FI Morning Grain Comments 06/13/22

PDF attached

 

Good
morning.
I will be out of the office, returning later today after 3 pm CT

 

It
was drier and hotter than expected over the weekend for the central US and Dakotas. Temperatures turn hot across the western Corn Belt today and eastern Corn Belt Tuesday. The morning forecast is slightly drier than that of Friday for the US. Scattered showers
are expected in the northern Plains and northern Midwest this week. Heavy rainfall is expected for the Canadian Prairies this week, including southern Manitoba were crop plantings are running well behind normal. Western Europe will see hot temperatures this
week.

 

US
FOMC meeting will conclude their two-day session this Wednesday. Outside market volatility is expected to spill over into the ag markets this week.

 

 

 

 

 

Weather

 

Past
7 days

 

World
Weather Inc.

 

 

 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

CFTC
Commitment of Traders

The
Commitment of Traders report showed funds reduced their net long position for soybeans instead of extending it, as expected. Funds were less long than expected for corn and soybean oil and added more contracts than expected for soybean meal.

 

 

 

 

 

Macros

US
FOMC meeting will conclude their two-day session this Wednesday.

US
Rate Futures Imply 30% Chance Of Fed Raising Rates By 75 Bps At June Meeting – FedWatch Via RTRS

–
For July Meeting, Rate Futures Price In 83% Chance Of 75 Bps Fed Rate Increase

 

Corn

·        
Outside market volatility is expected to spill over into the ag markets this week. USD was up 58 points at the tine this was written.

·        
US corn futures are higher tracking strength in wheat but weakness in WTI crude oil is limiting gains. US temperatures will be very hot this week, causing some crop stress to recently planted corn. Several records for the high
in temperatures across the Midwest are expected to be broken.

·        
Last week USDA boosted its outlook for Ukraine grain production but there is uncertainty on how the country will export the grain in large volume. Ukraine is expected to increase grain exports by rail and truck to about 2 million
tons per month, barring no additional infrastructure damage.

·        
Ukraine’s First Deputy Agriculture Minister looks for 2022 Ukraine grain production to end up near 48.5 million tons. Ukraine corn producers completed spring plantings on 4.6 million hectares (corn only), down from 5.5 million
in 2021.

·        
Last week China’s AgMin noted the corn supply is ample after producers boosted sales and the government implemented controls to move the grain during Covid-19 outbreaks.

·        
Manitoba, Canada, crop report: Provincial seeding progress sits at 65% completion, behind the 5-year average of 96% for Week 22 remains highly variable within each region, and many wet spots and low-lying areas are left unseeded
in an effort to maximize equipment planting time.

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT soybeans,
meal and oil are all lower on good US planting weather over the weekend and weakness in soybean oil following another down session in Malaysian palm oil. Covid-19 cases are on the rise in Beijing, renewing concerns over potential lockdowns.

·        
US crude oil is lower this morning and that is also weighing on soybean oil.

·        
Indonesia issued 1.16 million tons of palm export permits. This is up sharply from late last week and pressured Malaysian palm futures. Malaysia is expected to see slower exports in June and inventories are expected to build.
2.25 million tons will be allowed for export based on domestic supply.

·        
SGS reported Malaysian palm oil exports for the June 1-10 period at 408,070 tons, up 9.9 percent from the same period previous month.

·        
Malaysia palm oil hit an April 4^th low, off 2.1 percent or 127 points to 5793, and cash was off $14/ton to $1450.00 per ton.

·        
China soybean futures were down 0.4%, meal down 0.7%, soybean oil off 1.3% and palm shed 2.2%. 

·        
Rotterdam vegetable oils were mixed, and meal unchanged to 5 euros lower.

·        
Offshore values are leading SBO about 65 points higher and meal $4.80 lower.

 

Export
Developments

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

 

 

Wheat

·        
US and Paris wheat futures are higher on ongoing concerns Ukraine Black Sea shipments will not sail anytime soon and hot temperatures forecast this week across the heard of the US and western Europe.

·        
Paris September wheat was up 4.25 euros earlier at 396.25 euros per ton.

·        
Ukraine mentioned about 300,000 tons of grain may have been destroyed in warehouses located in Kyiv.

·        
CNBC noted Egypt could see an additional burden of 10 billion USD this year based on higher crude oil and wheat prices.

·        
Iraq plans to import 1.5 million tons of wheat from Australia and the US. They may sign ceremonial contracts this week.

·        
US Wheat Associates: “Heavy rain and isolated hailstorms slowed harvest progress in Texas and Oklahoma; the first samples from Oklahoma arrived at the lab for testing. The SRW harvest is well underway; data from the first samples
will be available next week. Significant HRS planting progress was made in Minnesota. Improved weather allowed for significant progress the last week of HRS and northern durum planting. The SW crop in the Pacific Northwest is 2-3 weeks behind average but remains
in good to excellent condition. “

 

Export
Developments.

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

·        
Jordan seeks 120,000 tons of barley on June 15 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 rice stocks are ample, and the country does not plan to restrict exports.