FI Morning Grain Comments 06/15/21

PDF attached

 

Good
morning.
 

 

Rain
over the past day fell across western to central Kansas and central to southeastern South Dakota.  Rest of the western growing areas were mostly dry.  The 1-7 day looks as if rain forecast for IA, WI, lower MN, IL & IA is wetter than that of yesterday.  Temperatures
are also a little cooler.  15 days out shows good rain across northern IA. 

 

Soybean
oil contracts are seeing a reversal.  Some feel the biofuel relief talk is overdone with no update or confirmation of what will happen.  We think there will be some type of relief but not without some type of bipartisan deal with food producers.  Soybeans
are seeing bull spreading. Back months are lower on improving Canadian and US weather.  Meal turned lower.  Corn is lower on improving WCB weather conditions and lower wheat. 

 

US
crop conditions declined by a more than expected amount for corn, soybeans and winter wheat. Spring declined by a less than expected 1 point.  USDA crop progress showed a slow start to the US winter wheat harvest and drop in ratings, in part from last week’s
heavy rain across the lower US, IMO. 

 

After
trading six consecutive days lower, palm oil was up 6% overnight on bottom picking, settling 205MYR higher at 3580/ton. Cash palm was up $27.50. Offshore values are leading soybean oil 88 points higher and meal $1.00 higher. 

China
cash crush margins eroded from late last week to unfavorable levels basis spot position. 

 

NOPA
due out later and trade looking for 165.1 million May US crush and 1713 billion SBO stocks (1702 end of April). 

 

South
Korea’s MFG bought 65,000 tons of feed wheat and $304.25/ton c&f for October and November arrival.  Japan seeks 207,472 tons of food wheat.  The Philippines seeks 205,000 tons of milling wheat for Aug/Sep shipment. 

 

 

 

Weather

 

15
days out shows good rain across northern IA. 

 

 

 

World
Weather, Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 15, 2021

• Tropical
  Storm Bill will impact Newfoundland as a mid-latitude storm after losing its tropical characteristics today.
  
• A
  new tropical depression or tropical storm is expected in the Gulf of Mexico later this week that will bring heavy rain to eastern Louisiana, southern Mississippi and Alabama.
  
• In
  the meantime, three days of excessive heat in the central U.S. will be followed by milder weather for most of the U.S. Plains and Midwest during the weekend and all of next week.
• Extreme
  highs to 106 will occur in Montana today and 100-104 in Nebraska and South Dakota Wednesday and in the 90s to 102 in the central Plains and southwestern corn Belt Thursday
  
• Periods
  of rain next week will help maintain a good environment for summer crops in the Midwest.
  
• North
  Dakota, northeastern South Dakota and Minnesota may not receive much rain and will continue to deal with some dryness
  
• Russia’s
  southeastern New Lands and neighboring Kazakhstan will get relief from dryness also in the coming ten days.
  
• Warm
  and relatively dry weather is expected from western Kazakhstan into the lower Volga River Valley of Russia for the next ten days
• Good
  weather will continue in western parts of the CIS
• Excessive
  rain fell in Shandong, China overnight resulting in some flooding
• Eastern
  China’s dry region has shrunk tremendously in the past week, but pockets of dryness are lingering
• The
  outlook for Europe, Australia and South America is largely unchanged from Monday.
  
• Europe
  will experience a good mix of weather for the next ten days
• Australia
  will get some periodic showers that will support winter crop emergence and establishment, although greater rain would be welcome
• Argentina
  will continue to receive restricted rainfall over the next ten days
• Wheat
  areas in the south and west would benefit from greater rainfall
• Brazil
  rainfall will continue in the interior south with no risk of crop damaging cold in key grain, sugarcane or coffee areas during the next ten days
• India’s
  monsoon will remain weak leaving the interior west and far south with limited rainfall for the balance of this month. 
• East-central
  Africa coffee, cocoa, rice and sugarcane areas need greater rainfall
• This
  includes parts of Ethiopia, Kenya and Uganda

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
480,341                 versus   275000-500000  range

Corn                     
1,544,031             versus   1500000-2100000             range

Soybeans           
128,092                 versus   150000-300000  range

 

 

Macros

 

Corn

• Weather
  driving factor.  15 days out shows good rain across northern IA.  Today we also think US corn futures are lower on follow through selling and lower wheat.  Front month July is seeing limited losses from higher July & August soybeans and good demand for spot
  US domestic corn.  However, yesterday’s inspections report came in at the low end of expectations and 67 million bushels are needed to be shipped in order to reach USDA’s 2.850 billion bushel crop year export projection.  Shipments of corn need to increase
  over the summer months to reach USDA’s, and our export figures. 
• The
  weather models still call for milder temperatures mid this week and next week.  1-7 day for the US looks wetter for the WCB. 
  
