FI Morning Grain Comments 06/09/21

PDF attached

 

Good
morning.

 

Minneapolis
wheat is leading Chicago and KC wheat lower this morning from follow through correction in spreads.  Soybeans and corn are lower on technical selling and lower outside markets.  Malaysian palm oil traded sharply lower by 178 points (5-week low) and cash was
off $35/ton to $1,015. The trade will get 4 major reports on Thursday so expect positioning today. 

 

Upper
MN and southern WI saw rain over the past day.  A good portion of the ECB was wet.   It will be another hot one for much of the US today.  Canadian Prairies weather improves through Friday with an increase in rainfall.  The Northern Great Plains will see more
local rains through Friday as indicated in the evening GFS model.  Rain for the Northern Plains over the past day was near expectations.  The morning weather forecast is largely unchanged for the US.  The Midwest will see rain bias the southeastern areas through
Friday, some rain in the northwest Friday and central areas Saturday.  Brazil’s MGDS, southern Minas, southern Goias, Sao Paulo, through RGDS will see rain through the end of the workweek.

 

 

 

Weather

 

 

 

World
Weather, Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 9, 2021

• More
  rain is slated for the northern U.S. Plains and Canada’s Prairies during the next few days, but this is not a “long term” trend changer and more drying will return to these areas beginning late this weekend and lasting for an extended period of time.
  
• Crop
  improvement will certainly occur for a little while.
• Western
  U.S. Corn Belt crop areas will experience erratic rainfall that may result in a dry bias later this month and that will need to be closely monitored.
  
• China
  weather still looks to be improving in east-central parts of the nation
• India’s
  predicted monsoon depression has lost some intensity, but will still bring significant rain from Odisha to Madhya Pradesh.
  
• South
  America’s weather was unchanged overnight
• Argentina
  still has need for rain in its winter wheat production region
• Brazil’s
  Safrinha corn areas are experiencing little weather change leaving northern areas dry
• Most
  of the crop is filling and maturing with harvesting expected to begin soon
• Changes
  in production potential should not change much from this point forward
• The
  Russian southern New Lands and northern Kazakhstan dryness is expected to continue for a while. 
• A
  Sukhovei is still expected briefly in Russia and Kazakhstan early to mid-week next week resulting in a strong east to northeasterly drying wind occurring across western Kazakhstan and some Russia Southern region production areas while temperatures are in the
  90s Fahrenheit and a few extremes over 100 Fahrenheit
• This
  will be most significant early to mid-week next week
• Western
  Europe will be drying down for a while, but no excessive heat is expected; the need for rain will be rising over time, though
• Western
  Russia and Ukraine are expecting waves of rain for a while longer keeping the ground wet
• Australia
  will see a mix of rain and sunshine; there is still need for greater rain in South Australia, Queensland, northwestern Victoria and western New South Wales
• Canada’s
  Prairies are getting some relief from dryness and more is expected over the next few days
• Southeastern
  Canada’s corn, soybean and wheat areas are experiencing mostly good weather
• A
  tropical cyclone will form in the South China Sea Friday and move across Hainan, China and the inland near the Vietnam/China border
• A
  tropical disturbance will form along the Guatemala Pacific Coast later this week generating a boost in rainfall in that nation and parts of southern Mexico and El Salvador

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
MBA Mortgage Applications Jun 4: -3.1% (prev -4.0%

Mexican
CPI Core (M/M) May: 0.53% (est 0.48%; prev 0.37%)

Mexican
CPI (M/M) May: 0.20% (est 0.18%; prev 0.33%)

Mexican
CPI (Y/Y) May: 5.89% (est 5.86%; prev 6.08%)

 

China
May 2021 Inflation data:

CPI
1.3% y/y expected 1.6% y/y, prior 0.9%

food
prices expected to fall, pork prices continue to plunge, for the month/month -0.2%

PPI
9.0% y/y, higher than the median estimate and fastest since 2008, expected 8.5%, prior 6.8%

impacted
by rising commodity prices, for the m/m, +1.6%

 

 

Corn

• US
  corn futures are
  lower on positioning and technical selling. Look for December corn to fill its recent gap ($5.9275). 
  
• Upper
  MN and southern WI saw rain over the past day.  A good portion of the ECB was wet.  It will be another hot one for much of the US today.  Brazil’s MGDS, southern Minas, southern Goias, Sao Paulo, through RGDS will see rain through the end of the workweek.
• China
  announced they will use their state reserves of pork to help stabilize prices, without getting into details.  We think they will be buying and storing pork to help prop up prices.  Pork prices are down about 50 percent since the begging of the year and margins
  are now unprofitable in many areas.  China’s state reserve program for pork is not thought to be large relative to average monthly consumption.  China grain and oilseed prices, with exception of meal, were lower. 
  
