FI Morning Grain Comments 06/16/22

PDF attached

 

Good
morning.

 

The
US is on holiday Monday. Attached updated FI US acreage table.

 

The
USD was 41 points lower this morning, WTI crude oil lower, and US equities lower. Yesterday FOMC raised their benchmark interest rate by 75 basis points. US agriculture futures turned higher with exception of soybean oil.
USDA export sales were within expectations.

 

The
short-term outlook for the US weather forecast this morning turned a little negative for the Midwest and Great Plains. Much of the US Midwest will be dry through the end of the week. The two-week outlook calls for around 60-65 percent of normal precipitation
for the US Midwest, and warm temperatures for the remainder of the month.

 

 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 16, 2022

• Not
  much has changed overnight
• Alternating
  periods of rain and sunshine will impact Canada’s Prairies, the northern U.S. Plains and portions of the northern and eastern U.S. Midwest during the next two weeks
  
• Most
  crop areas will find the environment mostly good for field progress and crop development
• Excessive
  heat will impact most of the U.S. Plains and a part of the western Corn Belt Friday and especially during the weekend with some the heat beginning to abate in the early part of next week
  
• Extreme
  temperatures over 100 Fahrenheit (38C) will occur as far north as the Dakotas and Minnesota with readings in the lower to a few middle 90s (32-36C) in southeastern Canada’s Prairies
• “Some”
  relief from the heat is expected during mid- to late-week next week as cooler temperatures evolve and a little rain evolves 
  
• only
  a few areas will get enough rain to raise soil moisture and any improvement is expected to be brief
• A
  similar pattern of brief rainfall and alternating periods of warm and hot weather will continue through the end of this month
• U.S.
  Drying will be most significant in the central and southern Plains, southwestern Corn and Soybean Belt and the Delta where crop moisture stress is expected by the end of this month
• West
  Texas cotton, corn and sorghum areas are unlikely to receive “significant” moisture during the next two weeks, although a few showers and thunderstorms are expected
  
• Temperatures
  will be too hot to allow any improvements in topsoil moisture or crop conditions beyond a few hours 
• Argentina
  still has some opportunity for rain next week with Buenos Aires, Entre Rios and Santa Fe wettest
  
• limited
  relief from dryness is expected in the driest areas of Cordoba, La Pampa and San Luis
• Periods
  of rain will continue to come and go through southern Brazil during the next two weeks
• Europe
  is still expecting some beneficial rainfall next week and into the following weekend
  
• Dryness
  is still a concern in pockets across the continent, but mostly in the south
• Russia’s
  Southern Region and neighboring areas of Ukraine and western Kazakhstan will dry down over the next two weeks
• Relief
  for China’s dryness in the North China Plain is still possible late next week and into the last days of June, but there will be a continuing need for more moisture
• Far
  southern China will remain wetter than usual and in need of drying
• Northeast
  China might also benefit from drier weather 
• India’s
  monsoon will slowly increase with greater rain in many areas – especially key soybean, groundnut and corn production areas of Madhya Pradesh and Maharashtra
• A
  good mix of weather is expected in southern Australia wheat, barley and canola crop areas over the next couple of weeks
• South
  Africa will get some needed rain for better winter crop establishment next week

Source:
Bloomberg and FI

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

USDA
export sales were within expectations for most of the major commodities. Soybean commitments are near USDA’s projection, but corn is running well below.

 

 

Macros

Yesterday
FOMC raised their benchmark interest rate by 75 basis points.

US
Housing Starts (M/M) May: -14.4% (est -1.8%; prev -0.2%)

US
Housing Starts May: 1549K (est 1693K; prev 1724K)

US
Building Permits (M/M) May: -7.0% (est -2.5%; prevR -3.0%)

US
Building Permits May: 1695K (est 1778K; prevR 1823K)

US
Initial Jobless Claims Jun 11: 299K (est 217K; prevR 232K)

US
Continuing Claims Jun 4: 1312K (est 1304K; prevR 1309K)

US
Philadelphia Fed Business Outlook Jun: -3.3 (est 5.0; prev 2.6)

Canada
Wholesale Trade Sales (M/M) Apr: -0.5% (est 0.2%; prev 0.3%)

 

 

Corn

·        
US corn futures are higher from a drop in the USD and unfavorable US weather. We are thinking US corn and soybean crop conditions could slip when updated this Tuesday (US on holiday Monday).

·        
We updated our US acreage over the past two days. Took spring and durum wheat down a touch. Minor changes to feedgrains, rice, and hay. As reported earlier this week, revised soybeans and look for corn acres to go higher.

