FI Morning Grain Comments 07/20/22

PDF attached

 

Good
morning.

 

USDA
announced 136,000 tons of soybeans sold to China for 2022-23 delivery. Over the past couple days, there was chatter Sinograin and Cofco were interested in Feb/Mar US soybeans. Looks like some of that was confirmed.

 

The
US weather forecast is unchanged from yesterday but yesterday the 6-10 day did increase some rain for the Midwest. Hot and dry conditions continue through the week for much of the Midwest US and western US. Paris and US wheat futures are up sharply on European
and US weather concerns over hot and dry conditions affecting spring crops, no resolution made yet in Ukraine grain safe passage, and good global demand. Soybeans and corn are lower. Products are lower. Egypt seeks wheat today for shipment periods of September
16-30, October 16-31, and November 1-15 shipment.

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JULY 20, 2022

• Relief
  has come to the U.K. and other northwestern European locations today with temperatures 20 to 30 degrees Fahrenheit cooler than those of Tuesday
  
• Some
  rain has also fallen in France and more is expected across many northern and central Europe locations during the next ten days
• Rain
  in Europe will be more limited in southern areas with some hot and dry conditions likely to bring increasing stress to crops from southern France into the Balkan Countries where daily highs in the 90s Fahrenheit and extremes over 100 expected frequently through
  the next ten days
• Relief
  is also expected in the U.S. northern and central Plains where it has been outrageously hot this week
  
• Extreme
  highs earlier this week reached 110 Fahrenheit in South Dakota and Tuesday’s highest temperatures were 110 to 116 in parts of Oklahoma and Texas resulting in serious livestock and crop stress 
• Southern
  U.S. Plains heat and dryness will prevail over the next ten days, but the hottest temperatures will begin to abate soon
• Central
  and northern Plains and southwestern Corn Belt will see relief to heat and dryness gradually over the weekend and next week
  
• The
  first round of needed rain will reach the central Plains and southwestern Corn Belt Sunday into Monday
• The
  break will last about ten days before the heat in Texas bubbles northward once again
• Northern
  and eastern Midwest locations will continue favorably moist with more rain and seasonable temperatures expected to support good crop development
• U.S.
  northern Delta crop stress from heat and dryness will be slow in easing and when the break arrives it is likely to be brief and temporary 
• Texas
  and parts of Oklahoma will remain at the center of the heat and dryness over the next couple of weeks, although temperature extremes will relax
• Canada’s
  Prairies will see seasonable temperatures and brief bouts of rain for the next couple of weeks
  
• Some
  pockets of drying are expected
• Argentina
  is still expecting rain next week that should help improve wheat emergence and establishment
• Weather
  conditions in India will continue wet in the central and north during the next ten days 
• China
  weather will be favorable nationwide for a while
• Russia’s
  Southern Region is still expecting periods of rain and drizzle over the coming week with temperatures mild to cool
  
• Crop
  and field condition improvements are likely
• No
  changes in Australia or South Africa weather is expected
• The
  bottom line contribution from weather today may remain a little bearish because of improvements in northern Europe and anticipated improvements in U.S. weather next week

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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
MBA Mortgage Applications: -6.3% (prev -1.7%)

Canadian
CPI (Y/Y) Jun: 8.1% (est 8.4%; prev 7.7%)

Canadian
CPI NSA (M/M) Jun: 0.7% (est 0.9%; prev 1.4%)

Canadian
CPI BoC Core (Y/Y) Jun: 6.2% (est 8.4%; prev 6.1%)

Canadian
CPI BoC Core (M/M) Jun: 0.3% (prev 0.8%)

Canadian
CPI Core- Common (Y/Y) Jun: 4.6% (est 4.2%; prev 3.9%)

Canadian
CPI Core- Median (Y/Y) Jun: 4.9% (est 5.1%; prev 4.9%)

Canadian
CPI Core- Trim (Y/Y) Jun: 4.9% (est 5.6%; prev 5.4%)

Canadian
Industrial Product Price (M/M) Jun: -1.1% (est -0.5%; prev 1.7%)

Canadian
Raw Materials Price Index (M/M) Jun: -0.1% (prev 2.5%)

Canada
Home Price Index Up 1.3% In June From May – Teranet

 

Corn

·        
CBOT corn
is lower on weaker WTI crude oil, slightly higher USD and lower soybeans. Traders are waiting for a Ukraine Black Sea grain shipment agreement.

