FI Morning Grain Comments 06/15/23

PDF attached

 

Good
morning.

 

USD
was down 49 points and WTI higher by 102 cents. A drier US forecast is supporting prices this morning. CPC has a grim outlook for summer North American weather (see weather headlines). After the release of the US weekly drought monitor, several comments/tweets
are flying around, including one that stated Illinois alone during the April 1-June 10^th period is driest on record since 1988, second driest since data going back to 1951. Class one degradation was most notable for MI, IL, IA, and parts of WI &
MN. . Argentina’s Rosario grains exchange lowered their soybean estimate to 20.5 million tons. India palm oil imports declined last month and SBO and sunflower oil imports were good. India cut their import duty on SBO and sunoil to 12.5% vs 17.5%. Russia again
stated they are looking at not renewing the grain export deal. EU crops are shrinking due to unfavorable weather.

 

NOPA
crush is due out at 11 am CT.

 

Fund
estimates as of June 14 (net in 000)

 

Weather

Reuters
headlines on CPC El Nino update:

U.S.
WEATHER FORECASTER CPC: EL NIÑO CONDITIONS ARE PRESENT AND EQUATORIAL SEA SURFACE TEMPERATURES ARE ABOVE AVERAGE ACROSS CENTRAL AND EASTERN EQUATORIAL PACIFIC OCEAN

U.S.
CPC: EL NIÑO IS EXPECTED TO STRENGTHEN AND PERSIST THROUGH THE WINTER 2023-24

U.S.
CPC: JULY-AUGUST-SEPTEMBER 2023 TEMPERATURE OUTLOOK FAVORS ABOVE-NORMAL SEASONAL MEAN TEMPERATURES ACROSS A MAJORITY OF THE U.S.

U.S.
CPC: JULY-AUGUST-SEPTEMBER PRECIPITATION OUTLOOK DEPICTS ELEVATED PROBABILITIES OF
BELOW-NORMAL PRECIPITATION FOR PARTS OF SOUTHWEST, PACIFIC NORTHWEST, GREAT LAKES

U.S.
CPC: JULY-AUGUST-SEPTEMBER ABOVE-NORMAL PRECIPITATION IS FAVORED ACROSS MUCH OF GREAT PLAINS, PARTS OF MIDDLE TO LOWER MISSISSIPPI VALLEY, NORTHERN ROCKIES, FLORIDA PENINSULA

U.S.
CPC: HIGHEST PROBABILITIES (MORE THAN 50 %) OF ABOVE-NORMAL TEMPERATURES ARE FORECAST ACROSS PARTS OF CALIFORNIA, PACIFIC NORTHWEST, GREAT BASIN, SOUTHWEST, GULF COAST, AND EAST

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 15, 2023

• No
  major changes overnight
• Tropical
  Cyclone Biparjoy will reach the northwest coast of Gujarat, India this evening and will bring with it some torrential rain, a storm surge and some windy conditions
• Remnants
  of the storm will move through Rajasthan Friday into the weekend with some rain reaching as far east as Uttar Pradesh; most of the moisture from the storm will be welcome, despite some flooding
• U.S.
  Midwest dryness will continue from eastern Minnesota, eastern Iowa and northeastern Missouri to western Wisconsin and parts of Illinois over the coming week to nearly 10 days
• Canada’s
  Prairies are still expecting some increase in shower and thunderstorm activity over the next ten days, but some of the rain will continue erratic and light leaving a greater need for more rain
• Argentina
  rainfall will continue well below normal leaving western wheat areas too dry
• Northern
  Europe rainfall will continue restricted in this first week of the outlook especially from northeastern France through Germany, but the following week should trend wetter
• Russia’s
  eastern New Lands are only expecting partial relief to dryness over the next two weeks, although there will be no excessive heat for a while
• There
  is some potential for frost and light freezes in Russia’s northeastern New Lands this weekend and next week
  
