FI Morning Grain Comments 06/08/23

PDF attached

 

Good
morning. 

 

US
energies are higher this morning and USD about 44 points lower. Export sales were mostly within expectations. Day 2 of the Goldman Roll. CBOT soybeans are lower. Follow through bull spreading is seen with tight supplies. Soybean meal and soybean oil are mixed.
. Offshore values were leading SBO higher by about 8 points this morning and meal $0.70 short ton higher. US corn is lower. The weather outlook for the Midwest slightly improved from that of yesterday. Rain will fall across WI on Friday & Saturday, IA Saturday,
and the central areas Sunday, before lingering in the east Monday. A good portion of the Great Plains is still slated to see rain. US wheat is higher on technical buying (was down sharply Wednesday) and global supply concerns. Ukraine said they could lose
millions of tons of crops from flooding and lack of irrigation after the dam collapsed.

 

 

Fund
estimates as of June 7 (net in 000)

 

 

 

Weather

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 08, 2023

• Rain
  is expected in the U.S. Midwest starting in the west this weekend and then advancing to the east next week
• Be
  cautious here…..the Gulf of Mexico is still not open as a good moisture source and the abundant rain seen in the GFS model will not likely verify
• The
  European model has the best forecast through day ten
• U.S.
  wheat production areas in the central Plains will continue to receive frequent rain, but there has not been much of a threat to grain quality with the most recent precipitation events; nonetheless, there is potential for quality declines again if it rains
  too frequently
• Eastern
  Alberta, Canada is still suffering from serious crop moisture stress
• Computer
  forecast models do not agree on when it will rain and how much
• World
  Weather, Inc. believes some rain will begin falling in the second half of this month and it will not likely be a fix all for crop development until later in the summer after atmospheric moisture is better than it will be in late June
• United
  Kingdom and France will get rain this weekend and then go back to a dry biased pattern for a little while longer
• The
  Baltic Plain and Scandinavia will continue to have the driest conditions over the next ten days with more crop moisture stress likely before rain finally evolves after June 18
• Russia’s
  eastern New Lands are not nearly as wet in today’s ten day forecast than it was Wednesday
• A
  little too much rain was removed, but relief is still anticipated through the middle part of this month occurring as both cooler temperatures and occasional rain
• China’s
  weather remains mostly good and unchanged from that of Wednesday
• Australia
  will trend drier for a while, but recent rain is inducing a well-established wheat, barley and canola crop
• India’s
  monsoon will not perform well for another week and probably ten days with well below normal rainfall in the south and eastern parts of the nation.
  
• Timely
  rain will continue in most tropical areas in the world over the next ten days with only pockets of dryness expected

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

 

 

 

 

USDA
export sales

 

 

Macros

US
Jobless Claims Rose To 261,000 Jun 3 Week (Consensus 235,000) From 233,000 Prior Week (Previous 232,000)

US
Jobless Claims 4-Wk Avg Rose To 237,250 Jun 3 Week From 229,750 Prior Week (Previous 229,500)

US
Continued Claims Fell To 1.757 Mln May 27 Week (Con. 1.800 Mln) From 1.794 Mln Prior Week (Prev 1.795 Mln)

US
Insured Unemployment Rate Unchanged At 1.2% May 27 Week From 1.2% Prior Week (Prev 1.2%)

 

Corn

·        
Corn futures are lower as traders wait for results for upcoming weekend rains across key US Midwest states experiencing drought.

·        
Day 2 of the Goldman roll.

·        
The USDA Broiler Report showed eggs set in the US up 1 percent and chicks placed down 2 percent.  Cumulative placements were down slightly from the same period a year earlier.

·        
US weekly ethanol production increased 32,000 barrels per day to 1.036 million barrels per day, largest volume since December 9, 2022.  US ethanol stocks increased a large 616,000 barrels to 22.948 million barrels. For comparison,
a Bloomberg poll looked for weekly US ethanol production to be up 13,000 thousand barrels from the previous week and stocks up 72,000 barrels.

 

EIA:
Increased U.S. renewable and natural gas generation likely to reduce summer coal demand

U.S.
Energy Information Administration – EIA – Independent Statistics and Analysis

 

Adjusting
Reference Prices Based on Changes in Cost of Production. 

Bart
Fischer, Texas A&M University

https://southernagtoday.org/2023/06/08/adjusting-reference-prices-based-on-changes-in-cost-of-production/

 

Export
developments.