·        
China’s end of June sow herd increased 2% from the previous month to 42.77 million head from 41.92 million reported at the end of May, but down 6.3% from a year ago.

·        
AgRural reported Brazil’s Center South second corn harvest was 53% complete, up from 40.5% week earlier and compares to 30.1% year ago.  Deral reported Parana was 30 percent complete, compared to only 4 percent at this time year
ago. 

·        
Bloomberg Cattle on Feed report: June placements onto feedlots seen falling y/y to 1.58m head, according to a Bloomberg survey of ten analysts. That would be the biggest y/y decline since July 2021.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 9,000 barrels to 1014 thousand (996-1030 range) from the previous week and stocks down 99,000 barrels to 23.507 million.

 

 

U
of I: Nitrogen Fertilizer Outlook for 2023 Decisions

Schnitkey,
G., K. Swanson, N. Paulson, C. Zulauf, J. Coppess and J. Baltz. “Nitrogen Fertilizer Outlook for 2023 Decisions.” farmdoc daily (12):106,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, July 19, 2022.

https://farmdocdaily.illinois.edu/2022/07/nitrogen-fertilizer-outlook-for-2023-decisions.html

 

Export
developments.

·        
None reported

 

 

 

Soybeans

·        
The soybean complex is lower on talk of an increase in rainfall for the Midwest during the 6-10 period. Overall conditions will remain hot and dry through the end of the month.

·        
USDA announced 136,000 tons of soybeans sold to China for 2022-23 delivery. Over the past couple days, there was chatter Sinograin and Cofco were interested in Feb/Mar US soybeans. Looks like some of that was confirmed.

·        
The last 24-H sale to China was June 1.

·        
The breakdown of China soybean imports during the month of June showed 7.24 million tons originated from Brazil, down from 10.48 million tons year earlier, out of the total 8.25 million tons imported (23 percent below year ago).
China took only 773,114 tons from the US. January through June imports from Brazil were 27.71 MMT (26.13 MMT year earlier) and imports from the US 17.54 MMT (21.57 MMT year earlier).

·        
Cargo surveyor SGS reported month to date July 15 Malaysian palm exports at 570,050 tons, 22,373 tons below the same period a month ago or down 3.8%, and 112,376 tons below the same period a year ago or down 16.5%.

·        
Cargo surveyor AmSpec reported Malaysian July 1-15 palm exports at 646,853 tons, compared to 659,768 tons a month ago.

·        
Cargo surveyor ITS reported Malaysian palm exports at 667,509 tons, 9.6 percent below 738,368 tons from the same period a month ago.

·        
Malaysia October palm was up 123MYR to 3935 ton and cash up $55.00 to $1020.00.

·        
China soybean futures were down 0.5%, meal 3.3% lower, soybean oil down 0.6% and palm up 0.7%.

·        
Rotterdam vegetable oils were mixed
and meal 1-8 euros lower, from this time yesterday morning.

·        
Offshore values were leading SBO up by about 168 points earlier this morning and meal $6.70 short ton lower.

 

Export
Developments

·        
Under the 24-hour system, USDA announced 136,000 tons of soybeans sold to China for 2022-23 delivery. Over the past couple days, there was chatter Sinograin and Cofco were interested in Feb/Mar US soybeans. Looks like some of
that was confirmed.

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

 

 

Wheat

·        
US and Paris wheat futures are higher on strong global demand and hot temperatures across Europe threatening related spring crop production. 

·        
Egypt is in for wheat. Yesterday Egypt lowered their wheat protein level for US wheat for their import tender to 10.5% from previous 11.5% (acceptable down to 11%).

·        
Paris wheat was up 2.25 euros at 339.25 euros as of 8:10 am CT.

·        
Germany’s 2022 winter barley crop was estimated at 9 million tons by the association of German farmers DBV, up from 8.8 million tons from last year.

·        
Manitoba, Canada, saw heavy rain and high humidity last week, according to their weekly crop report. Wheat conditions crop in southern areas were rated mostly good-to-excellent and canola widely varied.

 

Export
Developments.

·        
5 offers presented: Jordan seeks 120,000 tons of feed barley on July 20 for Dec and/or Jan shipment.

·        
Jordan seeks 120,000 tons of wheat on July 26 for November and/or December shipment.

·        
Pakistan seeks 200,000 tons of wheat on July 25 for September 1-16 shipment. They may be in for 300,000 tons.

 

Rice/Other

·        
None reported