FI Morning Grain Comments 06/23/21

PDF attached

 

Good
morning.
 

 

Nearby
soybeans are higher from a rise in soybean oil futures but the back months are lower on an unchanged US weather outlook calling for rains across the growing regions.  Meal is on the defensive from product spreading and mostly lower back month corn.  There
is some talk some of the upcoming US rains will be too heavy for the central Corn Belt.  Chicago wheat is higher on technical buying and follow through strength in Minneapolis futures.  We expect wheat prices to soon stabilize, at least for KC and Chicago
type wheat from ongoing and upcoming US and Black Sea harvest pressure.  

 

 

 

Weather

1-7
DAY

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 23, 2021

• Strong
  to severe thunderstorms producing heavy rain, strong wind speeds and hail will evolve Thursday into Saturday in the heart of the Midwest.
  
• Some
  excessive rain is expected and flooding will result.
• Crop
  damage will be possible because of the hail and flooding, but losses should be low.
  
• The
  moisture will saturate the soil in a part of the central Midwest and that should help carry crops into first half of July in many areas.
  
• In
  the meantime excessive heat and dryness in the far western parts of North America in this coming week will creep to the east into a part of western Canada and the northern U.S. Plains as June comes to an end and July begins.
  
• This
  eastward advancement of the heat and continued dryness will further stress spring and summer crops in Canada’s Prairies and the northern U.S. Plains.
  
• Western
  Russia’s heat and dryness will peak in the next few days with cooling and some showers expected next week. 
• Temperatures
  in the 80s and 90s will continue throughout western Russia with little to no rain for the next few days
  
• Relief
  is expected to occur from northwest to southeast across the drier and warmer biased region this weekend through next week
• Recent
  rain has begun easing dryness in southeastern Russia’s New Lands and northern Kazakhstan and some of the region’s spring wheat and sunseed crop has benefited
• Dryness
  remains a concern in the southeast Ural Mountains region including some western New Lands’ spring wheat and sunseed areas
• Very
  warm and dry weather has been occurring over the past week in western Russia with highest temperatures in the 80s and lower 90s with little to no rain except in western areas of Russia’s Southern Region and southern Ukraine
• China’s
  weather will remain favorably mixed except from Jiangsu to Shaanxi and parts of Shanxi where net drying is expected for a while
• Northeastern
  China weather is favorably mixed
• Southern
  China will remain quite wet for the next ten days
• India’s
  weather will continue dry in the north and in some interior western and far southern parts of the nation while crops to the east are good shape
• Not
  much change in the pattern is likely for at least two weeks with the biggest concern over dryness rising in the northwest part of the nation
• It
  is still early enough that this dryness should not be a huge problem, but July rainfall is a must
• Western
  Thailand rainfall will remain restricted for a while
• Other
  Southeast Asia countries will experience good weather for a while
• Australia
  and Europe weather will be favorably mixed over the next two weeks
• Argentina
  rainfall will continue restricted in the west and south where a boost in rainfall would be welcome for winter crops
• Wheat
  and barley are in better condition than either of the past two planting seasons, but a little more moisture would be welcome
• Brazil
  harvest weather will remain good for Safrinha corn, sugarcane, citrus, coffee and northeastern cotton
• There
  is no risk of frost or freezes in immature crop areas
• Canada’s
  Prairies will experience a mix of rain and sunshine in the coming week, but many areas will continue too dry or will dry down
• West
  Texas rain is expected this weekend into early next week offering some relief to persistent dryness
  
• Excessive
  heat and dryness is predicted for the U.S. Pacific Northwest and British Columbia this weekend and early next week with some of the heat and dryness expanding to the Canada Prairies and northern U.S. Plains by the end of next week

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

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

Canada
Retail Sales Fall 3.2% In May – StatsCan Flash Estimate

 

 

Corn

• US
  corn futures are lower on a favorable US weather outlook. USD is slightly lower.  WTI is about 57 cents higher. 
  
• Early
  harvest across the lower and central Delta and Southeast could limit upside in the September/December corn spreads, currently around 14 cents. 
  
