FI Morning Grain Comments 05/25/22

PDF attached

 

Good
morning.

 

Improved
prospects to free up grain exportable supply out of the Black Sea, a higher USD, and steady to an improvement in US weather is sending grains and the soybean complex lower. WTI crude is higher. Russia’s Foreign Ministry is calling for a dialogue on supplies
from Ukraine in response to requests for humanitarian passage. Rain was near expectations for the central and southern Great Plains yesterday and the forecast is slightly wetter for Thursday. Rain increases for the Midwest through the end of the workweek before
drying down this weekend. That should favor recently planted spring grains.  South American weather looks good.

 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 25, 2022

• France
  still looks to be dry biased over the next week to nearly ten days 
• some
  relief is expected briefly after that time period, but the relief should be temporary
• Other
  western crop areas in Europe will also experience below average precipitation in this first week of the outlook
• Eastern
  Europe, including Germany, will see a better distribution of rainfall relative to that of France, but some pockets of dryness will continue in the southeast part of the  continent
• China’s
  North China Plain will continue to dry down for ten days with temperatures above normal
  
• crop
  stress will slowly increase in unirrigated areas
• Far
  southern China will continue to be extremely wet keeping flood potentials high
• Northeastern
  China weather will be good, although a little wet biased at times. 
• U.S.
  weather still looks to be favorably balanced with rain and sunshine in the Midwest, Delta and southeastern states as well as a portion of the Plains
• Additional
  rain in West Texas overnight brought a little more rain to dryland production areas, but much more is needed to improve planting, emergence and establishment conditions for corn, sorghum and cotton
• Rain
  in hard red winter wheat areas overnight and that of Monday night into Tuesday improved topsoil moisture for summer crops and reproducing winter crops, although the change in yield is not expected to be dramatically 
• A
  more active weather pattern will be returning to the  northern Plains and Canada’s Prairies Friday into next week setting back the region’s recent drying trend and delaying fieldwork additionally in the wettest areas
• A
  ridge of high pressure advertised in the  eastern Midwest for next week will provide a warming trend and less rain for a little while, but the impact should be more beneficial than detrimental – at least for now
• No
  changes in South America today
• cooling
  in Argentina will bring rain to southern Brazil and Paraguay, but no crop damaging cold is expected in Safrinha corn areas
• Australia’s
  weather will be favorably mixed as it should be in India
• Russia’s
  west and north will continue wet

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

Macros

US
Durable Goods Orders Apr P: 0.4% (est 0.6%; prev 1.1%)

US
Durable Ex Transportations Apr P: 0.3% (est 0.5%; prev 1.4%)

US
Cap Goods Orders Nondef Ex Air Apr P: 0.3% (est 0.5%; prev 1.3%)

US
Cap Goods Ship Nondef Ex Air Apr P: 0.8% (est 0.5%; prev 0.4%)

 

 

Corn

·        
US corn futures are lower (6-week low) on improving US weather, higher USD and sharply lower wheat.

·        
Russia is open to talks on possibly freeing up exportable grain supply through Black Sea posts.

·        
Rain increases for the Midwest through the end of the workweek before drying down this weekend. That should favor recently planted spring grains. 

·        
South American weather looks good.

·        
Anec: Brazil corn exports for May seen at 1.243 million tons, down from 1.264 previous.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 8,000 barrels to 999 thousand (991-1014 range) from the previous week and stocks up 45,000 barrels to 23.836 million.

 

Export
developments.

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

 

 

Potential
2022 Fall Prices for Corn and Soybeans Based on History

Schnitkey,
G., K. Swanson, C. Zulauf and N. Paulson. “Potential 2022 Fall Prices for Corn and Soybeans Based on History.”
farmdoc daily (12):76, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 24, 2022.

https://farmdocdaily.illinois.edu/2022/05/potential-2022-fall-prices-for-corn-and-soybeans-based-on-history.html

 

 

Soybeans

·        
Soybeans, meal and oil are lower on technical selling, higher USD and weakness in US grains.

