FI Morning Grain Comments 06/06/23

PDF attached

 

Good
morning.

 

USDA:
Private exporters reported sales of 165,000 metric tons of soybeans for delivery to Spain during the 2022/2023 marketing year.

 

A
water dam bust in southern Ukraine is sending grains higher along with a deterioration in the US corn crop rating and low production estimate for Australian wheat. Australia sees their wheat crop at 26.2 million tons, a 34 percent decline from last year. Traders
are concerned the Ukraine/Russia conflict is escalating. Local flooding of farms and villages is expected across a portion surrounding the Russian-controlled Nova Kakhovka dam, about the same size of Utah’s Great Salt Lake. Soybeans are higher after USDA reported
the initial soybean crop ratings at 62 percent G/E, three points below an average trade guess. Corn ratings slipped 5 points to 64 percent from the previous week. Spring wheat ratings were 64 percent, two points below expectations. Soybean meal futures are
trading higher on short covering. Soybean oil is lower on weaker energy prices and lower lead by offshore values. August Malaysia palm futures decreased 65 ringgit to 3316 and Aug. cash fell $20 to $780/ton. Offshore values were leading SBO lower by about
162 points this morning and meal $2.40 short ton higher.
The
European model remains dry for the WCB but the GFS model is turning slightly wetter for the 7-10 day.

 

 

Fund
estimates as of June 5 (net in 000)

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 6, 2023

• U.S.
  Midwest cooling and expected rainfall during the  coming week to ten days will offer some relief to recent drying and crop moisture stress
•  A
  full restoration of soil moisture is  not likely and many areas will remain on a path for below average rainfall this month, but the timely rain and cooling should benefit many crops
• Less
  rain is expected in West Texas cotton, corn, sorghum and peanut production areas during the next ten days, although it will not be dry
• Canada’s
  Prairies will continue drier biased and warm through the end of this week and into the  weekend, despite some showers
  
• Some
  increase in rain and cooling is possible in the second week of the  forecast
• Northern
  Europe is expecting rain this weekend and next week easing long term dryness
• Eastern
  CIS New Lands will get some much  needed rain this week and into early next week easing recent very warm to hot temperatures and accelerated drying
• India’s
  monsoon will perform poorly through the weekend and into early next week, but it will  improve shortly thereafter with greater rain in the south and eastern parts of the  nation
• Australia
  is still getting some very well distributed rainfall across key wheat, barley and canola areas favoring well established winter crops
• Argentina
  is  not likely to see much rain, but will have good planting conditions for wheat and barley as well as have success with summer crop harvest progress
• Brazil’s
  Safrinha crops will get a little rain in this coming week
• China’s
  weather will be mostly good

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Tuesday,
June 6:

• Russia
  grain union conference in Gelendzhik, day 1
• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• New
  Zealand commodity prices
• Malaysia’s
  June 1-5 palm oil export data
• US
  Purdue Agriculture Sentiment

Wednesday,
June 7:

• China’s
  1st batch of May trade data, including soybean, edible oil, rubber and meat & offal imports
• EIA
  weekly US ethanol inventories, production, 10:30am
• Russia
  grain union conference in Gelendzhik, day 2

Thursday,
June 8:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Russia
  grain union conference in Gelendzhik, day 3
• HOLIDAY:
  Brazil

Friday,
June 9:

• USDA’s
  World Agricultural Supply & Demand Estimates (WASDE), 12pm
• China’s
  agriculture ministry (CASDE) releases monthly supply and demand report
• Sustainable
  World Resources conference in Singapore
• 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
• Russia
  grain union conference in Gelendzhik, day 4

Source:
Bloomberg and FI

 

 

 

 

Reuters
estimates for USDA S&D

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
291,599                 versus   200000-600000  range

Corn                     
1,180,954             versus   600000-1400000                range

Soybeans           
214,247                 versus   100000-400000  range

 

 

Macros

The
Goldman Roll starts Wednesday, lasting for 5 business days.

 

Corn

·        
Corn futures are
higher after USDA reported a 5 point drop in the US rating
to 64 percent G/E.

·        
A water dam bust in southern Ukraine is also sending grains higher. Traders are concerned the Ukraine/Russia conflict is escalating. Local flooding of farms and villages is expected across a portion surrounding the Russian-controlled
Nova Kakhovka dam, about the same size of Utah’s Great Salt Lake.

 

Export
developments.

• None
  reported

 

Soybeans

·        
Soybeans are higher after USDA reported the initial soybean crop ratings at 62 percent G/E, three points below an average trade guess. Soybean meal futures are trading higher on short covering.

·        
Soybean oil is lower on weaker energy prices and lower lead by offshore values.

·        
India palm oil imports during May were only 441,000 tons, down from 510,094 tons during April. May was at a 27-month low.

·        
August Malaysia palm futures decreased 65 ringgit to 3316 and Aug. cash fell $20 to $780/ton.

·        
China May soybean futures were down 0.9%, meal up 1.5%, SBO unchanged and palm oil futures down 0.1%.

·        
Nearby Rotterdam vegetable oils were unchanged to 5 euros higher from this time yesterday morning and meal up 2-6 euros higher.

·        
Offshore values were leading SBO lower by about 162 points this morning and meal $2.40 short ton higher.

 

Export
Developments

·        
Under the 24-hour reporting system, USDA announced 165,000 tons of soybeans were sold to Spain for 2022-23 delivery.

·        
USDA seeks 1,140 tons of packaged vegetable oil on June 6 for July shipment.

 

Reuters
MPOB estimates

 

 

Wheat

·        
US wheat futures are higher on Black Sea conflict tensions and a low production estimate for Australian wheat.

·        
US spring wheat ratings were 64 percent, two points below expectations.

·        
Australia sees their wheat crop at 26.2 million tons, a 34 percent decline from last year. Plantings are nearing an end for Australia. For comparison, USDA is at 29 million tons versus 39 million tons year earlier.

·        
Australia’s weather outfit sees a 70 percent chance of El Nino this year.

·        
December Paris wheat futures are up 3.25 euros earlier to 233.75 per ton.

·        
Ukraine grain exports were 45.6 million tons so far the 2022-23 July-June season, down from 47.2 million tons in the same period year ago. That includes 15.6 million tons of wheat, 27.1 million tons of corn and 2.7 million tons
of barley.

·        
Kazakhstan’s AgMin expects to harvest about 16 million tons of wheat this year.  USDA is a 14 million tons.

 

Export
Developments.

·        
Lowest offer for Egypt seeking wheat was $229/ton fob from Russia for July 21-31 shipment.

·        
Japan seeks 86,922 tons of food wheat later this week for August shipment.

·        
Iran seeks 120,000 tons of soybean meal from Brazil on June 7 for July and/or August shipment.

·        
Saudi Arabia bought 624,000 tons of wheat on June 5 for September through October delivery at an average price of $261.76/ton c&f.  On March 13 they purchased 1.043 million tons for July through August arrival at an average price
of $316.86/ton c&f.

·        
Morocco seeks 500,000 tons of feed barley on June 14.

 

Rice/Other

·        
South Korea seeks about 62,200 tons of rice, 44,400 tons from China and rest from Vietnam, on June 8, for arrival between September 1-30.