FI Morning Grain Comments 06/16/23

PDF attached

 

Good
morning.

 

Week
to date

 

 

USD
was up 7 points and WTI 59 cents higher. Ahead of a three day weekend, US grains
and
the soybean complex are higher on follow through buying over dry US weather concerns and higher outside grain and oilseed markets. NOPA’s US crush and soybean oil stocks for the US implied demand was strong last month. We look for a decline in US soybean and
corn ratings when updated next week, and wheat to remain steady. Palm
oil futures were up 11 percent on the week. August Malaysia palm futures traded 245 ringgit higher (7%) to 3766 and Aug. cash increased $47.50/ton to $860.00/ton. Offshore values were leading SBO lower by 53 points this morning (211 lower for the week) and
meal $6.50 lower ($7.10 higher for the week).

 

 

Fund
estimates as of June 15 (net in 000)

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 16, 2023

• Excessive
  rain fell in northern Florida and a few counties in far southern Georgia Thursday and overnight with 3.00 to 7.60 inches and Pensacola, Fla. reporting 9.84 inches
  
• Additional
  waves of heavy rain will fall in these same areas during the coming week to ten days resulting in more flooding and possible crop damage
• Central
  and eastern Midwest crop areas are unlikely to get much rain for the next ten days; the area includes eastern Iowa and southern Wisconsin through Illinois to Michigan, Ohio and some northern Kentucky locations
  
• The
  areas already hurting from dryness are most significant in Illinois, eastern Iowa and some areas in southeastern Minnesota and southwestern Wisconsin
• Excessive
  rain is expected in western Alberta, Canada Sunday through Tuesday while drought remains in interior southern and east-central parts of the same province
• Texas
  weather will be hot and mostly dry during the next ten days
• Mexico’s
  drought will not be seriously eased in the next ten days
• No
  changes were noted in South America overnight leaving western wheat areas in Argentina dry and southern Brazil wet
• Europe
  will remain warmer than usual during the next ten days with improving chances for rain in drier areas of the north
• Russia’s
  Eastern New Lands will be quite cold this weekend into next week resulting in some unusually late frost and freezes
  
• Rain
  is expected in eastern Russia’s New Lands and northern Kazakhstan in this coming week to help ease dryness
• India
  will get heavy rain from Gujarat to Uttar Pradesh this weekend and early next week
• India’s
  monsoon will begin improving late next week and continuing into early July, but it will take a while for “normal” rain to evolve
• China’s
  North China Plain and northern half of the Yellow River Basin will experience lighter than usual rain for much of the next two weeks and temperatures will be warm enough for net drying, despite some showers
• Southern
  China will receive too much rain over the next two weeks resulting in concerns for rice and sugarcane
• No
  changes of significance were noted for Southeast Asia, Australia or South Africa

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

Sunday,
June 18

• China’s
  2nd batch of May trade data, including agricultural imports

Monday,
June 19:

• MARS
  monthly report on EU crop conditions
• HOLIDAY:
  US, Argentina

Tuesday,
June 20:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  corn, cotton, soybean, spring wheat and winter wheat condition, 4pm
• China’s
  3rd batch of May trade data, including country breakdowns for commodities
• US
  planting data for cotton, spring wheat and soybeans, 4pm
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  Argentina

Wednesday,
June 21:

• Grain
  and Oilseeds MENA conference in Cairo, day 1
• SIIA
  Haze Outlook 2023 in Singapore
• USDA
  Total Milk Production

Thursday,
June 22: 

• Port
  of Rouen data on French grain exports
• EIA
  weekly US ethanol inventories, production, 10:30am
• Grain
  and Oilseeds MENA conference in Cairo, day 2
• Brazil
  Unica cane crush, sugar production (tentative)
• USDA
  Red Meat Production, 3pm
• HOLIDAY:
  China, Hong Kong

Friday,
June 23:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• 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
• US
  Cattle on Feed, 3pm
• US
  cold storage data for beef, pork and poultry
• HOLIDAY:
  China

Source:
Bloomberg and FI

 

 

 

 

 

 

EPA

U.S.
GENERATED 750 MLN BIODIESEL (D4) BLENDING CREDITS IN MAY, VS 603 MLN IN APRIL

U.S.
GENERATED 1.28 BLN ETHANOL (D6) BLENDING CREDITS IN MAY, VS 1.16 BLN IN APRIL

 

