FI Morning Grain Comments 06/27/22

PDF attached

 

Good
morning.

 

US
equities and WTI crude oil are higher. USD is pairing overnight losses.

 

The
soybean complex is rallying in part to supportive outside markets. Palm oil rallied 5.5%. We don’t look for major changes in US crop conditions when updated later today.
US
wheat futures are rebounding somewhat after hitting a four month low overnight. The USD is weaker.
Corn
futures are lower on improving US weather. Global export developments are improving with Taiwan and SK picking up corn. Several wheat export developments also developed over the weekend including Egypt and Saudi Arabia.

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 27, 2022

• Not
  much change occurred overnight
• U.S.
  Rainfall during the weekend was a little greater than expected in Illinois, northeastern Iowa and in a few areas of far northwestern Iowa and northeastern Nebraska while lighter than expected in southern Minnesota
• Today’s
  U.S. outlook promotes a relatively good mix of showers and sunshine in both this week and next week, but resulting rainfall is mostly light in both weeks and there is potential for some missed rainfall
• Temperatures
  in the U.S. Midwest this week will be near to above normal and readings next week will be a little warmer which will keep evaporation rates high warranting a close watch on the distribution of rain
• Northwestern
  France will be drier biased over the next two weeks, but the rest of France, Germany and western Poland will get some timely rainfall that will bolster soil moisture
• Warm
  temperatures and restricted rain in eastern Europe and western most parts of the CIS this week will lead to some drying, but improved rainfall and less heat next week will return favorable conditions to a part of the region
• Russia’s
  Southern Region and eastern Ukraine are advertised to get less rain than predicted Friday over the next two weeks which could lead to some dryness and moisture stress issues since a part of the region is already dry
• China’s
  North China Plain will get some timely rainfall this week easing long term dryness
• A
  tropical cyclone may come into southeastern China this weekend that could induce new flooding after serious flooding occurred earlier this month
• The
  same tropical cyclone may induce flooding rain in western Luzon Island, Philippines during the second half of this week and on into the weekend
  
• Taiwan
  may also be impacted by excessive rain
• A
  second tropical cyclone may evolve east of Taiwan late this week that could impact western Japan and the Korean Peninsula 
  
• South
  Korea needs significant rain to end drought
• India’s
  monsoon is expected to expand to the west and north this week while increasing and its performance should be much improved later in the week and through all of next week
• Queensland
  and northeastern New South Wales should get some rain later this week
• A
  part of Argentina’s dry wheat areas will get some rain early this week, but more will be needed

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
June 27:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for spring and winter wheat, corn, soybeans and cotton; harvest progress for winter wheat, 4pm
• HOLIDAY:
  Chile

Tuesday,
June 28:

• EU
  weekly grain, oilseed import and export data
• Malaysian
  Palm Oil Board’s Transfer of Technology seminar

Wednesday,
June 29:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• OECD-FAO
  agriculture outlook report
• Vietnam’s
  general statistics dept releases June coffee, rice, rubber export data
• USDA
  hogs & pigs inventory, 3pm

Thursday,
June 30:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA’s
  quarterly stockpile data for wheat, barley, corn, oat, soy and sorghum, noon
• US
  acreage for corn, soybeans and wheat
• US
  agricultural prices paid, received, 3pm
• Malaysia’s
  June palm oil export data

Friday,
July 1:

• 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
• Monthly
  coffee exports from Costa Rica and Honduras
• International
  Cotton Advisory Committee releases monthly world outlook report
• USDA
  soybean crush, DDGS production, corn for ethanol, 3pm
• FranceAgriMer
  weekly update on crop conditions
• Australia
  commodity index
• HOLIDAY:
  Canada, Hong Kong

Source:
Bloomberg and FI

 

 

 

 

 

CFTC
Commitment of Traders

The
trade was off on estimating the traditional net long position for corn but keep in mind we saw some volatile days. Open interest didn’t change all that much, suggesting traders were busy positioning for the week ending June 21.  Index funds appeared to have
liquidated net long positions, what we speculated earlier this week.

