FI Morning Grain Comments 06/14/21

PDF attached

 

Good
morning.
 Offshore
values are NA due to no EU feed quotes available at the time this was sent. Other values throughout the text. 

 

I
will be out of the office today with limited access to emails and phone calls. 

 

Sunday
night CBOT agriculture markets opened sharply lower in response to improving US weather, at least for cooler temperatures this week and rain forecast for week two.  The

National
Weather Service shows above-normal rains and average temperatures across the Midwest in the 8-14 day range (Bloomberg). Funds were also reported less long than expected by CFTC as of last Tuesday. 
Focus on futures prices this week will depend on changes in the North American weather models and any updates/rumors for US biofuel policy . 

 

Palm
oil fell to a 4-month low.  August palm oil closed 285MYR lower at 3,378MYR a ton. RBD palm cash for the Aug/Sep position dropped $90.00/ton to $880/ton, according to Dow Jones.  China is on holiday.

 

Overnight
July soybean oil dropped to its lowest level since May 11.  Soybean meal saw limited losses on unwinding of product spreads and soybeans were off 26 to 36 cents at the time this was written.  July corn fell hard overnight but paired about half of its losses
on bull spreading and tight spot UD domestic supplies amid good industrial demand.  The weather story mainly impacted new crop.  December corn traded 39.25 cents lower overnight to $5.7950, lowest since June 4, and filled a gap that was made June 7.  US wheat
futures fell led by the MN market. Other than NA weather, the only other bearish development for wheat over the weekend was Ethiopia cancelling their import tender for 400,000 tons of wheat. 

 

Limited
rain is seen over the next week from South Dakota and Nebraska through the lower Midwest. North Dakota, the upper Midwest and Great Lakes region will dry down, although milder temperatures mid-week will slow evaporation rates. The tropical cyclone coming north
from the southwestern Gulf of Mexico could bring rain to the lower Delta next weekend, but other areas will be dry. Drought will continue in the western United States.  The central or southern Plains or southeastern states will also be dry.

 

Week
2 offers a wetter outlook and models should be monitored this week.  The western United States may stay dry. Rain may develop during week 2 across the northern Plains, upper Midwest and northern Midwest.  Temperatures will be milder week 2. 

 

After
seeing rain across many parts of the Canadian Prairies over the last week (not all areas saw rain), the Canada’s Prairies will trend drier this week, apart from western and northern Alberta and northern Saskatchewan.

 

Weather

 

Past
7 days

 

 

 

Bloomberg
Ag Calendar

Monday,
June 14:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop condition — corn, cotton, soybeans, wheat, 4pm
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Australia, China, Hong Kong

Tuesday,
June 15:

• FT
  Commodities Global Summit, day 1
• Malaysia
  June 1-15 palm oil export data
• Malaysia
  CPO export tax for July (tentative)
• New
  Zealand Food Prices
• New
  Zealand global dairy trade auction

Wednesday,
June 16:

• EIA
  weekly U.S. ethanol inventories, production
• FT
  Commodities Global Summit, day 2
• Australia’s
  Abares to release agricultural commodities report
• Brazil’s
  Unica may release cane crush, sugar production data (tentative)
• CNGOIC
  oilseed conference, Chengdu, China, Day 1

Thursday,
June 17:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• Itau
  webinar on agribusiness outlook, Sao Paulo, Brazil
• CNGOIC
  oilseed conference, Chengdu, China, Day 2

Friday,
June 18:

• 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
• China
  customs to publish trade data, including imports of corn, wheat, sugar and pork
• World
  coffee market report by USDA’s Foreign Agricultural Service, 3pm
• FranceAgriMer
  weekly update on crop conditions
• USDA
  Total Milk Production

Source:
Bloomberg and FI

 

 

 

 

 

CFTC
Commitment of Traders

Funds
were less long than expected in corn, soybeans, and soybean oil as of last Tuesday. 

 

 

 

 

 

 

Macros

 

Corn

• July
  corn fell hard overnight but paired about half of its losses on bull spreading and tight spot UD domestic supplies amid good industrial demand.  The weather story mainly impacted new crop. 
  