2022

U.S.
GENERATED 513 MLN BIODIESEL (D4) BLENDING CREDITS IN MAY, VS 499 MLN IN APRIL

U.S.
GENERATED 1.23 BLN ETHANOL (D6) BLENDING CREDITS IN MAY, VS 1.14 BLN IN APRIL

 

 

Macros

Canadian
Wholesale Trade Sales (M/M) Apr: -1.4% (exp 1.6%; R prev -1.1%)

Canadian
International Securities Transactions (CAD) Apr: 13.52B (R prev -19.72B)

 

 

Corn

·        
Corn futures are higher on follow through buying led by new-crop over US dry weather.

·        
Don’t discount profit taking during the session ahead of the long US holiday weekend.

·        
We look for a decline in US soybean and corn ratings when updated next week, and wheat to remain steady.

·        
EPA reported that the U.S. generated 1.28 billion ethanol (D6) blending credits in May compared to 1.16 billion in April. 

·        
Ukraine’s 2023 spring sowing is nearly done over an estimated 13 million hectares

4
million hectares of corn.

271,100
hectares of spring wheat

810,000
hectares of barley

138,500
hectares of peas

146,200
hectares of oats

5.3
million hectares of sunflower

213,100
hectares of sugar beet

1.8
million hectares of soybeans.

 

Export
developments.

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

 

Soybeans

·        
CBOT soybeans, meal and soybean oil higher on follow through buying. August soybeans hit an April 24 high overnight.

·        
Russia plans to limit sunflower seed exports until their domestic processing plants are fully loaded.

·        
The NOPA crush report yesterday showed US crush for May was a record for the month at 177.9 million bushels, 2 million above the average trade guess of 175.88 million, 4 million above April but down 0.6 percent on a daily adjusted
basis from the previous month. Soybean oil stocks were 1.872 billion pounds, down 85 million from April (April was a 14-month high) and was 70 million pounds below expectations. Note the higher than expected crush includes a new NOPA member for the IA locations.
Shell Rock Soy Processors LLC

·        
EPA reported that the U.S. generated 750 million biodiesel (D4) blending credits in May compared to 603 million in April.  We think USDA is too low on their 2022-23 US SBO for biofuel use.

·        
Palm oil futures were up 11 percent on the week.  Sabah, Malaysia’s largest producing state of the commodity, are experiencing water stress from early signs of El Nino (Reuters).

·        
August Malaysia palm futures traded 245 ringgit higher (7%) to 3766 and Aug. cash increased $47.50/ton to $860.00/ton.

·        
China September soybean futures were up 2.1%, meal up 2.5%, SBO higher by 3.4% and palm oil futures increased 3.8%.

·        
Nearby Rotterdam vegetable oils were 25-30 euros higher from this time yesterday morning and meal mostly 5-8 euros higher.

·        
Offshore values were leading SBO lower by 53 points this morning (211 lower for the week) and meal $6.50 lower ($7.10 higher for the week).

·        
“Brazilian crushing firm Be8 will build a new soybean crush plant in Marialva, in the southern state of Paraná, which will target the biodiesel industry, according to local media reports.” (AgriCensus)

 

Export
Developments

• Results
  awaited: Iran seeks 120,000 tons of soybean meal and 120,000 tons of corn on June 14.
  

 

Wheat

·        
US wheat futures are higher on technical buying. Black Sea shipping uncertainty was a feature this week. Russia officials indicated the grain deal is “not working” but they don’t intend to end the current extension early.

·        
Buenos Aires Grain Exchange warned Argentina producers in the west may miss the optimum planting window from dry conditions. Plantings are 40 percent complete, 18 points below last season.

·        
French wheat conditions as of June 12 fell 3 points to 85 percent and compares to 65 percent year ago.

·        
Yesterday 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.

·        
September Paris wheat futures were up 4.25 euros earlier at 239.25 per ton.

 

Export
Developments.

·        
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

·        
(Reuters) – Indonesian has signed an agreement with the Indian government to potentially import 1 million tons of rice if the El Nino weather pattern hits domestic supply, the trade minister was quoted as saying by news site Kompas.com
on Friday. The agreement would come on top of a 2 million tons rice import quota issued for state food procurement agency Bulog this year, Indonesian Trade Minister Zulkifli Hasan was quoted as saying.