• After
  releasing CPI and PPI May economic data, China announced measure to control feed commodity prices but it’s unclear what they will exactly do. 
  
• China’s
  Sinograin will offer 11,058 tons of Ukrainian imported corn at auction from reserves on June 11. 
  
• Today
  is the third day of the Goldman Roll.
• USD
  was 9 points lower as of 7:48 am CT.  
• A
  Bloomberg poll looks for weekly US ethanol production to be up 2,000 barrels (1020-1047 range) from the previous week and stocks up 110,000 barrels to 19.698 million.
  

 

China
hog chart created by Reuters

Source:
Reuters

 

Export
developments.

• None
  reported

 

U
of I – Direct Costs and Prices on Grain Farms

Schnitkey,
G., N. Paulson, C. Zulauf and K. Swanson. “Direct Costs and Prices on Grain Farms.”
farmdoc daily (11):90,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 8, 2021.

https://farmdocdaily.illinois.edu/2021/06/direct-costs-and-prices-on-grain-farms.html

 

Soybeans

• The
  soybean complex is lower mainly on positioning and lower outside product values. 
  
• Malaysian
  palm oil traded sharply lower by 178 points (5-week low) and cash was off $35/ton to $1,015. Rotterdam feed and vegetable oil prices were mixed to mostly lower.  Offshore values are leading soybean oil 196 points lower and meal $2.10 lower. 
  
• Rotterdam
  rapeseed and soybean oil prices were unchanged to 20 euros lower, and meal mixed. 
  
• China:
  

• Malaysian
  palm oil:

• Argentina
  product basis levels have been under pressure. 
• Argentine
  producers sold 20.9 million tons of soybeans as of June 2 for the 2020-21 season, up 863,600 tons from the previous week, and down from 24.4 million tons at this time year ago.
  
• Argentina
  soybean crushing hit a six-year high in April at 4.2 million tons. That brings Q1 crush to 13.7 million tons.
• Brazil
  soybean exports for the month of June are seen reaching 11 million tons, according to Anec.  
  

 

 

Export
Developments

• USDA
  seeks 1,180 tons of packaged vegetable oil for export donation on June 15 for July 16-Aug 15 shipment. 
  
• Yesterday
  Egypt’s GASC bought 60,000 tons of soyoil and 40,000 tons of sunflower oil for arrival in Egypt between Aug 1-20 with payment in 180 days.  The soybean oil, 2 cargoes, was all bought at $1,299 a ton c&f ($36/ton higher than their previous purchase last month,
  according to AgriCensus data) and the sunflower oil all at $1,368 a ton c&f ($222/ton lower than previous purchase last month).

 

Wheat

• US
  wheat is lower again led by the Minneapolis contract after rain fell across parts of the Dakotas overnight.  The dip in prices attracted more buyers to the Market. Japan, Tunisia and Ethiopia all announced import tender over the past day. 
  
• Canadian
  Prairies weather improves through Friday with an increase in rainfall.  The Northern Great Plains will see more local rains through Friday as indicated in the evening GFS model.  Rain for the Northern Plains over the past day was near expectations. 
  
• September
  Paris wheat market basis September was down 2.75 euros at 213.50 at the time this was written.
• (Reuters)
  – Algeria’s state grain office has barred a 33,000-tonne durum wheat shipment from Canada from entering the eastern port of Annaba port, for non compliance with agreed specifications, Ennahar TV reported on Wednesday on Twitter.

 

Export
Developments.

• Algeria
  may have bought 420,000 to 500,000 tons of wheat, up from 400,000 tons previously reported.  There were in for July and/or August shipment and prices were reported at $297.50 and $298/ton c&f. 
  
• Tunisia
  seeks 50,000 tons of soft wheat on June 10, optional origin. 
• Ethiopia
  seeks 400,000 tons of milling wheat on June 14, two lots of 200,000 tons each with delivery within 70 to 90 days of contract date.
  
• Jordan
  passed 120,000 tons of feed barley on June 9 for Lat Oct/Nov shipment. 
• Japan
  seeks 80,000 tons of feed wheat and 100,000 tons of barley on June 16 under its SBS import system, for arrival in Japan by November 25. 
  
• Japan
  seeks 181,355 tons of food wheat later this week from United States, Canada and Australia.
  

• Jordan
  seeks 20,000 tons of wheat bran on June 15 for July/August shipment. 
• Jordan
  seeks 120,000 tons of wheat on June 22 for December shipment. 

 

Rice/Other

·        
Indonesia aims to produce 55.2 million tons of rice in 2022 and 20.1 million tons of corn.