FI Morning Grain Comments 05/19/22

PDF attached

 

Good
morning.

 

I
will be out of the office today attending a conference. 

 

Indonesia
plans to lift their export ban on palm oil on Monday. Export sales were mostly within expectations. The weather outlook for the US Great Plains improved with northern areas drying down starting this weekend favoring spring planting progress. Jordan issued
a new import tender for 120,000 tons of wheat set to close May 24 for Aug/Sep shipment. South Korea’s NOFI bought 69,000 tons of South American corn at 245.16 cents over the September contract for arrival around August 25. Japan bought food wheat. Offshore
values were leading SBO 207 points higher and meal $1.00 short ton higher. 

 

 

 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 19, 2022

• Frost
  and freezes were more widespread in Argentina this morning with little to no impact on crops since most were mature and being harvested
• Argentina
  still has an opportunity for rain in the last days of May and early June for wheat planting
• Brazil’s
  potential for damaging cold in Safrinha corn, coffee, sugarcane and citrus areas is low, although frost will be possible in Parana crop areas in the next couple of mornings
  
• Most
  of the cold in Parana will not be intense enough to induce much damage, but a little impact may occur in minor corn areas where frost is expected
• Dryness
  in Mato Grosso and Goias Brazil will continue over the next two weeks
• World
  Weather, Inc. still believes improved field conditions are coming this weekend through most of next week in the eastern Canada Prairies and neighboring areas of North Dakota and Minnesota
  
• Conditions
  will improve, but may still not be ideal for aggressive fieldwork
• West
  Texas cotton, corn and sorghum areas will get some needed rain Monday through Wednesday of next week with 0.50 to 1.50 inches of moisture in some of the dryland production areas which may improve planting potentials
• U.S.
  Midwest weather will be wettest during the middle to latter part of next week at which time fieldwork will be most delayed; otherwise, farming activity will advance around brief periods of rain during the next two weeks
• Europe
  will continue to dry down in the southwest of France, Spain, Portugal, the Italian Peninsula and some of the Balkan Countries during the next ten days
  
• rain
  is expected periodically in northern and eastern France and Germany offering some relief to recent drying
• Russia,
  Ukraine and northern Kazakhstan will receive periods of rain during the next couple of weeks supporting long term crop development potential, although fieldwork, may be slowed occasionally
• Excessive
  rain is still expected in southern Myanmar and some other mainland Southeast Asia locations
• Taiwan
  and northwestern Luzon Island, Philippines will also be quite wet next week
• Portions
  of the North China Plain will continue drying out over the next ten days
• Australia
  rainfall may improve in the south during the week next week to begin bolstering soil moisture for better planting of wheat, barley and canola

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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
Export Sales

Complex
and corn with expectations when combining crop years. Wheat better than expected. China showed up for old crop soybeans.

 

 

 

Macros

 

 

Corn

·        
Corn is lower tracking weakness in wheat and US planting progress pressure. Soybean/corn spreading could also be weighing on prices.

·        
The International Grains Council lowered its 2022-23 forecast for world corn production to 1.184 billion tons from 1.197 billion.

·        
Nepal reported its first outbreak of African swine fever.

·        
The Delta and much of the US Midwest will see widespread rains over the next week, good for recently planted spring grains.

·        
Planting progress is moving along nicely for the US WCB but parts of the ECB are well behind normal.

·        
Weekly ethanol production was unchanged, and stocks decreased 349,000 barrels. A Bloomberg poll looked for weekly US ethanol production to be up 4,000 barrels and stocks down 77,000 barrels.

·        
The weekly USDA Broiler Report showed eggs set in the US up 1 percent from a year ago and chicks placed up slightly. Cumulative placements from the week ending January 8, 2022 through May 14, 2022 for the United States were 3.54
billion. Cumulative placements were down slightly from the same period a year earlier.

 

U
of I – Tracking Corn and Soybean Prevent Plant in 2022

Zulauf,
C., G. Schnitkey, K. Swanson, J. Coppess and N. Paulson. “Tracking Corn and Soybean Prevent Plant in 2022.” farmdoc daily (12):72, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 18, 2022.

https://farmdocdaily.illinois.edu/2022/05/tracking-corn-and-soybean-prevent-plant-in-2022.html

 

Export
developments.

·        
South Korea’s NOFI bought 69,000 tons of South American corn at 245.16 cents over the September contract for arrival around August 25.

