FI Morning Grain Comments 06/28/22

PDF attached

 

Good
morning.

 

Deteriorating
US soybean and corn crop conditions lifted CBOT futures overnight. China strict Covid-19 protocols are easing. Restaurants in Shanghai will be open for indoor dinning this week. China’s soybean complex rallied overnight. Soybean meal prices slipped while soybean
oil is higher on strength in palm oil and energy markets. Wheat is higher on improving global import demand and short covering.

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 28, 2022

• Not
  many changes were noted overnight
• U.S.
  weather does not include an abundance of rain, but there will be enough mixed conditions to stave off a seriously threatening environment for a while
  
• Alternating
  periods of warm and seasonable temperatures are expected during the next two weeks
• Periodic
  rainfall will be possible as well, although the precipitation amounts do not seem to be very impressive for some areas
• pockets
  of dryness are expected, but areas of favorable soil moisture will also occur in many areas
• Rain
  in Europe will concentrate on central parts of the continent for a while
• drying
  in the far west and from the eastern Adriatic Sea into Hungary will be monitored
• Russia’s
  Southern Region will be mild to cool with limited rainfall for a while as will parts of eastern Ukraine and western Kazakhstan
  
• Rain
  is needed in these areas; however
• Additional
  opportunities for rain will evolve in China’s North China Plain in the next two weeks maintaining an improving trend for crops and soil moisture in the region
• Southern
  China is still vulnerable to a weekend tropical cyclone
• A
  tropical cyclone is expected to evolve in the South China Sea west of the Philippines
  
• Some
  heavy rain from the storm is expected in western Luzon Island during the second half of this week
• Another
  tropical cyclone is expected to evolve east of Taiwan and will impact western Japan and the southern Korean Peninsula late this weekend into early next week
• India’s
  Monsoon will continue to expand into a more favorable rain distribution in time
• Tropical
  Depression Two has formed over the Atlantic Ocean east southeast of Trinidad and is expected to become a tropical storm later today and then skirt the coast of Venezuela 

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
352,404                 versus   300000-600000  range

Corn                     
1,246,014             versus   900000-1250000                range

Soybeans           
468,309                 versus   300000-575000  range

 

Macros

(Bloomberg)
— Saudi Aramco may increase the official selling price of its flagship Arab Light crude by $2.50/bbl m/m to Asia for Aug. sales, according to the median estimate in a Bloomberg survey of five refiners, traders.

US
Wholesale Inventories (M/M) May P: 2.0% (est 2.1%; prev 2.2%)

US
Advance Goods Trade Balance May: $-104.3Bln (est-$105.0Bln; prevR -$106.7Bln)

US
Retail Inventories (M/M) May: 1.1% (est 1.6%; prev 0.7%)

 

 

Corn

·        
Corn futures
are rebounding after crop conditions dipped last week.

·        
WTI crude oil was $1.42 higher at 7:44 am CT.

·        
China will see heavy rain across the northeast that could result in local flooding across Liaoning and Jilin over the next 10 days. This comes after southern China saw heavy flooding earlier this season.

·        
US corn crop conditions fell to 67 percent from 70 percent previous week. The trade was looking for a one point decrease. We revised down our US corn yield from 180.1 to 177.6 bu/ac.

 

 

·        
AgRural: Brazil 2021-22 total corn crop estimated at 113.8 MMT, up from 112.3 million previously. Second crop was projected at 80.3 million tons versus 80.9 million previous. Center-South was 20 percent harvested for the second
corn crop.

·        
USDA US corn export inspections as of June 23, 2022 were 1,246,014 tons, within a range of trade expectations, above 1,192,151 tons previous week and compares to 1,045,179 tons year ago. Major countries included Japan for 476,658
tons, Mexico for 296,714 tons, and China for 208,190 tons.

 

What
Do We Know About Revisions to USDA Planted Acreage Estimates?

Irwin,
S. “What Do We Know About Revisions to USDA Planted Acreage Estimates?” farmdoc daily (12):95, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 27, 2022.

https://farmdocdaily.illinois.edu/2022/06/what-do-we-know-about-revisions-to-usda-planted-acreage-estimates.html

 

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.

 

 

Soybeans

·        
CBOT soybeans are higher after USDA reported a decline in crop conditions. China strict Covid-19 protocols are easing. Restaurants in Shanghai will be open for indoor dinning this week. China’s soybean complex rallied overnight.
CBOT soybean meal prices were mixed while soybean oil was higher on strength in palm oil and energy markets.

·        
Palm oil was up for the second consecutive day on production concerns after some millers closed operations due to low CPO prices. Prices started the session on a report June 1-25 palm oil production was up sharply from the previous
month.

·        
US soybean crop conditions of 65 percent were also below expectations, down from 68 previous week. The trade was looking for unchanged.

 

 

·        
SGS reported June 1-25 Malaysian palm oil exports at 991,624 tons, down 10.8 percent from the same period previous month.

·        
September Malaysia palm oil.

·        
China futures. 

·        
Rotterdam vegetable oils were 20-40 euros higher, and meal mostly higher.

·        
Offshore values are leading SBO about 30 points higher and meal $0.30 lower.

·        
USDA US soybean export inspections as of June 23, 2022 were 468,309 tons, within a range of trade expectations, above 428,322 tons previous week and compares to 111,250 tons year ago. Major countries included China for 80,556
tons, Egypt for 67,138 tons, and Japan for 49,724 tons.

 

Export
Developments

·        
South Korea’s NOFI group seeks 120,000 tons of soybean meal, optional origin, for October 25-November 5 arrival.

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

 

Wheat

·        
US wheat futures are higher on improving global import demand, higher outside grain markets and short covering. Russian grain production prospects are large this season. 

·        
A Reuters poll calls for Russia to produce 86.9 million tons of wheat (max 89.2MMT), a 14 percent increase from 2021, and exports to reach a record 41 million tons, a 25 percent increase. Yesterday MARS pegged the Russian wheat
crop at 88.8 million tons (16% increase from last year). 

·        
Paris September wheat was up 6.50 euros earlier at 356.50 euros per ton.

·        
Egypt seeks wheat for September and/or October shipment on June 29.

·        
US spring wheat and winter wheat conditions were unchanged from the previous week. The trade was looking up one for winter wheat and up one point for spring. Winter wheat harvest progress was 41 percent versus 40 percent trade
average.

·        
USDA US all-wheat export inspections as of June 23, 2022 were 352,404 tons, within a range of trade expectations, above 348,309 tons previous week and compares to 291,043 tons year ago. Major countries included Mexico for 98,209
tons, Philippines for 65,505 tons, and Nigeria for 29,050 tons.

 

Export
Developments.

·        
Egypt seeks wheat for Sep and/or Oct shipment.

·        
Jordan bought 60,000 tons of milling wheat at $445/ton c&f for Sep-Nov shipment.

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

·        
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).

 

Rice/Other

·        
None reported