• Macro
  inflation concerns could slow selling in corn futures sometime this week.  Yesterday funds sold an estimated net 21,000 corn contracts. 
  
• Corn
  conditions came in today at 68% G/E, down 4 points, 1 point less than expected. 
  
• CBOT
  corn OI was down 8,909 contracts on Monday. 
• USD
  was 11 points higher as of 7:11 am CT and WTI up nearly $1.00.   

 

Export
developments.

• None
  reported

 

Soybeans

• A
  rebound in front month soybean oil contracts and reversal in bear spreading in soybeans is supporting July soybean complex contracts.   Some think the biofuel relief talk is overdone with no update or confirmation that it will happen.  We think there will
  be some type of relief but not without some type of bipartisan deal with food producers. 
  
• China
  is back form holiday and futures fell hard led by palm oil and meal.  China
  hog futures hit a new low.  China
  crush margins declined from last week and are negative for the spot position.  It’s been a while since we heard of China buying a good amount of soybeans from SA or the US. 
  
• Yesterday’s
  USDA soybean export inspections of 128,092 tons were below expectations.
• US
  soy crop is at 62% G/E, down 5 points, 3 lower than expected.  94% of the crop is planted, one point below expectations.   
  
• Germany’s
  association of farm cooperatives estimated the 2021 winter rapeseed crop up 4.6% from last summer’s crop to 3.67 million tons and compares to their previous estimate of 3.62 million tons.
• Funds
  on Monday sold an estimated net 14,000 soybean contracts, sold 7,000 soybean meal and sold 6,000 soybean oil contracts. 
  
• Offshore
  values are leading soybean oil 88 points higher and meal $1.00 higher. 
• Rotterdam
  rapeseed and soybean oil prices were mixed, and meal mixed. 
• China:
  Back from Holiday. 
  

• AmSpec:
  Malaysian palm June 1-15 shipments down 6.2% to 652,700 tons.  ITS 3.8 decline to 658,900.
  
• Malaysian
  palm oil:  

 

Export
Developments

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

 

 

Wheat

• US
  wheat futures are lower on forecasts for improving US and Canadian weather.   Egypt is in for wheat and lowest offer was $250.88 a ton for 60,000 tons of Russian wheat.
• US
  winter wheat conditions were at 48% G/E, 2 points below the previous week and 2 lower than expected.  The winter wheat harvest is getting off to a slow start as only 4% of the crop is harvested, less than the 10% harvested which was expected.  This was 6 points
  below a average trade guess. 
• US
  spring wheat conditions fell by 1 point to 37% G/E, 1 point better than expected. 
  
• Funds
  on Monday sold an estimated net 6,000 SRW wheat contracts. 
• September
  Paris wheat market basis September was down 2.25 euros at 206.75 at the time this was written.
• Germany’s
  association of farm cooperatives said the 2021 wheat crop is expected to increase by 3.8% on the year to 22.98 million tons. 22.66 million tons was their previous estimate.
  

 

Export
Developments. 
*NEW

• Egypt
  seeks the usual tender for wheat for August 21-31 shipment and with payment at sight.  Lowest offer was $250.88 a ton for 60,000 tons of Russian wheat.
• Results
  awaited: Jordan seeks 20,000 tons of wheat bran on June 15 for July/August shipment. 
  
• *South
  Korea’s MFG bought 65,000 tons of feed wheat and $304.25/ton c&f for October and November arrival. 
  
• *Japan
  seeks 207,472 tons of food wheat. 
• *The
  Philippines seeks 205,000 tons of milling wheat for Aug/Sep 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