 13: 242K (est 251K; prev 264K)

US
Continuing Claims May 6: 1799K (est 1820K; prevR 1807K)

Fed
Swaps Upgrade June Rate-Hike Odds To About 40%

 

Corn

·        
CBOT corn futures
are lower on follow through selling with the 120-day extension of the grain deal.

·        
Bloomberg: LIVESTOCK SURVEY: US Cattle on Feed Placements Seen Falling 3.8%. April placements onto feedlots seen falling y/y to 1.75m head, according to a Bloomberg survey of ten analysts.

·        
Weekly US ethanol production increased 22,000 barrels and stocks fell 100,000.
For
comparison, a Bloomberg poll looked for production to be up 16,000 barrels  and stocks up 45,000 barrels.

·        
Bloomberg: China Seen Exporting ~7M Tons of Phosphate This Year: Mosaic CEO– Mosaic CEO Joc O’Rourke sees China exporting roughly 7M tons of phosphate fertilizer this year, up from 6M in 2022 as the Asian nation looks to balance
its goal of greater farming self-sufficiency with supporting its crop-nutrient industry. 

 

U
of I: Overview of the U.S. Renewable Fuel Standard

Gerveni,
M., T. Hubbs and S. Irwin. “Overview of the U.S. Renewable Fuel Standard.” farmdoc daily (13):90, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 17, 2023.

https://farmdocdaily.illinois.edu/2023/05/overview-of-the-us-renewable-fuel-standard.html

 

 

Export
developments.

• South
  Korea’s MFG group seeks 70,000 tons of corn on May 18 for arrival around October 20.
  

 

 

 

Soybeans

·        
Soybean
complex is again under pressure. Oil Share is seeing a reversal with July meal down about $6.10 and July SBO off 20 points. WTI crude was lower earlier and USD higher by about 44 points.

·        
Palm oil futures closed at 20-day low, down for the third consecutive session.

·        
Malaysia left its crude palm oil June export tax unchanged at 8% and raised its reference price to 4,144.31 ringgit ($934.46) per ton for June, from previous 4,063.58 ringgit ($916.25).

·        
Third month (Aug) Malaysia palm futures decreased 42 ringgit to 3392, and Aug. cash decreased $7.50 to $922.50/ton.

·        
China May soybean futures were down 0.5%, meal near unchanged, SBO down 0.3% and palm oil futures down 0.1%.

·        
Netherlands and other EU countries are on holiday today for Ascension Day.

·        
Offshore values were leading SBO higher by about 57 points this morning and meal $0.60 short ton lower.

 

Export
Developments

• None
  reported

 

Wheat

·        
US wheat and corn are lower on follow through selling after an agreement was reached to extend the Black Sea grain deal by 60 days.

·        
Russia said the deal was a “a qualified result.” The next issue that will be worked on will be easing restrictions on Russia’s state agricultural bank, and lifting restrictions on agricultural machinery & parts, insurance and
reinsurance.

·        
Russia sees 2023-24 grain exports at 50-55 million tons, down from 55-60 million tons for 2022-23. The 2023 wheat crop was seen at 78 million tons.

·        
A freight train carrying grain derailed in Crimea, blocking shipments of grain to Sevastopol along the Black Sea shoreline.

·        
September Paris wheat fell 3.25 euros to 222.25 per tons.

·        
Day 2 of the Kansas wheat crop tour showed the average yield at 27.5 bu/ac, below 37 year ago. USDA is at 29.0 bu/ac for the entire state.

·        
Iraq said wheat reserves stand at 6 months of supply.

 

Export
Developments.

·        
Japan bought 113,555 tons of food wheat. Original tender as follows.

 

Rice/Other

·        
None reported

 

 

USDA
export sales

Overall
export sales were poor for 2022-23 delivery. New-crop soybean sales were above expectations and within for all-wheat. 2022-23 soybean sales were only 17,000 tons while new-crop 663,800 tons (unknown destinations (390,000 MT) and China (187,000 MT). 202,500
tons of 2022-23 soybean meal sales included the Philippines and Columbia. Soybean oil sales were only 900 tons. Corn net sales reductions of 339,000 tons for 2022-23 was a marketing-year low. Increases primarily for Japan (35,500 MT), Colombia (18,900 MT),
Guatemala (15,400 MT),  and the Netherlands (15,000 MT), were more than offset by reductions primarily for China (271,200 MT), unknown destinations (85,600 MT), and Mexico (30,800 MT). All-wheat sales posted a net reduction of 42,100 tons and new crop of 336,800
tons were primarily for the Philippines, Mexico and unknown. Sorghum sales were 3,700 tons and pork at 31,900 tons (China 5,200). 

 

 

 

Export
Sales Highlights 

This summary
is based on reports from exporters for the period May 5-11, 2023.