• India’s
  monsoonal rainfall will continue minimal in this first week of the outlook, but conditions may begin to improve after June 22; rain will be most significant in association with Tropical Cyclone Biparjoy in the north through the weekend
• Australia’s
  rainfall will be greatest near the southern coast over the next ten days
• Northern
  China (north of the Yellow River) will be driest over the next ten days leaving very good crop weather for the remainder of nation
• Thailand
  and Vietnam rainfall will continue lighter than usual, but timely; water supply remains well below normal with little change likely

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

 

 

 

 

USDA
export sales

USDA
export sales were near the upper end of expectations for soybeans for old crop and below expectations for new crop. Old crop soybean sales included 218,700 tons for Spain. Soybean meal and soybean oil sales were withing a range of expectations. Soybean meal
and oil shipments were good. Corn export sales were a positive 273,300 tons for old crop, up from 172,700 tons previous week and all-wheat sales were a low 165,000 tons. For corn, Japan and Mexico were the largest takers. Sorghum sales were 114,200 tons, with
most for China. Pork sales were 26,700 tons with Mexico taking 10,700 tons.

 

 

 

Macros

US
Initial Jobless Claims Jun 10: 262K (est 245K; prev 261K)

US
Continuing Claims Jun 3: 1775K (est 1768K; prev 1757K)

US
Retail Sales Advance (M/M) May: 0.3% (est -0.2%; prev 0.4%)

US
Retail Sales Ex Auto (M/M) May: 0.1% (est 0.1%; prev 0.4%)

US
Retail Sales Ex Auto And Gas May: 0.4% (est 0.2%; prev 0.6%)

US
Import Price Index (M/M) May: -0.6% (est -0.5%; prev 0.4%)

US
Import Price Index Ex Petroleum (M/M) May: -0.2% (est -0.1%; prev -0.1%)

US
Import Price Index (Y/Y) May: -5.9% (est -5.6%; prev -4.8%)

US
Export Price Index (M/M) May: -1.9% (est -0.1%; prev 0.2%)

US
Export Price Index (Y/Y) May: -10.1% (est -8.4%; prev -5.9%)

US
Empire Manufacturing Jun: 6.6 (est -15.1; prev -31.8)

US
Philadelphia Fed Business Outlook Jun: -13.7 (est -14.0; prev -10.4)

Canadian
Manufacturing Sales (M/M) Apr: 0.3% (est -0.2%; prev 0.7%)

ECB
raised rates by 25 points

 

 

Corn

·        
Corn futures are higher on global supply concerns. US drought monitor, morning weather model runs, CPC long term summer outlook for the US, and technical buying are attracting funds back to long positions.

·        
Weekly US ethanol production was down 18,000 barrels to 1.018 million and stocks fell a large 722,000 barrels to 22.226 million. For comparison, a Bloomberg poll looked for weekly US ethanol production to be up 7,000 thousand
barrels and stocks up 104,000 barrels to 23.052 million.

·        
USDA Broiler Report showed broiler eggs set in the US up one percent and chicks placed down 1 percent.  Cumulative placements were down slightly from the same period a year earlier.

·        
USDA turkey hatchery:

• Eggs
  in Incubators on June 1 Up 7 Percent from Last Year
• Poults
  Hatched During May Up 4 Percent from Last Year
• Net
  Poults Placed During May Up 4 Percent from Last Year

 

Export
developments.

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

 

Soybeans

·        
CBOT soybeans are higher on weather concerns. Meal is higher and soybean oil higher (bear spreading). High soybean oil cash prices bias WCB might prompt light demand destruction. Although soybean oil shipments in the latest USDA
export sales report neared 10,000 tons. Recall April exports per Census were better than expected. We see no reason for USDA to cut soybean oil exports in the next S&D update (450 million pounds for 2022-23 versus 1773 million 2021-22) but remain confident
summer exports will considerably slow in part to regular yearly crush downtime.

·        
China plans to auction off 315,000 tons of (2020) imported soybeans on June 20.

·        
Argentina Rosario grains exchange: 2022-23 soybean production 20.5 MMT versus 21.5MMT previous.

