FI Morning Grain Comments 06/21/23

PDF attached

 

Good
morning.

 

USD
is higher, WTI moderately higher, and US equities lower. EPA released mandates for 2023-2025 and traders viewed the advanced biofuel as less than expected (modest increase), sending soybean oil sharply lower (renewable) overnight. Some traders were looking
for a 5-7% increase for advanced from the December proposal of 5.82 billion gallons. Soybean futures and meal rallied after USDA released a bullish crop progress report, along with corn and wheat. September Malaysia palm futures traded 113 ringgit lower to
3614 and Sep. cash decreased $27.50/ton to $827.50/ton. Offshore values were leading SBO lower by 136 points this morning and meal $0.10 higher.

 

US
weather looks good for US wheat (PNW still dry) bias Great Plains and parts of the WCB for summer crops. It will be wet for the far ECB while the heart of the US will see net drying.  The southeastern US will see rain through Friday and northeast areas this
weekend. The central and northwestern areas have a chance for rain late this week.

 

US
EPA mandates via Rueters:

• US
  EPA PLANS TO FINALIZE 2023 BIOFUEL BLENDING VOLUMES AT 20.94 BLN GALLONS, VERSUS 20.82 BLN GALLONS IN PROPOSED RULE – SOURCES
• US
  EPA PLANS TO FINALIZE 2024 BIOFUEL BLENDING VOLUMES AT 21.54 BLN GALLONS, VERSUS 21.87 BLN GALLONS IN PROPOSED RULE – SOURCES
• US
  EPA PLANS TO FINALIZE 2025 BIOFUEL BLENDING VOLUMES AT 22.33 BLN GALLONS, VERSUS 22.68 BLN GALLONS IN PROPOSED RULE – SOURCES
• U.S.
  EPA PLANS TO FINALIZE ETHANOL BLENDING MANDATE AT 15.25 BILLION GALLONS FOR 2023 AND 15 BILLION GALLONS FOR 2024 AND 2025 – SOURCES
• US
  EPA TO SET ADVANCED BIOFUEL BLENDING MANDATE AT 5.94 BILLION GALLONS IN 2023, UP FROM A PROPOSED 5.82 BILLION – SOURCES
• US
  EPA TO SET BIOMASS-BASED DIESEL MANDATE AT 2.82 BILLION GALLONS IN 2023, UNCHANGED FROM PROPOSAL – SOURCES
• US
  EPA TO SET BIOMASS-BASED DIESEL MANDATE AT 3.04 BILLION GALLONS IN 2024, UP FROM PROPOSED 2.89 BILLION GALLONS – SOURCES
• US
  EPA TO SET CELLULOSIC BIOFUEL MANDATE AT 840 MILLION GALLONS IN 2023, UP FROM A PROPOSED 720 MILLION GALLONS – SOURCES
• US
  EPA TO SET BIOMASS-BASED DIESEL MANDATE AT 3.35 BLN GALLONS IN 2025, UP FROM PROPOSED 2.95 BLN GALLONS – SOURCES

 

 

Fund
estimates as of June 20 (net in 000)

 

 

Weather

7-day

 

World
Weather Inc.

 

 

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
237,820                 versus   150000-400000  range

Corn                     
877,310                 versus   600000-1250000                range

Soybeans           
185,184                 versus   100000-300000  range

 

Macros

Fed’s
Powell Repeats Officials See Rates Somewhat Higher By Year End

Fed’s
Powell: Process Of Getting Inflation Back Down To 2% Has A Long Way To Go – Prepared Testimony To House Financial Services Committee

Fed’s
Powell: Interest-Rate Pause Is Expected To Be Temporary

 

Canadian
Retail Sales (M/M) Apr: 1.1% (est 0.4%; prevR -1.5%)

Canadian
Retail Sales Ex Auto (M/M) Apr: 1.3% (est 0.5%; prev -0.4%)

 

 

Corn

·        
A large 6 point drop in US corn crop conditions for the G/E categories sent nearby and new-crop corn futures higher overnight. 