·        
Reuters reported China’s sow heard at the end of May was 41.92 million heads, 0.4 percent above April and 4.7 percent below year earlier.

·        
The weekly USDA Broiler Report showed eggs set in the US up 1 percent and chicks placed up one percent.  Cumulative placements from the week ending January 8, 2022 through June 11, 2022 for the United States were 4.30 billion.
Cumulative placements were down slightly from the same period a year earlier.

·        
The monthly Turkey Hatchery report showed eggs in incubators on June 1 up slightly from last year, poults hatched during May up 8 percent and net poults placed up 9 percent.

·        
Weekly US ethanol increased 21,000 barrels to 1.060 million barrels and stocks fell 439,000 barrels to 23.197 million barrels.
A
Bloomberg poll called for weekly US ethanol production to be up 4,000 barrels from the previous week and stocks up 142,000 barrels.

 

Export
developments.

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

 

EIA
expects significant increases in wholesale electricity prices this summer

https://www.eia.gov/todayinenergy/detail.php?id=52798&src=email

 

Brazil
Expecting Historic Safrinha Despite Less Than Ideal Weather

Colussi,
J., G. Schnitkey and C. Zulauf. “Brazil Expecting Historic Safrinha Despite Less Than Ideal Weather.”
farmdoc daily (12):90,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 15, 2022.

https://farmdocdaily.illinois.edu/2022/06/brazil-expecting-historic-safrinha-despite-less-than-ideal-weather.html

 

Soybeans

·        
CBOT soybeans are higher as the second week of the US weather forecast calls for hot temperatures for the US. Meal is higher and soybean oil lower. Look for positioning to start ahead of the 3-day US holiday weekend.

·        
Brazil is on holiday.

·        
India oilmeal exports during May fell 23.5 percent from April to 255,453 tons from 333,972 tons but are up from 228,319 tons from May 2021.

·        
Indonesia issued over 820,000 tons of palm oil exports, 602,142 tons DMO and 219,782 tons for the export acceleration program.

·        
Over the past couple nights, there have been a lot of palm oil blocked. Strips have been popular.

·        
Palm futures touched a 4-month low. September Malaysia palm oil was down 103 points to 5473 and cash was down $20/ton to $1360.00 per ton.

·        
China soybean futures were up 0.3%, meal down 0.1%, soybean oil down 1.5% and palm shed 2.3%. 

·        
Rotterdam vegetable oils were unchanged to 5 euros lower, and meal unchanged to 4 euros lower.

·        
Offshore values are leading SBO about 35 points lower and meal $3.40 lower.

·        
NOPA’s May crush of 171.1 million bushels was up 1.3 million from April, 0.5 million below trade expectations, and compares to 163.5 million year earlier. The daily crush rate was down 2.5% from April and up 4.6% from a year ago.
Soybean oil stocks fell 40 million pounds from end of April but were near expectations.

 

 

 

Export
Developments

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

 

Wheat

·        
US wheat futures are higher on US weather and uncertainty over Black Sea Ukraine grain exports.

·        
President Biden proposed building temporary grain silos along the western Ukrainian border to help them export grain. This may take up to 6 months to complete.

·        
Paris September wheat was up 1.25 euros earlier at 394.00 euros per ton.

·        
Russia said they will offer safe passage for Ukraine grain exports but won’t be responsible for corridors. Turkey said Ukraine grain ships could avoid mines.

·        
Romania may see a lower grain harvest this year due to weather from a record 11.3 million tons produced in 2021.

 

Export
Developments.

·        
Bangladesh cancelled their 50,000-ton wheat import tender set to close June 22. They also cancelled their June 9 import tender.

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

 

Rice/Other

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

 

 

 

USDA export sales

This summary is based on reports from exporters for the period June 3 – June 9, 2022.

Wheat: Net sales of 236,900 metric tons (MT) for 2022/2023 primarily for Brazil (78,000
MT, including 50,000 MT switched from Switzerland), Mexico (58,800 MT, including decreases of 200 MT), Ecuador (49,600 MT, including 48,000 MT switched from unknown destinations), Chile (48,000 MT), and Nigeria (34,600 MT, including 33,600 MT switched from
unknown destinations), were offset by reductions primarily for unknown destinations (56,300 MT), Switzerland (50,000 MT), and Guatemala (16,900 MT).  Exports of 370,100 MT were primarily to Mexico (80,400 MT), Japan (58,500 MT), Ecuador (49,600 MT), Nigeria
(34,600 MT), and Chile (33,000 MT). 

