FI Morning Grain Comments 06/15/22

PDF attached

 

Good
morning.

 

US
FED will increase interest rates this afternoon. A 75 point hike is not out of the question. If realized, that would be the largest rate hike since 1994. The USD is sharply lower this morning and WTI crude oil lower. The US soybean complex is mixed with soybean
oil contracts (most) following weaker Malaysian palm oil, meal higher on product spreading and soybeans mixed. Corn and wheat are trading lower. NOPA is due out at 11 am CT and traders are looking for 171.6 million bushels versus 163.5 million year earlier.
A Bloomberg poll looks for weekly US ethanol production to be up 4,000 barrels to 1043 thousand (1028-1066 range) from the previous week and stocks up 142,000 barrels to 23.778 million.

 

The
US weather forecast turned slightly unfavorable for the Midwest and Delta this morning. Some light showers are expected in the southeastern areas and southern region starting today, lasting through Friday. Most of the rest of the Midwest will be dry through
the end of the week. The two-week outlook calls for around 65 percent of normal precipitation for the US Midwest. Parts of the northern Great Plains will see rain today. US temperatures will be very hot again today. Western Europe will be hot this week.
Eastern
Europe will see rain.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 15, 2022

• Another
  very warm day will occur in the U.S. Midwest today before some cooling takes place
• A
  strong ridge of high pressure is expected to evolve in the U.S. Plains Thursday and especially Friday through Monday at which time a new heatwave is expected 
  
• temperatures
  will reach over 100 Fahrenheit as far north as the Dakotas and Minnesota with 90s in southeastern Canada’s Prairies 
• The
  North America high pressure ridge will break down next week and as it does there will be a scattering of showers and thunderstorms for a little while
  
• Resulting
  rainfall should be light and a greater need for rain will return after the period of hot and dry weather
• West
  Texas rainfall should be restricted for an extended period of time
• Canada’s
  Western Prairies have benefited from recent rain and more will occur today and again during the weekend into next week
  
• much
  improved crop development potential will result, although more rain will be needed especially in parts of Saskatchewan
• Limited
  rain in the eastern Canada Prairies will be good getting farmers back into their fields relatively quickly after recent rain
• Argentina
  wheat areas may get some rain late next week, but it will favor Buenos Aires and not the driest areas in the west
• Southern
  Brazil will experience a new wave of rain Thursday into Friday with another round of it expected early to mid-week next week keeping the region wet
• Europe’s
  advertised rain for early next week has been delayed until later in the week next week, but it is still coming
• Hot
  temperatures are expected in southwestern Europe for a while
• Russia’s
  Southern Region and western Kazakhstan will continue to be dry biased for a while – at least ten days
  
• some
  areas in Ukraine will also be dry in the first seven days of the outlook followed by some showers in the June 23-29 period
• Today’s
  ECMWF model generated significant rain in the North China Plain for late next week, but this is not likely to verify
  
• showers
  are still possible in the second week of the two-week outlook, but no sooner than that
• Australia’s
  rainfall pattern looks quite favorable for wheat, barley and canola planting, emergence and establishment for the next two weeks
• South
  Africa may get some significant rain in its wheat region next week improving crop emergence and establishment
• India’s
  monsoon is still expected to slowly improve after a poor performance in the first two weeks of the season – change will come slowly, though
• Southern
  China flooding will slowly ease in this coming week, but more rain will fall through the weekend
• Far
  northeastern China is still abundantly wet and would benefit from some drying

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
MBA Mortgage Applications Jun 10: 6.6% (prev -6.5%)

US
MBA 30-Year Mortgage Rate Jun 10: 5.56% (prev 5.40%)

Bloomberg)
— Russia’s currency trades near highest level against the dollar since March 2018.

 

US
Retail Sales Advance (M/M) May: -0.3% (est 0.1%; prev 0.9%)

US
Retail Sales Ex Auto (M/M) May: 0.5% (est 0.7%; prev 0.6%)

US
Retail Sales Ex Auto And Gas May: 0.1% (est 0.4%; prev 1.0%)

US
Retail Sales Control Group May: 0.0% (est 0.3%; prev 1.0%)

US
Import Price Index (M/M) May: 0.6% (est 1.1%; prev 0.0%)

US
Import Price Index Ex Petroleum (M/M) May: -0.1% (est 0.6%; prev 0.4%)

US
Import Price Index (Y/Y) May: 11.7% (est 11.9%; prev 12.0%)

US
Export Price Index (M/M) May: 2.8% (est 1.3%; prev 0.6%)

US
Export Price Index (Y/Y) May: 18.9% (prev 18.0%)

US
Empire Manufacturing Jun: -1.2 (est 2.3; prev -11.6)

 

 

Corn

·        
US corn futures are lower from a higher USD and lack of fresh news.