·        
India cut their import duty on SBO and sunoil to 12.5% vs 17.5%.

·        
India May palm oil imports fell to a 27-month low to 439,173 tons versus 510,094 tons in April.

• Soyoil
  imports at 318,887 T vs 262,455 T in April. Average from November 2022 through May is 818,203 tons.
  
• Sunflower
  oil imports at 295,206 T vs 249,122 T in April
• Total
  vegetable oil imports 1.06 million tons, up 1 percent from April.

·        
Cargo surveyors released June 1-15 Malaysian palm oil export data. ITS reported 464,380 tons, a decrease of 16.6% from 557,090 previous period month earlier. AmSpec reported a 166.4% decrease to 437,101 tons. For comparison, June
1-10 had declined between 16.7% and 17.6% (Reuters).

·        
August Malaysia palm futures traded 69 ringgit higher to 3521 and Aug. cash increased $5.00/ton to $812.50/ton.

·        
China September soybean futures were down 0.1%, meal up 0.4%, SBO higher by 0.3% and palm oil futures increased 0.4%.

·        
Nearby Rotterdam vegetable oils were unchanged to 20 euros higher from this time yesterday morning and meal mixed.

·        
Offshore values were leading SBO higher by 5 points this morning and meal $1.70 lower.

·        
NOPA US crush is due out today 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).

 

August
soybean oil share

 

Export
Developments

• Iran
  seeks 120,000 tons of soybean meal and 120,000 tons of corn on June 14.
• USDA
  seeks 6,410 tons of vegetable oils on June 15 for FH July shipment to the Dominican Republic.
  

 

 

Wheat

·        
US wheat futures are higher on unfavorable weather for the EU and higher outside related markets. Russia again said they are unlikely extending the grain deal.

·        
The EU will remain hot through the end of the month.

·        
Strategie Grains  lowered its 2023-24 European Union soft wheat production estimate to 128.7 million tons from 130.0 million in May, about 3% above 2022-23. Barley was cut 2 million tons to 47.9 million tons, about 6% below last
year. France and Spain have been hardest hit with heat.

·        
Argentina Rosario grains exchange: Planted area of wheat 5.6 million hectares.

·        
September Paris wheat futures were up 2.50 euros earlier at 235.75 per ton.

 

 

Export
Developments.

·        
Iraq bought 400,000 tons of Australian wheat for arrival through September.

·        
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.

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

 

Rice/Other

·        
None reported

 

 

USDA export sales

U.S. EXPORT SALES FOR WEEK ENDING 6/8/2023 

  

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	72.1	679.5	1,125.2	66.6	120.0	217.5	0.0	0.0
SRW	56.6	1,130.9	897.8	2.0	28.7	87.3	0.0	0.0
HRS	-4.5	1,055.0	1,285.9	63.6	145.5	169.2	0.0	0.0
WHITE	40.7	551.6	840.3	117.5	145.6	108.2	0.0	0.0
DURUM	0.0	94.4	64.4	0.0	0.0	0.0	0.0	0.0
TOTAL	165.0	3,511.3	4,213.6	249.7	439.9	582.2	0.0	0.0
BARLEY	7.0	16.3	12.8	0.0	0.0	1.0	0.0	0.0
CORN	273.3	5,633.9	10,594.1	1,192.6	32,978.1	49,069.0	21.1	2,979.4
SORGHUM	114.2	498.3	783.3	52.1	1,458.0	6,023.1	0.0	63.2
SOYBEANS	478.4	3,129.8	9,491.9	141.3	48,519.1	50,648.8	48.5	3,165.9
SOY MEAL	207.7	2,674.3	2,638.3	273.8	8,680.6	8,462.3	18.2	625.1
SOY OIL	2.0	41.7	87.9	9.6	86.6	595.1	-0.1	3.8
RICE
L G RGH	-1.0	87.0	82.7	16.2	639.5	1,216.5	1.4	23.4
M S RGH	0.0	32.1	7.4	0.6	26.0	13.5	0.0	5.0
L G BRN	0.4	5.8	4.7	0.1	18.8	49.5	0.0	0.0
M&S BR	0.0	6.8	9.9	14.8	38.7	77.7	0.0	0.0
L G MLD	8.6	94.7	93.2	8.6	632.1	715.4	0.0	40.0
M S MLD	0.9	75.3	156.0	0.9	241.1	367.3	0.0	40.2
TOTAL	9.0	301.7	353.9	41.2	1,596.2	2,439.9	1.4	108.6
COTTON		THOUSAND RUNNING BALES
UPLAND	98.9	3,584.2	4,764.1	244.8	10,025.8	10,774.6	65.7	1,781.6
PIMA	2.0	42.8	68.0	0.3	272.5	409.8	0.0	4.7

