FI Morning Grain Comments 06/14/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 148,000 metric tons of corn for delivery to Mexico.  Of the total, 103,000 metric tons is for delivery during the 2021/2022 marketing year and 45,000 metric tons is for delivery during the 2022/2023 marketing year.

 

USD
was slightly lower, WTI higher and US equities higher earlier this morning. We expect volatility in the outside markets over the next two days to spill over into agricultural markets. CBOT soybeans, meal and oil are all higher this morning, a reversal of what
we saw at the beginning of the Monday morning session. Grain are lower from technical selling. USDA rated US corn conditions at 72%, down 1 percentage point from a week ago. US soybeans were rated 70%, in line with trade expectations.
US FOMC meeting will conclude their two-day session this Wednesday.

 

US
rainfall will be limited for the Midwest through Friday. Some light showers are expected in the southeastern areas and southern region Thursday and Friday. The Midwest will see some rain in the west central and eastern areas today. Temperatures will be very
hot over the next two days, stressing crops. Western Europe will be hot this week.

 

 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 14, 2022

• Rain
  in Alberta and western Saskatchewan Monday was welcome and good for bringing relief to some of the drought stricken areas
  
• Additional
  rain is expected into Thursday
• Hot,
  dry, weather in the central U.S. is impacting the central and southern Plains, Midwest and Delta and these areas will continue to deal with waves of excessive heat and dryness into next week
  
• Some
  of the model data suggests a weaker ridge of high pressure will continue present in the central U.S. during the second week of the forecast, but it will not be as strong and there will be disturbances moving over its top in the northern Plains and northern
  Midwest
• Longer
  range forecast models continue to suggest a shift to the west in the U.S. high pressure ridge to the Rocky Mountains or high Plains region in weeks 3 and 4 and if that occurs there would be a potential for some rain to bring relief to the drying areas
• West
  Texas cotton, corn and sorghum areas will continue mostly dry and warm to occasionally hot over the next ten days – any rain that falls will be evaporated before it has a chance to benefit crops
• Argentina
  wheat areas have a little better potential for rain in the second week of the two week outlook today, although confidence is still a little low
• Southern
  Brazil will trend wetter again later this week and into the weekend
• Western
  Europe will be dry through the weekend and then some rain will return during the week next week
• Russia’s
  Southern Region and a few areas in Ukraine and Kazakhstan will experience net drying conditions for the next ten days, despite a few showers infrequently
• China’s
  North China Plain will continue to dry down for at least another week, but some forecast models have suggested some partial relief may occur in the second week of the forecast – confidence is low
• Australia
  will continue to see a very good mix of weather for wheat, barley and canola planting, emergence and establishment
• India’s
  monsoon performance has been poor so far this year, but rain is expected to increase and expand in the second week of the outlook, June 22-28. 
• South
  Africa is advertised to get significant moisture in the second week of the outlook today, but that event may be overdone

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

Brazil
selected export data for the month of May.

Commodity                     
May 2022           May 2021

CRUDE
OIL (TNS)                4,580,975             5,072,838

IRON
ORE (TNS)                 25,523,612            26,538,322

SOYBEANS
(TNS)                 10,632,770            14,966,212

CORN
(TNS)                     1,165,804             13,919

GREEN
COFFEE(TNS)              142,467               190,118

SUGAR
(TNS)                    1,580,438             2,482,695

BEEF
(TNS)                     153,161               126,763

POULTRY
(TNS)                  400,758               382,762

PULP
(TNS)                     1,791,611             1,439,954

 

US
Soybean and Corn Advisory

2022
U.S. Corn – 89.0 mac Planted, 177.0 bu/ac, 14.35 Billion Bu.

2020
U.S. Soybeans – 91.0 mac Planted, 51.5 bu/ac, 4.64 Billion Bu.

2021/22
Brazil Corn Estimate Increased 3.0 mt to 110.0 Million

2021/22
Brazil Soybean Estimate Increased 1.0 mt to 123.0 Million

2021/22
Argentina Soybeans Increased 1.0 mt to 42.0 Million

2021/22
Argentina Corn Estimate Unchanged at 49.0 Million Tons

 

 

 

Macros

OPEC
Leaves Full-Year 2022 World Oil Demand Growth Forecast Unchanged At 3.36 Million BPD

US
President Joe Biden To Visit Saudi Arabia On July 15-16 – State Television

US
PPI Final Demand (M/M) May: 0.8% (est 0.8%; prev 0.5%) 

US
PPI Ex Food And Energy (M/M) May: 0.5% (est 0.6%; prev 0.4%)

US
PPI Final Demand (Y/Y) May: 10.8% (est 10.9%; prev 11.0%)

US
PPI Ex Food And Energy (Y/Y) May: 8.3% (est 8.6%; prev 8.8%)

Canada
Manufacturing Sales (M/M) Apr: 1.7 (est 1.7%; prev 3.5%)

 

 

Corn

·        
US corn futures are lower with the front months extending losses after big declines in US stocks Monday that spilled over into the commodity markets. The USD was slightly lower earlier this morning.

