FI Morning Grain Comments 05/19/23

PDF attached

 

Good
morning. 

 

Grains
and the soybean complex are rebounding Friday from positioning ahead of the weekend. The US weather forecast for the Midwest turned slightly unfavorable from that of yesterday. Limited rains in central areas next week may allow stress to build.
WTI crude was $1.13 cents higher earlier and USD 37 points lower. The Kansas wheat crop tour reported a yield of 30 bu/ac, 1 bu above USDA, but production came in at a low 178 million bushels, below USDA’s May estimate of 191 million,
due higher abandonment. Yesterday Argentina’s BA grains exchange cut their soybean outlook from 22.5 million tons to 21 million. 69.2 percent of the crop had been harvested across Argentina. Palm oil futures snapped a 3-day losing streak. Third month (Aug)
Malaysia palm futures increased 89 ringgit to 3481, and Aug. cash increased $12.50 to $835.00/ton. Offshore values were leading SBO higher by about 21 points this morning (380 higher for the week to date) and meal $2.80 short ton lower ($4.40 lower for the
week).

 

Fund
estimates as of May 18

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 19, 2023

• Frost
  and freezes occurred this morning in western North Dakota and surrounding areas; extreme lows slipped to 28 Fahrenheit
• Frost
  in Canada’s Prairies overnight had a limited impact
• Drying
  is likely in the northern U.S. Plains and portions of Canada’s Prairies through the weekend and into early next week with warming temperatures that will help accelerate drying and induce better planting conditions in the wetter areas
• Central
  and some western parts of the U.S. Midwest will experience net drying over the next ten days due to restricted rainfall and warm temperatures
• Some
  rain of significance fell in Kansas and the Texas Panhandle overnight lifting topsoil moisture in favor of better crop development in winter and summer crop areas
• Argentina
  rainfall will benefit wheat planting over the next ten days
• Safrinha
  corn and cotton areas in Brazil will be dry over the next ten days to two weeks which is normal
• Southern
  Brazil temperatures may cool down in early June
• Drying
  is expected in Russia’s New Lands over the coming week with temperatures trending warmer than usual
• China
  weather will be well mixed with rain and sunshine over the next ten days, although dryness will remain in parts of Inner Mongolia
• Northeastern
  Xinjiang, China will experience showers and milder than usual weather through the next ten days
• Western
  Xinjiang, China will cool down for a little while in the coming week after a few days of beneficial warmth
• Increasing
  rainfall is expected next week in Thailand and other mainland areas of Southeast Asia where it has been dry
• Rain
  will be abundant in Indonesia and Malaysia during the next ten days
• Europe
  weather will be favorable over the next ten days with the greatest precipitation in the south
  
• North
  Africa is still anticipating greater than usual rain in the coming week that will come too late for crops
• Australia
  rainfall will be limited for the next ten days with coastal Victoria being the wettest area

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

Monday,
May 22:

• Monthly
  MARS report on EU crop conditions
• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  winter wheat condition, 4pm
• US
  planting data for corn, cotton, spring wheat and soybeans, 4pm
• Holiday:
  Canada

Tuesday,
May 23:

• EU
  weekly grain, oilseed import and export data
• Cane
  crush and sugar production data by Brazil’s Unica (tentative)

Wednesday,
May 24:

• EIA
  weekly US ethanol inventories, production, 10:30am
• US
  cold storage data for beef, pork and poultry
• EARNINGS:
  Sime Darby Plantation

Thursday,
May 25:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Malaysia’s
  May 1-25 palm oil exports
• US
  poultry slaughter, red meat output, 3pm
• EARNINGS:
  IOI
• HOLIDAY:
  Argentina

Friday,
May 26:

• 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
• EARNINGS:
  Select Harvests
• HOLIDAY:
  Hong Kong

Source:
Bloomberg and FI

 

 

 

 

 

US
RIN Generation

U.S.
GENERATED 603 MLN BIODIESEL (D4) BLENDING CREDITS IN APRIL, VS 619 MLN IN MARCH -EPA

U.S.
GENERATED 1.16 BLN ETHANOL (D6) BLENDING CREDITS IN APRIL, VS 1.22 BLN IN MARCH -EPA

 

Year
ago

U.S.
GENERATED 498 MLN BIODIESEL (D4) BLENDING CREDITS IN APRIL, VS 490 MLN IN MARCH -EPA

U.S.
GENERATED 1.14 BLN ETHANOL (D6) BLENDING CREDITS IN APRIL, VS 1.27 BLN IN MARCH -EPA

 

Macros

Canadian
Retail Sales (M/M) Mar: -1.4% (est -1.4%; prev -0.2%)

Canadian
Retail Sales Ex Auto (M/M) Mar: -0.3% (est -0.8%; prev -0.7%)

 

Corn

·        
CBOT corn futures
are higher on technical buying. Corn futures hit a November 2021 level on a weekly chart on Thursday.