 

 

Export Sales Highlights 

This summary is based on reports from exporters for the period June 2-8, 2023.

 

Wheat:  Net sales of 165,000 metric tons (MT) for 2023/2024 primarily
for Mexico (47,600 MT, including decreases of 400 MT), Vietnam (42,000 MT switched from unknown destinations), Chile (30,000 MT), the Philippines (26,300 MT), and Ecuador (20,000 MT), were offset by reductions for Colombia (10,000 MT), unknown destinations
(8,000 MT), and Honduras (6,000 MT). Exports of 249,700 MT were primarily to Mexico (60,200 MT), Taiwan (57,000 MT), the Philippines (56,600 MT), Yemen (53,800 MT), and Colombia (14,500 MT). 

 

Corn:  Net sales of 273,300 MT for 2022/2023 were up 58 percent from the previous week and up noticeably from the prior 4-week average. Increases
primarily for Japan (173,300 MT, including 160,500 MT switched from unknown destinations and decreases of 7,700 MT), Mexico (157,700 MT, including 31,000 MT switched from unknown destinations and decreases of 2,200 MT), Colombia (113,700 MT, including 91,000
MT switched from unknown destinations and decreases of 17,700 MT), Honduras (60,200 MT, including 7,500 MT switched from Nicaragua and decreases of 5,200 MT), and Guatemala (19,600 MT), were offset by reductions for unknown destinations (279,500 MT), Nicaragua
(7,500 MT), the French West Indies (7,300 MT), and China (600 MT). Net sales of 21,100 MT for 2023/2024 were primarily for Honduras (9,800 MT) and Canada (8,200 MT). Exports of 1,192,600 MT were down 4 percent from the previous week and 10 percent from the
prior 4-week average. The destinations were primarily to Mexico (367,000 MT), Japan (304,500 MT), China (204,500 MT), Colombia (139,600 MT), and South Korea (67,600 MT).

 

Barley:  Total net sales of 7,000 MT for 2023/2024 were for Mexico. No exports were reported for the week. 

Sorghum:  Net sales of 114,200 MT for 2022/2023 were up 75 percent from the previous
week and up noticeably from the prior 4-week average. Increases were reported for China (109,200 MT, including decreases of 1,400 MT and 55,000 MT – late) and Mexico (5,000 MT). Exports of 52,100 MT were up 3 percent from the previous week, but down 19 percent
from the prior 4-week average. The destination was to China. 

Late Reporting:  For 2022/2023, net sales totaling 55,000 MT of sorghum were reported late for China.

 

Rice:  Net sales of 9,000 MT for 2022/2023 were down 21 percent from the previous week, but up 34 percent from the prior 4-week average. Increases
primarily for Haiti (7,000 MT), Mexico (1,900 MT), Canada (1,100 MT), the Netherlands (200 MT), and the Bahamas (100 MT), were offset by reductions for Colombia (1,400 MT). Total net sales of 1,400 MT for 2023/2024 were for Honduras. Exports of 41,200 MT were
down 42 percent from the previous week and 9 percent from the prior 4-week average. The destinations were primarily to Colombia (14,800 MT), South Korea (14,600 MT), the Dominican Republic (6,000 MT), Mexico (3,500 MT), and Canada (1,500 MT).  

