FI Morning Grain Comments 06/10/22

PDF attached

 

Good
morning.

 

USDA
report day. Reuters and FI convenience tables attached.

 

US
inflation was reported slightly above expectations. The consumer price index increased 1.0% last month after gaining 0.3% in April, the Labor Department said on Friday. Economists polled by Reuters had forecast the monthly CPI picking up 0.7%.

 

MPOB
and China CASDE were out earlier. In
China’s month S&D update, there were no changes to supply or demand for corn and soybeans. MPOB reported Malaysia’s palm oil inventories declined at the end of May as exports increased (higher than trade expectations). Production was 1.461 million tons, 57,400
tons above a Reuters trade guess. Exports were higher in five months at 1.359 million tons.

 

 

US
temperatures will be above normal during the third week of June.

 

 

Weather

 

 

Past
7 days

 

Bloomberg
Ag Calendar

Friday,
June 10:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• ICE
  Futures Europe weekly commitments of traders report
• Malaysian
  Palm Oil Board’s data for May output, exports and stockpiles
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• Malaysia’s
  June 1-10 palm oil export data
• Brazil’s
  Unica may release cane crush and sugar output data (tentative)

Monday,
June 13:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop planting data for soybeans and cotton; winter wheat condition and harvesting, 4pm
• US
  cotton, corn, soybean and spring wheat conditions, 4pm
• HOLIDAY:
  Australia, Russia

Tuesday,
June 14:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand Food Prices

Wednesday,
June 15:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Malaysia’s
  June 1-15 palm oil export data
• St
  Petersburg International Economic Forum, June 15-18

Thursday,
June 16:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• HOLIDAY:
  Brazil, South Africa

Friday,
June 17:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions

Saturday,
June 18:

• China’s
  second batch of May trade data, including corn, pork and wheat imports

Source:
Bloomberg and FI

 

 

 

 

USDA
S&D estimates

 

 

 

Macros

US
CPI (Y/Y) SA May: 8.6% (est 8.3%, prev 8.3%)

US
CPI (M/M) SA May: 1% (est 0.7%, prev 0.3%)

CPI
Ex Food And Energy (Y/Y) May: 6% (est 5.9%, prev 6.2%)

CPI
Ex Food And Energy (M/M) May: 0.6% (est 0.5%, prev 0.6%)

Canada
Employment Change May: 39.8K (est 30K, prev 15.3K)

Unemployment
Rate May: 5.1% (est 5.2%, prev 5.2%)

Participation
Rate May: 65.3% (est 65.3%, prev 65.3%)

US
EIA Expects Refinery Utilization To Average 96% In June, 94% In July, And 96% In August

 

 

Corn

·        
US equity markets are weaker from a higher US inflation numbers were released.

·        
US corn futures are unchanged to lower after hitting a two-week high on Thursday. Export sales for corn were poor yesterday and US weather looks good, with exception to hot temperatures expected next week across the heart of the
US. Some crop stress is expected.

·        
We don’t expect USDA to change area or yield numbers in its monthly update for corn and soybeans.

·        
In China’s month S&D update, there were no changes to supply or demand for corn and soybeans. China mentioned corn for feed demand was increasing while wheat feed was decreasing. 

·        
Indian state oil retailers have agreed to provide some monetary relief to sugar mills and other producers of ethanol to compensate for high energy costs in support to use more biofuels.

 

Export
developments.

·        
China looks to buy 40,000 tons of frozen pork on June 10.

 

Soybeans

·        
CBOT soybeans
are higher in the nearby months and price are nearing an all-time high, fueled by good export demand and positioning ahead of the USDA report. Soybean meal is higher while soybean oil sold off following another weaker palm oil trading session.  

·        
Indonesia again reversed its palm oil export policy. They are looking to “flush out” shipments, a senior minister told Reuters on Friday.

·        
After Indonesia yesterday rolled out another plan to boost palm oil exports (1 million tons by July 31), export permits are starting to increase. By Thursday, DMO export permits had been or will be issued for about 460,000 tons
of palm oil products. Shipments have been slow to start but now it appears palm oil exports are on the rise. Indonesia raised its max export tax rate for CPO to $288 per ton, when the reference price is above $1,500. The government will still require companies
to sell some of their output domestically to secure 300,000 tons of cooking (refined) oil a month, equivalent of about 416,000 tons of crude palm oil.

·        
MPOB reported Malaysia’s palm oil inventories declined at the end of May as exports increased (higher than trade expectations). Production was 1.461 million tons, 57,400 tons above a Reuters trade guess. Exports were higher in
five months at 1.359 million tons.

 

 

·        
Malaysia palm oil was down 290 points to near a two month low, and cash was off $55/ton to $1490.00 per ton.

·        
China soybean and vegetable oils were lower and meal futures higher. 

·        
Rotterdam vegetable oils were down 15-20 euros, and meal 2-8 euros higher.

·        
Offshore values are leading SBO about 145 points lower and meal $3.80 lower.

 

Export
Developments

·        
China plans to sell another 500,000 tons of soybeans from reserves on June 17.

·        
China sold about 55,000 tons of soybeans out of reserves out of about 500,000 offered on Friday.
We
heard the average price was about 5,762CNY per ton ($861 per ton), up from $834.50 previous week.

 

Wheat

·        
Wheat futures are
lower for Chicago and KC and mostly higher for MN. Positioning ahead of the USDA report, very strong USD, and improving weather for parts of US wheat country are pressuring prices. Ukraine/Russia developments were light.

·        
FranceAgriMer reported 66% of the French soft wheat crop was in good or excellent condition as of June 6, versus 67% the previous week, and 81% a year ago.

·        
Russia is currently loading wheat for Egypt and Turkey, and corn for Libya.

·        
Argentina’s BA Grains Exchange lowered their estimate of the Argentina planting area for the wheat crop to 6.4 million hectares from previous 6.5 million.

·        
About 17 percent of the Argentina wheat crop had been planted, 13 points behind last season.

·        
The Canadian Saskatchewan government reported 91 percent of the 2022 crop had been planted, up from 76 percent from last week and behind the five-year average of 97 percent (2017-2021). They warned many acres in east Saskatchewan
may not be seeded this year due to excess moisture and standing water.

 

Export
Developments.

·        
Jordan seeks 120,000 tons of barley on June 15 for September/October shipment.

·        
Jordan seeks 120,000 tons of wheat on June 14 for September/October shipment.

·        
Japan seeks 70,000 tons of feed wheat and 40,000 tons of barley on June 15 for arrival by November 24.

 

Rice/Other

·        
India will donate 5,000 tons of rice to Madagascar as humanitarian aid.