·        
Turkey’s TMO seeks 175,000 tons of feed corn on May 26 for shipment between June 7 and June 30.

 

 

Soybeans

·        
Soybean oil is lower tracking weakness in palm and other related markets after Indonesia decided to lift their export ban on palm oil effective Monday. Widespread protests and economic losses from the export ban pressured the
government to reverse their decision.  They said domestic supplies have been replenished although domestic prices remain above the government target.

·        
Soybeans and meal are higher on technical buying and China returning to the US market for old crop soybeans per USDA export sales report. We also heard China was looking around for quotes this morning for 2021-22 US soybeans.

·        
China removed their restrictions on Canadian canola that has been ongoing for three years, but imports are expected to be minimal for the near term.

·        
Offshore values were leading SBO 207 points higher and meal $1.00 short ton higher. 

·        
Rotterdam vegetable oil prices were mixed from this time yesterday morning and meal mostly higher.  

·        
Malaysian palm oil ended 62 ringgit per ton lower at 6,072 and cash was down $30/ton at $1,450 ton.

·        
China September soybean futures were down 0.1%, meal down 0.3%, SBO 0.6% lower and China palm oil down 0.4%.

 

Export
Developments

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

 

Wheat

·        
Wheat futures are lower on follow through selling despite a lower USD. Traders were eying a large Russian wheat crop and US weather. The weather outlook for the US Great Plains improved with northern areas drying down starting
this weekend favoring spring planting progress.

·        
The International Grains Council lowered its 2022-23 forecast for wheat production to 769 million tons from 780 million.

·        
Ukraine exports of grain so far during May are down 64 percent from same period year ago.

·        
Russia would like to see sanctions reviewed if Ukraine grain exports were to be open for shipping per UN’s request this week.

·        
Day 2 of the Wheat Quality Council 2022 Hard Red Winter Wheat Tour pegged the average yield at 37.0 bushels per acre, down from 56.7 bushels in 2021 and compares to a five year average of 47.1 bushels per acre. There was no tour
in 2021. (#wheattour22 on Twitter).

·        
September Paris wheat was down 7.75 at 422.75 euros a ton.

 

Export
Developments.

·        
Japan bought 174,744 tons of food wheat from the US, Canada and Australia. Original details as follows.

·        
Jordan issued a new import tender for 120,000 tons of wheat set to close May 24 for Aug/Sep shipment.

·        
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.

·        
Jordan seeks on 120,000 tons of barley on May 26 for Aug/Sep shipment.

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

 

Rice/Other

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

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING  5/12/2022

 

	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	-34.8	592.0	584.2	124.0	6,883.2	8,132.3	91.6	693.5
SRW	2.9	200.2	186.3	27.1	2,678.1	1,689.0	13.5	679.5
HRS	63.0	553.7	685.3	153.4	4,968.9	7,066.2	120.8	793.7
WHITE	-22.6	232.8	569.9	40.9	3,133.4	6,055.2	99.6	526.7
DURUM	0.0	0.5	48.6	0.0	195.5	631.8	0.0	64.4
TOTAL	8.5	1,579.1	2,074.3	345.4	17,859.1	23,574.6	325.6	2,757.8
BARLEY	0.0	5.2	2.1	0.5	15.3	26.5	0.0	8.6
CORN	435.3	16,004.8	20,733.8	1,380.1	42,921.2	47,287.4	588.5	5,579.8
SORGHUM	-67.3	1,421.9	1,581.3	192.0	5,343.6	5,767.8	0.0	0.0
SOYBEANS	752.7	10,487.5	4,513.6	957.2	48,720.7	56,949.7	149.5	11,375.1
SOY MEAL	293.1	2,709.5	2,092.3	192.1	7,651.9	7,797.2	0.0	386.9
SOY OIL	-0.5	107.1	58.0	3.0	558.2	607.0	0.0	0.0
RICE
L G RGH	8.1	139.7	260.5	3.1	1,101.2	1,359.1	0.0	2.0
M S RGH	0.0	8.6	16.9	0.0	12.3	24.0	0.0	0.0
L G BRN	1.8	5.3	2.7	0.5	48.3	36.4	0.0	0.0
M&S BR	0.1	9.9	45.4	0.1	77.5	110.2	0.0	0.0
L G MLD	1.6	74.3	44.4	15.8	663.3	531.7	0.0	0.0
M S MLD	1.5	197.3	219.0	4.7	319.7	454.2	0.0	0.0
TOTAL	13.1	435.1	588.8	24.2	2,222.3	2,515.6	0.0	2.0
COTTON		THOUSAND RUNNING BALES
UPLAND	110.9	5,561.5	3,468.9	343.2	9,300.3	11,906.5	25.4	3,055.4
PIMA	2.3	100.3	169.1	10.3	371.7	615.6	2.7	50.2

 

This
summary is based on reports from exporters for the period May 6-12, 2022.

