FI Morning Grain Comments 05/27/22

PDF attached

 

Good
morning.

 

Holiday
mode is kicking in with US off Monday and Jubilee next week. Some Asian countries will also be on holiday selected days.

 

Indonesia
announced they will allocate 1 million tons of palm oil for the export market, but no details or timeline were provided. We see little reaction in soybean oil futures from this news. Palm oil did sell off. Soybeans are trading near contract highs and profit
taking is not out of the question today. Expect a light trade today ahead of the US holiday weekend. US markets will resume trading Monday evening (CT). The USD was 12 points lower and WTI crude oil was off  $0.33 at the time this was written. The models for
the US and EU weather forecasts improved for the short term. Expect good US Midwest plantings next week.  South Korea bought a variety of 124,700 tons of wheat from Canada, US, and Australia. French wheat conditions again deteriorated.

 

 

CME

https://www.cmegroup.com/tools-information/holiday-calendar.html

 

 

 

Weather

Past
7 days

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MAY 27, 2022

• France
  and some neighboring areas are advertised wetter for the middle to latter part of next week and into the following weekend today relative to that of previous days
  
• The
  wetter bias will offer greater relief to persistent dryness 
• Eastern
  Europe the western and northern parts of Russia and a few neighboring areas will be plenty wet for a while causing some delay to spring fieldwork, but the long term growth potential is not bad for the area
• Rain
  was also advertised in China’s North China Plain during the latter part of next week and especially in the following weekend
  
• the
  moisture will help reduce from moisture stress resulting from recent dryness and warm temperatures
• Southern
  Brazil is wetter today than that advertised earlier this week and if it verifies there may be some flooding rainfall next week
• northern
  Brazil and much of central and western Argentina will be drier biased over the next two weeks
• Western
  Australia would benefit from a boost in rainfall, but there is plenty of time for improved rainfall to reach the area
• Most
  of the U.S. Midwest, Delta and southeastern states will experience a good mix of weather resulting in ongoing aggressive early season crop development, although the rain will delay fieldwork periodically. 
• The
  northern U.S. Plains and eastern Canada’s Prairies will be wet biased once again for the weekend and early next week reversing the recent drying trend and raising the potential for some abandonment. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

Monday,
May 30:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Vietnam
  General Statistics office to release May coffee, rice, rubber exports data
• HOLIDAY:
  US

Tuesday,
May 31:

• U.S.
  crop planting data for corn, soybeans, spring wheat and cotton; winter wheat harvesting; cotton, corn winter wheat condition, 4pm
• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  May palm oil export data
• U.S.
  agricultural prices paid, received
• EARNINGS:
  FGV

Wednesday,
June 1:

• USDA
  soybean crush, DDGS production, corn for ethanol, 3pm
• Global
  Food Forum 2022 in Melbourne
• Australia
  Commodity Index
• HOLIDAY:
  Indonesia, Korea

Thursday,
June 2:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• HOLIDAY:
  Italy, UK

Friday,
June 3:

• FAO
  World Food Price Index
• 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
• HOLIDAY:
  China, Hong Kong, Thailand, UK

Source:
Bloomberg and FI

 

 

 

 

 

 

Macros

US
PCE Deflator (M/M) Apr: 0.2% (est 0.2%; prev 0.9%)

–
PCE Deflator (Y/Y) Apr: 6.3% (est 6.2%; prev 6.6%)

–
PCE Core (M/M) Apr: 0.3% (est 0.3%; prev 0.3%)

–
PCE Core (Y/Y) Apr: 4.9% (est 4.9%; prev 5.2%)

–
Personal Income (M/M) Apr: 0.4% (est 0.5%; prev 0.5%)

–
Personal Spending Apr: 0.9% (est 0.8%; prev 1.1%; prevR 1.4%)

US
Advance Goods Trade Balance (USD) May: -$105.9B (est -$114.8B; prevR -$127.1B)

–
Wholesale Inventories (M/M) Apr: 2.1% (est 2.0%; prev 2.3%; prevR 2.7%)

–
Retail Inventories (M/M) Apr: 0.7% (est 2.0%; prev 2.0%; prevR 3.0%)

 

 

Corn

·        
US corn futures
are higher from a reversal in intra commodity spreading, positioning ahead of the holiday weekend and lower USD.

·        
US markets will resume trading Monday evening (CT).

·        
We expect good planting progress across the US Midwest later this weekend well into next week.

·        
USDA could possibly issue their initial US corn crop condition on Tuesday. Corn emerged generally needs to be around 50 percent for conditions to be reported and as of May 22, corn was at 39 percent. We are eying 70 percent good/excellent
for initial 2022 ratings, same as the 5-year average and down from 76 year ago.

 

Export
developments.

·        
None reported

 

Soybeans

·        
July soybeans are trading near its contract high and profit taking today can’t be ruled out. Rumors of Chinese buying has underpinned this market and pressure crush margins this week. There were no USDA 24-hour sales announcements.

·        
Indonesia announced they will allocate 1 million tons of palm oil for the export market, but no details or timeline were provided.

·        
We see little reaction in soybean oil futures from this news. Palm oil did sell off.

·        
Expect good US Midwest plantings next week. 

·        
Malaysian palm oil ended 180 ringgit per ton lower at 6,353 and cash was down $10/ton at $1,555 ton.

·        
China September soybean futures were up 0.2%, meal up 2.3%, SBO 1.4% higher and China palm oil up  2.8%.

·        
Offshore values were leading SBO 92 points lower (90 higher for the week to date) and meal $2.40 short ton higher (0.30 higher for the week). 

·        
Rotterdam vegetable oil prices were mixed. Rotterdam meal when imported from SA were 1-5 euros higher.  

 

Export
Developments

·        
China plans to sell 500,000 tons of soybeans from reserves on June 1.

·        
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 are mixed with good strength in MN (slow spring wheat plantings), fund buying in Chicago wheat and improving weather for the Great Plains pressuring KC wheat.

·        
After local Indian traders said no rice export ban would be considered yesterday, India’s government is again mulling over banning it.  That is potentially supportive for the wheat market.

·        
South Korea bought a variety of 124,700 tons of wheat from Canada, US, and Australia.

·        
French wheat conditions again deteriorated. French soft wheat was rated 69% G/E versus 73% previous week and 80% year ago. The rating is down 20 points over the past three weeks.

·        
September Paris wheat were unchanged at 409.50 euros a ton at the time this was written.

·        
51% of the US mainland is experiencing drought, compared to 53% last week.

 

Export
Developments.

·        
South Korea bought a variety of 124,700 tons of wheat from Canada, US, and Australia.

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

 

Rice/Other

·        
India trade sources said the country has no plans to curb rice exports.