FI Morning Grain Comments 05/23/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 130,000 metric tons of soybeans for delivery to Egypt during the 2021/2022 marketing year.

 

USD
is sharply lower. Most markets are in the green on technical buying and global export flow uncertainty. The morning weather forecast improved for the US Great Plains and parts of Brazil. Brazil saw mild frost events last week, easing trade concerns over the
late planted Brazil second corn crop currently in the pollination stage. Dry areas of the US Great Plains will see rain this week. Indonesia palm oil export ban ended overnight but don’t expect a surge in shipments as they reinstated the Domestic Market Obligation
(DMO) and Domestic Price Obligation (DPO) program. China plans to sell another 500,000 tons of soybeans from reserves on May 27.

 

 

 

 

Weather

 

World
Weather Inc.

 

 

 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Monday,
May 23:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• MARS
  monthly EU crop conditions report
• U.S.
  crop planting data for corn, soybeans, spring wheat and cotton; winter wheat conditions, 4pm
• U.S.
  cold storage data for beef, pork and poultry, 3pm
• HOLIDAY:
  Canada

Tuesday,
May 24:

• Grain
  & Maritime Days conference in Istanbul, May 24-25
• Russian
  Meat & Feed Industry conference in Moscow
• EU
  weekly grain, oilseed import and export data
• Brazil’s
  Unica may release cane crush and sugar output data during the week (tentative)

Wednesday,
May 25:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Malaysia’s
  May 1-25 palm oil export data
• U.S.
  poultry slaughter, 3pm
• HOLIDAY:
  Argentina

Thursday,
May 26:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  releases World Sugar Markets and Trade outlook
• Russian
  grain forum starts in Sochi
• HOLIDAY:
  France, Germany, Indonesia

Friday,
May 27:

• 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
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

 

CFTC
COT

Chicago
wheat fell way short of expectations, and after Friday, traditional funds are thought to be net short!  All other major commodity net long positions were also less than expected, an indication funds were not as aggressive in buying for the week ending May
17 than expected. 

 

 

 

 

Macros

US
Chicago Fed Nat Activity Index Apr: 0.47(est 0.50; prev 0.44; prevR 0.36)

 

Corn

·        
Corn is higher along with other grains from a very weak USD and technical buying. News is light.

·        
The US White House is considering, again, on cutting tariffs on Chinese goods and calling on OPEC to increase crude oil production. That could pave the way for an increase in China/US trade relations after China emerges from COVID
lockdowns.

·        
Brazil saw mild frost events last week, easing trade concerns over the late planted Brazil second corn crop currently in the pollination stage.

·        
Managed money longs were less than anticipated for the week ending 5/17.

·        
USDA Cattle on Feed was seen slightly supportive for corn feed demand and bearish for cattle based on higher than expected May 1 cattle on feed.

 

 

 

Export
developments.

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

 

Soybeans

·        
Soybeans are higher led by appreciation in soybean oil stemming from a 2.6% jump in palm oil over uncertainty with Indonesian palm oil exports. Soybean meal is losing ground on product spreading and a modest increase in corn futures
versus a strong rally in wheat.

·        
Indonesia palm oil export ban ended overnight but don’t expect a gold rush as they reinstated the Domestic Market Obligation (DMO) and Domestic Price Obligation (DPO) program.

·        
Offshore values were leading SBO 100 points higher and meal $0.70 short ton higher. 

·        
Rotterdam vegetable oil prices were 10-60 euros higher from this time yesterday morning and meal mostly unchanged.  

·        
Malaysia is looking to can wheat import permits and halt exports of 3.6 million chickens per month from June until production and prices stabilize.

·        
Malaysian palm oil ended 152 ringgit per ton higher at 6,261 and cash was up $25/ton at $1,505 ton.

·        
China September soybean futures were up 0.4%, meal up 1.0%, SBO 1.4% higher and China palm oil up 2.1%.

 

Export
Developments

·        
China plans to sell another 500,000 tons of soybeans from reserves on May 27.

·        
Private exporters reported sales of 130,000 metric tons of soybeans for delivery to Egypt during the 2021/2022 marketing year.

 

Wheat

·        
Wheat futures are higher on technical buying after funds went short at the end of last week.  After three days of selling, a sharply lower USD is hinting US exports could tick higher. India wheat export uncertainties are helping
US futures.

·        
India is studying requests from wheat traders to allow for more exports.

·        
Russian grain exports are slowing. SovEcon sees May exports at 1.4 million tons, with only 800,000 tons projected for wheat. It is not unusual to see Black Sea shipments decline in May as it is the tail end of the crop year.

·        
Bangladesh saw only one offer for wheat.

·        
Ukraine grain shipments for the month of May were estimated around 1.5 million tons, below previous expectations. India cut taxes for imports on selected commodities to battle inflation. – Ukrainian Agrarian Business Club Association.

·        
September Paris wheat was up 3.50 at 424.25 euros a ton at the time this was written.

·        
CBOT wheat abandonment and OTM exercise: 157 June 1170 puts were abandoned, and 500 June 1170 calls were exercised.
https://www.cmegroup.com/delivery_reports/OptionExceptionSummaryReport_OPINS_CME_7.pdf

·        
Egypt’s local wheat procurement hit 2.5 million tons so far for this year’s harvest, a signal imports are not immediately needed over the short term. 

·        
May 23 (Reuters) – “The Kremlin said on Monday that the West had triggered a global food crisis by imposing the severest sanctions in modern history on Russia over the war in Ukraine.”  This is a remainder geopolitical problems
may persist for a while.

·        
SovEcon: Prices for wheat with 12.5% protein content from Black Sea ports were at $395-405 free on board (FOB) at the end of last week, up $10 from a week earlier. IKAR said that the price rose by $20 to $410 per ton, but there
were no deals signed. (Reuters)

 

Export Developments.

·        
One offer and results awaited: Bangladesh seeks 50,000 tons of wheat for shipment within 40 days of contract signing.

·        
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.

·        
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

·        
None reported