FI Morning Grain Comments 06/17/21

PDF attached

 

Good
morning.
 

 

WASHINGTON,
June 17, 2021—Private exporters reported to the U.S. Department of Agriculture export sales of 135,000 metric tons of soybean cake and meal for delivery to the Philippines during the 2020/2021 marketing year.

 

USD
is sharply higher.  Lower trade in CBOT agriculture markets.  It’s currently raining across central IA (band is narrow).  GFS weather model are wetter for the US while the European model is not as optimistic as they are much drier.  The trade looks as if they
are agreeing with the GFS models that put good rains across the northern half of IA, lower WI, MI and other parts of the upper Midwest.  Not all the drought areas of the WCB may see soaking rains over the next ten days, if realized.  Weather will continue
to drive CBOT price fluctuations for a while.  Other fundamentals have been widely ignored this week. 
Turkey seeks 395,000 tons of wheat on June 30 for July 19-August 21 shipment.  Japan bought food wheat as expected.  Soybean oil is on track to end seven consecutive days lower.  Remember CBOT soybean complex have expanded limits today. 
https://www.cmegroup.com/trading/price-limits.html 

 

 

 

Weather

1-7
DAY

 

 

 

 

 

 

World
Weather, Inc.

7-DAY
RAINFALL PREDICTED BY DAWN THURSDAY, JUNE 24, 2021

 

WORLD
WEATHER HIGHLIGHS FOR JUNE 17, 2021

Today’s
greatest interest in the market place is likely to be split between the North America cooling trend and the hot, dry, bias evolving in western Kazakhstan and Russia’s New Lands northward into the lower Volga River Basin. For North America, some relief to dryness
will occur in eastern Iowa and southern Wisconsin to the Ohio River during the next few days as cooler air arrives. Follow up precipitation is expected into late this month. The cooler and wetter conditions will be very good for the next 2-3 weeks of corn
and soybean development – at least into early July. However, the upper Midwest and northern Plains along with southeastern Canada’s Prairies and some far western Corn Below areas will not get much lasting moisture from this weather change. There is also some
risk of at least some patches of Frost in eastern Saskatchewan and Manitoba possibly early next week. The heat wave in southern Russia and western Kazakhstan will take a few days to get going, but it will eventually prove stressful for crops. The rest of the
world is seeing status quo conditions today relative to those advertised Wednesday. 

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

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
Export Sales

USDA
export sales were on the low side for many of the major commodities, but good meal shipments may provide a positive undertone for that commodity coupled by unwinding of oil/meal spreads.  Soybean sales were only 65,300 tons, within expectations, and not a
surprise as commitments is running 99 percent of USDA’s projection.  Corn sales of 18,000 old crop and 276,100 tons new crop were poor.  All-wheat sales cooled last week to 287,100 tons from 325,900 tons, negative in our opinion.  Soybean meal sales improved
to 177,300 tons and shipments were 199,000.  Soybean oil commitments were only 2,300 tons and shipments were off from the previous week at 8,000 tons.  We look for sales to improve next week amid break in futures prices. 

 

 

 

Macros

 

Corn

• USD
  is sharply higher.
• US
  corn futures are lower on a wetter outlook by GFS model for the western Corn Belt and upper Midwest.  European model remains drier than that of the GFS.  Rain prospects continue to improve for Iowa, S. Minn and the ECB. The GFS models show up to 5-10” rain
  in Iowa over the next 10 days.
• Not
  much news developed overnight. 
• USD
  was 65 points higher as of 8:13 am CT and WTI down $0.10. 
• Funds
  sold an estimated net 3,000 corn contracts on Wednesday, yet open interest was nearly unchanged. 
  
• EPA
  reported the US generated 1.26 billion ethanol D6 RIN credits during May, up from 1.14 billion during April.
  
• Weekly
  US ethanol production as of June 11 dropped a much more than expected 42,000 barrels per day from the previous week (a Bloomberg poll looked for only 4,000 barrels) to 1.025 million and stocks increased 642,000 barrels (poll was +189,000 barrels) to 20.602
  million, highest since April 2. 
• The
  weekly USDA Broiler Report showed broiler type eggs set up 2 percent and chicks placed up 1 percent.  Cumulative placements from the week ending January 9, 2021 through June 12, 2021 for the United States were 4.30 billion. Cumulative placements were up 1
  percent from the same period a year earlier.

 

Export
developments.

• China’s
  Sinograin plans to sell or auction off 37,126 tons of imported Ukrainian corn on June 18 to replenish tightening supplies and alleviate high prices.