 

 

 

 

Macros

US
Durable Goods Orders May P: 0.7% (est 0.2%; prev 0.5%)

US
Durables Ex Transportation May P: 0.7% (est 0.3%; prev 0.4%)

US
Cap Goods Orders Nondef Ex Air May P: 0.5% (est 0.1%; prev 0.4%)

US
Cap Goods Ship Nondef Ex Air May P: 0.8% (est 0.2%; prev 0.8%)

 

Corn

·        
Corn futures
are lower on improving US weather. Traders are bracing for a volatile week with USDA reports due out June 30.

·        
WTI crude oil was higher.

·        
China hog futures hit a one year high. Germany’s hog herd fell to more than a decade low.

·        
USDA cattle inventories at the end of last month were near expectations. The report was slightly negative for corn futures.

 

 

Export
developments.

·        
Taiwan’s MFIG seeks up to 65,000 tons of corn from the US or SA on June 29 for Aug 25-Sep 13 shipment.

·        
On Friday we heard South Korea’s KFA bought a cargo of corn at $356.99 percent ton for September arrival.

·        
NOFI was also in for corn.

 

 

Soybeans

·        
CBOT soybean complex is higher in part to supportive outside related markets.

·        
Palm oil rallied 5.5%. Talk of mill closures in Peninsular Malaysia was seen as bullish. Millers are slowing production due to the recent decline in CPO prices.

·        
Demand destruction is spilling over into several commodity markets.

·        
AgriCensus reported Ceres Global Ag Corp has postponed building out their large canola plant in Saskatchewan, Canada. The $350 million crushing facility is projected to run over budget, in part to inflation for building materials.

·        
CBOT corn and soybean open interest was down a good amount on Friday.

·        
We don’t look for major changes in US crop conditions when updated later today. The US drought monitor did show expanding dryness bias WCB, which might shift conditions for G/E lower for soybeans and corn.

·        
Strategie Grains raised its forecast for this year’s EU rapeseed crop to 18.3 million tons from 18.2 million a month ago, about 8% above last year. They see rapeseed and sunseed prices falling as supplies improve.

·        
AmSpec reported Malaysian palm oil exports for the June 1-25 period at 888,288 tons, a large 19.6 percent decline from 1.105 million month earlier. ITS reported a 13 percent decrease to 991,000 tons.

·        
September Malaysia palm oil.

·        
China futures. 

·        
Rotterdam vegetable oils were down mixed, and meal unchanged to 5 euros higher.

·        
Offshore values are leading SBO about 88 points lower and meal $1.30 lower.

·        
Argentina sold 18.5 million tons of soybeans to crushers and exporters, 44 percent of estimated production and below the 5-year average, according to the Rosario Board.

 

Export
Developments

·        
China will be back late this week selling a half a million tons of soybeans out of reserves 

 

Wheat

·        
US wheat futures are rebounding somewhat after hitting a four month low overnight. Futures last week were down sharply. The USD is weaker.

·        
Paris September wheat was down 1.25 euros earlier at 356.00 euros per ton.

·        
Egypt secured Indian wheat over the weekend. Egypt has enough wheat supplies to last for 5.7 months. They said they plan to cut wheat imports by 500,000 tons per year, or about 10%, by boosting domestic production.

·        
India exported 1.8 million tons of wheat since slapping on their export ban.

·        
Russian wheat export prices have been under pressure from a rally in the currency and high export taxes. IKAR reported 12% protein for spot shipment at $400 fob, down about $20/ton from the previous week.

·        
Ukraine June to date grain exports are down 44 percent from same period year ago to 1.11 million tons.

·        
Moldova lifted its export ban for wheat and flour that has been in place since March 1.

 

Export
Developments.

·        
Saudi Arabia bought 495,000 tons of wheat for Nov-Jan shipment at an average price of $441.93 per ton.

·        
Egypt bought 180,000 tons of wheat from India. They have been in talks since the beginning of the month.

·        
Taiwan Flour Millers seeks 40,000 tons of US milling wheat on June 29 for Aug shipment.

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

·        
Bangladesh seeks 50,000 tons of wheat on July 5 and again July 14 for shipment within 40 days (updated 6/27).

·        
Jordan seeks 120,000 tons of milling wheat on June 28 for Sep-Nov shipment.

·        
Jordan seeks 120,000 tons of feed barley on June 29 for Oct and/or Nov shipment.

 

Rice/Other

·        
None reported