Corn:  Net sales of 140,900 MT for 2021/2022–a marketing-year low–were down 50
percent from the previous week and 45 percent from the prior 4-week average.  Increases primarily for Mexico (124,500 MT, including decreases of 36,600 MT), Japan (117,200 MT, including 112,300 MT switched from unknown destinations and decreases of 700 MT),
South Korea (72,400 MT, including 68,000 MT switched from unknown destinations and decreases of 1,200 MT), the Lee Ward Windward Islands (10,100 MT, including 9,300 MT switched from unknown destinations and 700 MT switched from Barbados), and China (4,900
MT), were offset by reductions primarily for unknown destinations (189,400 MT).  Net sales of 138,900 MT for 2022/2023 primarily for Mexico (77,000 MT), Japan (50,000 MT), unknown destinations (6,100 MT), and Colombia (4,000 MT), were offset by reductions
for El Salvador (1,300 MT).  Exports of 1,387,100 MT were unchanged from the previous week, but down 10 percent from the prior 4-week average.  The destinations were primarily to Mexico (459,700 MT), China (412,900 MT), Japan (230,500 MT), South Korea (137,800
MT), and Canada (63,600 MT).

Optional Origin Sales:  For 2021/2022, the current outstanding balance of 218,300
MT is for unknown destinations (175,000 MT), Italy (34,300 MT), and Saudi Arabia (9,000 MT).  For 2022/2023, the current outstanding balance of 35,400 MT is for Italy.

Barley: 
No net sales were reported for the week.  Exports of 1,000 MT were to Japan. 

Sorghum:  Net sales of 2,100 MT for 2021/2022 were down 79 percent from the previous
week and down noticeably from the prior 4-week average.  Increases reported for China (67,100 MT, including 65,000 MT switched from unknown destinations), were offset by reductions for unknown destinations (65,000 MT).  Exports of 133,400 MT were down 39 percent
from the previous week and 28 percent from the prior 4-week average.  The destination was China.

Rice:  Net sales of 78,400 MT for 2021/2022 were up noticeably from the previous
week and from the prior 4-week average.  Increases primarily for Mexico (24,400 MT), Haiti (22,400 MT, including decreases of 100 MT), Colombia (17,700 MT, including decreases of 100 MT), Panama (9,900 MT), and Canada (2,500 MT), were offset by reductions
for Saudi Arabia (900 MT).  Exports of 103,800 MT were up noticeably from the previous week and from the prior 4-week average.  The destinations were primarily to Mexico (27,000 MT), Colombia (26,900 MT), Japan (12,100 MT), Panama (9,900 MT), and Nicaragua
(9,500 MT).

Late reporting:  For 2021/2022, exports totaling 100 MT of long grain, milled rice
were reported late to Liberia.

Soybeans:  Net sales of 317,200 MT for 2021/2022 were down 26 percent from the previous
week and 16 percent from the prior 4-week average.  Increases primarily for China (135,400 MT, including decreases of 1,600 MT), Japan (83,000 MT, including 50,000 MT switched from China, 37,500 MT switched from unknown destinations, and decreases of 9,000
MT), the Netherlands (68,500 MT, including 63,000 MT switched from unknown destinations), Mexico (58,900 MT, including 47,500 MT switched from unknown destinations and decreases of 6,000 MT), and Bangladesh (57,700 MT, including 55,000 MT switched from unknown
destinations), were offset by reductions for unknown destinations (191,500 MT).  Net sales of 407,600 MT for 2022/2023 were primarily for unknown destinations (196,500 MT), China (132,000 MT), Japan (50,000 MT), Colombia (14,000 MT), and Mexico (9,900 MT). 
Exports of 708,700 MT were up 49 percent from the previous week and 23 percent from the prior 4-week average.  The destinations were primarily to Mexico (184,800 MT), Egypt (109,500 MT), Japan (93,600 MT), China (74,600 MT), and the Netherlands (68,500 MT).  

Export for Own Account: For 2021/2022, exports for own account totaling 57,300 MT
to Canada were applied to new or outstanding sales. The current exports for own account outstanding balance is 6,300 MT, all Canada.

Soybean Cake and Meal:  Net sales of 256,300 MT for 2021/2022 were up 91 percent
from the previous week and 32 percent from the prior 4-week average.  Increases primarily for Colombia (65,900 MT, including decreases of 200 MT), the Philippines (47,000 MT, including decreases of 600 MT), Honduras (31,500 MT, including decreases of 35,400
MT), Japan (29,300 MT), and Nicaragua (26,200 MT), were offset by reductions primarily for Ireland (9,000 MT) and unknown destinations (5,500 MT).  Net sales of 35,600 MT for 2022/2023 primarily for the Philippines (44,000 MT), were offset by reductions for
Costa Rica (8,700 MT).  Exports of 224,500 MT were down 2 percent from the previous week, but up 15 percent from the prior 4-week average.  The destinations were primarily to Ecuador (61,800 MT), the Philippines (52,300 MT), Mexico (35,200 MT), Canada (28,800
MT), and Colombia (11,800 MT).