Wheat:  Net
sales of 8,500 metric tons (MT) for 2021/2022–a marketing-year low–were down 40 percent from the previous week and 82 percent from the prior 4-week average.  Increases primarily for Mexico (37,000 MT, including decreases of 400 MT), Venezuela (29,400 MT,
including 30,400 MT switched from unknown destination and decreases of 1,000 MT), Nigeria (28,200 MT), Taiwan (2,500 MT), and Vietnam (2,000 MT), were offset by reductions primarily for Colombia (39,900 MT), unknown destinations (27,300 MT), and South Korea
(25,500 MT).  Net sales of 325,600 MT for 2022/2023 were primarily reported for Japan (87,600 MT), Vietnam (53,400 MT), Colombia (45,000 MT), unknown destinations (35,500 MT), and Mexico (33,500 MT).  Exports of 345,400 MT were up 44 percent from the previous
week and 1 percent from the prior 4-week average.  The destinations were primarily to Nigeria (75,200 MT), Mexico (60,900 MT), Thailand (52,900 MT), Taiwan (52,500 MT), and Venezuela (29,400 MT). 

Corn: 
Net sales of 435,300 MT for 2021/2022 were up noticeably from the previous week, but down 36 percent from the prior 4-week average.  Increases primarily for Taiwan (64,900 MT, including decreases of 100 MT), South Korea (59,500 MT, including decreases of 8,400
MT), China (59,300 MT, including decreases of 8,700 MT), Guatemala (49,500 MT), and Canada (40,000 MT, including decreases of 10,900 MT), were offset by reductions for unknown destinations (24,700 MT), Colombia (7,300 MT), Japan (6,500 MT), and Panama (1,000
MT).  Net sales of 588,500 MT for 2022/2023 resulting in increases for China (544,000 MT), Mexico (52,500 MT), Japan (50,000 MT), and Costa Rica (13,700 MT), were offset by reductions primarily for Guatemala (46,700 MT) and El Salvador (21,100 MT).  Exports
of 1,380,100 MT were down 8 percent from the previous week and 11 percent from the prior 4-week average.  The destinations were primarily to Mexico (366,100 MT), South Korea (259,800 MT), Colombia (205,400 MT), China (195,300 MT), and Japan (97,500 MT). 

Optional
Origin Sales: 
For 2021/2022, new optional origin sales of 60,000 MT were reported for unknown destinations.  Options were exercised to export 30,000 MT to Morocco from the United States.  The current outstanding balance of 408,300 MT is for unknown
destinations (300,000 MT), South Korea (65,000 MT), Italy (34,300 MT), and Saudi Arabia (9,000 MT).  For 2022/2023, the current outstanding balance of 35,400 MT is for Italy.

Late
Reporting:
For 2021/20222, net sales and exports totaling 46,500 MT of corn was reported late for Italy (35,300 MT) and Venezuela (11,200 MT).

Barley:
No net sales were reported for the week.  Exports of 500 MT were unchanged from the previous week, but up noticeably from the prior 4-week average.  The destination was to Japan.

Sorghum: 
Net sales reductions of 67,300 MT for 2021/2022–a marketing-year low–were down noticeably from the previous week and from the prior 4-week average.  Increases reported for China (63,700 MT, including 124,700 MT switched from unknown destinations and decreases
of 63,100 MT), were more than offset by reductions for unknown destinations (131,000 MT).  Exports of 192,000 MT were down 29 percent from the previous week and 18 percent from the prior 4-week average.  The destination was to China.

Rice: 
Net sales of 13,100 MT for 2021/2022 were down 55 percent from the previous week and 57 percent from the prior 4-week average.  Increases primarily for Canada (4,000 MT), Honduras (3,700 MT), Guatemala (3,000 MT), and Mexico (2,000 MT), were offset by reductions
for Haiti (300 MT).  Exports of 24,200 MT were down 47 percent from the previous week and 53 percent from the prior 4-week average.  The destinations were primarily to Haiti (13,200 MT), Mexico (3,300 MT), Canada (3,300 MT), South Korea (2,200 MT), and Honduras
(1,000 MT).