 

Soybeans

• The
  US soybean complex was lower in large part on improving US weather.  Soybean oil is lower on follow through selling.  Meal is seeing limited downside from decent USDA export sales and unwinding of product spreads.  Ireland was one of the reported destinations
  for soybean meal.  Italy was not included.  A cash broker told us Vietnam was a “surprise but given the weak Western Meal premiums, it shouldn’t be a surprise”.  Ireland was reported as a destination for soybean meal.  Italy was not included.  A cash broker
  told us that “Vietnam was a surprise but given the weak Western Meal premiums, it shouldn’t be a surprise”.  Colombia bought meal and 68,800 tons were shipped to the Philippines, but both country commitments are running 73% and 85% below the previous season
  pace, respectively.  USDA later announced 135,000 tons of soybean meal to the Philippines. 
  
• Outside
  the US, product markets are starting to divorce themselves from CBOT price movement.  Palm traded 27 MRY lower and cash was down $7.50.  Palm was up overnight but fell after India announced they will hold off on lowering their import tax.  China vegetable
  oils were down 1.7% and meal by only 0.7%.
• CBOT
  oil share continues to slide lower. 
• We
  continue to debate whether or not US biofuel mandates could be lowered by the current Administration as they are set into law.  We think lawmakers might be looking at a long term rather than a short term fix.  It may take years to overhaul the biofuel program,
  IMO.  Bottom line is that if production, and end product is profitable for industries, we see no reason for biofuel production to decline from current levels. 
  
• Funds
  on Wednesday
  sold an estimated net 11,000 soybean contracts, bought 5,000 soybean meal and sold 15,000 soybean oil contracts. 
  
• EPA
  reported the US generated 396 million biodiesel D4 RIN credits during May, up from 386 million during April.  With USDA amending their soybean oil for biofuel use, it’s difficult to find a correlation between biodiesel D4 RIN generation and what will be reported
  by EIA for SBO for biofuel use. 
• Offshore
  values are leading soybean oil 209 points higher and meal $3.60 lower. 
• Rotterdam
  rapeseed and soybean oil prices were unchanged to 35 euros lower, and meal 3-12 euros higher. 
  
• China:
  

• SGS
  reported June 1-15 Malaysian palm oil export fell 7.9% from the same period a month ago. 
  
• Malaysian
  palm oil:  

 

Export
Developments

• WASHINGTON,
  June 17, 2021—Private exporters reported to the U.S. Department of Agriculture export sales of 135,000 metric tons of soybean cake and meal for delivery to the Philippines during the 2020/2021 marketing year.
  
• Today
  the USDA CCC program seeks 25,000 tons of soybean meal for Bangladesh and 8,000 tons for Cambodia for July 15-25 shipment.
  

 

Wheat

• US
  wheat futures are lower on improving North American weather.   Other than a couple import tender developments, news was light. 
  
• September
  Paris wheat is 1.75 euros lower at 204.75.  EU weather looks good.
• Funds
  on Wednesday bought an estimated net 1,000 SRW wheat contracts. 
• Yesterday
  it was announced Algeria
  rejected a 27,000 ton French wheat cargo after 2 dead pigs were found in the cargo.  We are curious how these animals ended up in the cargo.   
  

 

Export
Developments. 
*NEW

• *Turkey
  seeks 395,000 tons of wheat on June 30 for July through August shipment. 
  
• Japan
  bought 207,472 tons of food wheat.  Initial tender below:

• Egypt
  retendered for wheat that includes shipment bids after cancelling their import tender yesterday.  Lowest offer yesterday was $250.88 a ton for 60,000 tons of Russian wheat but it was cancelled due to high freight prices.  There were at least 19 offers on Tuesday. 
  
• Iran
  seeks 60,000 tons of milling wheat for July and August shipment. 
• The
  Philippines seeks 205,000 tons of milling wheat for Aug/Sep shipment. 
• 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

• Results
  awaited: The lowest offer for Bangladesh in for 50,000 tons of rice was $399.90/ton CIF.
  

·        
(Bloomberg) — National Food and Strategic Reserves Administration will release state reserves of metals including copper, aluminum and zinc in batches, according to a statement from the administration.

 

USDA Export Sales

USDA export sales were on the low side for many of the major commodities, but good meal
shipments may provide a positive undertone for that commodity coupled by unwinding of oil/meal spreads.  Soybean sales were only 65,300 tons, within expectations, and not a surprise as commitments is running 99 percent of USDA’s projection.  Corn sales of
18,000 old crop and 276,100 tons new crop were poor.  All-wheat sales cooled last week to 287,100 tons from 325,900 tons, negative in our opinion.  Soybean meal sales improved to 177,300 tons and shipments were 199,000.  Soybean oil commitments were only 2,300
tons and shipments were off from the previous week at 8,000 tons.  We look for sales to improve next week amid break in futures prices. 

