FI Morning Grain Comments 05/25/23

PDF attached

 

Good
morning. 

 

USDA
export sales were very good for soybean meal. Old crop corn and wheat showed net reductions. Old crop soybeans, soybean oil and new crop grains were within expectations. The USD was up 29 points earlier and WTI crude down $1.12. Global equities were mixed.
The weakness in WTI crude oil is not impacting soybean oil and corn as much as it could. SBO is higher in large part to higher palm oil futures. Soybeans are lower from follow through selling in soybean meal. Corn is mixed while wheat is lower.
The
Great Plains will see additional precipitation bias western areas over the next week. Traders are starting to position ahead of the long US holiday weekend. Third month (Aug) Malaysia palm futures increased 86 ringgit to 3493 and Aug. cash increased $17.50
to $820.00/ton. Offshore values were leading SBO lower by about 5 points this morning and meal $2.10 short ton lower. The EU agreed to extend the suspension of selected Ukraine imports for a year.

 

Fund
estimates as of May 24

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 25, 2023

• Rain
  will bring dryness relief to Saskatchewan and northwestern Manitoba, Canada over the next several days
• Alberta,
  Canada’s drought areas “may” get some needed rain in early June, although the GFS model run this morning has suggested significant rain may occur there this weekend and early next week – confidence in the GFS outlook is a little low
• U.S.
  Midwest weather will continue drier than usual for another week and then scattered showers and thunderstorms are likely, though resulting rainfall may continue lighter than usual
• West
  Texas received some welcome rain overnight and more is expected today and again Saturday night with a few other sporadic showers expected during the balance of the next two weeks
• Planting
  moisture is improving, but subsoil moisture will continue low leaving concern about the long term outlook for dryland crops
• U.S.
  hard red winter wheat areas will get periodic showers and thunderstorms over the next week to ten days with a little worry over crop quality in some of the wetter areas
• Northern
  Europe will be notably drier biased over the next ten days while the south continues to get waves of rain
• Russia’s
  eastern New Lands are advertised to get some rain in early June after a dry finish to May
• Northern
  India will trend wetter than usual this weekend into early next week disrupting some fieldwork, but perhaps benefiting early cotton development
• China
  weather will continue well mixed for all crops
• Southern
  Australia rainfall will be timely in the next week to ten days, despite lighter than usual
  
• Early
  monsoon rainfall will be abundant in Kerala, India and along the coast of Myanmar during the next couple of weeks
• Interior
  Thailand crop area will get needed rain, but may continue to see lighter than usual rain amounts for a while
• Indonesia
  and Malaysia rainfall will be in decline next week and on into the first half of June

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

 

 

 

 

USDA
export sales

Big
soybean meal sales this week. Increases were primarily for Poland (100,000 MT), unknown destinations (46,500 MT), Colombia (45,700 MT).  Soybean sales were 115,000 tons and soybean oil improved to 6,200 tons. Old crop corn net reduction was not as bad as traders
expected. China cancelled 331,600 tons of corn and unknown was reduced by 216,700 tons. This and other cancelations were partially offset by a 216,100 ton increase by Mexico. All wheat sales for 2023-24 were 245,100 tons with Japan as largest buyer. Sorghum
sales were 5,700 tons and pork 29,200 tons.

 

 

 

 

Macros

US
GDP Annualized (Q/Q) Q1 S: 1.3% (est 1.1%; prev 1.1%)

US
Core PCE (Q/Q) Q1 S: 5.0% (est 4.9%; prev 4.9%)

US
Personal Consumption Q1 S: 3.8% (est 3.7%; prev 3.7%)

US
GDP Price Index Q1 S: 4.2% (est 4.0%; prev 4.0%)

US
Initial Jobless Claims May 20: 229K (est 245K; prevR 225K)

US
Continuing Claims May 13: 1794K (est 1800K; prev 1799K)

US
Chicago Fed Nat Activity Index Apr: 0.07 (est -0.20; prevR -0.37)

Canadian
Payroll Employment Change – SEPH Mar: -9.9K (prev 62.5K)

 

Corn

·        
Corn futures are mixed. USDA reported large China cancelations for old crop commitments but there were some countries that added to commitments, offsetting total old crop reductions.

·        
Black Sea shipments have not significantly improved since the recent extension of the grain deal. Vessels are slow to arrive.

·        
Traders are starting to position ahead of the long US holiday weekend.