 

Wheat:  Net
sales reductions of 42,100 metric tons (MT) for 2022/2023–a marketing-year low–were down noticeably from the previous week and from the prior 4-week average. Increases primarily for Nigeria (25,100 MT switched from unknown destinations), Colombia (7,700
MT, including 7,000 MT switched from unknown destinations), Taiwan (5,900 MT), the Philippines (2,300 MT), and Thailand (500 MT), were more than offset by reductions primarily for unknown destinations (53,000 MT), Mexico (17,600 MT), and Vietnam (12,000 MT).
Net sales of 336,800 MT for 2023/2024 were primarily for the Philippines (80,000 MT), unknown destinations (78,500 MT), Mexico (64,200 MT), Taiwan (46,400 MT), and Japan (21,200 MT). Exports of 216,600 MT were up 6 percent from the previous week, but down
13 percent from the prior 4-week average. The destinations were primarily to Japan (47,400 MT), the Philippines (47,300 MT), Mexico (42,900 MT), Nigeria (25,100 MT), and Algeria (19,700 MT).

 

Corn:  Net
sales reductions of 339,000 MT for 2022/2023–a marketing-year low–were down noticeably from the previous week and from the prior 4-week average. Increases primarily for Japan (35,500 MT, including decreases of 6,800 MT), Colombia (18,900 MT, including decreases
of 11,900 MT), Guatemala (15,400 MT, including 7,500 MT switched from Costa Rica, 6,200 MT switched from El Salvador, and decreases of 600 MT), the Netherlands (15,000 MT), and Germany (8,200 MT), were more than offset by reductions primarily for China (271,200
MT), unknown destinations (85,600 MT), Mexico (30,800 MT), Venezuela (27,700 MT), and Costa Rica (24,300 MT). Net sales of 74,000 MT for 2023/2024 were reported for Mexico (61,000 MT), Trinidad and Tobago (7,100 MT), Honduras (5,300 MT), and Guatemala (600
MT). Exports of 1,086,500 MT were down 5 percent from the previous week and 17 percent from the prior 4-week average. The destinations were primarily to Mexico (414,000 MT), China (409,900 MT), Japan (93,800 MT), the Dominican Republic (40,600 MT), and Costa
Rica (22,200 MT).

 

Barley:  No
net sales or exports were reported for the week.

 

Sorghum: 
Total net sales reductions of 3,700 MT for 2022/2023–a marketing-year low–were down noticeably from the previous week and from the prior 4-week average. Decreases were for China. Exports of 53,100 MT were up 5 percent from the previous week, but down 24
percent from the prior 4-week average. The destination was to China.

 

Rice:  Net
sales reductions of 31,700 MT for 2022/2023–a marketing-year low–were down noticeably from the previous week and from the prior 4-week average. Increases primarily for Haiti (20,500 MT), Canada (15,000 MT, including decreases of 100 MT), Mexico (200 MT),
Belgium (100 MT), and Guam (100 MT), were more than offset by reductions primarily for Iraq (40,000 MT) and Japan (27,200 MT). Net sales of 73,200 MT for 2023/2024 were reported for Iraq (40,000 MT), Japan (27,200 MT), and Guatemala (6,000 MT). Exports of
55,400 MT were up noticeably from the previous week and up 50 percent from the prior 4-week average. The destinations were primarily to Mexico (26,500 MT), El Salvador (12,500 MT), Haiti (6,900 MT), Guatemala (6,300 MT), and Canada (1,000 MT).

 

Soybeans:  Net
sales of 17,000 MT for 2022/2023 were down 73 percent from the previous week and 89 percent from the prior 4-week average. Increases primarily for Mexico (34,200 MT), unknown destinations (33,600 MT), Colombia (30,900 MT, including 7,000 MT switched from unknown
destinations and decreases of 500 MT), Japan (11,700 MT, including decreases of 100 MT), and the Philippines (10,900 MT), were offset by reductions for China (119,200 MT), Costa Rica (16,300 MT), and Canada (300 MT). Net sales of 663,800 MT for 2023/2024 were
reported for unknown destinations (390,000 MT), China (187,000 MT), Mexico (65,000 MT), Costa Rica (16,300 MT), and Panama (5,500 MT). Exports of 189,100 MT were down 54 percent from the previous week and 60 percent from the prior 4-week average. The destinations
were primarily to Mexico (79,700 MT), Egypt (34,300 MT), the Philippines (11,900 MT), Indonesia (11,600 MT), and Venezuela (8,500 MT). 

 

Optional Origin Sales:  For
2022/2023, the current outstanding balance of 300 MT, all South Korea. 