Soybeans:  Net sales of 478,400 MT for 2022/2023 were up noticeably from the previous
week and from the prior 4-week average. Increases primarily for Spain (218,700 MT, including 50,000 MT switched from unknown destinations), unknown destinations (92,400 MT), Mexico (86,500 MT, including decreases of 200 MT), Indonesia (31,400 MT, including
decreases of 900 MT), and Japan (20,100 MT, including decreases of 300 MT), were offset by reductions for South Korea (2,500 MT). Net sales of 48,500 MT for 2023/2024 were reported for Mexico (43,500 MT) and Taiwan (5,000 MT). Exports of 141,300 MT were down
43 percent from the previous week and 41 percent from the prior 4-week average. The destinations were primarily to Spain (53,700 MT), Mexico (33,900 MT), Indonesia (18,400 MT), Venezuela (11,000 MT), and China (7,600 MT).   

Optional Origin Sales:  For 2022/2023, the current outstanding balance of 300 MT,
all South Korea. 

Export for Own Account:  For 2022/2023, new exports for own account totaling 100
MT were to Taiwan. The current exports for own account outstanding balance of 1,700 MT are for Canada (1,400 MT) and Taiwan (300 MT). 

Soybean Cake and Meal:  Net sales of 207,700 MT for 2022/2023 were up 17 percent from the previous week, but down 26 percent from the prior
4-week average. Increases primarily for Mexico (51,700 MT, including decreases of 1,900 MT), Canada (33,200 MT), unknown destinations (23,500 MT), Colombia (19,100 MT, including 10,000 MT switched from unknown destinations), and Honduras (17,900 MT, including
6,000 MT switched from El Salvador, 600 MT switched from Costa Rica, and decreases of 8,500 MT), were offset by reductions for Poland (18,800 MT), El Salvador (6,000 MT), Trinidad and Tobago (3,400 MT), Belgium (1,300 MT), and Costa Rica (600 MT). Total net
sales of 18,200 MT for 2023/2024 were for Canada. Exports of 273,800 MT were up 40 percent from the previous week and 13 percent from the prior 4-week average. The destinations were primarily to the Philippines (52,300 MT), Mexico (36,500 MT), Ecuador (31,900
MT), Poland (31,200 MT), and Colombia (25,100 MT).

 

Soybean Oil:  Net sales of 2,000 MT for 2022/2023 were down noticeably from the previous week and down 6 percent from the prior 4-week average.
Increases reported for Mexico (1,100 MT) and Canada (1,000 MT), were offset by reductions for Sri Lanka (100 MT). Total net sales reductions of 100 MT for 2023/2024 were for Mexico. Exports of 9,600 MT were up noticeably from the previous week and up 99 percent
from the prior 4-week average. The destinations were to Mexico (9,100 MT) and Canada (500 MT).

 

Cotton:  Net sales of 98,900 RB for 2022/2023 were down 79 percent
from the previous week and 61 percent from the prior 4-week average. Increases primarily for China (70,500 RB, including decreases of 1,000 RB), Bangladesh (11,700 RB), Vietnam (9,900 RB, including 3,600 RB switched from Macau, 500 RB switched from Japan,
300 RB switched from China, and decreases of 800 RB), Indonesia (4,500 RB, including 300 RB switched from Japan), and Taiwan (2,900 RB), were offset by reductions for Macau (3,600 RB) and Pakistan (500 RB). Net sales of 65,700 RB for 2023/2024 were primarily
for China (63,800 RB) and Turkey (1,800 RB). Exports of 244,800 RB were down 23 percent from the previous week and 19 percent from the prior 4-week average. The destinations were primarily to Turkey (64,000 RB), Vietnam (39,100 RB), Pakistan (38,000 RB), China
(25,400 RB), and Bangladesh (16,400 RB). Net sales of Pima totaling 2,000 RB for 2022/2023 were down 4 percent from the previous week and 48 percent from the prior 4-week average. Increases primarily for Egypt (1,300 RB), Pakistan (400 RB), and Brazil (200
RB), were offset by reductions for Colombia (100 RB). Exports of 300 RB were down 98 percent from the previous week and from the prior 4-week average. The destinations were to India (200 RB) and China (100 RB). 