Export
for Own Account:
For
2021/2022, new exports for own account totaling 100 MT were to Canada.  Exports of 100 MT to Canada were applied to new or outstanding sales.

Soybeans: 
Net sales of 752,700 MT for 2021/2022 were up noticeably from the previous week and 65 percent from the prior 4-week average.  Increases primarily for China (392,600 MT, including 57,000 MT switched from unknown destinations and 72,600 MT – late), the Netherlands
(84,600 MT, including 78,000 MT switched from unknown destinations), Egypt (58,300 MT, including 55,000 MT switched from unknown destinations and decreases of 5,800 MT), Taiwan (55,500 MT, including decreases of 13,700 MT), and Bangladesh (55,000 MT), were
offset by reductions for unknown destinations (110,800 MT).  Net sales of 149,500 MT for 2022/2023 were reported for unknown destinations (113,500 MT), Taiwan (16,000 MT), Mexico (12,000 MT), and China (8,000 MT).  Exports of 957,200 MT were up noticeably
from the previous week and 45 percent from the prior 4-week average.  The destinations were primarily to Egypt (271,300 MT), China (230,800 MT, including 72,600 MT – late), Mexico (141,500 MT), Indonesia (88,200 MT), and the Netherlands (84,600 MT). 

Export
for Own Account:
For 2021/2022, the current exports for own account outstanding balance is 62,400 MT, all Canada.

Late
Reporting:
For 2021/20222, net sales and exports totaling 72,600 MT of soybeans was reported late for China. 

Soybean
Cake and Meal: 
Net sales of 293,100 MT for 2021/2022 were up 61 percent from the previous week and 75 percent from the prior 4-week average.  Increases primarily for Mexico (97,300 MT), the Philippines (48,200 MT), Ecuador (35,000 MT), Colombia (32,800 MT, including decreases
of 1,900 MT), and unknown destinations (30,600 MT), were offset by reductions primarily for Peru (15,000 MT).  Exports of 192,100 MT were down 19 percent from the previous week and 25 percent from the prior 4-week average.  The destinations were primarily
to Colombia (56,800 MT), the Philippines (47,200 MT), Mexico (26,200 MT), the United Kingdom (19,800 MT), and Canada (19,100 MT).

Soybean
Oil: 
Net sales reductions of 500 MT for 2021/2022 were down noticeably from the previous week and from the prior 4-week average.  Increases primarily for Mexico (100 MT) and Canada (100 MT), were more than offset by reductions for South Korea (700 MT).  Exports
of 3,000 MT were down 89 percent from the previous week and 78 percent from the prior 4-week average.  The destinations were primarily to Mexico (2,300 MT) and Canada (500 MT).

Cotton: 
Net sales of 110,900 RB for 2021/2022 were up noticeably from the previous week and up 3 percent from the prior 4-week average.  Increases primarily for India (34,100 RB), Vietnam (31,100 RB, including 1,800 RB switched from China, 700 RB switched from South
Korea, 500 RB switched from Japan, and decreases of 1,900 RB), Turkey (18,400 RB, including decreases of 6,600 RB), China (11,700 RB, including decreases of 2,400 RB), and Bangladesh (10,600 RB), were offset by reductions for Thailand (4,100 RB), Pakistan
(1,200 RB), and South Korea (300 RB).  Net sales of 25,400 RB for 2022/2023 were reported for India (13,200 RB), Peru (4,600 RB), Guatemala (4,000 RB), Mexico (2,700 RB), and Costa Rica (900 RB).  Exports of 343,200 RB were down 6 percent from the previous
week and 11 percent from the prior 4-week average.  The destinations were primarily to China (101,600 RB), Vietnam (56,000 RB), Turkey (41,200 RB), Pakistan (38,600 RB), and Bangladesh (19,200 RB).  Net sales of Pima totaling 2,300 RB were up 10 percent from
the previous week, but down 59 percent from the prior 4-week average.  Increases were reported for China (1,300 RB), Taiwan (500 RB), Pakistan (400 RB), and Germany (100 RB).  Net sales of 2,700 RB for 2022/2023 were reported for Peru (1,900 RB), Turkey (400
RB), and India (400 RB).  Exports of 10,300 RB were up 25 percent from the previous week, but down 15 percent from the prior 4-week average.  The destinations were primarily to India (6,900 RB), Peru (1,700 RB), Pakistan (900 RB), Bangladesh (400 RB), and
Japan (300 RB). 