• South
  Korea’s NOFI group bought 66,000 tons of South American or South African corn at $244.89/ton c&f for arrival around October 30.
  
• South
  Korea’s MFG group bought 132,000 tons of South American corn at $244.33/ton c&f for arrival around October 28.
  
• The
  Philippines bought an estimated 50,000 tons of South American corn at $350 to $280 per ton c&f for August shipment.
  
• Results
  are awaited on Algeria seeking up to 140,000 tons of corn for July-Aug 15 shipment.
  

 

Soybeans

·        
CBOT soybeans are lower. Follow though bull spreading is seen from tight US supplies and a pickup in domestic demand. Strong Chinese demand is also supporting nearby soybeans. Don’t discount USDA lowering their 2022-23 US carryout
post June 1 quarterly stocks report. They left the US carryout unchanged in their monthly update after March 1 stocks were reported below trade expectations.

·        
Soybean meal and soybean oil are higher led by meal.

·        
August Malaysia palm futures decreased 56 ringgit to 3264 and Aug. cash fell $10.00 to $765/ton.

·        
China September soybean futures were down 0.3%, meal down 0.4%, SBO off 0.4% and palm oil futures down 0.3%.

·        
Nearby Rotterdam vegetable oils were 10 euros lower from this time yesterday morning and meal mixed.

·        
Offshore values were leading SBO higher by about 8 points this morning and meal $0.70 short ton higher.

 

Export
Developments

·        
Results awaited: Iran seeks 120,000 tons of soybean meal from Brazil for July and/or August shipment.

·        
Algeria is in for 35,000 tons of soybean meal today for July 1-15 shipment.

 

Reuters
MPOB estimates

 

 

 

Wheat

·        
US wheat futures are higher on technical buying (was down sharply Wednesday) and global supply concerns. Ukraine said they could lose millions of tons of crops from flooding and lack of irrigation after the dam collapsed.

·        
The US Great Plains will see rain one time or another over the next seven days.

·        
December Paris wheat futures are up 0.50 euro earlier at 230.75 per ton.

·        
Kazakhstan shipped its first wheat cargo to China. They look to export up to 1 million tons per this marketing year per recent agreement.

·        
Egypt bought 3.2 million tons of local wheat so far this crop season. A senior government official told Reuters that Egypt will not achieve local purchases of 4 million tons this season.

·        
Iraq bought 3 million tons of wheat in the local market out of 4.0-4.5 million tons expected to be produced.

 

Export
Developments.

·        
Tunisia seeks 100,000 tons of soft milling wheat on June 9 for July 1 through August 15 shipment.

·        
Japan bought 86,922 tons of food wheat this week for August shipment. Original tender details as follows.

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

·        
Taiwan seeks about 56,000 tons of US wheat from the US on June 14 for July 31-August 14 shipment off the PNW.

 

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.

 

 

U.S. EXPORT SALES FOR WEEK ENDING 6/1/2023

 

	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
WHEAT	THOUSAND METRIC TONS
HRW	18.2	674.0	1,160.1	53.4	53.4	62.8	0.0	0.0
SRW	56.6	1,076.2	919.6	26.7	26.7	31.2	0.0	0.0
HRS	152.8	1,123.1	1,367.0	81.9	81.9	60.0	0.0	0.0
WHITE	7.2	628.4	835.8	28.1	28.1	58.0	0.0	0.0
DURUM	0.0	94.4	64.4	0.0	0.0	0.0	0.0	0.0
TOTAL	234.8	3,596.1	4,346.8	190.1	190.1	212.0	0.0	0.0
BARLEY	0.0	9.3	13.8	0.0	0.0	0.0	0.0	0.0
CORN	172.7	6,553.3	11,840.2	1,244.7	31,785.5	47,681.9	-106.8	2,958.4
SORGHUM	65.2	436.2	914.6	50.8	1,405.9	5,889.7	0.2	63.2
SOYBEANS	207.2	2,792.8	9,883.4	247.6	48,377.8	50,008.7	264.6	3,117.3
SOY MEAL	177.6	2,740.5	2,606.5	196.1	8,406.8	8,237.8	90.0	606.9
SOY OIL	-0.3	49.2	98.1	1.0	77.0	578.7	0.1	3.9
RICE
L G RGH	1.5	104.2	125.3	49.0	623.3	1,139.8	16.0	22.0
M S RGH	0.0	32.7	7.5	0.7	25.3	13.4	0.0	5.0
L G BRN	0.1	5.5	5.0	0.5	18.7	49.0	0.0	0.0
M&S BR	0.0	21.6	9.9	0.0	24.0	77.6	0.0	0.0
L G MLD	9.1	94.7	62.0	19.9	623.5	705.7	0.0	40.0
M S MLD	0.7	75.2	169.6	0.7	240.2	350.6	0.0	40.2
TOTAL	11.4	333.9	379.3	70.8	1,555.0	2,336.1	16.0	107.2
COTTON		THOUSAND RUNNING BALES
UPLAND	480.4	3,730.1	5,073.4	317.0	9,781.0	10,438.8	30.8	1,715.9
PIMA	2.1	41.0	73.8	11.7	272.2	403.1	0.0	4.7