Soybean Oil:  Net sales of 6,200 MT for 2021/2022 were up noticeably from the previous
week and from the prior 4-week average.  Increases reported for Venezuela (6,400 MT), were offset by reductions for Canada (200 MT).  Exports of 16,300 MT were up noticeably from the previous week and from the prior 4-week average.  The destinations were to
Venezuela (10,900 MT), Jamaica (3,500 MT), Mexico (1,000 MT), and Canada (900 MT).

Cotton:  Net sales of 26,500 RB for 2021/2022–a marketing-year low–were down 90
percent from the previous week and 86 percent from the prior 4-week average.  Increases primarily for China (7,300 RB), Pakistan (4,900 RB, including decreases of 100 RB), Vietnam (4,600 RB, including 500 RB switched from South Korea), Bangladesh (3,800 RB),
and Mexico (3,300 RB, including decreases of 3,300 RB), were offset by reductions for South Korea (300 RB).  Net sales of 380,200 RB for 2022/2023 primarily for China (363,700 RB) and Vietnam (11,400 RB), were offset by reductions for Mexico (100 RB).  Exports
of 335,800 RB were unchanged from the previous week, but down 9 percent from the prior 4-week average.  The destinations were primarily to China (128,700 RB), Vietnam (48,300 RB), India (29,300 RB), Pakistan (26,800 RB), and Turkey (23,100 RB).  Net sales
of Pima totaling 900 RB were up noticeably from the previous week, but down 50 percent from the prior 4-week average.  Increases were primarily for India (300 RB) and Turkey (300 RB).  Total net sales of 300 RB for 2022/2023 were reported for Turkey.  Exports
of 6,700 RB were down 40 percent from the previous week and 36 percent from the prior 4-week average.  The destinations were primarily to India (4,000 RB), Bangladesh (900 RB), China (400 RB), Indonesia (400 RB), and Pakistan (300 RB). 

Optional Origin Sales:  For 2021/2022, options were exercised to export 4,100 RB
to Vietnam from the United States.  The current outstanding balance of 18,900 RB is for Vietnam (16,400 RB) and Pakistan (2,500 RB). 

Export for Own Account: For 2021/2022, new exports for own account totaling 18,400
MT were to China (15,000 RB) and Vietnam (3,300 RB).  Exports for own account totaling 100 RB to Vietnam were applied to new or outstanding sales.  The current exports for own account outstanding balance of 18,300 RB is for China (15,000 RB) and Vietnam (3,300).

Hides and Skins: 
Net sales of 570,000 pieces for 2022 were up 67 percent from the previous week and 33 percent from the prior 4-week average.  Increases were primarily for China (236,900 whole cattle hides, including decreases of 12,600 pieces), South Korea (91,700 whole cattle
hides, including decreases of 3,900 pieces), Mexico (87,800 whole cattle hides, including decreases of 1,300 pieces), Thailand (42,200 whole cattle hides, including decreases of 1,100 pieces), and Indonesia (40,700 whole cattle hides).  In addition, total
net sales of 8,400 kip skins were reported for Belgium.  Exports of 510,000 pieces were up 43 percent from the previous week and 25 percent from the prior 4-week average.  Whole cattle hides exports were primarily to China (250,600 pieces), South Korea (104,200
pieces), Mexico (65,100 pieces), Thailand (39,200 pieces), and Turkey (21,400 pieces). 

Net sales of 179,000 wet blues for 2022 were up 29 percent from the previous week and 5 percent from
the prior 4-week average.  Increases primarily for Thailand (60,700 unsplit, including decreases of 400 unsplit), Italy (44,900 unsplit, including decreases of 100 unsplit and 100 grain splits), Vietnam (41,900 unsplit), China (20,500 unsplit, including decreases
of 7,000 unsplit), and Taiwan (9,600 unsplit), were offset by reductions for Brazil (3,800 unsplit).  Exports of 184,500 wet blues were up 22 percent from the previous week and 31 percent from the prior 4-week average.  The destinations were primarily to China
(63,200 unsplit), Vietnam (40,500 unsplit), Italy (30,200 unsplit and 3,800 grain splits), Mexico (22,200 unsplit and 2,300 grain splits), and Thailand (12,100 unsplit).  Net sales of 300 splits were down 99 percent from the previous week and down noticeably
from the prior 4-week average.  Increases reported for Vietnam (1,400 pounds) and Taiwan (1,100 pounds), were offset by reductions for China (2,200 pounds).  Exports of 575,700 pounds were up noticeably from the previous week and up 20 percent from the prior
4-week average. The destinations were primarily to Vietnam (240,000 pounds) and China (168,700 pounds).