·        
EIA reported US ethanol production decreased 4,000 barrels per day last week to 983,000 barrels. Stocks fell a large 1.150 million barrels to 22.041 million barrels. For comparison, a Bloomberg poll looked for production to be
up 10,000 barrels and stocks to be down 213,000 barrels.  Ethanol stocks are down five consecutive weeks, from 25.293 million as of 4/14 to 22.041 million as of 5/19.

 

University
of IL: Overview of the RIN Compliance System and Pricing of RINs for the U.S. Renewable Fuel Standard

Gerveni,
M., T. Hubbs and S. Irwin. “Overview of the RIN Compliance System and Pricing of RINs for the U.S. Renewable Fuel Standard.”
farmdoc daily (13):95, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 24, 2023.

https://farmdocdaily.illinois.edu/2023/05/overview-of-the-rin-compliance-system-and-pricing-of-rins-for-the-us-renewable-fuel-standard.html

 

Export
developments.

• None
  reported

 

 

Soybeans

·        
Soybeans are lower following weakness in follow through selling in the soybean meal market. There are some demand concerns for China soybean meal and corn after China has been aggressive with wheat imports. Meanwhile SA soybean
meal premiums have been under pressure this week

·        
SBO is higher in large part to higher palm oil futures.

·        
China exported 139,000 tons of used cooking oil during the month of April, 40,000 tons of that was for the US.  China October-April exports of used cooking oil to the US amounts to 211,000 tons, up from zero during the same period
year earlier. China exports of biodiesel to the EU during the October-April period were 1.267 million tons versus 874 year earlier and China exports of used cooking oil to the EU for the same 2022-23 period were 229,000 tons versus 539,000 tons year earlier.

·        
Following an increase in EU biofuel imports, the EU vegetable oil industry group FEDIOL called for an investigation into the authenticity of these biofuel imports. They also want production of biodiesel made with waste oils and
fat as part of targets for renewable energy use. EU rapeseed oil prices are down 30% in the past five months.

·        
Concerns over El Nino cutting Malaysian palm oil production sent palm oil futures higher. MPOB said crude palm oil production could fall between 1 and 3 million tons next year (3MMT being worst case). It takes about 15 to 18 months
for the impact on palm oil production.  MPOB maintained their average 2023 CPO price at 4,200 ringgit per ton.

·        
Cargo surveyor AmSpec reported May 1-25 palm oil exports at 933,615 tons, a 0.7% decrease from 927,331 tons during the April 1-25 period. ITS reported a 0.7% decrease to 982,605 tons.

·        
Third month (Aug) Malaysia palm futures increased 86 ringgit to 3493 and Aug. cash increased $17.50 to $820.00/ton.

·        
China May soybean futures were down 0.1%, meal down 0.9%, SBO down 0.9% and palm oil futures down 0.5%.

·        
Nearby Rotterdam vegetable oils were unchanged to up 17.50 eros from this time yesterday morning and meal mostly lower.

·        
Offshore values were leading SBO lower by about 5 points this morning and meal $2.10 short ton lower.

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat is lower on US weather and slow Black Sea grain shipments. The USD index hit a 2-month high.

·        
The EU agreed to extend the suspension of selected Ukraine imports for a year. The ban on Ukraine grain imports started in April after a few countries complained about an influx of grain imports resulting in cheaper supplies undercutting
local producers. Hungary, Poland, Bulgaria, Romania and Slovakia curbed domestic sales of selected grains from Ukraine but will allow their transit as a pass through for other import destinations.

·        
September Paris wheat are up 0.75 euro to 223.25 per tons.

·        
Reuters: “So far, 30.3 million tons of grain on 953 vessels have been transported through the grain corridor. Most of the products have been shipped to China, or 23% of the total volume. Spain’s share is 18% and Turkey’s is 11.87%,”
said Karakas, deputy director general of the Turkish Trade Ministry’s Directorate General of International Service Trade.

·        
Egypt said their wheat reserves are large enough to last 5.9 months and vegetable oil reserves for 5.0 months.

 

Export
Developments.

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

 

Rice/Other

·        
None reported

 

USDA
export sales

Export
Sales Highlights 

This
summary is based on reports from exporters for the period May 12-18, 2023.