 

FINAL 2022/23 MARKETING YEAR
COMMODITY	NET SALES	CARRYOVER SALES 1/	05/31/2023 EXPORTS	ACCUMULATED EXPORTS
WHEAT
HRW	-8.6	236.1	28.7	4,872.4
SRW	-0.7	149.8	19.3	2,694.9
HRS	12.7	321.8	28.2	5,381.9
WHITE	0.9	154.2	9.6	4,413.9
DURUM	0.7	15.5	1.4	395.4
TOTAL	5.0	877.4	87.3	17,758.5
BARLEY	0.0	3.3	0.0	8.7

 

 

Export Sales Highlights

 

This summary is based on reports from exporters for the period May 26-June 1, 2023.

 

Wheat: 
Net sales of 234,800 metric tons (MT) for the 2023/2024 marketing year, which began June 1, primarily for Taiwan (56,000 MT), Colombia (40,800 MT, including decreases of 9,700 MT), Mexico (36,400 MT, including decreases of 11,400 MT), Jamaica (22,000 MT),
and the Philippines (21,500 MT), were offset by reductions for the Dominican Republic (1,400 MT). A total of 877,400 MT in sales were carried over from the 2022/2023 marketing year, which ended May 31. Exports for the period ending May 31, of 87,300 MT brought
accumulated exports to 17,758,500 MT, down 5 percent from the prior year’s total of 18,668,900 MT. The destinations were primarily to South Korea (35,200 MT), Thailand (18,600 MT), Colombia (17,400 MT), Mexico (14,400 MT), and Japan (700 MT). Exports for June
1 of 190,100 MT were primarily to the Philippines (71,500 MT), Mexico (44,600 MT), Venezuela (21,000 MT), Sri Lanka (19,800 MT), and Honduras (16,800 MT).

 

Corn: 
Net sales of 172,700 MT for 2022/2023 were down 8 percent from the previous week, but up noticeably from the prior 4-week average. Increases primarily for Japan (117,500 MT, including 66,200 MT switched from unknown destinations and decreases of 7,600 MT),
Mexico (44,700 MT, including decreases of 59,200 MT), South Korea (32,000 MT, including 30,000 MT switched from unknown destinations and decreases of 1,700 MT), Honduras (28,500 MT, including 6,500 MT switched from Costa Rica and decreases of 37,500 MT), and
El Salvador (22,600 MT, including 16,600 MT switched from Nicaragua), were offset by reductions for unknown destinations (89,600 MT), Nicaragua (16,600 MT), and Colombia (3,600 MT). Net sales reductions of 106,800 MT for 2023/2024 resulting in increases for
Canada (22,000 MT) and Mexico (10,700 MT), were more than offset by reductions for Mexico (119,900 MT), Honduras (19,100 MT), and Guatemala (500 MT). Exports of 1,244,700 MT were down 13 percent from the previous week and 4 percent from the prior 4-week average.
The destinations were primarily to China (403,400 MT), Mexico (276,900 MT), Japan (198,400 MT), South Korea (161,300 MT), and Honduras (43,500 MT).

 

Barley: 
No net sales were reported for the 2023/2024 marketing year, which began June 1. A total of 3,300 MT in sales were carried over from the 2022/2023 marketing year, which ended May 31. Accumulated exports were 8,700 MT, down 43 percent from the prior year’s
total of 15,300 MT. There were no exports for the period ending May 31 and June 1.

