FI Morning Grain Comments 06/30/21

PDF attached

 

Good
morning.

 

USDA
reports today.  Attached is our FI convenience table.  (Trade estimates for Reuters in the smaller table below was corrected for corn and soybean plantings.)

 

Lower
trade in most CBOT agriculture markets on positioning ahead of the USDA reports. US weather outlook for the Great Plains and Midwest appears to be unchanged from yesterday.  The Delta saw favorable rains.  For the Midwest, rains will fall across the southern
and eastern areas today and Thursday. Dry weather prevails Friday through Sunday. 
Brazil
weather concerns continue with cold temperatures recorded again this morning impacting corn, coffee and sugarcane.  First Notice Day deliveries were 427 for soybean oil, little higher than expected and included ADM issuing 427.  Marx stopped 268.  Soybean
deliveries were 13 with no apparent commercial stoppers.  There were no meal deliveries, as expected. 

 

 

 

 

Weather

1-7
DAY

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 30, 2021

• Frost
  and freezes occurred in Brazil this morning impacting wheat, corn, coffee, sugarcane and some citrus areas.
  
• Most
  of the cold in coffee, citrus and sugarcane areas was not serious enough to induce permanent damage, but some leaf damage likely resulted.
  
• The
  first week of the U.S. outlook is dry biased in much of the Corn And Soybean Belt excepting the Ohio River Basin where rain will occur through Thursday.
  
• Temperatures
  will get hotter in eastern Canada’s Prairies and the northern U.S. Plains over the next few days.
  
• Accelerated
  drying in the northern Plains and upper Midwest is expected because of warm and dry conditions
• Rain
  advertised for mid-week next week in the northern Plains and upper Midwest may be overdone, although some rainfall is expected
• The
  precipitation will be extremely important after the coming week of dry and warm conditions
  
• Dryness
  will be expanding as will crop stress in the region
• Rain
  will continue frequently in the southern U.S. Plains, Delta and southeastern states during the coming week and some concern over unharvested wheat quality remains in the southern Plains.
  
• Concern
  remains over drying in a small part of southeastern Europe including the region from the eastern Adriatic Sea into Hungary and western Slovakia
• Another
  excessively hot and dry day occurred Tuesday in Kazakhstan Tuesday with extreme highs of 100 to 110 Fahrenheit
  
• Some
  of the heat bled over the border into a few southern Russia New Lands crop areas with extreme highs to 108
• Greater
  crop stress is impacting these areas, but cooling is expected with “some” showers
  
• Greater
  rain will be needed
• A
  new ridge of high pressure evolves in northwestern Russia late next week and expands over most of western Russia through Jul 15 making rain that falls in this coming week extremely important to those areas impacted by last week’s warm and dry bias
• China
  will remain plenty wet
• Northeastern
  Xinjiang weather will continue variable with some improvement expected for a little while before more rain and cooling occurs late next week
• Australia
  is expecting good balance of showers and sunshine
• Western
  parts of South Africa continue to get periodic rain resulting in well-established wheat in the region
  
• Improving
  rainfall is expected in mainland areas of Southeast Asia (including Thailand) in the second week of July
• India’s
  rainfall will continue very limited in the northwest through the next ten days
• This
  includes Gujarat, Rajasthan, Haryana and Punjab

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

Wednesday,
June 30:

• EIA
  weekly U.S. ethanol inventories, production
• U.S.
  acreage data for corn, wheat, soybeans and cotton; quarterly grain stockpiles
• Bloomberg
  New Economy Catalyst; climate and agriculture
• Malaysia
  June 1-30 palm oil export data
• U.S.
  agricultural prices paid, received

Thursday,
July 1:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• World
  cotton outlook update from International Cotton Advisory Committee
• Costa
  Rica, Honduras monthly coffee exports
• U.S.
  corn for ethanol, DDGS production, 3pm
• USDA
  soybean crush, 3pm
• Port
  of Rouen data on French grain exports
• Australia
  Commodity Index
• AB
  Sugar trading update
• HOLIDAY:
  Canada, Hong Kong

Friday,
July 2:

• 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
• FranceAgriMer
  weekly update on crop conditions
• Source:
  Bloomberg and FI

Source:
Bloomberg and FI

 

 

 

 

 

 

 

Macros

US
ADP Employment Change Jun: 692K (est 600K; prevR 886K; prev 978K)

Brent
Crude Oil Seen Averaging USD67.48/Barrel In 2021 Versus USD64.79 In May – RTRS Poll

 

 

Corn

• US
  corn futures
  are lower with light old/new-crop spreading on positioning ahead of the USDA grain stocks and
  Acreage reports.  Ongoing concerns over the US far WCB weather may limit losses is we see a bearish US corn planted and harvested area.  World Weather noted the first week of the US outlook is dry biased for the Corn Belt with exception to the Ohio River
  Basin.  Net drying should be good for areas that have seen well above normal rainfall.   
  
• First
  Notice Day corn deliveries were zero. 
• Brazil
  weather concerns continue with cold temperatures recorded this morning impacting corn, coffee and sugarcane.  Areas included northern Parana and southern MGDS.  Thursday could be just as cold, according to Rural Clima.  For Brazil corn we see light impact
  from this cold event as the second corn crop already sustained damage and/or is already made. 
  
• Argentina
  sold 31.1 million tons of corn, about 3 million tons more than at the same time last year.

 

 

U
of I: Historical Relationships Suggest Rising Corn Seed Costs for 2022

https://farmdocdaily.illinois.edu/2021/06/historical-relationships-suggest-rising-corn-seed-costs-for-2022.html?utm_source=rss&utm_medium=rss&utm_campaign=historical-relationships-suggest-rising-corn-seed-costs-for-2022

 

Export
developments.

