FI Morning Grain Comments 06/18/21

PDF attached

 

Good
morning.
 

 

Today
is a US Federal Holiday and CFTC’s Commitment of Traders will be delayed until Monday.  USD is higher and WTI down around 70 cents.  Equities are lower.  CBOT agriculture reversal in prices is seen this morning.  Technical buying in focus.  US over the next
ten days will see rain.  EU weather is in good shape. 

 

CME
RAISES CORN FUTURES (C) MAINTENANCE MARGINS BY 9.4 % TO $2,325 PER CONTRACT FROM $2,125 FOR JULY 2021

CME
RAISES SOYBEAN FUTURES (S) MAINTENANCE MARGINS BY 9.8% TO $4,500 PER CONTRACT FROM $4,100 FOR JULY 2021

 

Limits
for the soybean complex will remain unchanged for Friday but corn expands to 60.  Lumber and lean hogs expansions are in place as well.
https://www.cmegroup.com/trading/price-limits.html

 

 

 

 

Weather

1-7
DAY

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 18, 2021

• Western
  Russia and western Kazakhstan are still poised to experience at least ten days of dry weather with temperatures rising above average.
  
• The
  situation will result in some quick drying and rising crop and livestock stress.
  
• Temperatures
  are not expected to be exceptionally hot except in a few areas between the Caspian and Black Seas where  a Sukhovei (hot, dry wind) is expected.
  
• East-central
  China will dry down a bit in the coming week, but crop conditions in that country are very good.
  
• Australia
  will see a good mix of weather in the next ten days as well as Europe.
• No
  changes are expected in South America leaving Argentina in need of a little rain for wheat and Safrinha corn harvest conditions generally good.
  
• There
  is no risk of frost or freeze in grain, sugarcane, citrus or coffee areas of Brazil anytime soon.
  
• Southern
  Canada’s Prairies will continue drier than usual along with portions of the U.S. Plains and extreme western fringes of the U.S. Corn Belt while rain falls farther to the east. 
• Rain
  fell in Gujarat, India overnight benefiting some cotton and peanut crops as well as others
• Gujarat
  will get additional rain soon while the remainder of western India receives below average rainfall

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

Sunday,
June 20:

• China
  customs publishes country-wise import data for farm goods such as soybeans and corn

Monday,
June 21:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions — corn, cotton, soybeans, wheat, 4pm
• Monthly
  MARS report on EU crop conditions
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals

Tuesday,
June 22:

• Copersucar,
  one of Brazil’s top sugar and ethanol exporters, holds presser on the market’s outlook
• Future
  Food-Tech’s Alternative Proteins Summit, day 1
• OECD
  to release agricultural policy evaluation report
• U.S.
  cold storage data – pork, beef, poultry, 3pm

Wednesday,
June 23:

• EIA
  weekly U.S. ethanol inventories, production
• Future
  Food- Tech’s Alternative Proteins Summit, day 2

Thursday,
June 24:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports
• USDA
  hogs and pigs inventory, poultry slaughter, red meat production, 3pm

Friday,
June 25:

• 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
• Malaysia
  June 1-25 palm oil export data
• U.S.
  cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

 

Macros

Canadian
New Housing Price Index May: 1.4% (prev 1.9%)

 

 

Corn

• US
  corn futures are higher on technical buying.  December overnight traded below yesterday’s low but failed to generate additional selling.  The contract hit its lowest level since May 27 yesterday and overnight.  Bottom picking lifted the contract higher.  Stronger
  USD may limit gains. 
• China
  May corn imports reached 3.16 million tons, bringing Jan-May imports to 11.7MMT (+323% Y/Y).  This puts them on track to import 26-28 million tons of corn throughout 2021. 
  
