FI Morning Grain Comments 05/25/21

PDF attached

 

Good
morning.

 

The
upper Midwest saw light rain across parts of MN, WI, IL, MI, and IN over the past 24-hours.  It was mostly dry elsewhere across the ECB. Far central and northern Great Plains received good rain.  Morning models are suggesting a touch drier for the northern
Plains and upper Midwest. 

 

This
morning we are seeing a higher trade in soybeans and soybean oil while meal and corn are on the defensive.  Wheat is mixed to higher led by the spring wheat contracts to the upside. 

 

USDA
reported a disappointing crop progress report for wheat.  Initial spring wheat conditions came in 12 points below expectations at only 45 percent G/E.  Winter wheat declined 1 point and was 3 points below expectations.  Corn plantings at 90 percent were one
point above expectations but ten above average.  Soybean plantings of 75 percent.

 

 

 

Weather

 

Last
24-hours

 

Next
7 days

World
Weather, Inc.

SOME
WORLD WEATHER HIGHLIGHTS FOR MAY 25, 2021

• Not
  much change occurred around the world overnight.
• Frost
  returned to parts of central and southern Parana, Brazil while harder freezes occurred farther south into Santa Catarina. 
  
• Rain
  will return to southern Brazil this weekend and early next week ahead of additional cool air. 
  
• In
  North America,
• Weather
  conditions will be trending more tranquil in Canada’s Prairies for a while.
  
• Recent
  moisture will support better planting and emergence conditions
• Frost
  and freezes are still expected in northeastern Saskatchewan and Manitoba Wednesday morning with a limited amount of permanent crop damage
• Rain
  is expected in the northern U.S. Plains late Wednesday and Thursday
• Hard
  red winter wheat areas will get a little too much moisture in the coming week.
  
• A
  good mix of weather is expected in the U.S. Midwest, Delta and southeastern states.
  
• West
  Texas received some additional rain of significance overnight, but mostly in the north.
  
• Russia’s
  southern New Lands and neighboring Kazakhstan will receive restricted rainfall, although temperatures will be milder for a while.
• Tropical
  Cyclone Yaas is expected to move into northeastern Odisha, India tonight as a weak Category One hurricane equivalent storm
• Torrential
  rain and flooding will accompany the storm inland, but damage due to excessive wind has been reduced by the storm’s weaker condition
• Australia
  will get some timely rain for its wheat, barley and canola planting, but it will need more moisture
• China
  will remain wettest in the northeast and far south with good planting progress elsewhere
• Argentina
  drying will improve harvest conditions after recent rain
• Wheat
  planting will advance well
• Europe
  weather will be favorable
• Western
  CIS weather will remain a little wetter than desired

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

Tuesday,
May 25:

• Monthly
  MARS bulletin on crop conditions in Europe
• Malaysia
  May 1-25 palm oil export data

Wednesday,
May 26:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Unica releases cane crush, sugar output data
• HOLIDAY:
  Malaysia, Indonesia, Singapore, Thailand

Thursday,
May 27:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports
• Brazil
  orange crop forecast for 2021-22

Friday,
May 28:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  agricultural prices paid, received

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
573,912                 versus   425000-625000  range

Corn                     
1,727,878             versus   1700000-2200000             range

Soybeans           
193,912                 versus   150000-250000  range

 

Macro

US
Philadelphia Fed Non-Manufacturing Regional Business Activity Index May: 36.9 (prev 36.3)

 

Corn

• CBOT
  corn was lower this morning as US planting progress hits 90 percent of USDA’s intended area. 
  
• China
  plans to “strengthen” price controls on corn and other commodities during its 5-year plan (2021-2025) to tame fluctuation in prices.  China also plans to build grain supplies. They also will keep wheat & rice minimum support price schemes.
• Reuters
  reported a Mexican federal judge ruled against a request by the National Farm Council to freeze a government plan to ban genetically modified (GMO) corn and herbicide glyphosate by 2024.  We were under the impression the ban on GMO corn would exclude yellow
  corn used for animal feed. 
• We
  see support in July corn around $6.33, then $6.21, with strong support at $6.05.
• Soybean
  and Corn Advisory:
• 2020/21
  Brazil Corn Estimate Lowered 2.0 mt to 95.0 Million Tons
• 2020/21
  Argentina Corn Estimate Unchanged at 46.5 Million Tons
• Traders
  may want to monitor the cold temperatures across southern Brazil that may impact corn areas of west of Parana and south of Mato Grosso do Sul. 
  
