FI Morning Grain Comments 06/30/23

PDF attached

USDA
reported 132,000 tons of new crop soybeans sold to China.

WTI
crude oil is higher and USD is lower. The CBOT agriculture markets are higher pre-USDA report after a derecho swept across the Midwest on Tuesday. Wind gusts upwards of 100 mph may have damaged some crops. This would have been much more destructive if it occurred
later in the season, in our opinion.

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Fox
news

https://www.foxweather.com/weather-news/chicago-midwest-severe-weather-air-quality-june-2023

Expiring
July contracts for the soybean complex are firm. There was talk of US crushing downtime for next month and August. Meanwhile, a Reuters poll calls for the May Us crush to end up near 5.693 million short tons, or 189.8 million bushels, up from the 187.0 million
bushels in April and 180.9 million bushels May 2022. (188.0-191.0 range). Soybean oil stocks as of May 31 were estimated at 2.437 billion pounds, down 2.540 billion pounds at the end of April but above 2.384 billion pounds at the end of May 2022. (2.400-2.500
billion range). There were some soybean oil and wheat deliveries overnight. Grain futures are higher on positioning and potential US weather damage. Offshore values were leading SBO higher by about 150 points this morning (66 higher for the week to date) and
meal $0.70 short ton lower ($21.50/ton lower for the week).

Fund
estimates as of June 29 (net in 000)

Weather

7-day

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World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 30, 2023

Beneficial
rain fell in a part of the central Midwest overnight with parts of central Illinois into southwestern Indiana receiving more than 1.00 inch of rain; some excessive rainfall of multiple inches impacted southwestern Indiana
A
derecho impacted the Midwest Thursday coming out of Nebraska and far northeastern Kansas to northern Missouri, southern Iowa and parts of Illinois and Indiana

Some
crop damage resulted, but the assessments are just beginning; the losses should not be as great as 2020, but it will contribute to the already smaller 2023 drought impacted corn crop

Waves
of rain will continue to impact the Midwest through the next week to ten days with some of the greatest rain occurring this weekend and early next week
Tropical
Storm Beatriz will become a hurricane today and will be close enough to the central western Mexico coast to produce torrential rain, flooding and strong wind speeds today into Sunday; Guerrero to Jalisco will be most impacted

Drought
relief is expected and damage should be mostly near the coast and might be mostly from heavy rain and flooding
The
hurricane may weaken to tropical storm status as it impacts the southern tip of Baja California early next week

Canada’s
Prairies will experience a cool airmass early to mid-week next week that may set off a little rain, but amounts will be light and the crop relief from dryness will be limited; nonetheless, some relief will occur from this weekend’s warm and dry bias
West
Texas will get some welcome rain tonight and again Saturday night resulting in some 0.30 to 1.00 inch amounts of rain with several totals of 1.00 to 2.00 inches; the relief will be welcome for many crops impacted by excessive heat and dryness over the past
ten days
Hot
weather continued in the southern half of the Plains Thursday and some of it pushed into the southwestern Corn Belt and Delta

The
heat will advance to the east today and Saturday, but should breakdown as it moves to the east

India’s
rainfall is expected to be favorable over the next two weeks
China,
Europe, the CIS, Australia and South America Weather outlooks did not change much overnight

Source:
World Weather, INC.

Bloomberg
Ag calendar

Friday,
June 30:

USDA
quarterly stockpiles data for corn, soybeans, wheat, barley, oat and sorghum, noon
ICE
Futures Europe weekly commitments of traders report
US
annual acreage data for corn, cotton, wheat and soybeans
US
agricultural prices paid, received, 3pm
CFTC
commitments of traders weekly report on positions for various US futures and options, 3:30pm
FranceAgriMer’s
weekly crop condition report
HOLIDAY:
Indonesia, Pakistan

Monday,
July 3:

USDA
export inspections – corn, soybeans, wheat, 11am
US
corn for ethanol, DDGS production, 3pm
US
corn, soy, spring wheat and winter wheat conditions, 4pm
US
cotton planting, winter wheat harvesting, 4pm
HOLIDAY:
Canada

Tuesday,
July 4:

New
Zealand global dairy trade auction
EU
weekly grain, oilseed import and export data
HOLIDAY:
US

Wednesday,
July 5:

Malaysian
July 1-5 palm oil exports
Purdue
Agriculture Sentiment, 9:30am
New
Zealand Commodity Price

Thursday,
July 6:

EIA
weekly US ethanol inventories, production, 10:30am
USDA
weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
Port
of Rouen data on French grain exports

Friday,
July 7:

FAO
food price index, monthly grains report
ICE
Futures Europe weekly commitments of traders report
CFTC
commitments of traders weekly report on positions for various US futures and options, 3:30pm
FranceAgriMer’s
weekly crop condition report

Source:
Bloomberg and FI

Reuters
estimates for June 30 USDA reports

Bloomberg
Estimates

Corn

·
US corn futures are higher on crop damage concerns after a derecho whipped across the heart of the Midwest yesterday with winds around 100 miles per hour for many areas.

·
China’s sow herd declined 0.6% during the month of May to 42.58 million tons, but 1.6% above year ago.

·
We look for USDA to lower the US July corn yield by at least three bushels per acre.

·
For the July report, there were few times USDA changed their yield estimates for corn and soybeans:

Corn

July
2012 146.0 dn 20.0 bushels

July
2008 148.4 dn 0.5 bushels

July
2005 145.0 dn 3.0 bushels

July
2003 142.7 up 3.0 bushels

Soybeans

July
2019 48.5 dn 1.0 bushels

July
2012 40.5 dn 3.4 bushels

July
2008 42.1 dn 0.5 bushels

July
2004 39.9 dn 0.1 bushels

Export
Developments

South
Korea’s MFG bought 69,000 tons of corn from South America or South Africa at $249.99/ton c&f for September or October shipment.
South
Korea’s KFA bought 65,000 tons of corn from either the US or South America at $249.97/ton c&f for September or October shipment.

Export
developments.

None
reported

Soybeans

·
The US soybean complex is higher on technical buying ahead of the USDA reports. There is talk of US processor downtime for the July-August period, and that is generating interest in soybean oil.

·
A Reuters poll calls for the May Us crush to end up near 5.693 million short tons, or 189.8 million bushels, up from the 187.0 million bushels in April and 180.9 million bushels May 2022. (188.0-191.0 range). Soybean oil stocks
as of May 31 were estimated at 2.437 billion pounds, down 2.540 billion pounds at the end of April but above 2.384 billion pounds at the end of May 2022. (2.400-2.500 billion range).

·
AmSpec reported Malaysian palm oil exports during June were up 0.6% from the previous month to 1.092 million tons. Malaysia is back from holiday and futures were 34MYR higher and cash up $15.00/ton. ITS reported Malaysian palm
oil exports for June down 6.9 percent to 1.086 million tons.

·
Malaysia is back from holiday and futures were 34MYR higher and cash up $15.00/ton.

·
China soybeans futures were slightly higher, meal up 0.7%, SBO up 1.1% and palm up 1.1%.

·
Nearby Rotterdam vegetable oils were 10-40 euros higher and meal 5.00-13.00 euros higher.

·
Offshore values were leading SBO higher by about 150 points this morning (66 higher for the week to date) and meal $0.70 short ton lower ($21.50/ton lower for the week).