·        
December corn traded as high as $6.1725 overnight.

 

The
hardest hit areas for US corn conditions occurred across the ECB followed by the WCB.

 

Due
out Friday

 

 

Export
developments.

• Taiwan’s
  MFIG group bought about 65,000 tons of corn from Brazil at 82.79 cents a bushel over the December contract.
  

 

Soybeans

·        
EPA released mandates for 2023-2025 and traders viewed the advanced biofuel as less than expected, sending soybean oil sharply lower (renewable) overnight. Soybeans and meal rallied after USDA released a bullish crop progress
report, along with corn and wheat.

·        
US soybean conditions dropped 5 points from the previous week. We are eying a tentative yield below 50.5 bushels per acre. Updated production and balance sheets for US soybeans, corn and wheat will be out later.

 

 

·        
Malaysia left their July crude palm oil export duty unchanged at 8 percent and lowered the reference price 3,604.73 ringgit ($775.38) per ton for July from previous 4,144.31 ringgit a ton.

·        
September Malaysia palm futures traded 113 ringgit lower to 3614 and Sep. cash decreased $27.50/ton to $827.50/ton.

·        
China September soybean futures were up 1.3%, meal up 0.7%, SBO lower by 1.9% and palm oil futures decreased 2.2%.

·        
Nearby Rotterdam vegetable oils were 30-40 euros lower from this time yesterday morning and meal mostly 4-14 euros higher.

·        
Offshore values were leading SBO lower by 136 points this morning and meal $0.10 higher.

·        
(Bloomberg) — India’s oilmeals exports fell to 436,596 tons in May from 493,448 tons in April, according to the Solvent Extractors’ Association of India.

• Rapeseed
  meal exports fell to 233,663 tons from 246,568 tons in April
• Soymeal
  exports fell to 114,225 tons from 177,243 tons in April
• Rice-bran
  extract exports rose to 42,398 tons from 37,479 tons in April

·        
USDA US soybean export inspections as of June 15, 2023 were 185,184 tons, within a range of trade expectations, above 147,572 tons previous week and compares to 429,644 tons year ago. Major countries included Egypt for 67,829
tons, Mexico for 45,599 tons, and Costa Rica for 29,698 tons.

·        
European Union soybean imports in the 2022-23 season (July-June) reached 12.52 million tons by June 11, down 12% from 14.17 million a year earlier. Rapeseed imports reached 7.24 million tons, up 38% compared with 5.26 million
a year earlier. Soybean meal imports were 15.38 million tons, down 4% from 16.06 million the prior season.

 

Export
Developments

• China
  will auction off 306,700 tons of imported soybeans from state reserves on June 27.
  

 

Wheat

·        
US wheat is trading higher from a steep drop in the US spring wheat rating and higher corn.

·        
September Paris wheat futures were up 5.75 euros earlier at 244.75 per ton.

·        
SovEcon estimated Russia wheat production at 86.8 million tons, down from 88 million previous.

·        
Germany’s association of farm cooperatives estimated 2023 wheat crop to decrease 2.9% to 21.87 million tons. Winter rapeseed was seen down 3.1% to 4.14 million tons.

·        
China is nearing winter wheat harvest completion. 137MMT was last projected by the country.

·        
EU soft wheat exports so far this season reached 30.37 million tons by June 18, up 11% compared with 27.25 million a year earlier.  Barley exports were 6.28 million tons, down 9% from 6.94 million a year ago and corn imports were
25.30 million tons, up 57%.

·        
USDA US all-wheat export inspections as of June 15, 2023 were 237,820 tons, within a range of trade expectations, below 247,958 tons previous week and compares to 348,309 tons year ago. Major countries included Mexico for 41,225
tons, Ecuador for 32,999 tons, and Korea Rep for 28,600 tons.

 

Export
Developments.

·        
Japan seeks 92,529 tons of milling wheat later this week for Aug shipment.

 

Rice/Other

·        
None reported