 

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING  6/10/2021

 

	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	130.6	1,587.0	2,038.7	150.6	210.2	288.5	0.0	0.0
SRW	25.0	1,015.6	571.1	4.6	4.6	17.5	0.0	0.0
HRS	81.6	1,642.3	1,767.1	63.4	85.3	130.0	0.0	0.0
WHITE	50.4	1,111.5	1,059.4	53.7	108.5	174.5	0.0	0.0
DURUM	-0.5	8.4	238.2	26.3	26.3	48.5	0.0	0.0
TOTAL	287.1	5,364.7	5,674.4	298.6	434.8	658.9	0.0	0.0
BARLEY	0.0	24.7	40.2	0.0	0.0	0.5	0.0	0.0
CORN	18.0	14,742.5	10,361.1	1,661.6	54,573.3	31,129.7	276.1	15,369.9
SORGHUM	-5.0	889.2	941.3	116.0	6,336.9	3,071.9	0.0	1,594.9
SOYBEANS	65.3	3,724.9	7,593.0	148.3	57,893.0	36,385.4	6.5	7,562.1
SOY MEAL	177.3	1,961.4	2,369.3	199.0	8,656.9	8,480.8	7.8	649.5
SOY OIL	2.2	29.2	265.5	8.0	644.0	900.5	0.0	0.6
RICE
L G RGH	18.0	193.2	158.1	13.5	1,469.9	1,245.8	0.0	0.0
M S RGH	0.0	15.9	26.2	0.2	25.0	70.2	0.0	0.0
L G BRN	0.8	13.3	12.6	0.6	38.3	55.4	0.0	0.0
M&S BR	0.1	45.2	38.0	0.1	111.4	80.9	0.0	0.0
L G MLD	17.6	32.6	58.9	45.3	601.1	824.8	0.0	0.0
M S MLD	1.3	163.6	144.8	18.5	522.4	584.5	0.0	0.0
TOTAL	37.8	463.8	438.7	78.3	2,768.1	2,861.6	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	111.3	2,788.1	4,864.9	303.8	13,158.8	11,958.0	102.9	2,144.4
PIMA	2.3	135.5	131.2	12.0	675.4	434.4	0.0	4.0

 

 

This
summary is based on reports from exporters for the period June 4-June 10, 2021.

Wheat:  Net
sales of 287,100 metric tons (MT) were reported for delivery in marketing year 2021/2022.  Increases primarily for Japan (95,100 MT, including decreases of 300 MT), unknown destinations (72,000 MT), Mexico (49,600 MT, including decreases of 100 MT), Thailand
(34,000 MT), and the Dominican Republic (14,600 MT), were offset by reductions primarily for Guatemala (2,000 MT) and Italy (600 MT).  Exports of 298,600 MT were primarily to Nigeria (77,500 MT), Taiwan (42,700 MT), the Philippines (34,500 MT), Japan (34,200
MT), and Nicaragua (32,000 MT). 

Optional
Origin Sales: 
For 2021/2022, options were exercised to export 63,900 MT to Spain from other than the United States. 

Corn: 
Net sales of 18,000 MT for 2020/2021 were down 91 percent from the previous week and 95 percent from the prior 4-week average.  Increases primarily for Japan (69,900 MT, including 138,200 MT switched from unknown destinations and decreases of 70,500 MT), Saudi
Arabia (57,500 MT), Colombia (44,000 MT, including 40,000 MT switched from unknown destinations), Mexico (35,700 MT, including decreases of 7,300 MT), and Nicaragua (31,400 MT, including 20,900 MT switched from El Salvador, 7,500 MT switched from Guatemala,
and decreases of 4,500 MT), were offset by reductions primarily for unknown destinations (152,200 MT) and Costa Rica (96,700 MT).  For 2021/2022, net sales of 276,100 MT were primarily for Mexico (100,000 MT), Costa Rica (97,400 MT), Guatemala (42,200 MT),
Taiwan (21,500 MT), and Jamaica (6,900 MT).  Exports of 1,661,600 MT were up 1 percent from the previous week, but down and 16 percent from the prior 4-week average.  The destinations were primarily to China (615,000 MT), Japan (550,300 MT), Mexico (348,100
MT), Colombia (44,000 MT), and Morocco (34,400 MT).