• Taiwan’s
  MFIG bought about 55,000 tons of South African corn at an estimated premium of 233.82 cents a bushel c&f over the Chicago December contract, for shipment between Sept. 21 and Oct. 10.
• Results
  awaited: Iran in for 60,000 tons of corn and 60,000 tons barley for Aug/Sep shipment. 
  
• China
  plans to auction off 155,000 tons of imported corn on July 2.
• 123,977
  tons of US
• 31,539
  tons of Ukraine origin

 

 

 

 

Soybeans

• Soybeans
  and soybean oil are trading lower on positioning.  September soybean oil hit a nearly two-week high on Tuesday and despite higher palm oil (India lowering import taxes) we might be seeing consolidation in SBO.  Soybean meal is higher on product spreading. 
  
• First
  Notice Day deliveries were 427 for soybean oil, little higher than expected and included ADM issuing 427.  Marx stopped 268.  Soybean deliveries were 13 with no apparent commercial stoppers.  There were no meal deliveries, as expected. 
  
• Argentina
  producers sold 23 million tons of soybeans for the 2020-21 season (43.5MMT production), up 518,800 tons for the week, through June 23.  This is down from 25.8 million tons year ago.  Argentina sold 31.1 million tons of corn, about 3 million tons more than
  at the same time last year.
• Yesterday
  India cut their import tax on crude palm oil to 10% from 15% for three months, effective June 30.
• AmSpec
  estimated Malaysian palm oil exports at 1.546 million tons for the morning of June, up 8.6 percent from 1.423 million tons during May.  ITS reported a 7.1% increase to 1.519 million tons.   Malaysian palm production in June is pegged at around 7.5% higher
  than the month before, according to one broker. 
• Palm
  oil settled 46MYR higher.  Cash palm was up $15/ton to $3599. 
• China
  futures were higher led by vegetable oils. 
• Offshore
  values are leading SBO 111 points lower and meal $5.60/short ton higher. 
• Rotterdam
  rapeseed and soybean oil prices were 5-10 euros higher (mixed to lower in back months), and meal mostly 1-4 euros higher. 
  
• China:
  

• Malaysian
  palm oil:  

• A
  Reuters polls calls for the May US soybean crush to end up near 173.4 million (172.5-174.0 range) from 169.8 million in April and below May 2020 of 179.5 million.  Stocks were estimated at 2.144 billion (2.125-2.160 range) compared with 2.178 billion at the
  end of April and 2.447 billion at the end of May 2020.

 

Export
Developments

• Results
  awaited: Iran in for 60,000 tons of soybean meal for Aug/Sep shipment. 

 

 

Wheat

• US
  wheat is lower led by follow through selling in MN markets after seeing profit taking yesterday after spring wheat prices hit multi-year highs.  Some weather models are calling for an increase in rain next week for the northern Great Plains but bias is that
  its overdone.  Some rain should develop. 
• For
  the second week in a row the local Manitoba government in Canada mentioned crops are stressed by high temperatures and strong winds along with lack of rain.  
  
• Heat
  and dryness across the northern Great Plains has not been as bad since 1988. 
  Record
  breaking heat will start to ease across the PNW by midweek. 
• September
  Paris wheat was down 0.75 euro at 202/ton.

 

Export
Developments. 

• South
  Korean flour mills bought around 77,000 tons of milling wheat from the United States for shipment between Sept. 1 and Sept. 30.
• 50,000
  tons consisted of 25,760 tons of soft white wheat of 11% protein at an estimated $312.77 a ton, 1,210 tons of soft white wheat of 9% protein bought at $367.88 a ton, 5,430 tons of hard red winter of 11.5% protein bought at $283.65 a ton and 17,600 tons of
  northern spring wheat of 14% minimum protein bought at $343.36 a ton.
• Another
  27,000 tons included 5,500 tons of soft white wheat of 11% protein, 1,100 tons of soft white wheat of 9% protein and 7,800 tons of hard red winter of 11.5% protein (same prices as above).  12,600 tons of northern spring wheat of 14% minimum protein at $345.20
  a ton.
• Tunisia
  bought about 100,000 tons of soft wheat and 100,000 tons of barley on Wednesday, optional origin.  One wheat consignment at $281.94 a ton c&f and one at $277.94 a ton c&f.  Barley went for $269.98, $270.48, 271.48 a ton c&f and $271.94 a ton c&f. 
  
• Thailand
  passed on up to 197,700 tons of feed wheat, set for five consignments for shipment between Aug and Dec.  Prices were regarded as too high. Lowest offer was estimated at $291 to $292 a ton c&f for about 58,000 tons for August/September shipment. 
  

• Turkey
  saw offers for 395,000 tons of milling wheat.  Lowest price was $262.85 a ton c&f, Ukraine origin likely.  Shipment in the tender is sought between July 19 and Aug. 21.
• Bangladesh’s
  seeks 50,000 tons of milling wheat on July 15.
• Results
  awaited: Iran seeks 60,000 tons of milling wheat on Wednesday for Aug/Sep shipment.
  

• Jordan
  retendered for 120,000 tons of feed barley set to close July 7 for Nov/Dec 2021 shipment. 
  
• Jordan
  retendered for 120,000 tons of wheat set to close July 6 for Jan/Feb 2022 shipment. 
  
• Ethiopia
  seeks 400,000 tons of wheat on July 19. 

 

Rice/Other

• Bangladesh
  seeks 50,000 tons of rice from India.