·        
Traders are watching to see if Ukraine corn shipments will soon increase out of the Baltic Sea, a new route previously announced earlier this week.

·        
The US heat is good for established corn but providing stress for recently emerged plants.

·        
US producer selling has slowed, and this has firmed basis for corn and soybean meal basis over the last week.

·        
China’s Ministry of Agriculture and Rural Affairs reported the May sow herd fell 0.2% from the previous month to 41.77 million heads, 4.3% lower than a year ago. China slaughtered 97.45 million pigs at large slaughterhouses in
the first four months of the year, up 45.7% from the previous year.

·        
Anec sees Brazil June corn exports at 1.79 million tons, up from 1.45 million tons projected previous week.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 4,000 barrels to 1043 thousand (1028-1066 range) from the previous week and stocks up 142,000 barrels to 23.778 million.

 

Export
developments.

·        
China seeks to buy 40,000 tons of frozen pork for reserves on June 17.

 

Soybeans

·        
The US soybean complex is mixed with most soybean oil contracts lower following weaker Malaysian palm oil, meal higher on product spreading and soybeans mixed. July soybean oil turned higher early this morning. That contract settled
below its 50-day MA yesterday.

·        
Nearby soybeans are now near a one week low.

·        
Nearby crush margins are below 70 cents.

·        
NOPA is due out at 11 am CT and traders are looking for 171.6 million bushels versus 163.5 million year earlier.

·        
Argentina may see a shortage of diesel supplies and the government may boost the biodiesel consumption for 60 days for replacement. Upwards to 12.5% blend was proposed against the current 5%.

·        
Our initial US soybean yield is 52.3 bushels per acre, 0.8 above USDA and production at 4.701 billion, 61 million bushels above USDA. The ten year trend is 53.3 bushels per acre. Our weighted US soybean crop rating was 1.9% above
year ago and 1.0% above a 5-year average.

·        
Anec sees Brazil June soybean exports at 10.84 million tons, up from 9.41 million tons previously. Soybean meal exports are seen at 2.19 million tons, up from 2.03 million projected last week.

·        
AmSpec reported Malaysia palm oil exports during the June 1-15 period at 5529,480 tons, down 6.1 percent from 563,633 tons for the May 1-15 period. ITS reported a 5.6 percent increase to 601,063 tons and SGS a 3.5 percent decrease
to 592,423 tons.

·        
Malaysia palm oil touched a 110-week low overnight. August was down 3.3 percent or 191 points to 5657, and cash was down $45/ton to $1415.00 per ton.

·        
China soybean futures were down 0.6%, meal down 0.3%, soybean oil down 0.6% and palm shed 1.1%. 

·        
Rotterdam vegetable oils were 5-40 lower, and meal 1-8 euros lower.

·        
Offshore values are leading SBO about 11 points higher and meal $2.20 higher.

 

Export
Developments

·        
USDA seeks 3,770 tons of vegetable oils for export today for July 16 to August 15 shipment.

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

 

 

June
soybean acreage

With
88 percent of the US soybean crop planted as of June 12, there is a chance for June Acreage to show a slight increase in US soybean acres when updated at the end of the month. Instead of looking for a 200,000 acre decline, we are now looking for a 200,000
acre increase from March to 91.16 million acres.

 

 

Wheat

·        
US and Paris wheat futures are mostly lower on US harvest pressure and slow export developments.  US wheat was led lower by MN type wheat. 94 percent of the spring wheat crop was sowed as of Sunday.

·        
Look for a good advancement in US winter wheat harvest progress this week.

·        
Ukraine’s AgMin reported 2.4 million hectares of winter grains remain to be harvested this year, a loss of nearly 1.5 billion USD.

·        
Germany’s agricultural cooperatives group DRV estimated the grain crop at 43.2 million tons, up from 42.9 million previously. Wheat harvest will soon start and production was pegged at 22.7 million tons, up 300,000 from previous.

·        
The UAE banned export and re-exports of Indian wheat until September.

·        
Kazakhstan extended their export quotas on wheat and flour exports until September 30. This includes a “quota of 550,000 tons of wheat and meslin to third countries and the EAEU states and 370,000 tons of wheat and rye-wheat flour
to the third countries,” according to Reuters.

·        
Turkey is awaiting a response from Russia from talk over the “safe grain transfer” from Ukraine.

·        
Paris September wheat was down 3.00 euros earlier at 389.25 euros per ton.

 

Export
Developments.

·        
Jordan bought 60,000 tons of barley for September/October shipment at an estimated $428.50 a ton c&f.

·        
Results awaited: Japan seeks 70,000 tons of feed wheat and 40,000 tons of barley on June 15 for arrival by November 24.

·        
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.

 

Rice/Other

·        
India rice stocks are ample, and the country does not plan to restrict exports.