FW: FI Evening Grain Comments 05/20/20

PDF attached

 

 

Weather

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS: 

           
Periodic rain delays are expected in U.S. planting during the next ten days, but some fieldwork is expected. The wettest conditions are expected this weekend into early next week. A very good environment will remain for emerging and establishing spring and
summer crops.

Rain
in western Canada’s Prairies this week will stall spring fieldwork through the weekend while weather in the east will be dry and warm favoring spring planting progress.  More rain in Ontario, Canada Friday into early next week will keep fieldwork for corn
and soybean areas advancing slowly. Next week will perpetuate some of the delays in southeastern Canada with rain expanding into Quebec after the weekend.

Brazil
and Argentina weather will not change much over the coming ten days and that should translate into ongoing good western Safrinha crop conditions in Brazil while conditions in the east are quite varied leaving many areas in need of rain. Harvesting in Argentina
may be briefly delayed by rain today and Thursday.

Good
harvest weather is expected in South Africa and India. Crop planting and establishment in China is expected to advance favorably, although the North China Plain and Yellow River Basin will be drying out.

Rain
is expected over the next few days in southeastern Europe brining some needed relief to dryness in the Balkan Countries. In the meantime, Western Europe will be drying out with northern France, the United Kingdom, Belgium, Netherlands and Germany becoming
too dry soon.

Rain
in Ukraine and a part of Russia’s Southern region in the coming week will be welcome, but more rain will be needed near the Black and Caspian Seas.

Southeast
Asia still needs greater rain in Thailand and portions of the Philippines while conditions in Indonesia and Malaysia are mostly good.

Overall,
today will likely provide a mixed influence on market mentality. 

 

MARKET
WEATHER MENTALITY FOR WHEAT:  Weather
conditions around the world changed little overnight. Dryness remains in the southwestern U.S. Plains and in some areas near the Black Sea and developing in northern Europe. Dryness was also continuing in Western and South Australia. Rain chances are improving
for some of these drier areas with rain in the Balkan Countries over the next few days, some scattered showers in Russia and Ukraine and some rainfall in the southwestern U.S. Plains.

           
Some showers may impact Queensland and far northern New South Wales, Australia today and early Thursday, but much more rain will be needed to induce the best autumn planting. Western Australia may receive some rain Sunday into Monday and that too will be welcome.

           
Canada’s Prairies planting has been advancing favorably while wheat development in Quebec and Ontario should begin improving this week due to warmer temperatures. A storm in Alberta and western Saskatchewan today into Friday will stall farm progress.

           
Spring wheat planting in the northern U.S. Plains should be advancing favorably.

           
Rain is needed in Argentina and South Africa to support planting.

           
Overall, weather today is expected to have a mixed influence with some bearish bias.

Source:
World Weather Inc. and FI

 

Seven-day
outlook:

 

Bloomberg
Ag Calendar

WEDNESDAY,
May 20:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• EU
  set to present its Farm to Fork strategy for sustainable food
• New
  Zealand food prices, 6:45pm ET Tuesday
• Malaysia’s
  palm oil export data for May 1-20
• USDA
  milk production, 3pm

THURSDAY,
May 21:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
• Port
  of Rouen data on French grain exports
• USDA
  red meat production, 3 pm
• U.S.
  cold storage – pork, beef, poultry
• HOLIDAY:
  France, Germany, Belgium, Indonesia

FRIDAY,
May 22:

• ICE
  Futures Europe weekly commitments of traders report on coffee, cocoa, sugar positions
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  cattle on feed, poultry slaughter, 3 pm
• Shanghai
  exchange’s weekly commodities inventory, 15.30
• EARNINGS:
  Sime Darby Plantation

SATURDAY,
May 23:

• China
  May trade data, including agricultural imports

Source:
Bloomberg and FI

 

 

Macros

Canadian
CPI NSA (M/M) Apr: -0.7% (exp -0.6%; prev -0.6%)

–         
CPI (Y/Y) Apr: -0.2% (exp -0.1%; prev 0.9%)

–         
CPI Core Median (Y/Y) Apr: 2.0% (exp 1.9%; prev 2.0%)

–         
CPI Core Common (Y/Y) Apr: 1.6% (exp 1.7%; prev 1.7%)

–         
CPI Core Trim (Y/Y) Apr: 1.8% (exp 1.8%; prev 1.8%)

Canadian
Wholesale Trade Sales (M/M) Mar: -2.2% (exp 4.8%; prev 0.7%)

 

Corn.

·        
Corn futures ended mixed on bear spreading.  Nearby futures fell to their lowest level since early March on talk of increasing import quotas and an upcoming corn sale out of reserves. July fell 1.75 cents
and December down 0.25 cent. On the contrary, July soybeans climbed 4.25 cents and November was up 3.75 cents.  Spreading was likely.  Previous to today, corn
futures
rose higher over the previous three sessions. Argentina and Ukraine were active in selling corn over the past day.  EIA showed another week of recovery in US ethanol production, but the rise was less than a Bloomberg trade guess. 
 

·        
Funds sold an estimated net 4,000 corn contracts. 

·        
AgRural lowered their outlook for the safrinha crop to 66.7 million tons,  amounting to a total corn crop of 97.7 million tons. 