 

Export for Own Account:  For
2022/2023, the current exports for own account outstanding balance of 1,600 MT are for Canada (1,400 MT) and Taiwan (200 MT).

 

Soybean Cake and Meal:  Net
sales of 202,500 MT for 2022/2023 were down 27 percent from the previous week, but up 7 percent from the prior 4-week average. Increases primarily for the Philippines (52,000 MT, including decreases of 200 MT), Colombia (27,700 MT), Guatemala (26,800 MT, including
12,000 MT switched from El Salvador), unknown destinations (25,000 MT), and Venezuela (18,900 MT, including 18,000 MT switched from Colombia), were offset by reductions primarily for Nicaragua (14,000 MT) and El Salvador (11,100 MT). Net sales of 89,000 MT
for 2023/2024 were primarily for unknown destinations (45,000 MT) and New Zealand (30,000 MT). Exports of 285,300 MT were up 52 percent from the previous week and 24 percent from the prior 4-week average. The destinations were primarily to the Philippines
(51,200 MT), Venezuela (46,400 MT), Tunisia (33,000 MT), Mexico (25,400 MT), and Guatemala (21,800 MT).

 

Soybean Oil:  Net
sales of 900 MT for 2022/2023 were up noticeably from the previous week, but down 77 percent from the prior 4-week average. Increases were primarily for Canada (400 MT). Exports of 4,400 MT were down noticeably from the previous week, but down 21 percent from
the prior 4-week average. The destinations were to Jamaica (3,500 MT), Mexico (500 MT), and Canada (400 MT). 

 

Cotton: 
Net sales of 132,400 RB for 2022/2023 were down 46 percent from the previous week and 28 percent from the prior 4-week average. Increases primarily for China (62,000 RB, including 1,100 RB switched from Singapore), Vietnam (24,000 RB, including 1,300 RB switched
from Japan, 100 RB switched from Taiwan, and decreases of 800 RB), Pakistan (18,900 RB, including decreases of 900 RB), Turkey (7,600 RB), and Indonesia (5,200 RB, including 300 RB switched from Japan and decreases of 2,200 RB), were offset by reductions for
Singapore (1,100 RB) and South Korea (100 RB). Net sales of 28,100 RB for 2023/2024 were reported for Bangladesh (12,000 RB), South Korea (6,600 RB), Turkey (4,400 RB), Indonesia (3,300 RB), and Thailand (1,800 RB). Exports of 332,700 RB were unchanged from
the previous week, but down 7 percent from the prior 4-week average. The destinations were primarily to Pakistan (71,700 RB), China (64,500 RB), Vietnam (59,100 RB), Turkey (54,500 RB), and Bangladesh (17,200 RB). Net sales of Pima totaling 9,500 RB for 2022/2023
were down 38 percent from the previous week and 54 percent from the prior 4-week average. Increases were primarily for China (3,300 RB), Vietnam (2,600 RB), India (1,600 RB), Peru (1,300 RB), and Thailand (600 RB). Exports of 14,600 RB were down 28 percent
from the previous week and 29 percent from the prior 4-week average. The destinations were primarily to China (5,700 RB), India (5,700 RB), Egypt (1,300 RB), Turkey (800 RB), and Indonesia (500 RB). 

 

Optional Origin Sales:  For
2022/2023, the current outstanding balance of 1,100 RB, all Malaysia.

 

Export for Own Account:  For
2022/2023, the current exports for own account outstanding balance of 112,800 RB are for China (80,600 RB), Vietnam (22,100 RB), Pakistan (5,000 RB), South Korea (2,400 RB), India (1,500 RB), and Turkey (1,200 RB).

 

Hides and Skins:  Net
sales of 419,000 pieces for 2023 were down 30 percent from the previous week and 5 percent from the prior 4-week average. Increases primarily for China (282,000 whole cattle hides, including decreases of 7,100 pieces), Mexico (58,700 whole cattle hides, including
decreases of 2,100 pieces), Brazil (32,100 whole cattle hides, including decreases of 400 pieces), South Korea (27,600 whole cattle hides, including decreases of 2,500 pieces), and Japan (7,200 whole cattle hides), were offset by reductions for Indonesia (100
pieces). Total net sales of 200 calf skins were for Italy. In addition, net sales of 8,300 kip skins resulting in increases for Belgium (8,700 kip skins), were offset by reductions for China (400 pieces). Exports of 346,400 pieces were down 6 percent from
the previous week and 9 percent from the prior 4-week average. Whole cattle hides exports were primarily to China (225,300 pieces), South Korea (49,600 pieces), Mexico (44,700 pieces), Brazil (12,400 pieces), and Thailand (7,200 pieces). Exports of 2,500 kip
skins were to China.