 

Wheat:  Net
sales reductions of 45,100 metric tons (MT) for 2022/2023–a marketing-year low–were up 7 percent from the previous week, but down noticeably from the prior 4-week average. Increases primarily for China (68,000 MT, including 65,000 MT switched from unknown
destinations), Nigeria (15,900 MT, including 15,000 MT switched from unknown destinations), Ecuador (9,600 MT), South Korea (2,200 MT), and Colombia (700 MT, including decreases of 6,600 MT), were more than offset by reductions primarily for Japan (63,100
MT), unknown destinations (59,400 MT), and the Philippines (16,000 MT). Net sales of 245,100 MT for 2023/2024 were primarily for Japan (143,900 MT), Guatemala (45,700 MT), the Philippines (22,000 MT), Honduras (14,000 MT), and Mexico (10,200 MT). Exports of
386,300 MT were up 78 percent from the previous week and 53 percent from the prior 4-week average. The destinations were primarily to Mexico (68,700 MT), China (68,000 MT), the Philippines (66,000 MT), Taiwan (51,400 MT), and Japan (36,300 MT).

 

Corn:  Net
sales reductions of 75,200 MT for 2022/2023 were down 78 percent from the previous week and down noticeably from the prior 4-week average. Increases primarily for Mexico (216,100 MT, including decreases of 100 MT), Japan (185,700 MT, including 194,800 MT switched
from unknown destinations and decreases of 10,900 MT), Morocco (19,800 MT, including 18,000 MT switched from unknown destinations), Jamaica (18,100 MT), and Taiwan (10,900 MT), were more than offset by reductions for China (331,600 MT), unknown destinations
(216,700 MT), Honduras (3,600 MT), and Colombia (1,200 MT). Net sales of 52,100 MT for 2023/2024 were reported for Canada (25,400 MT), Honduras (23,400 MT), unknown destinations (3,000 MT), and Guatemala (300 MT). Exports of 1,502,800 MT were up 38 percent
from the previous week and 20 percent from the prior 4-week average. The destinations were primarily to Japan (511,300 MT), China (377,400 MT), Mexico (263,300 MT), Colombia (171,100 MT), and Guatemala (70,00 MT).

 

Barley:  No
net sales or exports were reported for the week. 

Sorghum: 
Net sales of 5,700 MT for 2022/2023 were down noticeably from the previous week and down 50 percent from the prior 4-week average. Increases reported for China (115,700 MT, including 110,000 MT switched from unknown destinations), were offset by reductions
for unknown destinations (110,000 MT). Exports of 115,800 MT were up noticeably from the previous week and up 70 percent from the prior 4-week average. The destination was to China. 

Rice:  Net
sales of 30,300 MT for 2022/2023 were down noticeably from the previous week, but up 25 percent from the prior 4-week average. Increases were primarily for Haiti (15,100 MT, including decreases of 11,900 MT), the United Kingdom (6,900 MT), Honduras (5,600
MT), Canada (1,300 MT), and Mexico (600 MT). Exports of 22,300 MT were down 60 percent from the previous week and 52 percent from the prior 4-week average. The destinations were primarily to Haiti (15,100 MT), Mexico (4,200 MT), Canada (2,000 MT), Saudi Arabia
(500 MT), and the Bahamas (200 MT).  

Soybeans:  Net
sales of 115,000 MT for 2022/2023 were up noticeably from the previous week, but down 26 percent from the prior 4-week average. Increases primarily for Germany (57,700 MT), Japan (53,500 MT, including 52,200 MT switched from unknown destinations), China (25,000
MT), Indonesia (6,600 MT, including decreases of 100 MT), and Malaysia (5,000 MT), were offset by reductions for unknown destinations (37,700 MT), the Dominican Republic (500 MT), Egypt (200 MT), and Taiwan (100 MT). Net sales of 1,100 MT for 2023/2024 resulting
in increases for Mexico (4,000 MT) and Taiwan (200 MT), were offset by reductions for Japan (3,100 MT). Exports of 287,300 MT were up 52 percent from the previous week, but down 26 percent from the prior 4-week average. The destinations were primarily to Japan
(61,000 MT), Germany (57,700 MT), Egypt (56,800 MT – late), Mexico (37,800 MT), and Indonesia (22,300 MT).   

Optional
Origin Sales:  For
2022/2023, the current outstanding balance of 300 MT, all South Korea. 

Export
for Own Account:  For
2022/2023, the current exports for own account outstanding balance of 1,600 MT are for Canada (1,400 MT) and Taiwan (200 MT). 

Late
Reporting:  For
2022/2023, exports of 56,773 MT of soybeans were late to Egypt.

 

Export
Adjustments:  Accumulated
exports of soybeans to the Netherlands were adjusted down 57,723 MT for week ending May 4th. The correct destination for this shipment is Germany.