Beef:  Net sales of 17,400 MT for 2022 were down 2 percent from the previous week
and 12 percent from the prior 4-week average.  Increases were primarily for Japan (5,200 MT, including decreases of 600 MT), China (4,600 MT, including decreases of 100 MT), South Korea (3,500 MT, including decreases of 600 MT), Mexico (1,900 MT), and the
Netherlands (400 MT).  Exports of 19,800 MT were up 14 percent from the previous week and 7 percent from the prior 4-week average.  The destinations were primarily to Japan (5,100 MT), South Korea (5,000 MT), China (4,000 MT), Taiwan (1,100 MT), and Canada
(1,000 MT). 

Pork:  Net sales of 27,600 MT for 2022 were up 65 percent from the previous week
and 1 percent from the prior 4-week average.  Increases were primarily for Mexico (14,700 MT, including decreases of 200 MT), China (3,800 MT, including decreases of 200 MT), Japan (3,700 MT, including decreases of 200 MT), Colombia (2,400 MT), and South Korea
(1,700 MT, including decreases of 200 MT).  Exports of 27,800 MT were up 14 percent from the previous week, but down 7 percent from the prior 4-week average.  The destinations were primarily to Mexico (12,800 MT), China (3,700 MT), Japan (3,500 MT), South
Korea (2,700 MT), and Colombia (1,500 MT).

U.S. EXPORT SALES FOR WEEK ENDING  6/2/2022

 

	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
WHEAT	THOUSAND METRIC TONS
HRW	99.3	1,160.1	1,606.9	62.8	62.8	59.6	0.0	0.0
SRW	110.7	919.6	995.2	31.2	31.2	0.0	0.0	0.0
HRS	120.3	1,367.0	1,624.1	60.0	60.0	21.9	0.0	0.0
WHITE	120.7	835.8	1,114.8	58.0	58.0	54.7	0.0	0.0
DURUM	0.0	64.4	35.2	0.0	0.0	0.0	0.0	0.0
TOTAL	451.0	4,346.8	5,376.2	212.0	212.0	136.3	0.0	0.0
BARLEY	0.0	13.8	24.7	0.0	0.0	0.0	0.0	0.0
CORN	280.4	11,840.2	16,386.1	1,381.6	47,681.9	52,911.7	73.5	5,760.4
SORGHUM	10.2	914.6	1,010.2	217.7	5,889.7	6,220.9	0.0	0.0
SOYBEANS	429.9	9,883.4	3,807.9	476.5	50,077.1	57,732.9	595.3	12,697.4
SOY MEAL	134.4	2,606.5	1,983.0	229.4	8,237.8	8,457.9	8.7	420.0
SOY OIL	1.3	98.1	35.0	7.7	578.7	636.0	0.0	0.0
RICE
L G RGH	1.7	125.3	188.7	0.3	1,139.8	1,456.4	0.7	6.7
M S RGH	0.0	7.5	16.1	0.0	13.4	24.8	0.0	0.0
L G BRN	0.2	5.0	13.1	0.4	49.0	37.6	0.0	0.0
M&S BR	0.0	9.9	45.2	0.1	77.6	111.3	0.0	0.0
L G MLD	4.8	62.0	60.3	23.0	705.7	555.8	0.0	0.0
M S MLD	0.9	169.6	180.8	0.8	350.6	503.9	0.0	0.0
TOTAL	7.6	379.3	504.2	24.6	2,336.1	2,689.8	0.7	6.7
COTTON		THOUSAND RUNNING BALES
UPLAND	259.2	5,073.4	2,980.6	335.9	10,438.8	12,854.9	102.9	3,362.8
PIMA	0.4	73.8	145.2	11.1	403.1	663.4	0.0	52.8

 

FINAL 2021/22 MARKETING YEAR
COMMODITY	NET SALES	CARRYOVER SALES 1/	05/31/2022 EXPORTS	ACCUMULATED EXPORTS
WHEAT
HRW	5.9	308.4	65.9	7,172.4
SRW	1.4	87.7	25.9	2,785.9
HRS	-39.3	228.8	34.9	5,253.7
WHITE	4.6	115.3	12.1	3,260.5
DURUM	0.0	0.0	0.0	196.3
TOTAL	-27.5	740.3	138.8	18,668.9
BARLEY	0.0	5.2	0.0	15.3