Optional
Origin Sales: 
For 2021/2022, options were exercised to export 11,000 RB to Vietnam from the United States.  The current outstanding balance of 45,000 RB is for Vietnam (41,800 RB) and Pakistan (3,200 RB). 

Exports
for Own Account: For
2021/2022, the current exports for own account outstanding balance is 100 RB, all Vietnam.

Hides
and Skins: 
Net sales of 602,000 pieces for 2022 were up noticeably from the previous week and up 48 percent from the prior 4-week average.  Increases primarily for China (239,600 whole cattle hides, including decreases of 27,900 pieces), South Korea (146,800 whole cattle
hides, including decreases of 1,300 pieces), Thailand (110,300 whole cattle hides, including decreases of 4,500 pieces), Indonesia (39,300 whole cattle hides), and Mexico (37,100 whole cattle hides, including decreases of 1,200 pieces), were offset by reductions
primarily for Canada (700 pieces), Italy (300 pieces), and Spain (200 pieces).  Total net sales reductions of 300 calf skins were for Italy.  In addition, total net sales reductions of 100 kip skins were for Italy. Exports of 438,700 pieces were unchanged
from the previous week, but up 6 percent from the prior 4-week average.  Whole cattle hides exports were primarily to China (242,200 pieces), South Korea (69,300 pieces), Mexico (43,800 pieces), Thailand (38,800 pieces), and Brazil (15,700 pieces).  Exports
of 1,800 calf skins were to Italy.  In addition, 1,300 kip skins were to Italy.  

Net
sales of 241,100 wet blues for 2022 were up noticeably from the previous week and from the prior 4-week average.  Increases primarily for Italy (76,500 unsplit, 16,500 grain splits, including decreases of 200 unsplit and 100 grain splits), China (55,100 unsplit,
including decreases of 100 unsplit), Vietnam (32,600 unsplit), Thailand (25,100 unsplit, including decreases of 400 unsplit), and Portugal (22,100 grain splits, including decreases of 400 grain splits), were offset by reductions for Hong Kong (100 unsplit). 
Exports of 177,900 wet blues were up 4 percent from the previous week and 12 percent from the prior 4-week average.  The destinations were primarily to Italy (46,900 unsplit and 17,800 grain splits), China (56,000 unsplit), Vietnam (31,600 unsplit), Thailand
(12,600 unsplit), and India (3,100 unsplit).  Net sales of 678,000 splits were up noticeably from the previous week and up 46 percent from the prior 4-week average.  Increases primarily for Vietnam (606,400 pounds), were offset by reductions for South Korea
(8,500 pounds).  Exports of 731,800 pounds were up noticeably percent from the previous week and up 53 percent from the prior 4-week average. The destinations were primarily to Vietnam (520,000 pounds) and South Korea (128,000 pounds).

Beef: 
Net sales of 23,300 MT for 2022 were down 18 percent from the previous week, but up 35 percent from the prior 4-week average.  Increases were primarily for Japan (7,900 MT, including decreases of 400 MT), South Korea (7,400 MT, including decreases of 900 MT),
China (2,900 MT, including decreases of 200 MT), Taiwan (1,400 MT, including decreases of 200 MT), and Canada (900 MT, including decreases of 100 MT).  Exports of 19,800 MT were unchanged from the previous week, but up 1 percent from the prior 4-week average. 
The destinations were primarily to South Korea (6,100 MT), Japan (5,300 MT), China (3,100 MT), Mexico (1,400 MT), and Taiwan (1,000 MT). 

Pork: 
Net sales of 24,100 MT for 2022 were down 8 percent from the previous week, but up 2 percent from the prior 4-week average.  Increases were primarily for Mexico (8,400 MT, including decreases of 200 MT), South Korea (4,300 MT, including decreases of 300 MT),
Colombia (2,400 MT), China (2,100 MT, including decreases of 200 MT), and Japan (1,900 MT, including decreases of 100 MT).  Exports of 31,300 MT were down 6 percent from the previous week, but up 1 percent from the prior 4-week average.  The destinations were
primarily to Mexico (13,900 MT), China (4,200 MT), South Korea (3,600 MT), Japan (3,000 MT), and Canada (1,500 MT).