FI Morning Grain Comments 07/06/22

PDF attached

 

Good
morning. 

 

The
CBOT soybean complex and grain markets are rebounding after posting steep losses on Tuesday, in part from a larger than expected decline in soybean & corn conditions. Winter wheat conditions slightly improved while spring wheat C/E conditions jumper a large
7 points. Russia export passage uncertainties for Ukraine grains are increasing again after a Ukraine diplomat doubted a breakthrough in talks. The USD is higher again. WTI crude oil is higher and equities lower. Outside vegetable oil markets were weaker.
Palm oil futures hit a 1-year low before pairing some losses. The Southern Peninsula Palm Oil Millers’ Association (SPPOMA) reported that July 1-5 production fell nearly 16% from the month before. September Malaysian palm oil futures were down 119MYR and cash
was down $55 to $1,045. There were no USDA 24-hour sales.

 

 

 

Limits
expanded for the soybean complex, and other products

https://www.cmegroup.com/trading/price-limits.html

 

 

 

 

 

 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JULY 6, 2022

• Western
  Europe will be dry and trending much warmer over the next ten days to two weeks
  
• Soil
  moisture is favorable today, but the need for rain will be high a week from now and crop stress to unirrigated corn, sunseed, soybean and other crops will be rising from next week to beyond mid-month without rain
• U.S.
  thunderstorms produced damaging wind in South Dakota and Iowa Tuesday afternoon through the evening and there is concern that the derecho that resulted may have damaged some crops
  
• losses
  should be low relative to the nation’s entire crop with South Dakota most impacted
• Additional
  waves of rain will impact the northern and eastern Midwest during the next few days producing additional relief from dryness in many areas
• The
  southwestern Corn Belt, northern and western Delta and southern Plains will experience more heat and dryness into the weekend with the central and southern Plains dealing with similar conditions through much of the next two weeks
• Today’s
  U.S. ridge of high pressure does not go as far to the west, nor does it prevail there for as long as suggested in Tuesday’s forecasts
• U.S.
  rainfall was reduced in the second week of the outlook today relative to that of Tuesday in the Midwest, Delta and parts of the Plains 
• Canada’s
  Prairies rainfall will become a little lighter and less frequent for a while
• India
  and China will remain wet for the next two weeks with bouts of heavy to excessive rain possible
• Australia’s
  winter crops are establishing well
• Eastern
  Europe crop weather is good in some areas and still too dry in other areas
• Russia’s
  Southern Region still needs rain 
• Argentina
  rainfall in the west has been reduced in today’s forecast model runs, but eastern wheat areas should get some rain in time, but not right away. 

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

Due
out Thursday

 

USDA
inspections versus Reuters trade range

Wheat                 
111,830                 versus   300000-500000  range

Corn                     
676,824                 versus   900000-1200000                range

Soybeans           
354,987                 versus   400000-500000  range

 

Macros

 

Corn

·        
The CBOT soybean complex and grain markets are rebounding after posting steep losses on Tuesday, in part from a larger than expected decline in soybean & corn conditions.

·        
The USD is higher again. WTI crude oil is higher and equities lower.

·        
USDA US corn export inspections as of June 30, 2022, were 676,824 tons, below a range of trade expectations, below 1,246,950 tons previous week and compares to 1,251,583 tons year ago. Major countries included Mexico for 314,933
tons, Japan for 169,502 tons, and China for 67,434 tons.

 

Export
developments.

·        
South Korea’s MFG bought 140,000 tons of corn for November arrival at $321.49 and 321.00 per ton.

 

 

Soybeans

·        
CBOT soybeans, meal and oil are higher on technical buying, higher WTI crude oil, but look for gains to be limited on a sharply higher USD and lower trade in overnight outside global vegetable oil markets.  US soybean conditions
declined 2 points to 63 for the G/E.

·        
The US Midwest saw additional rain over the past 24-hours. 

·        
Outside vegetable oil markets were weaker. Palm oil futures hit a 1-year low before pairing some losses. The Southern Peninsula Palm Oil Millers’ Association (SPPOMA) reported that July 1-5 production fell nearly 16% from the
month before.

·        
September Malaysian palm oil futures were down 119MYR and cash was down $55 to $1,045.

·        
China soybean complex futures were lower, with soybean oil 5.4% lower and palm down 6.8%.

·        
Rotterdam vegetable oils were sharply lower and meal mostly lower.

·        
Offshore values were leading SBO about 207 points higher earlier this morning and meal $7.50 short ton higher.

·        
USDA US soybean export inspections as of June 30, 2022, were 354,987 tons, below a range of trade expectations, below 475,556 tons previous week and compares to 219,235 tons year ago. Major countries included Mexico for 129,180
tons, Egypt for 51,683 tons, and Colombia for 27,015 tons.

 

Source:
Reuters and FI

 

Export
Developments

·        
Results awaited: Egypt’s GASC seeks 3000 tons of soybean oil and 1000 tons of sunflower oil on July 6.

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

 

Wheat

·        
US wheat futures are higher on technical buying after prices traded sharply lower on Tuesday. 

·        
Russia export passage uncertainties for Ukraine grains are increasing again after a Ukraine diplomat doubted a breakthrough in talks. Ukraine exports started 2022-23 on a poor note, running 69% below same period last season.

·        
US winter wheat conditions slightly improved while spring wheat C/E conditions jumper a large 7 points.

·        
Ukraine may see a 50 million ton grain crop, down from a record 86 million in 2021, according to the AgMin.

·        
Ukraine’s grain traders union UGA estimated the combined grain and oilseed harvest at 69.4 million tons from the previous 66.5 million, well below the 2021 level of 106 million tons.

·        
Russia denies Turkey detained a grain shipment.

·        
USDA US all-wheat export inspections as of June 30, 2022, were 111,830 tons, below a range of trade expectations, below 352,894 tons previous week and compares to 368,279 tons year ago. Major countries included Mexico for 68,159
tons, Colombia for 16,638 tons, and Venezuela for 12,554 tons.

·        
Manitoba, Canada: Spring wheat crops are rated as 65% in excellent condition, 25% in good condition, and the remaining 10% in poor condition.

 

Export
Developments.

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

·        
South Korea’s NOFI bought 65,000 tons of feed wheat at $398.98/ton for July 17 and Aug 7. Origin could be European.

·        
Another group of South Korean millers bought 50,000 tons of wheat from the US (Sep shipment) and 100,000 tons from Australia (Nov shipment).

·        
Japan seeks 70,000 tons of feed wheat and 40,000 tons of barley on July 13 for arrival by December 22.

·        
Jordan saw 6 participants for 120,000 tons of barley.

·        
Egypt’s GASC seeks wheat in a private tender for September / October shipment. We heard about 444,000 tons of wheat was secured, a large amount given their import dependency of about 11 million tons for the 2022-23 season. Russia
and the EU were thought to be the origin.

·        
Japan seeks 122,420 tons of food wheat later this week for September loading.

 

Rice/Other

·        
None reported