FI Morning Grain Comments 07/01/22

PDF attached

 

Good
morning. 

 

The
CBOT will be on holiday Monday and agriculture markets will have a hard open on Tuesday, July 5 @ 8:30 am, CT.

 

https://www.cmegroup.com/tools-information/holiday-calendar.html

 

The
morning US weather outlook improved from that of yesterday for the Midwest and was unchanged for the Great Plains. Day after USDA reported US soybean plantings well below March Intentions and an average trade guess, CBOT futures reversed direction with the
soybean complex lower and grains higher, but all sharply lower soybeans pulled grains lower after the day session opened. Energy markets in the US and EU are higher. The USD was up 75 points earlier and US equities rebounded.

 

 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JULY 1, 2022

• A
  few waves of rain will move through the U.S. Midwest during the next ten days to two weeks offering rain for many areas in the region, but the precipitation is not likely to be uniform across the region 
  
• With
  that said, there should be sufficient moisture to support crops in the bulk of the Corn and Soybean Belt, although some pockets of dryness are expected
• A
  high-pressure ridge in the central and southern U.S. Plains and over the Delta will restrict rainfall in those areas and keep temperatures warmer biased
  
• This
  is expected to be most notable next week and into the following weekend
• West
  Texas “meaningful” rainfall potentials remain low for the next ten days, although a few showers will be possible
• A
  good mix of rain and sunshine will impact the southeastern U.S. 
• Canada’s
  Prairies will see scattered showers and thunderstorms frequently during the next two weeks with most crop areas impacted at one time or another
• Argentina
  remains dry for the next ten days and possibly two weeks threatening the emergence and establishment of winter wheat
• Western
  Europe has had favorable rainfall in the past week, but the region is expected to dry out over the next ten days
• Portions
  of eastern Europe will also have pockets of dryness
• India
  and China are expecting rain in most of their crop areas and the bottom line will be favorable for production potentials and general crop development
• Eastern
  and central Queensland, Australia and northeastern New South Wales are getting rain today and it should linger into the weekend favoring future winter crop development, but stalling fieldwork
• Tropical
  Storm Chaba will bring heavy rain to Guangdong and Hunan, China this weekend before its remnants move to Shandong 
• Tropical
  Storm Aere will impact western Japan early next week with some heavy rain
• Potential
  Tropical Storm Two in the Caribbean Sea will bring flooding rain to northern Costa Rica and southern most Nicaragua. 

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
July 4:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• HOLIDAY:
  US

Tuesday,
July 5:

• US
  crop condition for spring and winter wheat, corn, soybeans and cotton; crop progress for winter wheat, 4pm
• Canada’s
  Statcan publishes data on seeded area for wheat, durum, canola, barley and soybeans
• New
  Zealand commodity price
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• US
  Purdue agriculture sentiment
• Malaysia’s
  July 1-5 palm oil export data

Wednesday,
July 6:

• UN
  annual state of food security report

Thursday,
July 7:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• EIA
  weekly U.S. ethanol inventories, production, 11am
• Vietnam’s
  customs department releases coffee, rice and rubber export data for June
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans

Friday,
July 8:

• FAO
  world food price index, grains supply and demand outlook
• 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
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

 

Macros

European
Central Bank reported inflation rose 8.6% in June from year earlier.

 

Corn

·        
Corn futures
had rebounded after hitting multi—month lows overnight but turned lower in early day session trading from sharply lower soybeans. News was light.

·        
South Korea was back in the market but they have been not buyers of US corn lately.

·        
Traders are shrugging off the US Supreme Court ruling that clipped the US EPA’s wings to curb power-plant emissions. If biofuel production is profitable, it will be made.

·        
USDA NASS is due out this afternoon with its monthly grain grind update.  EIA monthly data for ethanol is delayed.

 

Export
developments.

·        
South Korea’s KFA bought 588,000 tons of optional origin corn at $343.49 c&f for arrival around October 15.

