FI Morning Grain Comments 06/22/22

PDF attached

 

Good
morning.

 

Outside
commodity markets are influencing some of the ag markets. The USD was down slightly and WTI crude oil off a large amount (more than $7.00). Wheat is rebounding after seeing heavy losses on Monday. Soybeans and corn (exception July corn) are lower despite a
downtick in US crop conditions, but that was expected. US spring grain plantings are nearly complete. US weather is still expected to improve later this week, but some areas of the US Midwest central and southern areas will miss out on rain. Palm oil futures
dropped a large amount on Wednesday with Indonesia issuing export permits. That market appears to be oversold.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 22, 2022

• No
  tremendous changes were noted overnight
• Limited
  rainfall in this first week to ten days in the eastern Midwest, Delta, Tennessee River Basin and southern Plains will lead to additional drying
  
• topsoil
  moisture has become very short in many of these areas already, but subsoil moisture is favorable
• timely
  rain will become increasingly more important especially after another week of 90- and lower 100-degree Fahrenheit (32-39C) heat with limited rainfall 
• Rain
  is still expected later this week in parts of Nebraska, Iowa, northern Kansas and northern Missouri where some welcome relief to dryness is expected 
  
• Some
  1.00 to  2.00-inch plus amounts of rain are possible, but most of the moisture will vary from 0.30 to 1.00 inch
• A
  good mix of rain and sunshine is expected in the northern U.S. Plains, upper Midwest, Canada’s Prairies and the U.S. southeastern states during the next two weeks 
• West
  Texas is looking a little wetter for early to mid-week next week as a cool front slips southward into the region from the northern Plains
  
• No
  general soaking of rain is expected, but some welcome relief to recent drying “may” occur in parts of the region
  
• The
  Texas Panhandle will be most favored
• Western
  and southern Argentina are still projected to be dry biased for the next ten days
• Western
  Europe rainfall in the coming week to ten days will be sufficient to improve soil and crop conditions after recent hot and dry weather
• Eastern
  Europe is expected to dry out over the next ten days from Poland and the Baltic States southward into a part of Hungary and Romania as well as a few other areas farther to the south – this forecast is drier than that of Tuesday
• Russia’s
  western Southern  Region and neighboring areas of Ukraine will get some rain periodically over the next week offering a little relief to dryness – this is unchanged from the forecast of Tuesday
• China’s
  North China Plain and central Yellow River Basin will get some rain today into Thursday and more rain of significance this weekend into early next week easing persistent dryness
  
• Some
  of the region reported high temperatures over 100 degrees Fahrenheit (38C) Tuesday and the region continues quite dry
• Excessive
  flooding in southern China continues, but the rain has ceased, and no further torrents of moisture are expected for a while
  
• Damage
  to rice, sugarcane and some minor grain and oilseeds has likely resulted with serious property damage
• India’s
  monsoon will continue to gradually increase its rainfall in Maharashtra and Madhya Pradesh during the coming week before expanding farther to the  north in the following week

Source:
World Weather INC

 

 

Bloomberg
Ag Calendar

Tuesday,
June 21:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop planting data for soybeans and cotton; winter wheat condition and harvesting, 4pm
• US
  cotton, corn, soybean and spring wheat conditions, 4pm
• European
  Food Safety Authority’s One Conference on food safety, Brussels and online, June 21-24
• New
  Zealand global dairy trade auction
• USDA
  total milk production, 3pm
• EU
  weekly grain, oilseed import and export data

Wednesday,
June 22:

• Specialty
  & Fine Food Asia trade show June 22-24 in Singapore

Thursday,
June 23:

• EIA
  weekly U.S. ethanol inventories, production, 11am
• US
  cold storage data for beef, pork and poultry, 3pm
• USDA
  world coffee report
• International
  Grains Council’s monthly report
• USDA
  red meat production, 3pm

Friday,
June 24:

• 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
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• FranceAgriMer
  weekly update on crop conditions
• Brazil’s
  Unica to release cane crush and sugar output data (tentative)
• US
  cattle on feed, poultry slaughter
• HOLIDAY:
  New Zealand

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections estimates via Reuters

Wheat                 
300000-500000

Corn                     
600000-1300000

Soybeans           
300000-625000

 

Macros

CANADA
INFLATION RISES TO FASTEST PACE SINCE JANUARY 1983

CANADA
ANNUAL INFLATION RISES TO 7.7% IN MAY, VS 7.3% ESTIMATE

 

Corn

·        
US corn futures are mostly lower (July slightly higher) on fund selling, WTI crude oil down more than $7.00, and a USD trading near unchanged.