·        
Argentina’s BA grains exchange left their corn production estimate unchanged at 36 million tons, below 50 million produced last season. 25 percent of the crop had been collected.

·        
The UK is adding on sanctions against Russia (metal exports) and cracking down on illegal Ukraine grain exports.

·        
USDA Cattle on Feed is due out after the close.

 

 

Export
developments.

• South
  Korea’s KFA bought 65,000 tons of South America or South Africa origin corn at $248.76/ton c&f for arrival around October 20.  Earlier in the week they bought 68,000 tons of corn at $258.75 for same arrival period.
  
• Yesterday
  South Korea’s MFG group bought 66,000 tons of South American corn for arrival around October 20 at an estimated $247.69 a ton c&f.
  
• Iran
  seeks 120,000 tons of South American corn on May 22 for June 1 and July 15 shipment.
  

 

Soybeans

·        
Soybeans are rebounding after hitting a 10-month low on Thursday in part to positioning ahead of the weekend. A rally in Malaysian palm oil and higher WTI crude oil spilled over in the soybean oil market. Soybean meal basis July
hit a late November 2022 level overnight but is higher this morning follow strength in soybeans.

·        
Soybean registrations fell 22 and stand at zero.

·        
Palm oil futures snapped a 4-day losing streak on talk of Chinese demand. August futures lost 4.6 percent this week. Prior to the overnight trade, US crude degummed soybean oil fob Gulf widened out yesterday to $323/ton versus
RBD palm oil.

·        
Yesterday Argentina’s BA grains exchange cut their soybean outlook from 22.5 million tons to 21 million. 69.2 percent of the crop had been harvested across Argentina.

·        
Third month (Aug) Malaysia palm futures increased 89 ringgit to 3481, and Aug. cash increased $12.50 to $835.00/ton.

·        
China May soybean futures were up 0.3%, meal near unchanged, SBO up 0.2% and palm oil futures down 0.9%.

·        
Nearby Rotterdam vegetable oils were up 5.00-17.50 euros higher from this time yesterday morning and meal 7-15 euros lower.

·        
Offshore values were leading SBO higher by about 21 points this morning (380 higher for the week to date) and meal $2.80 short ton lower ($4.40 lower for the week).

 

Export
Developments

• None
  reported

 

Wheat

·        
US nearby wheat futures are higher on technical buying. MN is strong in part to uncertainty over upcoming rain amounts set to fall across Alberta, Canada, next week. Parts of the northern US Great Plains could see net drying through
next week. The central areas of the US will see rain through this weekend.

·        
HRW harvest is off to a slow start in Texas due to rain delays, according to US Wheat Associates.

·        
French soft wheat crop ratings as of May 15 fell one point to 93% from 94% from the previous week, above 73% year earlier. Winter barley was 90%, down 2 points.

·        
Germany’s national statistics agency sees the 2023 winter wheat area down 1.4% to 2.85 million hectares. The winter rapeseed area grew 7.6% to 1.16 million hectares. Winter barley is up 5.2 percent to 1.27 million. 

·        
Ukraine may allow Russia to transport ammonia through Ukraine for Black Sea shipment if the grain deal is expanded to include additional Ukraine ports.

·        
Russia will increase the base price for calculating Russia’s wheat export duty to 17,000 rubles per ton ($218.73) from 15,000 rubles currently. This could boost producer selling.

·        
SovEcon raised their estimate of the Russia wheat crop for 2023 to 88 million tons, up from 86.8 million previous.

·        
Russia will ban and/or curb imports on foreign seed imports from October 1. They did not provide details.

·        
The Kansas wheat crop tour reported a yield of 30 bu/ac, 1 bu above USDA, but production came in at a low 178 million bushels, below USDA’s May estimate of 191 million, due higher abandonment. 178 million, if realized, would be
lowest since the 1950’s.

·        
September Paris wheat are up 3.00 euros to 225.25 per tons.

·        
Argentina’s weather outlook will improve over the next month with rain picking up across the weather growing areas.

 

Export
Developments.

·        
None reported

 

Rice/Other

·        
None reported