 

Sorghum: 
Net sales of 65,200 MT for 2022/2023 were down 50 percent from the previous week, but up 43 percent from the prior 4-week average. Increases reported for unknown destinations (68,000 MT), were offset by reductions for China (2,800 MT). Total net sales of 200
MT for 2023/2024 were for Japan. Exports of 50,800 MT were up 39 percent from the previous week, but down 21 percent from the prior 4-week average. The destination was to China.

 

Rice: 
Net sales of 11,400 MT for 2022/2023 were down 32 percent from the previous week, but unchanged from the prior 4-week average. Increases were primarily for Saudi Arabia (8,600 MT), Honduras (1,500 MT), Canada (1,000 MT), Mexico (200 MT), and American Samoa
(100 MT). Total net sales of 16,000 MT for 2023/2024 were for Honduras. Exports of 70,800 MT were up noticeably from the previous week and from the prior 4-week average. The destinations were primarily to Panama (29,600 MT), Honduras (17,100 MT), Haiti (10,000
MT), Saudi Arabia (9,200 MT), and Mexico (3,300 MT).

 

Soybeans: 
Net sales of 207,200 MT for 2022/2023 were up 68 percent from the previous week and up noticeably from the prior 4-week average. Increases primarily for Japan (97,100 MT, including 26,000 MT switched from unknown destinations and decreases of 1,000 MT), Germany
(68,700 MT, including 62,000 MT switched from unknown destinations), Egypt (32,800 MT, including 31,000 MT switched from unknown destinations), South Korea (21,000 MT, including 20,000 MT switched from unknown destinations), and Canada (10,900 MT), were offset
by reductions for unknown destinations (47,900 MT) and Mexico (1,400 MT). Net sales of 264,600 MT for 2023/2024 were primarily for China (131,000 MT), Mexico (60,000 MT), Taiwan (25,700 MT), Japan (20,000 MT), and Thailand (15,800 MT). Exports of 247,600 MT
were up 7 percent from the previous week, but down 7 percent from the prior 4-week average. The destinations were primarily to Germany (68,700 MT), Mexico (47,900 MT), Japan (46,200 MT), Egypt (32,800 MT), and South Korea (21,200 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).

 

Soybean Cake and Meal: 
Net sales of 177,600 MT for 2022/2023 were down 56 percent from the previous week and 42 percent from the prior 4-week average. Increases primarily for Colombia (46,000 MT, including decreases of 400 MT), the Dominican Republic (36,000 MT), Israel (28,500
MT), Ecuador (20,000 MT), and El Salvador (11,800 MT, including 12,000 MT switched from Nicaragua and decreases of 200 MT), were offset by reductions for Nicaragua (8,800 MT), Belgium (1,300 MT), and Trinidad and Tobago (300 MT). Total net sales of 90,000
MT for 2023/2024 were for Ecuador. Exports of 196,100 MT were down 24 percent from the previous week and 18 percent from the prior 4-week average. The destinations were primarily to the Philippines (49,400 MT), Mexico (31,800 MT), Saudi Arabia (25,000 MT),
Canada (22,300 MT), and El Salvador (11,800 MT).

 

Late Reporting: 
For 2022/2023, exports of 1,172 MT of soybean cake and meal were late to Panama.

 

Soybean Oil: 
Net sales reductions of 300 MT for 2022/2023 were down noticeably from the previous week and from the prior 4-week average. Increases for Sri Lanka (300 MT), were more than offset by reductions for Canada (500 MT) and Mexico (100 MT). Total net sales of 100
MT for 2023/2024 were for Mexico. Exports of 1,000 MT were down 93 percent from the previous week and 79 percent from the prior 4-week average. The destinations were primarily to Canada (500 MT), Sri Lanka (200 MT), and the Dominican Republic (200 MT).

 