 

Soybean
Cake and Meal:  Net
sales of 341,300 MT for 2022/2023 were up 69 percent from the previous week and 68 percent from the prior 4-week average. Increases primarily for Poland (100,000 MT), unknown destinations (46,500 MT), Colombia (45,700 MT, including decreases of 2,400 MT),
Mexico (23,300 MT, including decreases of 15,900 MT), and Guatemala (19,400 MT), were offset by reductions for Belgium (2,400 MT) and the Dominican Republic (400 MT). Net sales of 50,600 MT for 2023/2024 were primarily for Canada (30,500 MT) and Guatemala
(12,200 MT). Exports of 226,000 MT were down 21 percent from the previous week and 6 percent from the prior 4-week average. The destinations were primarily to Vietnam (54,400 MT), Colombia (45,900 MT), Mexico (33,800 MT), Canada (33,300 MT), and Panama (12,900
MT).

 

Soybean
Oil:  Net
sales of 6,200 MT for 2022/2023 were up noticeably from the previous week and up 62 percent from the prior 4-week average. Increases were reported for Jamaica (3,500 MT), Mexico (2,500 MT), and Canada (200 MT). Exports of 700 MT were down 84 percent from the
previous week and 89 percent from the prior 4-week average. The destination was to Canada. 

 

Cotton: 
Net sales of 131,200 RB for 2022/2023 were down 1 percent from the previous week and 35 percent from the prior 4-week average. Increases primarily for China (64,800 RB, including decreases of 1,900 RB), Vietnam (30,400 RB, including 2,700 RB switched from
China, 400 RB switched from Japan, and 200 RB switched from South Korea), Turkey (11,700 RB, including decreases of 4,700 RB), Bangladesh (9,000 RB, including decreases of 200 RB), and Pakistan (3,800 RB, including decreases of 400 RB), were offset by reductions
for South Korea (200 RB), Mexico (200 RB), Guatemala (100 RB), and Nicaragua (100 RB). Net sales of 84,300 RB for 2023/2024 were reported for Turkey (54,600 RB), Mexico (24,000 RB), China (4,400 RB), Indonesia (900 RB), and Thailand (400 RB). Exports of 268,700
RB were down 19 percent from the previous week and 27 percent from the prior 4-week average. The destinations were primarily to Vietnam (68,100 RB), Turkey (67,300 RB), Pakistan (38,500 RB), China (22,400 RB), and Bangladesh (16,900 RB). Net sales of Pima
totaling 3,300 RB for 2022/2023 were down 65 percent from the previous week and 80 percent from the prior 4-week average. Increases reported for Vietnam (1,800 RB, including 100 RB switched from Japan), India (800 RB), Turkey (500 RB), Pakistan (200 RB), and
Thailand (100 RB switched from Japan), were offset by reductions for Japan (200 RB) and Guatemala (100 RB). Exports of 13,500 RB were down 7 percent from the previous week and 33 percent from the prior 4-week average. The destinations were primarily to India
(5,200 RB), China (3,300 RB), Vietnam (2,300 RB), Egypt (900 RB), and Djibouti (900 RB). 

 

Optional
Origin Sales:  For
2022/2023, the current outstanding balance of 1,100 RB, all Malaysia.  

Export
for Own Account:  For
2022/2023, exports for own account totaling 600 RB to Vietnam were applied to new or outstanding sales. The current exports for own account outstanding balance of 112,200 RB are for China (80,600 RB), Vietnam (21,500 RB), Pakistan (5,000 RB), South Korea (2,400
RB), India (1,500 RB), and Turkey (1,200 RB). 

Hides
and Skins:  Net
sales of 451,000 pieces for 2023 were up 8 percent from the previous week and 2 percent from the prior 4-week average. Increases primarily for China (339,100 whole cattle hides, including decreases of 15,300 pieces), Mexico (51,100 whole cattle hides, including
decreases of 900 pieces), South Korea (34,300 whole cattle hides, including decreases of 300 pieces), Thailand (18,700 whole cattle hides, including decreases of 900 pieces), and Turkey (4,600 whole cattle hides), were offset by reductions for Italy (400 pieces)
and Brazil (200 pieces). Exports of 492,600 pieces were up 42 percent from the previous week and 34 percent from the prior 4-week average. Whole cattle hides exports were primarily to China (328,000 pieces), Mexico (58,800 pieces), South Korea (49,000 pieces),
Thailand (14,700 pieces), and Brazil (11,100 pieces).

