FI Morning Grain Comments 06/14/23

PDF attached

 

Good
morning.

 

USD
was down 35 points and WTI higher by 75 cents. Corn futures are lower from a slight correction in CBOT agriculture markets.  US weather outlook hasn’t changed that much.  Look for some rain to increase across the Midwest over the next week but keep an eye
on the dry areas of the northwestern Corn Belt. A
Bloomberg poll looks for weekly US ethanol production to be up 7,000 thousand barrels to 1043k (1030-1055 range) from the previous week and stocks up 104,000 barrels to 23.052 million. CBOT soybeans are lower following light weakness in products and risk off
trading after trading in a higher but very choppy session on Tuesday. Higher Malaysian and China palm oil and near unchanged EU cash vegetable oil prices may limit downside movement in CBOT soybean oil. Offshore values were leading SBO lower by 115 points
this morning and meal $2.40 higher. US
wheat futures are trading lower early Wednesday on light profit taking by funds bias Chicago and follow through selling for higher protein wheat from rain prospects for the central and northern Great Pains this week.

 

Fund
estimates as of June 13 (net in 000)

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 14, 2023

• U.S.
  Midwest rainfall will be minimal over the next ten days from southern Indiana through the heart of Illinois to eastern Iowa, eastern Minnesota and western Wisconsin
• These
  areas are already too dry and moisture stress will be intensifying
• Eastern
  Midwest will get showers today and Thursday with a few more possible during the middle part of next week
• Ohio,
  Pennsylvania and New York will be most favored for rain
• Portions
  of U.S. Delta and southeastern states will receive frequent rain that will be moderate to heavy at times during the next week to ten days
• Local
  flooding is possible
• U.S.
  central Plains weather will be well mixed with periods of rain and sunshine
• Northern
  U.S. Plains and upper Midwest rainfall will be restricted, but showers and thunderstorms are expected periodically
• Alberta
  and Saskatchewan will get some needed rain in the next ten days, although southeastern Alberta and southwestern Saskatchewan will be largely missed by the greatest rainfall
• Manitoba
  rainfall is expected to be restricted in the next ten days especially in the southeast
• Much
  of western and southern Texas will be dry with warm to hot temperatures in the south over the next ten days
• Northeastern
  France, Germany, Belgium, Netherlands and Denmark will be dry biased through the weekend, but showers and thunderstorms will slowly evolve next week to begin moistening the topsoil
• Crop
  moisture stress will remain high until the rain evolves
• Central
  and eastern Ukraine, eastern Belarus, the Baltic States and western Russia crop areas will be dry during the next week to ten days
• Southern
  Europe will continue wet
• Limited
  rain and mild weather will occur in Russia’s key grain and oilseed areas except in southern parts of the Southern Region where rain will fall significantly
• Limited
  rain will fall in Kazakhstan next ten days
• China’s
  Yellow River Basin is expected to continue drying out raising the need for rain
• Far
  southern China will be quite wet over the next two weeks resulting in some flooding in southern rice and sugarcane areas possibly harming the quality of early season rice and cutting into its production
• India’s
  greatest rain in this first week of the two weeks outlook will be from Tropical Cyclone Biparjoy which is expected inland over northwestern Gujarat around 1700 GMT Thursday producing torrential rain and flooding from there and southeastern Sindh, Pakistan
  into southern Rajasthan  and far northern Madhya Pradesh Thursday through Tuesday
  
• India’s
  monsoonal rainfall will otherwise be limited over the next week except strong thunderstorms in the far south this weekend
• India’s
  weather will become more active in the June 21-28 period, although west-central parts of the nation will continue drier than usual
• Western
  Thailand, western Cambodia and Vietnam rainfall will be lighter than usual over the next two weeks
• Australia
  rainfall will continue greatest in southernmost parts of the nation – near the coast over the next ten days
• South
  Africa’s southwestern wheat areas will continue to get rain periodically over the next ten days
• Central
  Africa rainfall will continue abundant over the next ten days
• North
  Africa weather will be drying out after rain ends today in northeastern Algeria and northern Tunisia
  
• Argentina
  rainfall will continue restricted over the next ten days
• Mato
  Grosso do Sul to Parana, Sao Paulo, Santa Catarina and northern Rio Grande do Sul will be wetter than usual through Friday
  
• Minas
  Gerais, Espirito Santo and Rio de Janeiro, Brazil will be wetter than usual Friday through the weekend

Source:
World Weather, INC.

 

 

 

 

 

Bloomberg
Ag calendar

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

 

Macros

US
Briefing 14/06/23:

Fed
Set To Pause And Keep Option To Raise Rates In July; ECB Expected To Hike Another Quarter Point As Tightening Cycle Nears Terminus

ECB
Expected To Hike Another Quarter Point As Tightening Cycle Nears Terminus

 

US
PPI Final Demand (M/M) May: -0.3% (est -0.1%; prev 0.2%)

 

US
PPI Ex Food And Energy (M/M) May: 0.2% (est 0.2%; prev 0.2%)

US
PPI Final Demand (Y/Y) May: 1.1% (est 1.5%; prev 2.3%)

US
PPI Ex Food And Energy (Y/Y) May: 2.8% (est 2.9%; prev 3.2%)

 

 

Corn

·        
Corn futures are lower from a slight correction in CBOT agriculture markets. 