·        
South Korea’s MFG bought 68,000 tons of optional origin corn at $337.25 c&f for arrival by October 17.

·        
For comparison, South Korea’s NOFI yesterday bought 136,000 tons of South American corn at $348.88 c&f for Sep-Oct shipment, depending on origin.

 

 

EIA
monthly ethanol report is delayed

 

Soybeans

·        
CBOT soybeans and products fell on Friday on long liquidation ahead of the weekend.  US weather looks good for the short-term.

·        
The Argentina truck strike ended yesterday evening but another disruption to ag flow might be around the corner. A major Argentina farm group called for a strike and four top farm groups agree on a strike starting July 13 to protest
shortages of diesel and fertilizers and import restrictions of farm related materials. Truck numbers rose back above 3,000 on Friday, up from 650 earlier this week.

·        
USDA NASS is due out this afternoon with its monthly US crush update.  EIA monthly data for biofuel feedstock is delayed.

·        
There were no deliveries posted for the soybean complex.

·        
September Malaysian palm oil futures were down 202MYR and cash was down $45 to $1215.

·        
SGS reported June Malaysian palm oil shipments at 1.231 million tons, down 7.4 percent from 1.329 million during May. ITS reported June Malaysian palm oil shipments decline 10.4 percent to 1.269 million tons from 1.416 million
previous month. AmSpec reported 1.180 million tons versus 1.361 million previously.

·        
China soybean complex futures were lower, with soybean oil 3.5% lower and palm down 4.7%.

·        
Rotterdam vegetable oils were mixed and meal unchanged to 8 euros higher.

·        
Offshore values were leading SBO about 165 points higher (36 lower for the week to date) and meal $0.60 short ton lower (8.00 lower for the week). 

 

Export
Developments

·        
Turkey seeks 18,000 tons of sunflower oil on July 5 for delivery between July 20 and August 29.

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

·        
China looks to sell a half a million tons of soybeans out of reserves on July 8.

 

 

EIA
monthly feedstock report is delayed

 

 

Wheat

·        
US wheat futures were higher to start but paired all gains after soybeans made a leg lower after the day session open. US harvest pressure should be noted. Look for positioning ahead of the long US holiday weekend. The US Great
Plains will see rain across parts of winter and spring wheat country over the next five days.

·        
We look for US winter wheat harvest progress to advance 14 points to 55 percent, when updated by USDA on Tuesday.

·        
Term stopped more wheat overnight, 352 after 516 were stopped FND. A total of 842 Chicago deliveries were posted.

·        
Agritel estimated Russia’s wheat production to reach 85.4 million tons for this season, up from 75.2 million last season.

·        
Arvalis and grain industry group Intercereales estimated the French soft wheat yield at 6.95 tons per hectare, down 2 percent from last year and 3 percent below a 10-year average.

·        
The EU Commission lowered their EU soft wheat production estimate to 125 million tons from 130.4 million last month and compares to 130.1 million for 2021-22. Exports were left unchanged at 38 million tons, which would be up 8
million from 2021-22.

·        
Paris September wheat was down 2.50 euro earlier at 347.75 euros per ton.

·        
Turkey said they can re-export Black Sea grain after talks with Russia and Ukraine.

·        
Ukraine June grain exports were 1.41 million tons, down 43.4 percent from year earlier. Wheat was only 143,000 tons, but it was the end of the crop year.

 

Export
Developments.

·        
Pakistan is getting offers for 500,000 tons of wheat, optional origin, for Aug/FH Sep shipment. Lowest offer was believed to be $439.40 a ton c&f. Pakistan looks to secure 3 million tons of wheat imports this year.

·        
Jordan seeks 120,000 tons of wheat on July 5 for Oct/Nov shipment.

·        
Jordan seeks 120,000 tons of barley on July 6 for Oct/Nov 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

·        
Russia plans to ban rice and some rice related product exports to ensure domestic demand.

·        
India planted 4.3 million hectares of rice so far this season, down 27% from the same period last year from lower than usual June rainfall.