• China’s
  central government urged its main growing regions to boost fertilizer supplies during the summer.  The government has been concerned over food security and high prices.  Reuters noted the prices of urea jumped 9% in the first 10 days of June to a record 2,674
  yuan ($414.87) per ton.
• (Reuters)
  – China will grant 20 billion yuan ($3.1 billion) in subsidies to farmers to help them cope with rising fertilizer and diesel prices, state media quoted the cabinet as saying on Friday.   China will reduce financing burdens on small firms that have been hurt
  by rising commodity prices, the cabinet was quoted as saying after a regular meeting.
• Reuters
  noted US merchant refiners racked up a shortfall of 1.6 billion dollars in biofuel credits.  This comes after Delta airlines was said to have refused to buy biofuel credits, reported last month.  We think end users expect the new administration to provide
  relief for refiners. 
• Funds
  sold an estimated net 30,000 corn contracts on Thursday. 

 

Export
developments.

• South
  Korea’s FLC bought 65,000 tons of corn, optional origin, at $295.21 per ton c&f for arrival around October 10. 
  
• South
  Korea’s MFG bought 136,000 tons of corn, through to be South American origin, at $295.21 per ton c&f for arrival around October 5. 
  
• China’s
  Sinograin on Thursday sold 37,126 tons of imported Ukrainian corn to replenish tightening supplies and alleviate high prices. No details were provided. 
  

 

Soybeans

• The
  US soybean complex is higher led by a big rebound in soybean oil after that contract closed the expanded limit lower on Thursday.  Some of the outside overnight markets didn’t follow CBOT sharply lower.  China ag futures traded about 0.5%-2.7% lower.  Palm
  futures were up 47MYR and cash up $10/ton to $865. 
• Offshore
  values are leading SBO 378 points higher (702 points higher for the week to date!) and meal $4.80/short ton higher ($1.10 higher for the week to date).  
• China
  cash crush margins eroded this week with the increase in volatility this week with global futures, and sharply lower imported price of soybeans into China. APK-Inform: Ukraine 2021-22 rapeseed harvest 2.46MMT for 2021, down from 2.51 previous and 2.62 million
  tons in 2020. 
• Funds
  on Thursday sold an estimated net 30,000 soybean contracts, sold 12,000 soybean meal and sold 15,000 soybean oil contracts. 
  
• Several
  Argentine maritime workers unions and the grain receivers union Urgara announced a strike action for June 18 (AgriCensus).  It will last for 24-hours, related to COVID-19 vaccines.  This might be the  4^th one in three weeks, but unsure as we have
  officially lost count.  We don’t see a price implication from this strike, unlike previous strikes. 
  
• (Reuters)
  – “China will issue new rules on the management of price indexes for commodities and services, it said on Thursday as the government steps up scrutiny of the country’s commodity markets and battles to contain inflation.  The measures, effective from Aug. 1,
  will standardize how price indexes are compiled and improve transparency on the release of information, the National Development and Reform Commission (NDRC) said on its official WeChat account.”
• Rotterdam
  rapeseed and soybean oil prices were 35-70 euros lower, and meal 10-13 euros lower. 
  
• China’s
  Dalian Exchange started trading palm oil options. 
• China:
  

• Malaysian
  palm oil:  

 

Export
Developments

• None
  reported

 

Wheat

• US
  wheat futures are higher from technical buying, higher corn and soybeans, and firm global import demand.  The USD was up about 24 points this morning. 
  
• France’s
  wheat crop condition as of June 14 were steady from the previous week at 81%, highest for this time in six years, according to Bloomberg.  French winter barley was unchanged at 76%.  Spring barley and corn French crop conditions were also unchanged .
  
• September
  Paris wheat was 1.25 euros higher at 205.75. 
• Funds
  on Thursday
  bought an estimated net 15,000 SRW wheat contracts. 

 

Export
Developments. 
*NEW

• *Iran’s
  GTC bought at least 195,000 tons of milling wheat (60k sought) for July and August shipment at 280 euros per ton ($333.37) c&f. 
  
• *The
  Philippines bought 150,000 tons of milling wheat. One consignment could be Australian-origin for shipment between July 21 and Aug 10 was bought at an estimated $324.25 a ton c&f.  Another consignment could also be Australian origin for Aug. 5-25 shipment at
  an estimated $321.50 a ton.  Details of the third cargo is not known. 
• 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

• None
  reported