FI Morning Grain Comments 07/25/22

PDF attached

 

Good
morning.

 

Black
Sea grain shipping uncertainty caused a rebound in the wheat market after a missile strike by Russia over the weekend. Ukraine appears to still be pushing for grain exports as workers return to ports. Soybeans and corn are higher. Offshore values are suggesting
meal to gain on soybean oil. WTI crude oil was up about $1.30 earlier and USD down 41 points, while US equities were suggesting a higher open. US temperatures will increase again this week increasing crop stress. Some rain will develop over the short term
and will be welcome. Ridging will develop next week across the central US, moving into the Midwest by the end of next week.

 

 

 

 

Weather

Last
seven days

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JULY 25, 2022

• Rain
  in the lower U.S. Midwest during the next week will be ideal for bolstering soil moisture in parts of the region from Kansas and southern Nebraska to Ohio, Kentucky, Tennessee and the northern Delta
• The
  overnight model runs were struggling with the second week ridge position over the central United States with the 00z GFS Ensemble getting too aggressive with the ridge by overly intensifying the feature and pushing it too far to the ease into the central Midwest
  Aug 4-8
• The
  00z European Ensemble and 06z GFS Ensemble are in line with each other suggesting the second week ridge of high pressure position will be over the central Plains and a part of the western Corn Belt
• The
  central U.S. ride in week two will bring hotter and drier weather back to the central states, but after this week’s rain in the southwestern Corn Belt the heat and dryness may not have an immediate impact and crops may reach into the second week of August
  without too many problems in the southwestern Corn Belt – as long as this week’s rain is as great as advertised
• Concern
  remains more for late season crop rather than early season crops because of the timeliness of rain in recent weeks and during this forecast period
• Texas
  stays too dry
• Excessive
  heat is expected in the far western U.S. this week with temperature extremes approaching 120 in the southwestern desert region and 110-112 possibly in the Yakima Valley of Washington Wednesday into Friday
  
• the
  far western heat should abate next week as it relocates in the central U.S. 
• Argentina
  is still expecting rain in its wheat and barley production areas this week
  
• The
  moisture will improve germination, emergence and establishment after a long stretch of drier weather
• Europe
  will remain drier and warmer biased in western and southeastern crop areas resulting in dryland crop stress
• Ukraine
  is advertised a little wetter in western, central and northeastern crop areas during the coming week to ten days
• Russia’s
  Southern Region will get some needed showers, but more rain will be necessary to ensure the best yield potentials
• China’s
  weather looks favorable during the next two weeks except in the southeast where net drying is expected
• India’s
  Monsoon will continue to be active with all areas in the nation impacted by rain at one time or another during the next two weeks
  
• Uttar
  Pradesh and Bihar will see adequate relief to dryness during this next ten days
• Australia'[s
  winter crops in the south will get timely rain to support great establishment ahead of spring growth

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
July 25:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  June poultry slaughter, 3pm
• US
  crop conditions for spring and winter wheat, corn, soybeans and cotton; spring wheat harvest, 4pm
• Brazil’s
  Unica to release cane crushing and sugar output data (tentative)
• Malaysia’s
  July 1-25 palm oil export data

Tuesday,
July 26:

• EU
  weekly grain, oilseed import and export data
• Earnings:
  ADM

Wednesday,
July 27:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Earnings:
  Bunge

Thursday,
July 28:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Buenos
  Aires grains exchange weekly crop report
• HOLIDAY:
  Thailand

Friday,
July 29:

• Vietnam
  July coffee, rice and rubber export data
• FranceAgriMer
  weekly update on crop conditions
• ICE
  Futures Europe weekly commitments of traders report
• US
  agricultural prices paid, received, 3pm
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• HOLIDAY:
  Thailand

Source:
Bloomberg and FI

 

 

 

 

CFTC
COT

Traders
missed it for corn and soybeans

 

 

 

 

Macros

 

Corn

·        
CBOT corn
is sharply higher following strength in wheat and uncertainty over Ukraine corn shipments. Ukraine is working on getting ports operational and hopes to ship their first cargo later this week. I would not hold any breath over this, but some grain should make
its way out of ports.

·        
Ukraine’s deal to ship grain safely through the Black Sea was initially seen bearish for corn, IMO, as bulk commodities take up storage space, but after the missile strike over the weekend several analysts are now wondering if
Russia will honor their side of the agreement.

·        
AgRural looks for 87MMT Brazil second corn crop (26.6MMT higher than year ago) and estimated harvest progress at 62%, up from 39% year ago and 53% previous week. Mato Grosso is nearly complete with corn harvest (AgriCensus).

·        
USDA Cattle on Feed showed July 1 inventories slightly above expectations, placements higher than expected and marketing near expectations.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
Soybeans are higher from a weaker USD, strength in meal (spread rebound) and higher grains. US weather will begin to deteriorate by mid-week.

·        
Russia increased their export taxes for sunflower oil and sunflower meal, to RUB 15,987.1/mt ($287/mt) for August, up from RUB 8,615.9/mt in July, and to RUB 2,265.4/mt ($39/mt), up from RUB 1,819/mt ($31/mt) rubles in July, respectively.
(AgriCensus)

·        
US crop conditions are expected to slip when updated this afternoon, more so for corn versus soybeans.

·        
Malaysian palm oil exports for the 1-25 period were 724,283 tons, down 1.4% from same period during June, according to SGS. AmSpec July 1-25palm oil shipments were seen at 864,563 tons, down 2.7%. ITS was at 878,879 tons, down
11.3 percent from same period during June.

·        
A Malaysian palm oil country official suggested to Reuters that the cash palm oil price could remain weak during the third quarter, with a range of 4,800 ringgit ($1,078.41) and 5,200 ringgit ($1,168.28) a ton, then rise to 5000-5500
ringgit during the 4^th quarter.

·        
Malaysia October palm was down 58 MYR to 3646 /ton and cash down $10 to $935.

·        
China soybean futures were up 0.1%, meal 0.8% higher, soybean oil up 0.3%, and palm 0.5% higher.

·        
Rotterdam vegetable oils were unchanged
to 30 euros higher earlier and meal mostly 3 euros higher, from this time Friday morning.

·        
Offshore values were leading SBO 125 points lower earlier this morning and meal $6.70 short ton higher.

 

Export
Developments

·        
China looks to sell a half a million tons of soybeans out of reserves on July 29.

 

Wheat

·        
US wheat futures are higher on Ukraine export uncertainty amid a missile strike against Odesa over the weekend, a key Ukraine grain export hub. Other news is light. A lower USD is supportive.

·        
Matif wheat saw solid volume Monday.

·        
Paris wheat was up 6 euros at 331.75 euros as of 7.45 am CT.

·        
As of Friday, IKAR estimated Russian prices for wheat with 12.5% protein content at $355 a ton, free on board (FOB), down $5 from the previous week.

 

Export
Developments.

·        
Lowest price for Pakistan in for 200,000 tons of wheat was $407.48/ton c&f for September 1-16 shipment.

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

·        
Jordan seeks 120,000 tons of feed barley on July 27 for Dec/Jan shipment.

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade seeks 92,100 tons of rice on Aug 3 for arrival in SK between Feb & Apr.