Cotton: 
Net sales of 480,400 RB for 2022/2023–a marketing-year high–were up 79 percent from the previous week and up noticeably from the prior 4-week average. Increases primarily for China (384,700 RB), Pakistan (51,600 RB, including 900 RB switched from China and
decreases of 100 RB), Turkey (18,800 RB, including 900 RB switched from South Korea and decreases of 100 RB), Bangladesh (13,300 RB), and Vietnam (6,500 RB, including 2,400 RB switched from China, 1,500 RB switched from South Korea, and decreases of 100 RB),
were offset by reductions for South Korea (2,400 RB) and Guatemala (2,000 RB). Net sales of 30,800 RB for 2023/2024 were primarily for Turkey (20,700 RB), Peru (4,000 RB), Guatemala (2,700 RB), China (2,200 RB), and Indonesia (900 RB). Exports of 317,000 RB
were up 12 percent from the previous week and 4 percent from the prior 4-week average. The destinations were primarily to Turkey (89,500 RB), Vietnam (75,800 RB), Pakistan (33,700 RB), China (32,700 RB), and Mexico (16,100 RB). Net sales of Pima totaling 2,100
RB for 2022/2023 were down 43 percent from the previous week and 71 percent from the prior 4-week average. Increases were primarily for Vietnam (900 RB) and India (900 RB). Exports of 11,700 RB were down 56 percent from the previous week and 35 percent from
the prior 4-week average. The destinations were to India (8,200 RB), Vietnam (1,300 RB), Bangladesh (900 RB), Pakistan (900 RB), and Turkey (400 RB). 

 

Optional Origin Sales:
 For 2022/2023, options were exercised to export 800 RB to Malaysia.
The current outstanding balance of 300 RB, all Malaysia.

 

Export for Own Account:
 For 2022/2023, decreases of 6,500 RB were for China. The current
exports for own account outstanding balance of 105,800 RB are for China (74,200 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 396,800 pieces for 2023 were down 13 percent from the previous week and 18 percent from the prior 4-week average. Increases were primarily for China (317,800 whole cattle hides, including decreases of 5,200 pieces), Mexico (48,500 whole cattle
hides, including decreases of 2,300 pieces), South Korea (13,300 whole cattle hides, including decreases of 1,300 pieces), Thailand (5,000 whole cattle hides), and Turkey (5,000 whole cattle hides). Exports of 455,200 pieces were up 18 percent from the previous
week and 14 percent from the prior 4-week average. Whole cattle hides exports were primarily to China (300,900 pieces), South Korea (63,400 pieces), Mexico (36,500 pieces), Brazil (32,400 pieces), and Thailand (9,500 pieces).

 

Net sales of 210,100 wet blues for 2023 were up noticeably from the previous
week and from the prior 4-week average. Increases primarily for China (81,600 unsplit, including decreases of 200 unsplit), Hong Kong (50,000 unsplit), Italy (42,000 unsplit, including decreases of 10,500 unsplit), Taiwan (11,700 unsplit), and Vietnam (9,600
unsplit), were offset by reductions for India (200 unsplit) and Brazil (100 grain splits). Exports of 93,600 wet blues were down 33 percent from the previous week and 29 percent from the prior 4-week average. The destinations were primarily to Italy (28,800
unsplit), Vietnam (16,100 unsplit), Hong Kong (12,000 unsplit), China (11,400 unsplit), and Thailand (8,500 unsplit). Net sales of 35,600 splits reported for China (42,000 pounds), were offset by reductions for Hong Kong (3,500 pounds) and Vietnam (2,900 pounds).
Exports of 73,900 pounds were to Hong Kong (37,100 pounds) and Vietnam (36,800 pounds).

 

Beef: 
Net sales of 12,800 MT for 2023 were down 29 percent from the previous week and 27 percent from the prior 4-week average. Increases primarily for Japan (3,900 MT, including decreases of 400 MT), South Korea (3,900 MT, including decreases of 400 MT), Mexico
(1,900 MT), Taiwan (1,000 MT, including decreases of 200 MT), and Canada (900 MT), were offset by reductions for China (100 MT). Exports of 15,400 MT were down 3 percent from the previous week and 6 percent from the prior 4-week average. The destinations were
primarily to Japan (4,000 MT), South Korea (3,700 MT), China (2,500 MT), Mexico (1,200 MT), and Canada (1,200 MT).

 

Pork: 
Net sales of 25,500 MT for 2023 were up 13 percent from the previous week, but down 11 percent from the prior 4-week average. Increases primarily for Mexico (9,100 MT, including decreases of 800 MT), China (8,100 MT, including decreases of 300 MT), Japan (3,200
MT, including decreases of 300 MT), South Korea (2,000 MT, including decreases of 800 MT), and Colombia (1,500 MT, including decreases of 100 MT), were offset by reductions for Nicaragua (500 MT), Australia (500 MT), and Taiwan (100 MT). Exports of 25,100
MT were down 26 percent from the previous week and 31 percent from the prior 4-week average. The destinations were primarily to Mexico (7,400 MT), Japan (4,000 MT), China (3,900 MT), South Korea (2,600 MT), and Canada (1,500 MT).