FI Morning Grain Comments 07/15/22

PDF attached

 

 

Good
morning. 

 

Private
exporters reported sales of 133,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.  The US dollar is lower for a change and equities are suggesting a higher open. WTI crude is higher.  The soybean complex is mixed with soybean
oil gaining on meal, a reversal after nearby oil share dipped below 40 percent. Corn is higher from follow through buying and wheat lower. The lower wheat prices this week is attracting business. Two Philippine groups bought wheat. Reuters apparently released
NOPA data early today, although we can not confirm it. Speculative table below. Expect positioning today. The weather situation has not changed much from that of yesterday.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JULY 15, 2022

• The
  weekend heatwave is still on for western Europe and it will prevail into the first half of next week 
  
• High
  temperatures in the 90s and over 100 degrees Fahrenheit will occur in France and parts of Germany while 100 to 113 degree highs occur in Spain and Portugal
• U.K.
  temperatures will be in the 80s and some lower 90s
• Much
  of central and western Europe will experience very little rainfall and net drying for at least ten days
• Russia’s
  Southern Region will continue lacking significant precipitation over the next ten days, although some light showers are expected 
• China’s
  wild weather is expected to settle down a little with less extreme rainfall, but it will stay plenty wet
• India’s
  monsoon has been very active recently and that will prevail over the next ten days with some flooding expected in central and northwestern parts of the nation
• U.S.
  northern and eastern Midwest will get routinely occurring showers and thunderstorms and be seasonably warm to support many crops, although pockets of dryness will remain 
• Dryness
  will be a potential issue for the western fringes of U.S. crop areas from the northern Delta to South Dakota
  
• Very
  little rain and warm to hot weather is expected through the next ten days
• U.S.
  central and southern Plains have been and will continue to be excessively hot and dry with highs often in the upper 90s to 110 Fahrenheit
  
• The
  pattern will prevail through the next ten days
• Interior
  parts of southern Canada’s Prairies will get needed rain early next week with some hail and damaging wind possible too
• Western
  U.S. drought conditions will prevail with little to no rain and warm to hot temperatures
• Argentina’s
  drier west-central and southern wheat areas will stay drier biased for a while
• No
  changes elsewhere in the world
• Australia’s
  wheat, barley and canola will continue favorably establishing

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Friday,
July 15:

• 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
• China’s
  1H pork output and hog inventory
• Malaysia’s
  July 1-15 palm oil export data
• FranceAgriMer
  weekly update on crop conditions
• The
  Cocoa Association of Asia releases 2Q cocoa grind data

Monday,
July 18:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for spring and winter wheat, corn, soybeans and cotton, 4pm
• China’s
  second batch of June trade data, including corn, pork and wheat imports
• HOLIDAY:
  Japan

Tuesday,
July 19:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction

Wednesday,
July 20:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• China’s
  third batch of June trade data, including soy, corn and pork imports by country
• Malaysia’s
  July 1-20 palm oil export data

Thursday,
July 21:

• International
  Grains Council releases monthly report
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  total milk and red meat production, 3pm

Friday,
July 22:

• 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
• US
  cattle inventory; cold storage data for beef, pork and poultry, 3pm

 

Source:
Bloomberg and FI

 

 

 

 

 

 

 

Macros

US
Univ. Of Michigan Sentiment Jul P: 51.1 (est 50.0; prev 50.0)

–
Current Conditions: 57.1 (est 53.7; prev 53.8)

–
Expectations: 47.3 (est 47.0; prev 47.5)

–
1-Year Inflation: 5.2% (est 5.3%; prev 5.3%)

–
5-10 Year Inflation: 2.8% (est 3.0%; prev 3.1%)

US
Capacity Utilisation (M/M) Jun: 80.0% (est 80.8%; prevR 80.3%)

US
Manufacturing (SIC) Production (M/M) Jun: -0.5% (est -0.1%; prevR -0.5%)

 

 

Corn

·        
CBOT corn
is higher, but well off overnight session highs, from follow through buying and another surprise with US corn sales was announced, this time under the 24-H USDA system with 133,000 tons new-crop reported for China.  More sales are anticipated.  It’s been about
a month the trade has seen a USDA 24-H corn sales announcement.

·        
Other fundamentals have not changed. Hot and dry US weather will continue to limit downside risk in corn from bearish outside influence.

 

Export
developments.

·        
Private exporters reported sales of 133,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.

 

 

Soybeans

·        
The US soybean complex was mixed with a rebound in soybean oil share. After dipping below 40 percent, some traders found the share to be a buy. Friday positioning ahead of the weekend also supported a reversal in product spreads.
Higher corn is limiting losses in soybeans.

·        
China soybean reserve sales of imported soybeans were small again, a signal soybean procurements might be slow for the short term.

·        
Ridging across the US is expected to restrict rain through June 28. But if the ridge dies dip in and out of the Midwest, some rain could be generated.

·        
Indonesia plans to roll out more incentives to boost palm oil exports. Earlier this week we heard some palm oil in storage tanks were degrading in quality.  End of May Indonesia palm stocks increased 18.5% from the previous month
to 7.23 million tons.

·        
ITS: Malaysian 1-15 July palm oil exports were 518,520 tons, down 13.7 percent from same period month ago. AmSpec reported a 5.6 percent decrease to 499,964 tons. 

·        
Malaysia September palm was up 20MYR and cash unchanged at $970. For the week futures are down 14 percent.  Note next week traders will be using the October contract as a benchmark.

·        
China soybean futures were up 1.0%, meal slightly higher, soybean oil 1.7% higher and palm down 1.3%.

·        
Rotterdam vegetable oils were lower
by mixed and meal unchanged to 12 euros higher, from this time yesterday morning. 

·        
Offshore values were leading SBO higher by about 172 points (321 for the week) earlier this morning and meal $3.00 short ton higher ($10.30 lower for the week).

 

Export
Developments

·        
USDA seeks 2,230 tons of vegetable oils for export on July 17 for Aug 16-Sep 15 shipment.

·        
China sold less than 15,000 ton of soybeans out of reserves Friday, from little more than 500,000 tons offered. 

·        
China looks to sell a half a million tons of soybeans out of reserves on July 22.

 

 

 

Wheat

·        
US wheat futures are lower on follow through selling as US spring wheat areas received rain and Canadian Prairie crop conditions stabilized.  Argentina crop prospects are deteriorating though. The five major global suppliers of
exportable wheat is still expected to end up at multi year lows, for stocks to use, by the end of the crop season.

·        
Buenos Aires Grains Exchange estimated the Argentina wheat crop at 17.7 million tons, down from previous 18.5 million tons. It mirrors another slash this week to the crop. Argentina’s Rosario Grains Exchange lowered their wheat
production estimate to 17.7 million tons from previous 18.5 million. The expected area shrank due to dryness.

·        
Russia issued proposals to help Ukraine Black Sea exports and apparently, they are supported by negotiators.  A deal might be reached next week.  Ukraine looks forward to signing a deal, according to a senior Ukraine official
talking with Reuters.

·        
Paris wheat was down 6.50 euros at 337.75 euros as of 6:20 am CT.

 

Export
Developments.

·        
The Philippines bought 40,000 tons of feed wheat for October 10 through November 10 shipment.

·        
Another group in the Philippines bought 110,000 tons of feed wheat, at $376.50 c&f for Q4 shipment.

·        
Pakistan seeks 300,000 tons of wheat, set to close July 18 for Aug 1-25 shipment.

·        
Jordan seeks 120,000 tons of wheat on July 19 for possible shipment sometime in November and/or December.

 

Rice/Other

·        
None reported