• Corn
  open interest was down 42,259 contracts to 1.634 million. 
• China
  corn prices are running near December levels.  Prices hit a record in January.  Poor quality of wheat (more used for feed now), high corn imports and government’s initiative to cool rising commodity prices are some of the reasons for the weakness in China
  corn prices.  
• Meanwhile
  China’s National Development and Reform Commission (NDRC) and market regulators launched investigations across multiple provinces to access commodity prices and supplies.  China commodity prices during May rose at their fastest annual pace in more than 12
  years.
• Yesterday
  in a Reuters poll, Brazil’s corn production was estimated at 93.93 million tons, 8.5% below year ago.  USDA is 98.5 million tons.  Conab at 96.4 million. 
  
• A
  Bloomberg poll calls for June 1 hog inventory at 75.551 million head vs 77.364 million last June, 2.3% decline.  The breeding inventory seen down 1.2% y/y, and market hogs seen falling 2.5% y/y. 
  
• A
  Bloomberg poll calls for June 1 cattle inventory at 1.96 million, down 4.6%. 
  
• July
  options expire Friday. 

• A
  Bloomberg poll looks for weekly US ethanol production to be up 6,000 barrels (1010-1045 range) from the previous week and stocks up 59,000 barrels to 20.661 million.
  
• We
  are hearing D4 RINs were up about 30 cents for the week as of yesterday. 

 

Export
developments.

• China’s
  Sinograin plans to auction off 18,207 tons of imported Ukraine corn on June 25. 
  

 

 

Soybeans

• Nearby
  soybeans are higher from a rise in soybean oil futures but the back months are lower on an unchanged US weather outlook calling for rains across the growing regions.  Meal is on the defensive from product spreading and mostly lower corn. 
  
• Palm
  futures were up 55MYR and cash was $30/ton higher on talk of improving demand but gains were likely trimmed after the Malaysian Palm Oil Association (MPOA) estimated June 1-20 production increased 15% from the month before. 
  
• Argentine
  producers sold 22.5 million tons of soybeans this crop year (21.7MMT week earlier), below 25.2 million tons year ago.  The 22.5MMT represents just over 50% of the BA Grain Exchange 43.5-million-ton production estimate.  Argentina is expected to crush about
  40.5 million tons in 2021. 
• The
  Argentina soybean crush during the month of May was 4.298 million tons, a 6% increase from a year earlier, and highest for that month since 2017.  Cumulative Jan-May soybean crush was 18.0 million tons, 2.6 million tons above the same period a year ago.  Cumulative
  Jan-May all oilseed crush was 19.6 million tons, 2.7 million tons above the same period a year ago. 
  
• Offshore
  values are leading SBO 74 points higher and meal $4.80/short ton higher. 
• Rotterdam
  rapeseed and soybean oil prices were 15-23 euros higher, and meal 3-8 euros lower. 
  
• China:
  

• Malaysian
  palm oil:  

 

Export
Developments

• Trade
  is waiting to see if China bought additional US new-crop soybeans. 
• Yesterday
  Egypt bought 63,000 tons of soybean oil and 10,500 tons of sunflower oil for September 5-30 arrival. 
  

 

 

Wheat

• Chicago
  wheat is higher on technical buying and follow through strength in Minneapolis futures.  We expect wheat prices to soon stabilize, at least for KC and Chicago type wheat from ongoing and upcoming US and Black Sea harvest pressure.
  
• South
  Dakota could see rain by end of Saturday.
• Russia’s
  AgMin sees the 2021 grain harvest at 127.4 million tons, unchanged from previous. 
  
• Ukraine
  grain stocks as of June 1 were 6.9 million tons, up 830,000 tons from the previous year.  The stocks do not include small farms.  2020 production was 65 million tons versus 75 million in 2019. 
  
• September
  Paris wheat was up 0.75 euro at 207.75. 

 

Export
Developments. 

• Taiwan
  seeks 55,000 tons of US million wheat on June 24 for Aug 12-26 shipment from the PNW. 
  
• Ethiopia
  seeks 400,000 tons of wheat on July 19. 
• Iran
  seeks optional origin wheat on Wednesday. 
• Japan
  seeks 159,665 tons of food wheat later this week. 

• Jordan
  retendered for 120,000 tons of wheat set to close July 6 for Jan/Feb 2022 shipment. 
  
• Cancelled: 
  Jordan is back in for feed barley (in today) for Nov/Dec shipment. 

 

Rice/Other

• None
  reported