 

Net sales of 181,300 wet blues
for 2023 were up noticeably from the previous week and 28 percent from the prior 4-week average. Increases were primarily for Italy (69,000 unsplit, including decreases of 100 unsplit), Brazil (30,000 unsplit), Taiwan (28,500 unsplit), Vietnam (25,200 unsplit,
including decreases of 100 unsplit), and China (15,200 unsplit, including decreases of 1,200 unsplit). Exports of 124,200 wet blues were up 4 percent from the previous week and 13 percent from the prior 4-week average. The destinations were primarily to Vietnam
(50,500 unsplit), Italy (30,400 unsplit), China (13,100 unsplit), Hong Kong (8,000 unsplit), and Thailand (7,500 unsplit). Net sales of 4,500 splits resulting in increases for Vietnam (6,400 pounds) and South Korea (2,300 pounds), were offset by reductions
for Taiwan (4,200 pounds). Exports of 152,100 pounds were to Vietnam (115,300 pounds) and Taiwan (36,800 pounds).

 

Beef:  Net
sales of 17,400 MT for 2023 were up 5 percent from the previous week and 7 percent from the prior 4-week average. Increases primarily for Japan (4,600 MT, including decreases of 300 MT), South Korea (3,500 MT, including decreases of 400 MT), China (2,900 MT,
including decreases of 100 MT), Mexico (2,500 MT), and Taiwan (1,600 MT, including decreases of 100 MT), were offset by reductions for Indonesia (200 MT) and Chile (100 MT). Exports of 18,300 MT were up 24 percent from the previous week and 11 percent from
the prior 4-week average. The destinations were primarily to South Korea (4,600 MT), Japan (3,800 MT), China (3,400 MT), Taiwan (2,000 MT), and Mexico (1,300 MT).

 

Pork:  Net
sales of 31,900 MT for 2023 were up 6 percent from the previous week, but down 25 percent from the prior 4-week average. Increases were primarily for Mexico (15,500 MT, including decreases of 300 MT), China (5,200 MT, including decreases of 200 MT), Japan
(2,700 MT, including decreases of 300 MT), Colombia (1,600 MT, including decreases of 100 MT), and Canada (1,000 MT, including decreases of 1,000 MT). Exports of 36,800 MT were unchanged from the previous week and from the prior 4-week average. The destinations
were primarily to Mexico (15,400 MT), China (6,600 MT), Japan (4,100 MT), South Korea (3,100 MT), and Canada (2,100 MT).

 

 

U.S. EXPORT SALES FOR WEEK ENDING 5/11/2023   

  

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	-10.5	386.5	592.0	86.0	4,723.1	6,883.2	90.6	371.5
SRW	-27.2	315.6	200.2	24.8	2,584.5	2,678.1	98.5	751.8
HRS	2.0	680.2	553.7	50.9	5,073.9	4,968.9	79.8	524.7
WHITE	-5.7	508.2	232.8	35.2	4,162.5	3,133.4	67.8	277.5
DURUM	-0.8	92.1	0.5	19.7	359.8	195.5	0.0	36.9
TOTAL	-42.1	1,982.6	1,579.1	216.6	16,903.9	17,859.1	336.8	1,962.4
BARLEY	0.0	3.5	5.2	0.0	8.5	15.3	0.0	6.0
CORN	-339.0	10,451.4	16,004.8	1,086.5	27,603.2	42,899.5	74.0	2,700.4
SORGHUM	-3.7	437.4	1,421.9	53.1	1,202.8	5,343.6	0.0	63.0
SOYBEANS	17.0	3,112.8	10,487.5	189.1	47,669.8	48,720.7	663.8	2,550.6
SOY MEAL	202.5	2,497.7	2,709.5	285.3	7,725.3	7,651.9	89.0	404.4
SOY OIL	0.9	56.4	107.1	4.4	62.2	558.2	0.0	0.6
RICE
L G RGH	-0.9	135.4	139.7	44.3	570.9	1,101.2	6.0	6.0
M S RGH	0.0	33.2	8.6	0.5	23.8	12.3	0.0	5.0
L G BRN	0.2	3.5	5.3	0.2	17.3	48.3	0.0	0.0
M&S BR	0.0	21.2	9.9	0.0	23.8	77.5	0.0	0.0
L G MLD	-10.6	118.5	74.3	8.1	569.9	663.3	40.0	40.0
M S MLD	-20.4	90.1	197.3	2.1	222.8	319.7	27.2	40.2
TOTAL	-31.7	401.8	435.1	55.4	1,428.6	2,222.3	73.2	91.2
COTTON		THOUSAND RUNNING BALES
UPLAND	132.4	3,719.3	5,561.5	332.7	8,912.3	9,300.3	28.1	1,524.2
PIMA	9.5	83.9	100.3	14.6	223.3	371.7	0.0	4.7