·        
A senior Ukraine government official said Ukraine’s grain harvest could fall to around 48.5 million tons for 2022 from 86 million tons year ago. Ukraine summer grain plantings are nearly complete, and the area is down more than
25 percent from a year ago.

·        
Ukraine’s UAC sees the 2022 corn harvest at 25.7 million tons, up from 21.5 million projected in May.

·        
USDA US corn export inspections as of June 09, 2022 were 1,199,976 tons, within a range of trade expectations, below 1,458,519 tons previous week and compares to 1,610,988 tons year ago. Major countries included China for 412,966
tons, Mexico for 296,041 tons, and Japan for 231,039 tons.

 

Export
developments.

·        
Private exporters reported sales of 148,000 metric tons of corn for delivery to Mexico.  Of the total, 103,000 metric tons is for delivery during the 2021/2022 marketing year and 45,000 metric tons is for delivery during the 2022/2023
marketing year.

 

 

Soybeans

·        
CBOT soybeans,
meal and oil are all higher this morning, a reversal of what we saw at the beginning of the Monday morning session. US soybean planting progress fell short of expectations. At 88 percent, it did match the 5-year average but was two points below a Reuters poll.
Palm oil snapped a 4-day price decline.

·        
Indonesia cut its max palm oil export levy to $200 from $375, until July 31. That rate will increase in August. The combined ceiling for both levy and tax would be reduced to $488 per ton from $575 per ton. Yesterday they announced
they allocated 2.25 million tons of palm exports from 1 million previously.

·        
Malaysia palm oil was up 0.9 percent or 55 points to 5848, and cash was up $10/ton to $1460.00 per ton.

·        
China soybean futures were down 0.2%, meal down 1.9%, soybean oil up 0.2% and palm shed 0.1%. 

·        
Rotterdam vegetable oils were mixed, and meal 4-10 euros lower.

·        
Offshore values are leading SBO about 90 points higher and meal $3.20 higher.

·        
USDA US soybean export inspections as of June 09, 2022 were 605,129 tons, within a range of trade expectations, above 365,455 tons previous week and compares to 141,320 tons year ago. Major countries included Mexico for 165,395
tons, Japan for 90,353 tons, and China for 70,535 tons.

·        
(Bloomberg) — China aims to complete this year’s target for intercropping soybeans with corn on more than 1 million hectares of farmland by June 25, according to a statement from the agriculture ministry on Monday.  Under the
plan, farmers seed rows of soybeans between corn, or so-called strip compound planting, which increases soybean production.

 

Export
Developments

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

 

 

Wheat

·        
US and Paris wheat futures are lower as the market takes a step back from the recent volatility in the commodity and equity markets.

·        
Ukraine’s AgMin warned Russia’s invasion will create a global wheat shortage for at least three seasons. At least 5 million tons of wheat are held in areas occupied by Russia. Ukraine grain and oilseed exports for 2022-23 are
projected at 55 to 60 million tons.

·        
China harvested 84 percent of their winter wheat crop. Normally harvest wraps up around late June.

·        
Paris September wheat was down 3.75 euros earlier at 390.75 euros per ton.

·        
USDA US all-wheat export inspections as of June 09, 2022 were 388,847 tons, within a range of trade expectations, above 355,340 tons previous week and compares to 499,945 tons year ago. Major countries included Mexico for 61,374
tons, Japan for 58,536 tons, and Ecuador for 49,613 tons.

·        
IKAR reported Russia 12.5 percent Black Sea wheat export prices at $425 FOB at the end of last week, steady from the previous week. They see Russia’s wheat crop at 87 million tons, up from 85 million projected in May. Russia grain
exports slowed last week from previous week.

 

 

Export
Developments.

·        
Jordan bought 60,000 tons of wheat at $489.75/ton c&f for September shipment.

·        
Japan seeks 186,441 tons of food wheat from the US, Australia and Canada, later this week.

·        
Bangladesh seeks 50,000 tons of wheat on June 22. They cancelled their June 9 import tender.

·        
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.