 

Optional Origin Sales:  For 2022/2023, the current outstanding balance of 300 RB, all Malaysia.  

Export for Own Account:  For 2022/2023, new exports for own account totaling 300
MT were to Vietnam. Exports for own account totaling 1,700 RB to Vietnam were applied to new or outstanding sales. Decreases of 5,200 RB were for China (4,500 RB) and Vietnam (700 RB). The current exports for own account outstanding balance of 99,000 RB are
for China (69,600 RB), Vietnam (19,300 RB), Pakistan (5,000 RB), South Korea (2,400 RB), India (1,500 RB), and Turkey (1,200 RB). 

Hides and Skins:  Net sales of 522,600 pieces for 2023 were up 32
percent from the previous week and 21 percent from the prior 4-week average. Increases were primarily for China (361,900 whole cattle hides, including decreases of 9,600 pieces), Mexico (77,500 whole cattle hides, including decreases of 600 pieces), Brazil
(50,000 whole cattle hides), South Korea (16,000 whole cattle hides, including decreases of 200 pieces), and Thailand (11,500 whole cattle hides, including decreases of 700 pieces). Total net sales reductions of 200 kip skins were for Belgium. Exports of 364,200
pieces were down 20 percent from the previous week and 13 percent from the prior 4-week average. Whole cattle hides exports were primarily to China (265,000 pieces), Mexico (43,700 pieces), Thailand (18,800 pieces), South Korea (18,300 pieces), and Brazil
(12,700 pieces). Exports of 2,500 kip skins were to Belgium. 

 

Net sales of 25,800 wet blues for 2023 were down 88 percent from the previous week and 82 percent from the prior 4-week average. Increases primarily for Thailand (14,200 unsplit), Vietnam (10,100
unsplit), Hong Kong (3,100 unsplit), Mexico (1,800 unsplit), and China (800 unsplit), were offset by reductions for India (2,300 grain splits) and Italy (1,900 unsplit). Exports of 85,200 wet blues were down 9 percent from the previous week and 32 percent
from the prior 4-week average. The destinations were primarily to China (42,300 unsplit), Vietnam (16,600 unsplit), Hong Kong (10,000 unsplit), Thailand (6,200 unsplit), and Italy (4,000 unsplit). Net sales of 45,500 splits were reported for China (44,000
pounds) and South Korea (1,500 pounds). Exports of 43,500 pounds were to China.

 

Beef:  Net sales of 12,800 MT for 2023 were unchanged from the previous week, but down 23 percent from the prior 4-week average. Increases primarily
for China (4,700 MT, including decreases of 100 MT), Japan (3,200 MT, including decreases of 400 MT), Mexico (1,200 MT), Taiwan (1,200 MT, including decreases of 100 MT), and South Korea (1,100 MT, including decreases of 700 MT), were offset by reductions
for the United Kingdom (100 MT). Total net sales of 200 MT for 2024 were for Japan. Exports of 16,000 MT were up 4 percent from the previous week, but down 3 percent from the prior 4-week average. The destinations were primarily to South Korea (4,200 MT),
Japan (4,000 MT), China (2,200 MT), Mexico (1,300 MT), and Taiwan (1,300 MT).

 

Pork:  Net sales of 26,700 MT for 2023 were up 5 percent from the previous week, but down 2 percent from the prior 4-week average. Increases
were primarily for Mexico (10,700 MT, including decreases of 300 MT), Japan (4,700 MT, including decreases of 600 MT), Australia (1,900 MT, including decreases of 100 MT), China (1,900 MT, including decreases of 300 MT), and Canada (1,600 MT, including decreases
of 500 MT). Exports of 36,000 MT were up 44 percent from the previous week and 7 percent from the prior 4-week average. The destinations were primarily to Mexico (14,400 MT), China (5,100 MT), Japan (3,900 MT), South Korea (3,200 MT), and Canada (1,800 MT).