Optional
Origin Sales: 
For 2020/2021, the current outstanding balance of 30,500 MT is for unknown destinations.  For 2021/2022, the current outstanding balance of 60,000 MT is for unknown destinations.

Barley: 
No net sales or exports were reported for the week. 

Sorghum: 
Net sales reduction of 5,000 MT for 2020/2021 resulting in increases for China (63,000 MT, including 68,000 MT switched from unknown destinations and decreases of 5,000 MT), were more than offset by reductions for unknown
destinations (68,000 MT).  Exports of 116,000 MT were up noticeably from the previous week, but down 10 percent from the prior 4-week average.  The destination was China.

Rice: 
Net sales of 37,800 MT for 2020/2021 were up 28 percent from the previous week, but down 19 percent from the prior 4-week average.  Increases were primarily for Haiti (14,700 MT, including decreases of 600 MT), Mexico (7,900 MT, including decreases of 100
MT), Guatemala (5,000 MT), Honduras (5,000 MT), and Canada (2,200MT, including decreases of 400 MT).  Exports of 78,300 MT were up 20 percent from the previous week and 29 percent from the prior 4-week average.  The destinations were primarily to Haiti (37,400
MT), Japan (13,600 MT), Panama (10,200 MT), Mexico (4,500 MT), and Canada (3,100 MT).

Exports
for Own Account: 
For 2020/2021, exports for own account totaling 100 MT to Canada were applied to new or outstanding sales. 

Soybeans: 
Net sales of 65,300 MT for 2020/2021 were up noticeably from the previous week and up 51 percent from the prior 4-week average.  Increases primarily for Japan (15,500 MT, including 11,000 MT switched from unknown destinations), Colombia (15,000 MT, including
10,000 MT switched from unknown destinations), Indonesia (12,300 MT, including decreases of 1,500 MT), Saudi Arabia (9,500 MT), and Canada (9,400 MT), were offset by reductions for unknown destinations (10,000 MT).  For 2021/2022, net sales of 6,500 MT resulting
in increases for unknown destinations (29,500 MT) and Taiwan (20,000 MT), were offset by reductions for China (43,000 MT).  Exports of 148,300 MT–a marketing-year low–were down 47 percent from the previous week and 48 percent from the prior 4-week average. 
The destinations were primarily to Japan (40,500 MT), Mexico (32,700 MT), Venezuela (17,700 MT), Indonesia (16,500 MT), and Colombia (12,500 MT).

Exports
for Own Account: 
For 2020/2021, the current exports for own account outstanding balance is 5,800 MT, all Canada.

Soybean
Cake and Meal: 
Net sales of 177,300 MT for 2020/2021 were up 30 percent from the previous week, but down 4 percent from the prior 4-week average.  Increases primarily for Vietnam (50,000 MT), Ireland (40,000 MT), Canada (28,400 MT, including decreases of 1,900 MT), Colombia
(16,000 MT), and Mexico (9,500 MT, including decreases of 4,700 MT), were offset by reductions primarily for Honduras (3,000 MT) and Belgium (2,800 MT).  For 2021/2022, net sales of 7,800 MT were for Jamaica (6,500 MT), Mexico (1,000 MT), and Canada (300 MT). 
Exports of 199,000 MT were up 6 percent from the previous week and 5 percent from the prior 4-week average.  The destinations were primarily to the Philippines (68,800 MT), the Dominican Republic (31,300 MT), Canada (26,300 MT), Mexico (21,100 MT), and Cote
D’Ivoire (16,500 MT).

Soybean
Oil: 
Net sales of 2,200 MT for 2020/2021 were down 31 percent from the previous week, but up noticeably from the prior 4-week average.  Increases reported for Mexico (1,900 MT) and Canada (700 MT, including decreases of 300 MT), were offset by reductions for Guatemala
(400 MT).  Exports of 8,000 MT were down 57 percent from the previous week and 26 percent from the prior 4-week average.  The destinations were primarily to Guatemala (6,700 MT) and Canada (1,200 MT).