• December
  corn traded 39.25 cents lower overnight to $5.7950, lowest since June 4, and filled a gap that was made June 7. 
  
• Funds
  on Friday sold an estimated net 15,000 corn contracts. 
• Funds
  were less long than expected in corn, soybeans, and soybean oil as of last Tuesday. 
  
• CBOT
  corn OI was up about 11,467 contracts on Friday. 
• USD
  was 6 points lower as of 5:15 am CT.  
• IHS
  Markit: 2021 corn plantings according to trade: 96,539 million vs. 96.847 million previous and 91.144 USDA.
  

 

Export
developments.

• None
  reported

 

Soybeans

• Improving
  NA weather aiding development of soybeans and canola sent soybeans lower. 
  
• China
  is on holiday.
• Vegetable
  oil prices also pressured soybeans.  Palm oil fell to a 4-month low.  August palm oil closed 285MYR lower at 3,378MYR a ton. RBD palm cash for the Aug/Sep position dropped $90.00/ton to $880/ton, according to Dow Jones. 
  
• Soybean
  oil is also seeing follow through pressure after Reuters put out a story on Friday that the White House is looking into providing relief to oil refiners impacted by high cost RIN prices amid biofuel blending mandates. 
  
• Overnight
  July soybean oil dropped to its lowest level since May 11. 
• Soybean
  meal saw limited losses on unwinding of product spreads. 
• After
  the large decline in soybean oil prices on Friday, open interest dropped only 261 contracts to 546,617 contracts.  July was down 4,903 contracts.  December was up 3,200. 
  
• We
  look for a decline in US soybean and corn conditions. 
• Funds
  on Friday sold an estimated net 15,000 soybean contracts, bought 2,000 soybean meal and sold 25,000 soybean contracts. 
  
• Rotterdam
  rapeseed and soybean oil prices were 5-75 euros lower. 
• China:
  Holiday

 

• Indonesia
  April palm oil exports were 2.64 million tons, down from 3.23MMT in March, according to GAPKI.  End of April stocks were seen at 3.14MMT versus 3.27 million month earlier. 
  
• India’s
  palm oil imports during the month of May were 769,602 tons, up from 701,795 tons during the month of April and up 92% increase from a year ago.  Last year, may was a very low import month amid COVID-19 economic slowdown.  Imports of all vegetable oils during
  the November through May period are running above the same period a year earlier.  May imports of vegetable oils increased after the country saw a decrease in stocks in a past few months.  India’s sunflower oil imports rose 31% to 175,759 tons in May, from
  a year ago.  June imports are expected to be large as the country emerges from their recent COVID-19 outbreak lockdown. 
  
• Malaysian
  palm oil:  Reuters
  values for Aug cash

• IHS
  Markit: 2021 soybean plantings according to trade: 89,065 million vs. 88.485 million previous and 87.600 USDA.
  

 

Export
Developments

• No
  fresh export developments. 
• USDA
  seeks 1,180 tons of packaged vegetable oil for export donation on June 15 for July 16-Aug 15 shipment. 
  

 

 

 

Wheat

• US
  wheat futures fell led by the MN market.  Other than NA weather, the only other bearish development over the weekend was Ethiopia cancelling their import tender for 400,000 tons of wheat. 
  
• September
  Paris wheat market basis September was down 3.00 euros at 208.25 at the time this was written.
• Funds
  on Friday sold an estimated net 3,000 SRW wheat contracts. 
• IHS
  Markit: 2021 spring wheat plantings (excluding durum) at 11.510 million acres, down from its May 14 figure of 11.610 million and below the USDA’s March 31 estimate of 11.740 million acres.  (Reuters)

 

Export
Developments.

• Cancelled:
  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.  They may float another import tender soon. 
  
• Jordan
  seeks 20,000 tons of wheat bran on June 15 for July/August 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. 
  
• Jordan
  seeks 120,000 tons of wheat on June 22 for December shipment. 
• Jordan
  is back in for feed barley on June 23 for Nov/Dec shipment. 

 

Rice/Other

·        
None reported