·        
September corn 50-day MA is at $5.36, just below the overnight low.

·        
US weather outlook hasn’t changed that much. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 7,000 thousand barrels to 1043k (1030-1055 range) from the previous week and stocks up 104,000 barrels to 23.052 million.

 

 

University
of Illinois: Nitrogen Fertilizer Prices Stabilize at High Levels in Spring 2023

Schnitkey,
G., N. Paulson, C. Zulauf and J. Baltz. “Nitrogen Fertilizer Prices Stabilize at High Levels in Spring 2023.”
farmdoc daily (13):108, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 13, 2023.

https://farmdocdaily.illinois.edu/2023/06/nitrogen-fertilizer-prices-stabilize-at-high-levels-in-spring-2023.html

 

Export
developments.

• Results
  awaited: Iran seeks 120,000 tons of soybean meal and 120,000 tons of corn.
  

 

Soybeans

·        
CBOT soybeans are lower following light weakness in products and risk off trading after trading in a higher but very choppy session on Tuesday.

·        
Yesterday August soybeans nearly tested its 50-day MA of $13.3775.

·        
Don’t discount a two-sided trade if the weather model runs for the US turn negative.

·        
Higher Malaysian and China palm oil and near unchanged EU cash vegetable oil prices may limit downside movement in CBOT soybean oil. Dry weather for the EU and US coupled with EPA’s decision to delay RVO mandates should also limit
losses for SBO.

·        
NOPA US crush is due out Thursday and traders are looking for 175.88 million bushels for the month of May, down on a daily adjusted basis from April but up nearly 3 percent from year ago. Soybean oil stocks are expected to drop
to 1.942 billion pounds from 1.957 billion pounds at the end of April (a 14 month high).

·        
Cargo surveyors are scheduled to release June 1-15 Malaysian palm oil export updates on Thursday. June 1-10 had declined between 16.7% and 17.6% (Reuters).

·        
August Malaysia palm futures traded 36 ringgit higher to 3452 and Aug. cash increased $17.50/ton to $807.50/ton.

·        
China September soybean futures were up 0.2%, meal up 0.9%, SBO higher by 1.6% and palm oil futures increased 2.6%.

·        
Nearby Rotterdam vegetable oils were unchanged to 5 euros higher from this time yesterday morning and meal mixed.

·        
Offshore values were leading SBO lower by 115 points this morning and meal $2.40 higher.

 

Export
Developments

• Egypt
  bought 18,000 tons of vegetable oils consisting of 6,000 sunflower oil at $926 per ton c&f and 12,000 soybean oil at $1,048/ton for arrival between August 20 and September 15.
  They
  were also in for a small amount of local vegetable oils, but no results were reported.
  
• Iran
  seeks 120,000 tons of soybean meal and 120,000 tons of corn on June 14.
• Algeria
  passed on soybean meal.
• USDA
  last week bought 1,220 tons of vegetable oils for export at $1,947-$2,292 per ton.
  
• USDA
  seeks 6,410 tons of vegetable oils on June 15 for FH July shipment to the Dominican Republic.
  
• USDA
  seeks 77,000 tons of soybean meal on June 14 for July 10-31 shipment to Indonesia.
  

 

 

Wheat

·        
US wheat futures are trading lower early Wednesday on light profit taking by funds bias Chicago and follow through selling for higher protein wheat from rain prospects for the central and northern Great Pains this week.

·        
Egypt bought 3.5 million tons of local wheat since mid-April, about 350,000 tons greater than what they secured as of around June 10. They will need to import about 5 million tons to reach their 8.25 million ton subsidy program
for the 2023-24 crop year.

·        
Look for Egypt to float another import tender soon as the latest purchase of one Russian wheat cargo was thought to be in jeopardy over payment issues.

·        
September Paris wheat futures were down 5.75 euros earlier at 233 per ton.

·        
FranceAgriMer lowered French soft wheat exports outside the European Union for 2022-23 by 100,000 tons to 10.2 million toes, 16% above the previous season.

·        
Argentina will see net drying over the next week, unwelcome for the recently planted wheat crop.

·        
Russia’s Deputy Prime Minister Viktoria Abramchenko noted 2023 Russian wheat exports could grow 10 percent from 2022, which saw a 12 percent growth in terms of revenue (41.5 USD billion).

·        
Agritel: Romania wheat production downward revised 15% to 8.76 MMT from 10.35 MMT projected last April, compared to 9.2 MMT year ago.

 

Export
Developments.

·        
Taiwan bought 56,000 tons of US wheat from the US for July 31-August 14 shipment off the PNW.

·        
Results awaited: Morocco seeks 500,000 tons of feed barley on June 14.

·        
Japan in a SBS import tender seeks 60,000 tons of feed wheat and 20,000 tons of barley on June 19 for arrival by November 30.

 

Rice/Other

·        
None reported