FI Morning Grain Comments 06/09/23

PDF attached

 

Good
morning. 

 

USDA:
Private exporters reported sales of 197,000 metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year.

 

 

WTI
crude oil was 32 cents lower earlier and natural gas lower. The USD was 10 points higher.  USDA report day.  Day 3 of the Goldman Roll. CBOT soybeans are higher, meal turned lower, and soybean oil up sharply.
USDA’s
24-hour sales announcement of old crop soybeans to unknown was supportive.
There
are rumors that the EU is importing US soybeans to crush and sell back the soybean oil and/or biodiesel to the US. 
The
US weather forecast is largely unchanged. Rotterdam
soybean oil physical prices fell 50 to 65 euros from this time yesterday. China in its monthly S&D update raised 2022-23 edible vegetable oil production by 690,000 tons to 29.9 million tons in large part to an upward revision to rapeseed oil production. With
a rise in rapeseed imports and higher rapeseed oil output, China lowered their soybean oil import estimate for 2023-24 by 700,000 tons to 500,000 tons, a 58 percent decrease from the previous month, but still 100,000 tons above the 2022-23 season. Offshore
values were leading SBO lower by about 171 points this morning (515 lower for the week to date) and meal $0.30 higher ($5.40 short ton higher for the week).

 

USDA
will update their S&D estimates later today. For South America, look for them to cut current crop year Argentina soybean and corn production by 3 and 1 million tons, respectively. No changes are expected for Brazil corn and soybean production, for 2022-23.
We expect no change to US 2023 corn or soybean harvested & yields from May. 

 

Fund
estimates as of June 8 (net in 000)

 

 

 

Weather

Past
7-days

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 09, 2023

• High
  pressure will remain aloft over central Canada’s Prairies and influence a part of the U.S. Northern Plains and Upper Midwest this weekend through mid-week next week limiting rainfall and allowing for warmer than usual temperatures
• The
  Canada high pressure ridge aloft will break down during mid- to late-week next week raising the potential for rain to develop in the western and central parts of the Prairies, including some of the dry areas in eastern and southern Alberta
• No
  general soaking of rain is expected, but enough shower activity “may” occur to bring some needed relief to dryness and some potential for better future crop development
• U.S.
  Midwest rainfall advertised for the next ten days will be light enough to maintain some concern over long term soil moisture and year enough precipitation will occur to benefit some of the crops in the region
• Cooler
  weather this weekend and early next week in U.S. Midwest will reduce crop moisture stress, although until significant rain falls there will be some ongoing concern over long term crop development potential
• High
  temperatures may be limited to the upper 60s and 70s Fahrenheit which is down from the 80s and lower 90s of earlier this week
• A
  favorable mix of weather will occur in the U.S. Delta, southeastern states and central Plains
• West
  Texas cotton, corn and sorghum areas will experience limited rainfall for a while and some drying is expected to support fieldwork
• Eastern
  Russia’s New Lands and Kazakhstan will receive “some” rain in the coming ten days to ease long term dryness, but greater rain may still be needed
• Northwestern
  Europe (i.e., the U.K., France and some neighboring areas) will get rain this weekend with a limited number of showers next week
• Northeastern
  Europe will continue dry biased for ten days
• India’s
  monsoon will continue performing poorly in the south and east through the next week and possibly for ten days
• Australia’s
  greatest rainfall of the past week has ended and limited precipitation will now occur for the next ten days
  
• Winter
  crops are becoming better established, although there is need for more rain in Queensland and interior South Australia
• Highly
  localized excessive rainfall occurred in southern Guangdong Wednesday and Thursday induced serious flooding; otherwise, no changes in the mostly good weather in the nations were noted
• Argentina
  will be dry for the next ten days
• No
  threatening cold is expected in southern Brazil next ten days; Rain will fall in the south

Source:
World Weather, INC.

 

 

Bloomberg
Ag calendar

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

Monday,
June 12:

• IGC
  grains conference, London, day 1
• Malaysian
  Palm Oil Board’s monthly report on stockpiles, production and exports
• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  corn, cotton, soybean, spring wheat and winter wheat condition, 4pm
• US
  planting data for corn, cotton, spring wheat and soybeans, 4pm
• Incorporated
  Society of Planters conference, Kuala Lumpur, June 12-14
• Brazil
  Unica cane crush and sugar production report (tentative)
• HOLIDAY:
  Australia

Tuesday,
June 13:

• France
  agriculture ministry’s report on field crops
• IGC
  grains conference, London, day 2
• EU
  weekly grain, oilseed import and export data
• Brazil’s
  Conab issues production, area and yield data for corn and soybeans

Wednesday,
June 14:

• FranceAgriMer
  monthly grains balance sheet
• New
  Zealand food prices
• EIA
  weekly US ethanol inventories, production, 10:30am

Thursday,
June 15:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports

Friday,
June 16:

• 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

Source:
Bloomberg and FI

 

 

 

 

 

Reuters
estimates for USDA S&D

 

 

 

 

 

 

 

 

 

Macros

Canadian
Net Change In Employment May: -17.3K (est 21.3K; prev 41.4K)

Canadian
Unemployment Rate May: 5.2% (est 5.1%; prev 5.0%)

Canadian
Hourly Wage Rate Permanent Employees (Y/Y) May: 5.1% (est 5.1%; prev 5.2%)

Canadian
Participation Rate May: 65.5% (est 65.6%; prev 65.6%)

Canadian
Full Time Employment Change May: -32.7K (prev -6.2K)

Canadian
Part Time Employment Change May: 15.5K (prev 47.6K)

Canadian
Capacity Utilization Rate Q1: 81.9% (est 82.0%; prevR 81.8%)

 

Corn

·        
Corn futures are lower from a mostly unchanged US weather forecast calling for rain for the central and parts of the upper Midwest one time or another through Monday. 

·        
Day 3 of the Goldman roll.

·        
Buenos Aires Grains Exchange reported about a third of the Argentina corn crop had been collected and production at 36 million tons. The wheat crop is expected to total 18 million tons.

·        
USDA will update their S&D estimates later today. For South America, look for them to cut current crop year Argentina soybean and corn production by 3 and 1 million tons, respectively. No changes are expected for Brazil corn and
soybean production, for 2022-23. We expect no change to US 2023 corn or soybean harvested & yields from May. 

 

Export
developments.

• Results
  are awaited for Algeria seeking up to 140,000 tons of corn for July-Aug 15 shipment.
  

 

Soybeans

·        
CBOT soybeans are higher from strength in soybean oil and a USDA 24-hour old crop sale announcement to unknown destinations. Soybean meal turned mixed. Earlier this week there was talk US food end users were seeking coverage for
soybean oil. Meanwhile, biofuel companies have been actively seeking coverage.

·        
Rotterdam soybean oil physical prices fell 50 to 65 euros from this time yesterday morning. There are rumors that the EU is importing US soybeans to crush and sell back the soybean oil and/or biofuel.  On paper US soybean oil
stocks are large and there is no need to currently increase domestic crush to get to the oil, but US industrial and food demand for the product has increased this month. CBOT soybean oil is higher this morning despite a sharply lower lead in offshore values.

·        
China in its monthly S&D update raised 2022-23 edible vegetable oil production by 690,000 tons to 29.9 million tons in large part to an upward revision to rapeseed oil production. With a rise in rapeseed imports and higher rapeseed
oil output, China lowered their soybean oil import estimate for 2023-24 by 700,000 tons to 500,000 tons, a 58 percent decrease from the previous month, but still 100,000 tons above the 2022-23 season. Rapeseed oil production for 2022-23 was projected at 7.2
million tons, up from the May outlook of 6.5 million tons.  China rapeseed imports since January 1 are running at around 1.2 million tons, about 35 percent above the same period year earlier. China’s CASDE reflected minor changes to other commodity estimates
for 2022-23 and for 2023-24, there were no changes in commodity estimates other than the lower soybean oil import projection.

·        
Buenos Aires Grains Exchange reported Argentina’s soybean harvest progress at 94 percent complete and production at 21 million tons.

·        
August Malaysia palm futures increased 103 ringgit to 3367 and Aug. cash rose $20.00 to $785/ton.

·        
China September soybean futures were up 0.4%, meal up 0.3%, SBO up 1.4% and palm oil futures up 1.6%.

·        
Nearby Rotterdam vegetable oils were mixed from this time yesterday morning and meal mixed/unchanged.

·        
Offshore values were leading SBO lower by about 171 points this morning (515 lower for the week to date) and meal $0.30 higher ($5.40 short ton higher for the week).

 

Export
Developments

·        
Under the 24-hour announcement system, US exporters sold 197,000 tons of soybeans to unknown for 2022-23 delivery. 

·        
Iran was thought to have passed on 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 lower on positioning ahead of the USDA report and rain expected for the Great Plains one time or another through late next workweek. Not all areas will see rain.

·        
Canadian Prairies have an opportunity for rain for the western and central areas mid to late next week as the high-pressure ridge breaks down.

·        
December Paris wheat futures are up 1.75 euros earlier at 234.25 per ton.

·        
French wheat crop ratings for the week ending June 5 fell to 88 percent from 91 percent previous week and 93 percent two weeks ago.

 

Export
Developments.

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

·        
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

·        
Results awaited: 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.