 

Net
sales of 105,900 wet blues for 2023 were down 42 percent from the previous week and 1 percent from the prior 4-week average. Increases were primarily for Italy (57,200 unsplit), Vietnam (18,300 unsplit), China (10,000 unsplit, including decreases of 100 unsplits),
Mexico (8,900 unsplit), and Thailand (8,000 unsplit). Exports of 145,500 wet blues were up 17 percent from the previous week and 36 percent from the prior 4-week average. The destinations were primarily to Italy (39,400 unsplit), Vietnam (23,900 unsplit and
4,000 grain splits), China (26,700 unsplit), Thailand (16,200 unsplit), and Brazil (11,000 unsplit and 1,900 grain splits). Net sales of 45,400 splits were reported for China (41,000 pounds) and Vietnam (4,400 pounds, including decreases of 200 pounds). Exports
of 39,900 pounds were to Vietnam.

 

Beef:  Net
sales of 18,300 MT for 2023 were up 5 percent from the previous week and 15 percent from the prior 4-week average. Increases were primarily for Japan (5,500 MT, including decreases of 400 MT), South Korea (3,800 MT, including decreases of 400 MT), China (2,500
MT, including decreases of 100 MT), Mexico (2,200 MT, including decreases of 100 MT), and Taiwan (1,200 MT, including decreases of 100 MT). Exports of 16,500 MT were down 10 percent from the previous week and 3 percent from the prior 4-week average. The destinations
were primarily to South Korea (4,700 MT), Japan (4,100 MT), China (2,300 MT), Mexico (1,400 MT), and Canada (1,300 MT).

 

Pork:  Net
sales of 29,200 MT for 2023 were down 8 percent from the previous week and 29 percent from the prior 4-week average. Increases were primarily for Mexico (14,400 MT, including decreases of 300 MT), Japan (4,400 MT, including decreases of 100 MT), South Korea
(4,400 MT, including decreases of 600 MT), Colombia (1,200 MT), and the Dominican Republic (1,100 MT, including decreases of 100 MT). Exports of 38,500 MT were up 5 percent from the previous week and 3 percent from the prior 4-week average. The destinations
were primarily to Mexico (16,900 MT), China (4,600 MT), Japan (4,300 MT), South Korea (3,200 MT), and Australia (2,100 MT).

 

May
25, 2023                                      1             FOREIGN AGRICULTURAL SERVICE/USDA

 

 

 

 

U.S.
EXPORT SALES FOR WEEK ENDING 5/18/2023   

  

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	13.6	365.3	490.8	34.8	4,757.9	6,982.6	55.3	426.8
SRW	7.5	272.2	138.5	50.8	2,635.4	2,731.6	50.2	802.0
HRS	-5.6	564.8	480.4	109.7	5,183.6	5,045.1	62.2	587.0
WHITE	-60.7	290.1	168.5	157.4	4,319.9	3,202.2	77.4	354.9
DURUM	0.2	58.8	0.5	33.6	393.4	195.9	0.0	36.9
TOTAL	-45.1	1,551.2	1,278.6	386.3	17,290.2	18,157.4	245.1	2,207.5
BARLEY	0.0	3.5	5.2	0.0	8.5	15.3	0.0	6.0
CORN	-75.2	8,873.4	14,335.4	1,502.8	29,106.0	44,720.6	52.1	2,752.5
SORGHUM	5.7	327.3	1,225.3	115.8	1,318.5	5,536.1	0.0	63.0
SOYBEANS	115.0	2,940.5	10,224.8	287.3	47,899.4	49,194.2	1.1	2,551.7
SOY MEAL	341.3	2,613.0	2,681.7	226.0	7,951.3	7,839.4	50.6	455.0
SOY OIL	6.2	61.9	111.4	0.7	62.9	559.9	0.0	0.6
RICE
L G RGH	5.6	138.5	142.1	2.5	573.4	1,110.0	0.0	6.0
M S RGH	0.0	33.2	8.1	0.0	23.8	12.9	0.0	5.0
L G BRN	3.2	6.1	5.1	0.6	17.9	48.5	0.0	0.0
M&S BR	0.5	21.6	9.9	0.1	23.9	77.5	0.0	0.0
L G MLD	19.8	120.5	88.7	17.8	587.7	666.1	0.0	40.0
M S MLD	1.1	89.9	185.2	1.3	224.1	333.1	0.0	40.2
TOTAL	30.3	409.8	439.1	22.3	1,450.9	2,248.2	0.0	91.2
COTTON		THOUSAND RUNNING BALES
UPLAND	131.2	3,581.8	5,280.1	268.7	9,181.1	9,618.7	84.3	1,608.5
PIMA	3.3	73.7	98.9	13.5	236.8	377.2	0.0	4.7