·        
President Biden is looking at suspending the US gas and diesel tax for three months. 18.3 cents is currently taxed on gasoline and 24 cents on diesel. US gas sales were off about 8% compared with the same week last year.

·        
Viterra’s Everi terminal in Ukraine’s southern port city of Mykolaiv is on fire after being attacked, leaving many wondering if Russia is serios on allowing Ukraine to ship grain via Black Sea.

·        
USDA US corn export inspections as of June 16, 2022, were 1,184,268 tons, within a range of trade expectations, below 1,221,332 tons previous week and compares to 1,775,716 tons year ago. Major countries included China for 338,641
tons, Mexico for 322,260 tons, and Japan for 246,385 tons.

 

Inflation
and Commodity Prices

Schnitkey,
G., K. Swanson, N. Paulson, C. Zulauf, J. Coppess, J. Baltz “Inflation and Commodity Prices.”
farmdoc
daily
(12):93, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 21, 2022.

https://farmdocdaily.illinois.edu/2022/06/inflation-and-commodity-prices.html

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
CBOT soybeans, meal and oil were lower at the electronic break, in part to sharply lower palm oil futures pulling SBO lower, and technical selling. WTI crude oil is sharply lower. Palm oil hit a 6-month low.

·        
News has not changed much. US weather should improve by the end of this week. Indonesia continues to issue CPO palm oil exports.

·        
We made no changes to our August US soybean and corn production estimates. See last nights comment, at the end, for production projections.

·        
September Malaysia palm oil.

·        
China futures. 

·        
Rotterdam vegetable oils were unchanged to 20 euros lower, and meal unchanged to 13 euros lower.

·        
Offshore values are leading SBO about 159 points lower and meal $1.20 higher.

·        
USDA US soybean export inspections as of June 16, 2022, were 427,344 tons, within a range of trade expectations, below 608,116 tons previous week and compares to 205,645 tons year ago. Major countries included Egypt for 105,220
tons, Mexico for 99,247 tons, and China for 72,432 tons.

 

Export
Developments

·        
China will be back late this week selling a half a million tons of soybeans out of reserves but note over the past few weeks a small amount had been sold from what was offered.

 

Wheat

·        
US wheat futures are rebounding after sustaining heavy losses on Tuesday. Global import tender announcements have increased with prices easing. Pakistan is in for a half million tons of wheat.

·        
The USD turned slightly lower.

·        
Tunisia bought more than expected soft wheat in their import tender.

·        
Parts of US spring wheat growing areas will see limited precipitation this week.

·        
Paris September wheat was up 1.00 euro earlier at 374.25 euros per ton.

·        
Russia export tax for wheat will increase to $142 per ton from $131.60 per ton on June 22. The export duty on barley rises sharply to $117.50 per ton from $92.80 per ton, and the export duty on corn increases to $86.50 per ton
from $84 per ton.

·        
USDA US all-wheat export inspections as of June 16, 2022, were 331,328 tons, within a range of trade expectations, below 411,916 tons previous week and compares to 554,712 tons year ago. Major countries included Philippines for
121,166 tons, Thailand for 56,830 tons, and El Salvador for 37,898 tons.

 

Export
Developments.

·        
Pakistan seeks 500,000 tons of wheat on July 1, optional origin, for Aug/FH Sep shipment.

·        
Jordan seeks 120,000 tons of feed barley for Oct/Nov shipment at $407/ton c&f.

·        
Tunisia bought about 100,000 tons of soft wheat (75k sought) and 50,000 tons of barley, optional origin, for shipments July 20-August 15. Prices were not available.

·        
Results awaited: Algeria seeks 50,000 tons of wheat on June 21, valid until next day, for August shipment.

·        
Bangladesh seeks 50,000 tons of wheat on July 5 for shipment within 40 days.

·        
Japan seeks 168,330 tons of food wheat later this week.

·        
Kazakhstan will sell 1 million tons of grain from the upcoming harvest to Iran, the Kazakh government said on Monday (Reuters).

 

Rice/Other

·        
None reported