FI Morning Grain Comments 07/02/21

PDF attached

 

Good
morning.

 

I
will be out of the office for most of the day, returning Tuesday. 

 

No
major surprises were seen in USDA’s monthly crush update other than high soybean meal stocks (tables attached).  Higher trade this morning in soybeans and mixed in corn. End of week positioning ahead of a long holiday weekend could mean light selling during
the day session. Wheat is mixed.  KC is lower on harvest pressure.  News was very light.  There were no fresh export developments. 

 

Weather

1-7
DAY

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JULY 2, 2021

• Talk
  about net drying in the western Corn Belt, northern Plains and portions of Canada’s Prairies remains in today’s market place.
  
• There
  is potential for “some” rain in parts of these regions, but resulting amounts will not be enough to counter the next ten days of drying.
  
• After
  the long holiday weekend forecast models early next week are likely to have a ridge position advertised for days 10-15 a little more in the Great Plains with warming for the western Corn Belt and continued below average precipitation leading to accelerated
  drying. 
• Tropical
  Storm Elsa was upgraded to hurricane status this morning and the storm will bring rain to Haiti and Cuba this weekend with Cuba being most impacted.
  
• The
  system may be downgraded to tropical storm status after moving across Cuba and then it will bring rain to northern Florida, Georgia and the eastern Carolinas during mid-week next week.
  
• The
  storm will be followed by a trough of low pressure in the Midwest that will cool things down a bit.
  
• Patches
  of soft frost occurred again today in Brazil coffee areas
• Dryness
  in a part of southeastern Europe is being closely monitored
• A
  new ridge of high pressure will evolve next week over western Russia. 
• India’s
  outlook is expected to continue drier than usual in the northwestern parts of the nation for at least ten days. 

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

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

Monday,
July 5:

• OECD-FAO
  Agricultural Outlook 2021-2030 report
• Ivory
  Coast cocoa arrivals
• Malaysia
  July 1-5 palm oil export data
• New
  Zealand Commodity Price
• HOLIDAY:
  U.S.

Tuesday,
July 6:

• CNGOIC
  monthly report on Chinese grains & oilseeds
• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions — corn, cotton, soybeans, wheat, 4pm
• EU
  weekly grain, oilseed import and export data
• Purdue
  Agriculture Sentiment
• New
  Zealand global dairy trade auction

Wednesday,
July 7:

• No
  major event scheduled

Thursday,
July 8:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Brazil’s
  Conab releases data on yield, area and output of corn and soybeans
• FAO
  World Food Price Index
• EIA
  weekly U.S. ethanol inventories, production
• Brazil
  Coffee Council Conference, Sao Paulo
• Port
  of Rouen data on French grain exports
• EARNINGS:
  Suedzucker, Agrana

Friday,
July 9:

• 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

 

 

 

 

 

 

Macros

US
Change In Nonfarm Payrolls Jun: 850K (est 720K; prevR 583K; prev 559K)

US
Unemployment Rate Jun: 5.9% (est 5.6%; prev 5.8%)

US
Average Hourly Earnings (M/M) Jun: 0.3% (est 0.3%; prevR 0.4%; prev 0.5%)

US
Average Hourly Earnings (Y/Y) Jun: 3.6% (est 3.6%; prevR 1.9%; prev 2.0%)

US
Change In Private Payrolls Jun: 15K (est 615K; prevR 516K; prev 492K)

US
Change In Manufacturing Payrolls Jun: 662K (est 25K; prevR 39K; prev 23K)

US
Average Weekly Hours All Employees Jun: 34.7 (est 34.9; prevR 34.8; prev 34.9)

US
Labour Force Participation Rate Jun: 61.6% (est 61.7%; prev 61.6%)

US
Underemployment Rate Jun: 9.8% (prev 10.2%)

US
Trade Balance (USD) May: -71.2B (est -71.3B; prevR -69.1B; prev -68.9B)

 

Corn

• US
  corn futures
  ended the electronic session mixed on lack of direction.  Traders will be monitoring the position of the ridge that is currently projected to be over the Great Plains for days 10-15.  Ridging in this area suggests no improvement for the
  Dakota’s and parts of Minnesota as it may be hot and dry.  Before that there is a slight chance for rain next week.  IA’s weather outlook will also be monitored. 
  
• Brazil’s
  frost events are likely over. 

 

Export
developments.

• China
  auctioned off 18% or 22,747 tons of US corn and 5,551 tons of Ukraine corn or 18%, out of a total 155,000 tons offered.
  
• Results
  awaited: Iran in for 60,000 tons of corn and 60,000 tons barley for Aug/Sep shipment. 
  

 

 

Soybeans

• Soybeans
  are higher
  this morning, but I expect some selling ahead of the weekend from long liquidation ahead of the long holiday weekend. 
    
• SBO
  is sharply higher. 
• Some
  of the trade expect a US biofuel RVO proposal announcement soon.  An unchanged to higher RVO requirement might be perceived bullish, IMO, by the trade sees it.  But not all will think an unchanged RVO will be bullish though as biofuel production expansion
  (Marathon plant, etc.) will generate more diesel RINs in 2021 and 2022 than that of 2020, putting pressure on RIN prices over the long term amid higher RIN supply. 
  
• USDA
  NASS US crush report showed no surprises other than very large soybean meal stocks at the end of May.  Table below and graphs attached. 
  
• Volatility
  remains high. 
• Malaysian
  palm futures were up 79 points and cash up $25/ton. 
• Offshore
  values are leading soybean oil 155 points higher (76 higher for the week) and meal $2.30/short ton higher ($3.90 higher for the week). 
  
• Rotterdam
  rapeseed and soybean oil prices were mostly 15-20 euros higher, and meal mostly 5-9 euros higher. 
  
• China:
  

• Malaysian
  palm oil:  

 

Export
Developments

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

 

 

Wheat

• US
  wheat is mixed.  KC is lower on harvest pressure.  There were no fresh export developments.  Look for a choppy trade on lack of direction. 
  
• The
  duty on wheat export from Russia will total $41.2 per ton from July 7 to 13, the Agriculture Ministry reported on Friday.  The duty on export of barley will amount to $37 per ton of corn – to $50.6 per ton. (Reuters)
• Ukraine’s
  weather is in good shape and selected agencies continue to upgrade crop prospects. 
  
• French
  wheat ratings were unchanged as of June 28 at 79%.  Winter-barley was 2% harvested, versus 36% a year earlier.
  
• September
  Paris wheat was down 2.25 euro at 206.50/ton.

 

Export
Developments. 

• Bangladesh’s
  seeks 50,000 tons of milling wheat on July 15. In addition to…
• Bangladesh’s
  seeks 50,000 tons of milling wheat on July 18.
• 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.
  Separately….

• Bangladesh seeks 50,000 tons of rice on July 12.