·        
US corn basis again firmed at selected locations across the western Corn Belt on Monday.  Blair, NE, was up 5 cents from Monday. China corn processors were up 5 cents to bid 5 under. 

·        
Some sections of the northern IL river are closed due to flooding. 

·        
China plans to sell 4 million tons of corn from state reserves on 28.  This would be the first auction of the season.  3.66 million tons of corn is from 2015. 

·        
China seeks to sell 10,000 tons of pork from state reserves on May 22.  320,000 tons have been sold this year. 

·        
Ukraine grain exports are up by 18 percent this season. 

·        
Kazakhstan is considering lifting their ban on grain and flour exports, with a target date of June 1. 

·        
The weekly USDA Broiler Report showed eggs set in the US down 2 percent and chicks placed down 10 percent.  Cumulative placements from the week ending January 4, 2020 through May 16, 2020 for the United States
were 3.70 billion. Cumulative placements were down slightly from the same period a year earlier.

 

US
ethanol production for the week ending 5/15 rose less than expected, up 46,000 barrels to 663,000, highest since early April.  Stocks declined a large 564,000 barrels reflecting a rebound in consumption, even though gasoline supplied fell from the previous
week.  A Bloomberg poll looked for weekly US ethanol production to be up 54,000 stocks to decrease 275,000 barrels to 23.915 million.

 

 

 

 

 

 

Corn
Export Developments

• None
  reported

 

Updated
5/11/20

• July
  corn is seen in a $2.90 and $3.35 range.  December lows could reach $2.90 if US weather cooperates. 
  

 

Soybean
complex

• CBOT
  July soybean futures increased 3.25-4.25 cents (bull spreading), meal up $0.30-$0.90/short ton, and soybean oil 25-27 points higher. 
  
• Funds
  bought an estimated net 4,000 soybeans, bought 1,000 soybean meal and bought 2,000 estimated net 3,000 soybean oil.
  
• Argentina
  producer sales of soybeans have slowed. 

• Anec
  estimated Brazil second half soybean exports at a record 7.2 million tons, which could bring May exports to 14-15 million tons. 
  
• India
  oilmeal exports for the month of April were only 102,001 tons, down 60 percent from April 2019.
• Indonesia’s
  Crop Estate Fund estimated the country may export 12 percent less palm oil than previously expected for 2020.  No figures were provided. 
  
• AmSpec
  Malaysian May 1-20 palm exports: 781,324 tons, +14.2% from 684,162 last month.  ITS: 772,142 or +11.6% from 691,910 tons. 
  

 

Oilseeds
Export Developments

• None
  reported

 

Updated
5/18/20

• July
  soybeans are seen in a $8.25-$8.75 range. 
• July
  soybean meal is seen in a $280 to $310 range. 
• July
  soybean oil range is now seen in a 26.00 to 28.50 range. 

 

Wheat

• CBOT
  July Chicago wheat screamed higher, ending 15.0 cents higher, from what appeared to be a short squeeze.  Day 2 KS wheat crop tour may show a wide range of yields.  The bulls might have been eying the 20-day moving average of $5.1775 after prices took out the
  May 13 high of $5.1425. The contract traded through that level but ended below it.  We learned South Korea is in for US wheat on Thursday.  European wheat rallied 2.75 euros to 189.75 euros, or 1.5 percent.   
  
• KC
  July ended 11.75 cents higher and MN July 12.25 higher.
• Funds
  bought an estimated net 12,000 Chicago wheat contracts. 
• Day
  one of the Kansas Wheat Commission, the Kansas State University extension and the Kansas Department of Agriculture crop tour showed mixed yields for the northern growing areas.  Day two will be out later this afternoon.  Preliminary pictures show varying yields. 
  
• Harvesting
  of winter wheat across TX and OK is expected to slow in the coming days from rain showers. 
  
• Russia
  official customs shows Jan-Mar wheat exports reaching 7.336 million tons, up from 6.605 million tons year earlier. 
  

 

2020
Kansas Wheat Tour is now underway

Day
1 showed the yield for north-central Kansas at 41.1 bushels per acre and 51.7 bu for northwest Kansas. Statewide USDA has 47.0 bu/acre. 

http://kswheat.com/harvest/hrw-virtual-wheat-tour

#wheattour20

 

Export
Developments.

• South
  Korea’s Kofmia seeks about 90,000 tons of milling wheat on Thursday for August and September arrival.  Much or all the wheat could be of US origin. 
  

• Ethiopia
  confirmed they bought 600,000 tons of wheat, optional origin, late last month.  Some of the wheat may have been sold just under $200/ton. 
  
• Russia
  plans to send more wheat to North Korea for aid. 
• Japan
  received no offers for 80,000 tons of feed wheat and 100,000 tons of feed barley to be loaded by August 31 and arrive in Japan by October 29, in its weekly (SBS) tender system.
• Results
  awaited: Syria seeks 200,000 tons of soft wheat on May 20.
• Japan
  seeks 110,573 tons of food wheat on Thursday.

• Japan
  seeks 80,000 tons of feed wheat and 100,000 tons of feed barley to be loaded by August 31 and arrive in Japan by October 29, in its weekly (SBS) tender system, on May 27.

 

Rice/Other

• None
  reported

 

Updated 5/18/20

• Chicago July is seen in a $4.75-$5.20 range. 
  
• KC July $4.20-$4.80.
• MN July $4.85-$5.25.