• USDA
  US corn export inspections as of May 20, 2021 were 1,727,878 tons, within a range of trade expectations, below 1,983,459 tons previous week and compares to 1,097,249 tons year ago. Major countries included China for 774,407 tons, Mexico for 356,683 tons, and
  Japan for 200,665 tons.

 

Export
developments.

• None
  reported

 

 

Soybeans

• CBOT
  soybeans and soybean oil are higher while meal is on the defensive.  Offshore values are suggesting a higher trade for the products.  Palm futures, after dropping hard on Monday, rebounded 134 points and cash palm was up $22.50/ton to $1,020.
  
• Soybean
  plantings are running above average at 75 percent. 
• Support
  for July soybeans is seen at $15.0625, then $14.8750.  November soybeans could test $13.00 by early June if we see US rains pickup across the ECB. 
  
• Soybean
  and Corn Advisory:
• 2020/21
  Brazil Soybean Estimate Unchanged at 134.0 Million Tons
• 2020/21
  Argentina Soybean Estimate Unchanged at 45.0 Million Tons
• USDA
  US soybean export inspections as of May 20, 2021 were 193,912 tons, within a range of trade expectations, below 310,408 tons previous week and compares to 343,698 tons year ago. Major countries included Indonesia for 79,104 tons, Egypt for 48,484 tons, and
  Mexico for 18,557 tons.  
• Offshore
  values were leading CBOT SBO 66 points higher and meal $2.20 lower. 
• Rotterdam
  vegetable oil prices for soybean oil and rapeseed oil were unchanged from late last week, according to Reuters, at least for the nearby months.  Rotterdam meal was mostly 1-3 euros higher. 
  
• China:
  

• Cargo
  surveyor SGS reported month to date May 25 Malaysian palm exports at 1,086,676 tons, 30,243 tons below the same period a month ago or down 2.7%, and 42,559 tons above the same period a year ago or up 4.1%.
• Cargo
  surveyor AmSpec reported Malaysian May 1-25 palm exports at 1.108 million tons, nearly from the same period a month ago.
  
• Cargo
  surveyor ITS reported Malaysian palm exports at 1.106MMT, also nearly unchanged from the same period a month ago.
  
• Malaysian
  palm oil: (uses settle price). 
  

 

Export
Developments

• USDA
  last week bought 4,970 tons of packaged vegetable oil for the educational program under the PL480 program at mostly $2,107.86 to $2,643.01/ton. 
  

 

Wheat

• Wheat
  is higher led by the spring wheat contract after USDA reported a much lower than expected spring wheat crop rating. At 45 good/excellent, this shows the dry areas of the northern Great Plains and parts of the PNW had an obvious impact on emergence this season,
  and a good rain soaking is still needed.  USDA reported the initial spring wheat rating 12 points lower than trade expectations and the winter wheat rating unexpectedly fell one point to 47 G/E, 3 points below a trade average.  Parts of North Dakota will see
  rain over the next few days but many parts of South Dakota could remain on the drier side.  The morning weather models did hint a touch lighter for rain across the central and northern Great Plains this week.   
  
• We
  see support at $6.35 for July Chicago wheat. 
• September
  Paris wheat market basis September was up 1.00 euro at 209.25.
• USDA
  US all-wheat export inspections as of May 20, 2021 were 573,912 tons, within a range of trade expectations, below 660,298 tons previous week and compares to 464,857 tons year ago. Major countries included Japan for 92,314 tons, Mexico for 77,194 tons, and
  Indonesia for 57,605 tons.

 

Export
Developments.

• Algeria
  seeks 50,000 tons of durum wheat on Wednesday, valid until Thursday, for shipment between July 1-31. 
  
• Japan
  seeks 124,620 tons of food wheat from the US and Canada later this week.

 

• Jordan
  seeks 120,000 tons of feed wheat on May 26 for Oct-Nov shipment. 
• Bangladesh
  seeks 50,000 tons of milling wheat on May 30. 
• USDA
  seeks 83,000 tons of hard red winter wheat for Africa on May 25 for July 6-16 shipment. 
  

 

Rice/Other

·        
None reported