·        
WTI crude is higher.

·        
Argentina markets are closed today.

·        
AmSpec Agri reported Malaysia May 1-25 palm oil exports at 1.105 million tons, a 23 percent increase from 901,978 tons during the same period in April. ITS reported May 1-25 palm oil exports at 1.142 million tons, a 25 percent
increase.

·        
Palm oil futures trended lower after India cut import taxes on crude soybean oil and crude sunflower oil to help cool domestic prices.

·        
A slowdown in China and India palm oil imports also weighed on palm futures. Some traders are looking for India soybean oil imports to jump, by about 50 to 60 percent, to a record 4.5 million tons, according to a Reuters average
forecast from five dealers. Palm oil imports could drop by a fifth to 6.7 million tons. Soybean oil imports for India are slightly at a discount to palm oil imports, which still have a 5.5% import tax. Sunflower imports were seen at 1.9 million tons for the
current year, according to the survey.

·        
Malaysian palm oil ended 99 ringgit per ton lower at 6,383 and cash was up $5/ton at $1,550 ton.

·        
China September soybean futures were up 0.3%, meal down 0.4%, SBO 0.8% higher and China palm oil up 0.9%.

·        
Offshore values were leading SBO 41 points lower and meal $5.10 short ton lower. 

·        
Rotterdam vegetable oil prices were 15-20 euros lower from this time yesterday morning and meal mixed.  

·        
Anec: Brazil soybean exports for May seen at 11.278 million tons, down from 11.483 previous.

·        
EU soybean imports by May 22 for the July 2021-22 season totaled 12.83 million tons, versus 13.52 million for the same period 2020-21.

 

Export
Developments

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

·        
The USDA seeks 5,710 tons of packaged veg oil for use in export programs for shipping July 1-25 on June 1, with notice following day.

 

Wheat

·        
Wheat futures extended losses on improved prospects to free up some of the grain exportable supply out of the Black Sea and a higher USD.  Chicago wheat is down 5/6 last trading sessions.

·        
Russia’s Foreign Ministry is calling for a dialogue on supplies from Ukraine in response to requests for humanitarian passage. Russia is looking for some sanctions to be lifted. Demining is underway in the Black Sea.

·        
India Commerce Minister Piyush Goyal told Reuters they have no immediate plans to lift the wheat export ban. Exports have been pushing for some of the wheat at ports to be released for shipment. India is looking into government
to government tenders rather than private transactions.

·        
Rain was near expectations for the central and southern Great Plains yesterday and the forecast is slightly wetter for Thursday.

·        
Spring wheat plantings are expected to remain slow for the upper GP and parts of Canada.

·        
Manitoba (Canada) crop update reported only 10 percent of the intended spring grains at only 10 percent versus 5-year average of 77%, leading some farmers to switch a small amount of planned corn or soybean acres into canola and
spring wheat.

·        
The International Islamic Trade Finance Corporation (ITFC) has doubled the total financing granted to Egypt to cover the country’s imports of wheat to $6 billion, Minister of Supply and Internal Trade Ali El-Moselhi said in an
interview with MBC Masr TV channel on May 23rd. (Reuters)

·        
September Paris wheat fell 16.50 to 410.50 euros a ton at the time this was written.

·        
France is expected to see some rain this week and cooler temperatures.

·        
EU soft wheat exports by May 22 for the July 2021-22 season totaled 24.13 million tons, versus 24.23 million for the same period 2020-21.

 

Export Developments.

·        
Pakistan saw offers for the 500,000 tons of wheat they seek. Lowest offer was believed to be $515.49/ton c&f. Bulk shipment is sought to Pakistan in June to July 2022.

·        
Jordan bought 60,000 tons of barley for Aug/Sep shipment at $452/ton c&f.

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

 

Rice/Other

·        
None reported