FI Morning Grain Comments 06/07/21

PDF attached

 

Good
morning.

 

CBOT
agriculture markets are higher on North American weather concerns and higher outside related commodity markets. The weather models are still hot and dry for the upper US Great Plains and Midwest. The southwestern US Plains will see excessive heat this week.
WCB will dry down.  Soybean futures and corn are leading the way.  Canola hit contract highs. Earlier WTI crude oil topped $70 for first time since 2018.  Canada has an opportunity for rain over the next two weeks and that might be limiting upside in wheat. 

 

Weather

 

 

World
Weather, Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 7, 2021

• Limited
  rainfall is expected in both the northern U.S. Plains and the western U.S. Corn Belt this week.
  
• Canada’s
  Prairies will get some rain, however.
• There
  is also concern about excessive heat for the southwestern U.S. Plains while the lower and eastern Midwest, Delta and southeastern states experience precipitation and milder than usual temperatures.
  
• Drought
  will continue in the far western United States.
• In
  Russia’s New Lands, excessive heat and dryness are expected to fester this weekend into next week and a “Sukhovei” may evolve next week raising a threat to crops in western Kazakhstan and Russia’s Southern Region.
  
• Ukraine
  and southwestern Russia will remain wet this week
• East-central
  China is a little wetter today than advertised Friday
• Central
  India will be impacted by a monsoon depression later this week and into the weekend causing excessive rain and flooding.
  
• India’s
  west coast will also be inundated with excessive rain. 
• No
  changes were noted for South America leaving need for rain in southwestern Argentina’s wheat region
  
• Brazil’s
  Safrinha corn areas will continue dry in the north while rain occurs in the south
• Most
  of the Safrinha crop has passed the moisture sensitive stage of development
• Australia’s
  forecast did not change much over the weekend and the same is true for Europe
  

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

Monday,
June 7:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions, planting — corn, cotton, soybeans, wheat, 4pm
• China
  customs to publish trade data, including imports of soybeans, edible oils, meat and rubber
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Malaysia, New Zealand

Tuesday,
June 8:

• Australian
  crop report
• International
  Grains Council Conference, day 1
• France
  agriculture ministry’s monthly crop estimates

Wednesday,
June 9:

• EIA
  weekly U.S. ethanol inventories, production
• International
  Grains Council Conference, day 2
• FranceAgriMer
  releases monthly grains report

Thursday,
June 10:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• Malaysian
  Palm Oil Board inventory, output and export data for May
• Brazil’s
  Conab releases output, yield and acreage data for corn and soybeans
• Port
  of Rouen data on French grain exports
• Malaysia
  June 1-10 palm oil export data

Friday,
June 11:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• 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

 

 

 

 

 

CFTC
Commitment of Traders

Funds
were less long than estimated for the 5 major CBOT commodities we follow on a daily basis. 

 

 

 

 

 

 

Corn

• US
  corn futures are higher
  on US weather concerns bias WCB and upper Midwest.  Heat forecast for the southwestern growing areas are also of concern.  ECB conditions look ok with rain occurring over the weekend.
  
• Goldman
  Roll begins today. 
• With
  corn sitting at a 3-week high, new contract highs are not out of question. December gapped sharply higher overnight.  Look for new crop to gain over July, which is already in play this morning. 
  
• Last
  week the money managed long positions fell short of expectations, not a price influencer, but a remainder there is room for them to add long positions.     
  

 

Export
developments.

• None
  reported

 

Soybeans

• The
  soybean complex is higher on North American weather concerns and higher outside related commodity markets.
  
• The
  weather models are still hot and dry for the upper US Great Plains and Midwest. The southwestern US Plains will see excessive heat this week. WCB will dry down. 
  
• Soybean
  futures and corn are leading the way.  Canola hit contract highs. Earlier WTI crude oil topped $70 for first time since 2018. 
  
• Rotterdam
  rapeseed and soybean oil prices were 25-65 euros higher from last Friday. 
  
• Malaysian
  is on holiday. 
• Indonesia
  will see heavy rain affecting palm oil production this week. 
• China
  sees May soybean imports at 9.61 million tons, up from 7.45 million in April and compares to 9.38 million tons a year ago. Reuters noted some cargoes were rolled over due to arrival delays in China in June.  China hog prices have been under pressure from a
  rebound in production, leading some to think China will slow soybean purchases from SA and US, which we have seen in recent week.  China crush margins are improving but remain at low levels. 
  
• Note
  we don’t see a slowdown for China importing corn from the US and Ukraine over the next few months. 
  
• Egypt
  is in for vegetable oils early this week. 
• 100
  soybean oil registrations were cancelled out of 2 locations (Emmetsburg, IA and Volga, SD, on Friday (SBO registrations stand at 868). 
  
• Offshore
  values are leading soybean oil 78 points lower and meal $3.30 higher. 
• China:
  

• Malaysian
  palm oil: holiday

 

 

Export
Developments

• Egypt’s
  GASC seeks vegetable oils on Tuesday for August 1-20 arrival.  Payment with 180-day letter of credit was requested. 
  
• Iran’s
  GTC bought 30,000 tons of each soybean oil and sunflower oil for June/July shipment.  The soybean oil could be sourced from South America.  Prices were not provided. 
  

 

Wheat

• US
  wheat is higher following soybeans and corn.  The southwestern US Plains will see excessive heat this week. Dakota’s saw extreme heat over the weekend as predicted. 
  
• Canada
  has an opportunity for rain over the next two weeks and that might be limiting upside in wheat. 
  
• Algeria
  seeks 50,000 tons of milling wheat on June 8 for July and/or August shipment.  IKAR raised its Russia wheat production estimate from 79.5 million tons to 80.0 million.  China sees May soybean imports at 9.61 million tons, up from 7.45 million in April and
  compares to 9.38 million tons a year ago.  Egypt is in for vegetable oils early this week. 
  
• Late
  last week the US Wheat Associates weekly harvest report noted harvest delays continue in Texas with cool and wet weather, and conditions improved from central Oklahoma north with warmer and drier weather.  They noted overall the SRW wheat crop looks good. 
  
• September
  Paris wheat market basis September was up 4.25 euros at 219.

 

Export
Developments.

• Algeria
  seeks 50,000 tons of milling wheat on June 8 for July and/or August shipment. 
  
• Jordan
  seeks 120,000 tons of feed barley on June 9 for Lat Oct/Nov shipment. 
• Jordan
  seeks 20,000 tons of wheat bran on June 15 for July/August shipment. 

 

Rice/Other

·        
None reported