FI Morning Grain Comments 05/22/23

PDF attached

 

Good
morning. 

 

USDA:
Private exporters reported sales of 225,000 metric tons of soybean cake and meal for delivery to the Philippines during the 2022/2023 marketing year.

 

US
debt ceiling talks are ongoing. We expect a resolution early this week. Net drying for selected summer crops for the US is in focus. Lower trade in wheat while corn and soybeans are catching a bid. The US Midwest weather forecast turned slightly unfavorable
over the weekend. Drier weather is expected across much of the Midwest this week. Note the Chicago area for April through May 22, rainfall is about 50 percent of average. MN will see rain through Wednesday. For wheat, rains were near expectations over the
weekend across OK, KS, and west central TX. Argentina’s wheat growing areas will improve over the next month. USDA will update crop conditions this afternoon and we look for an improvement by 2 points for winter wheat. Corn conditions should be reported a
week from today but if the emergence does surpass 50 percent, USDA could issue them today. 
WTI crude oil was 25 cents higher earlier and USD 2 points lower.
The
dip in grain prices is attracting additional corn and wheat import tenders. Third month (Aug) Malaysia palm futures decreased 53 ringgit to 3428, and Aug. cash decreased $12.50 to $822.50/ton. Offshore values were leading SBO lower by about 48 points this
morning and meal $4.80 short ton lower.

 

 

Fund
estimates as of May 19

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 22, 2023

• U.S.
  Midwest will experience net drying over the coming week to ten days
• Rain
  is expected in the southern U.S. Plains this week benefiting summer crop planting, emergence and establishment
• The
  moisture comes a little too late to benefit wheat yields
• Western
  Alberta, Canada will receive heavy rain early this week
• Mid-
  to late-week rain is expected in eastern Canada Prairies this week
• Drought
  will continue in the southwestern Canada Prairies
• Good
  planting weather will occur this week in the northern U.S. Plains, although some rain is expected
• Brazil’s
  Safrinha corn areas will get some timely rain late in this coming weekend and early next week ensuring good crop development in the late planted areas of Parana, Mato Grosso do Sul and Sao Paulo
• Some
  of Brazil’s rain will briefly reach sugarcane, citrus and coffee areas in Minas Gerais and Sao Paulo slowing crop maturation and harvesting
• Argentina’s
  wheat areas received rain and will get more, though the west needs greater amounts
• Eastern
  Russia’s New Lands will dry down over the next week to ten days and temperatures will become very warm
• China
  weather will be favorably mixed
• Northern
  India will become wetter than usual later this week and next week
• Australia
  will continue to get periodic rain near the southern coast while interior Western and South Australia are dry biased along with Queensland and northern New South Wales
• Tropical
  Cyclone Mawar will damage Guam and the southern Mariana Islands Tuesday into Wednesday with sustained wind speeds to 127 mph and stronger gusts possibly approaching 150 mph
• Northern
  Europe will be drying down as will western Ukraine, Belarus and the Baltic States

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

 

 

 

 

Macros

 

Corn

·        
CBOT corn futures
are higher on technical buying and a US weather outlook calling for net drying across the majority of the central and lower Midwest.

·        
US corn emerged was 30 percent as of last Monday. Initial 2023 US corn crop conditions should be out a week from Monday.

 

Export
developments.

• Taiwan’s
  MFIG is in for 65,000 tons of corn on Wednesday for Aug/early Sep shipment.
  
• Today
  Iran seeks 120,000 tons of South American corn for June 1 and July 15 shipment.
  

 

Soybeans

·        
Soybeans and products are higher on US weather concerns. The CBOT crush is down sharply this morning as product gains are limited from lower offshore values.

·        
USDA reported 225,000 tons of soybean meal sold to the Philippines.

·        
Third month (Aug) Malaysia palm futures decreased 53 ringgit to 3428, and Aug. cash decreased $12.50 to $822.50/ton.

·        
China May soybean futures were down 0.2%, meal down 1.7%, SBO down 0.8% and palm oil futures down 0.8%.

·        
Nearby Rotterdam vegetable oils were unchanged to 22.50 euros lower from this time Friday morning and meal 5-11 euros lower.

·        
Offshore values were leading SBO lower by about 48 points this morning and meal $4.80 short ton lower.

 

Export
Developments

·        
USDA under the 24-hour reporting system reported 225,000 tons of 2022-23 soybean meal sold to the Philippines.

 

 

Wheat

·        
US wheat is lower on improving Argentina and North American weather. Russian wheat export prices (fob) are lower at $242/ton, down $6.00 from the previous week, after the extension of the Black Sea grain deal.

·        
Chicago wheat is trading around $6.00 and a close below that could attract additional shorts.

·        
A wheat analyst is comparing this years KS winter wheat crop to 1989, when abandonment was very high. 33 percent of KS winter wheat could be abandoned, leading many to think corn and other summer growing crops could replace acreage.

·        
France increased grain shipments last week, to 138,262 tons from 64,920 week before.

·        
EU weather is mostly favorable, but parts of France and other southern regions are seeing net drying.

·        
September Paris wheat are down 2.00 euros to 220.50 per tons.

·        
Argentina’s weather outlook still shows an improvement over the next month with rain increasing over the wheat growing areas.

 

Export
Developments.

·        
South Korean flour millers seek 135,000 tons of wheat from US, Canada, or Australia on Tuesday for Aug shipment.

·        
Reuters reported another 30,000 tons of EU wheat was shipped to the US from Poland for arrival June/July.

·        
Taiwan seeks 56,000 tons of US wheat on May 26 for LF July shipment.

 

Rice/Other

·        
None reported

·        
China sold 87,582 tons of rice or 9.7 percent out of reserves on May 16, at an average price of 2,518 yuan per ton.