FI Morning Grain Comments 06/06/22

PDF attached

 

Good
morning.

 

Two
warehouses with sunflower meal at Nikatera (Ukraine) were hit by a rocket. This and uncertainty over Black Sea (Ukraine) exports are sending wheat and other commodities higher. Turkey was in negotiations to help get Ukraine grain exports to sail, but that
is in question now. That coupled by most of Europe on holiday created a thin and wide trading range overnight. Weekend weather was very good for much of North America. Later we get export inspections and crop progress. Both reports should be more favorable
than that of last week, IMO. Saudi Arabia’s SAGO awarded Saudi Agricultural and Livestock Investment Co (SALIC) a contract to supply 240,000 tons of wheat from abroad to be delivered to the kingdom between August and October 2022.

 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 6, 2022

• Frost
  and freezes occurred in eastern Russia’s New Lands during the weekend, but the impact should have been minimal on spring wheat while it might have negatively impacted a few early emerged sunseed crops
• Rain
  fell in France, the U.K., Germany and many other areas in Europe during the weekend offer a first round of rain that has brought some relief to the region 
  
• Additional
  rain is expected periodically in Europe over the coming week to ten days, but some of the moisture will become lighter than usual over time and the situation will need to be closely monitored
• Interior
  southern Alberta, Canada received some important rain during the weekend that bolstered topsoil moisture for a part of the drought region, but many other areas were missed
  
• some
  additional rain is expected early this week and then a break will occur for several days before more rain evolves next week
• Eastern
  Canada Prairies have been drying out and that will continue for a while longer, but rain is expected late this week and into the weekend before expanding returning again later next week 
  
• enough
  time is expected for late planting to be completed before rainy weather arrives again
• U.S.
  Midwest, Plains, Delta and southeastern states will see a good mix of rain and sunshine over the coming week
  
• next
  week will trend drier and warmer in the southern Plains, lower Midwest and Delta, but soil moisture will be ideal to carry on normal crop development
• West
  Texas rainfall is expected to be limited this week outside of the Texas Panhandle and warm temperatures will induce net drying
  
• some
  rainfall is possible, but resulting amounts will not be enough to counter evaporation
• Argentina’s
  western wheat areas will continue dry biased over the next ten days
• Southern
  Brazil will be quite wet for a while this week and that will maintain wet field conditions in wheat and some southern Safrinha corn areas
• Cotton
  areas of western Mato Grosso, Brazil will get rain Wednesday into Friday offering a little benefit to a few crops
• China’s
  North China Plain will get a few sporadic showers this week and still deal with drier than usual conditions for a while
  
• next
  week looks to be wetter, but World Weather, Inc. believes the wetter bias is overdone
• India’s
  monsoon will be lighter than usual for another week and then increase somewhat next week
• Australia’s
  weekend rain in the east was ideal for wheat, barley and canola planting. Western Australia will get some rain in this coming week to help with planting and emergence in those areas. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Monday,
June 6:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop planting data for corn, soybeans, wheat and cotton; winter wheat condition and harvesting, 4pm
• US
  cotton, corn, soybean and spring wheat conditions, 4pm
• HOLIDAY:
  Germany, South Korea, Malaysia, New Zealand
• Malaysia’s
  June 1-5 palm oil export data

Tuesday,
June 7:

• EU
  weekly grain, oilseed import and export data
• Vietnam’s
  customs department releases May export data for coffee, rice and rubber
• Russian
  Grain Union’s International Grain Round conference, Gelendzhik, Russia, day 1
• International
  Grains Council conference, day 1
• Global
  Food Summit in Munich, day 1
• Purdue
  Agriculture Sentiment
• Abares
  agricultural commodities outlook
• New
  Zealand Commodity Price
• New
  Zealand global dairy trade auction
• France
  agriculture ministry releases crop estimates

Wednesday,
June 8:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans
• Russian
  Grain Union’s International Grain Round conference, Gelendzhik, Russia, day 2
• International
  Grains Council conference, day 2
• Global
  Food Summit in Munich, day 2
• France
  AgriMer monthly grain outlook

Thursday,
June 9:

• China’s
  first batch of May trade data, including soybeans, edible oils, rubber and meat imports
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Ecosperity
  sustainability conference, Singapore
• Russian
  Grain Union’s International Grain Round conference, Gelendzhik, Russia, day 3

Friday,
June 10:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• ICE
  Futures Europe weekly commitments of traders report
• Malaysian
  Palm Oil Board’s data for May output, exports and stockpiles
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• Malaysia’s
  June 1-10 palm oil export data
• Brazil’s
  Unica may release cane crush and sugar output data (tentative)

Source:
Bloomberg and FI

 

 

 

 

Due
out June 8

 

 

 

CFTC
COT

Funds
are still negative for wheat but not as less long than expected.

 

 

 

 

Macros

 

Corn

·        
US corn futures are higher following wheat over Black Sea shipping concerns. News was light. We expect USDA export inspections and US corn plantings to improve relative to a week earlier. Corn plantings are already near its respected
5-year average. 

·        
Weekend weather was very good for much of North America.

·        
The USD was 2 points lower at the time this was written and WTI higher.

 

Export
developments.

·        
None reported 

 

Soybeans

·        
CBOT soybeans
are higher from strength in wheat and global supply problems for related oilseed products. 

·        
Malaysia

·        
China

·        
Rotterdam vegetable oils were unchanged to 15 euros lower and meal unchanged from Friday. Most of Europe is on holiday.

·        
Offshore values are leading SBO about 7 points lower and meal higher.

·        
Indonesia’s export permits for palm oil increased to 302,000 tons, but that is nothing to get excited about.

·        
Safras reported Brazil 2021-22 soybean sales at 65.9% as of June 3, up from 61% May 6 and down from 75.6% year ago.

 

Export
Developments

·        
Egypt’s GASC seeks local and international vegetable oils on June 8 for Aug 5-25 arrival.

·        
China will offer another 500,000 tons of soybeans out of reserves on June 10.

 

Wheat

·        
Wheat futures are sharply higher in a thin trade (most of EU on holiday) from uncertainty over Black Sea (Ukraine) export prospects. Turkey was in negotiations to help Ukraine grain exports to sail, but that is in question now.

·        
Ukraine exported 148,000 tons of grain during the first five days of June. 2021-22 grain exports stand at 47.2 million tons, with three weeks to go in the crop year.

·        
Russian wheat export prices increased last week. IKAR reported 12.5% protein content for supply from Black Sea ports in June rose $15 to $425 (FOB).

·        
We look for a 4 percent US winter wheat harvest to be reported as of Sunday, below 6 percent average.

·        
September EU wheat futures were up 13.50 euros per ton at 391.75 euros.

 

Export
Developments.

·        
Saudi Arabia’s SAGO awarded Saudi Agricultural and Livestock Investment Co (SALIC) a contract to supply 240,000 tons of wheat from abroad to be delivered to the kingdom between August and October 2022.

 

Rice/Other

·        
Cambodia rice exports to China are up 23.6 percent during the Jan-Mar period at 149,447 tons.