Cotton: 
Net sales of 111,300 RB for 2020/2021 were up 3 percent from the previous week, but down 22 percent from the prior 4-week average.  Increases primarily for Pakistan (53,000 RB, including decreases of 100 RB), Turkey (17,800 RB), Indonesia (9,700 RB, including
400 RB switched from Japan), Mexico (6,500 RB, including decreases of 6,600 RB), and Vietnam (5,900 RB, including 400 RB switched from Japan), were offset by reductions for the Philippines (100 RB).  For 2021/2022, net sales of 102,900 RB primarily for Pakistan
(84,600 RB), Turkey (7,900 RB), Indonesia (5,300 RB), Vietnam (4,800 RB), and Japan (3,600 RB), were offset by reductions for China (8,800 RB).  Exports of 303,800 RB were up 18 percent from the previous week, but down 6 percent from the prior 4-week average. 
Exports were primarily to Vietnam (97,800 RB), Turkey (49,100 RB), China (38,100 RB), Pakistan (31,200 RB), and Mexico (20,600 RB).  Net sales of Pima totaling 2,300 RB–a marketing-year low–were down 40 percent from the previous week and 71 percent from
the prior 4-week average.  Increases were primarily for China (900 RB), Bangladesh (400 RB), Thailand (400 RB), Germany (300 RB), and Vietnam (200 RB).  Exports of 12,000 RB were down 28 percent from the previous week and 13 percent from the prior 4-week average. 
The destinations were primarily to India (4,200 RB), Turkey (3,000 RB), Honduras (1,000 RB), Egypt (1,000 RB), and Japan (900 RB).  

Exports
for Own Account: 
For 2020/2021, the current exports for own account outstanding balance of 11,100 RB is for China (6,200 RB), Vietnam (4,500 RB), and Bangladesh (400 RB).

Hides
and Skins: 
Net sales of 240,900 pieces for 2021 were down 49 percent from the previous week and 39 percent from the prior 4-week average.  Increases primarily for China (149,300 whole cattle hides, including decreases of 2,100 pieces), South Korea (38,500 whole cattle
hides, including decreases of 1,200 pieces), Mexico (26,300 whole cattle hides, including decreases of 600 pieces), and Indonesia (13,900 whole cattle hides, including decreases of 100 pieces), were offset by reductions for Italy (200 pieces).  Exports of
355,800 pieces were up 1 percent from the previous week, but down 3 percent from the prior 4-week average.  Whole cattle hides exports were primarily to China (213,400 pieces), South Korea (62,000 pieces), Mexico (32,900 pieces), and Thailand (20,100 pieces). 

Net
sales of 62,900 wet blues for 2021 were down 46 percent from the previous week and 54 percent from the prior 4-week average.  Increases primarily for Vietnam (15,300 unsplit, including decreases of 100 unsplit), Italy (12,000 grain splits), Taiwan (12,000
unsplit), China (9,800 unsplit), and Mexico (7,900 MT grain splits and 1,000 unsplit), were offset by reductions for Italy (1,700 unsplit).  Exports of 191,700 wet blues were up 76 percent from the previous week and 46 percent from the prior 4-week average. 
The destinations were primarily to Vietnam (62,400 unsplit), Italy (44,300 unsplit and 3,600 grain splits), China (39,700 unsplit), Thailand (19,200 unsplit), and Mexico (11,800 grain splits and 7,300 unsplit).  Net sales reductions of 2,000 splits were reported
for China (1,700 pounds) and Taiwan (300 pounds).   Exports of 242,700 pounds were to Vietnam (200,000 pounds) and Taiwan (42,700 pounds).

Beef: 
Net
sales of 12,800 MT reported for 2021 were down 20 percent from the previous week and 36 percent from the prior 4-week average.  Increases primarily for Japan (4,400 MT, including decreases of 600 MT), China (3,600 MT, including decreases of 100 MT), South
Korea (1,700 MT, including decreases of 500 MT), Taiwan (1,200 MT, including decreases of 200 MT), and Canada (600 MT, including decreases of 200 MT), were offset by reductions for Turks and Caicos Islands (100 MT).  Exports of 17,800 MT were down 16 percent
from the previous week and 2 percent from the prior 4-week average.  The destinations were primarily to Japan (5,300 MT), South Korea (4,900 MT), China (3,000 MT), Taiwan (1,300 MT), and Mexico (1,000 MT).

Pork: 
Net
sales of 29,300 MT reported for 2021 were up 49 percent from the previous week and 8 percent from the prior 4-week average.  Increases primarily for Mexico (19,100 MT, including decreases of 700 MT), Japan (5,300 MT, including decreases 200 MT), South Korea
(2,300 MT, including decreases of 200), Canada (1,100 MT, including decreases of 600 MT), and the Dominican Republic (700 MT), were offset by reductions for China (400 MT).  Exports of 38,100 MT were up 39 percent from the previous week and 4 percent from
the prior 4-week average.  The destinations were primarily to Mexico (15,600 MT), China (8,800 MT), Japan (4,500 MT), South Korea (2,900 MT), and Canada (1,500 MT).