FW: FI Morning Grain Comments 05/20/20

PDF attached

 

Morning. 

 

 

 

Weather

Threat
of La Nina occurring during the Northern Hemisphere summer growing season remains low. 

SST’s
were near zero by the beginning of May. 

 

UNITED
STATES

• No
  significant change occurred in the first week of the outlook
• A
  small increase in rain was suggested from the central Plains into Wisconsin late next week
  
  • The
    change may verify
• Some
  rain was reduced in southern Canada’s Prairies and the northern U.S. Plains May 30-June 1
  • Some
    of this reduction was needed
• Rain
  was increased from Tennessee and northern Alabama into the western Carolinas and southwestern Virginia May 30-June 1
  • Some
    of this increase was overdone
• A
  boost in rainfall suggested for Florida May 30-June 1 was also overdone
• A
  decrease in South Texas rainfall May 30-June was needed
• Reduced
  June 2-3 rainfall in the Great Lakes region and northern Plains was needed
• Increased
  rainfall in the southeastern states June 2-3 was not expected to verify

 

The
bottom line remains favorably mixed for many key U.S. crop areas with alternating periods of rain and sunshine over the next two weeks. The environment will support late season planting and early season crop development. A little too much rain may fall in
a few areas causing some delay to farming activity at times. Some dryness will continue to be a concern in the southwestern U.S. Plains and a part of the interior southeastern states will likely dry down over time.

 

 

SOUTH
AMERICA

• No
  significant changes occurred in the first week of the outlook
• GFS
  model reduced rain in southern and far western Brazil crop areas late next week
  • The
    change was needed, but rain will fall from Rio Grande do Sul northward to Parana and from that region to parts of western and southern Mato Grosso
• Rain
  was increased from Mato Grosso to southern Minas Gerais and Sao Paulo May 30-June 1
  • This
    increase was much too great and not likely to verify

 

The
bottom line did not change much for South America.  Argentina gets rain today and Thursday with dry weather during the following ten days to two weeks. The environment will be mostly good for summer crop harvesting and wheat planting, but rain is needed in
western and southern Argentina to improve soil moisture for wheat emergence and establishment. In Brazil, the same general theme is prevailing with rain occurring Thursday into Saturday from Rio Grande do Sul through western and southern Parana and Paraguay
to southwestern Mato Grosso and much of this same region will get rain again a week later. The moisture will be good for wheat and western Safrinha crops, but eastern Safrinha crops will have an ongoing need for greater rain.

 

 

EUROPE/BLACK
SEA

• Very
  little change was noted in the first week of the outlook; western Europe experiences little to no rain and warmer temperatures while rain will be greatest in southeastern Europe where the central and southern Balkan Countries will receive some significant
  rain over the next few days
• Rain
  was increased in central and eastern Europe late next week and again in eastern Europe in the May 30-June 1 period
  • Some
    of the increase will verify
• Rain
  was reduced in northwestern Russia late next week and increased in the May 30-June 1 period
  • These
    changes may verify
• GFS
  increased rainfall in the Balkan region and western Ukraine into Belarus, far northwestern Russia and the Baltic States June 2-3
  • Some
    of this was overdone

 

Western
Europe will experience net drying during much of the coming ten days and some models suggest it for two weeks.
The area of greatest concern will be in the United Kingdom, northern France, northwestern Germany, Belgium and Netherlands where net drying is already occurring and the ground may become too dry soon especially with temperatures
rising
above normal.
Periodic showers and thunderstorms from the Balkan Countries across Ukraine into portions of western and southern Russia will prove to be helpful in maintaining status quo crop and field conditions especially while temperatures are a little cooler than usual.
The environment will be mostly good for crop develop in the western CIS and will improve with greater rain in southeastern Europe during the next week to ten days.

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

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

 

USDA
announced their Coronavirus Food Assistance Program

https://www.farmers.gov/cfap

https://www.farmers.gov/cfap/non-specialty

 

 

 

 

 

 

EPA
to make a biofuel target recommendation announcement soon?

Bloomberg
reported the Environmental Protection Agency has drafted a plan to increase the US 2021 biofuel-blending targets.  It would require the use of 5.17 billion gallons of advanced biofuels in 2021 by refiners, up from 5.09 billion gallons for 2020; including 670
million gallons of cellulosic from 590 million this year.  Conventual ethanol was not noted in the article but for 2022 biodiesel, it was thought the initial target of 2.76 billion gallons would be recommended, up from 2.43 billion gallons in 2021.  Note the
EPA has until the end of November to make a final decision, so anything can change. 

 

Macros

 

 

Corn.

·        
Corn futures are lower on technical selling after futures rose higher over the previous three sessions.  Argentina and Ukraine were active in selling corn over the past day.  EIA is out later today, and the trade is looking for another
jump in output and consumption. 

·        
China corn futures fell to their lowest level since early March on talk of increasing import quotas and an upcoming corn sale out of reserves.

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

·        
A Bloomberg poll looks for weekly US ethanol production to be up 54,000 at 671,000 barrels (621-762 range) from the previous week and stocks to decrease 275,000 barrels to 23.915 million.

·        
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. 

 

 

Corn
Export Developments

• None
  reported

 

 

Soybean
complex.

• Soybeans
  are 6 cents higher on higher WTI and slightly lower USD. Soybean oil is slightly higher and SBM up more than $2.00.
  
• Soybeans
  might be getting a boost from ideas the US Covid farm package may encourage more late US corn plantings, but we think this will not affect late decisions. 
  
• July
  soybeans 50-day MA is at $8.5450, so some bull might be eying that target. 
  
• 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. 
  
• Rotterdam
  meal when imported from South America were mixed from this time previous session and vegetable oil unchanged to 2 euros lower. 
  
• Offshore
  values for the week were leading CBOT soybean oil 21 points higher and meal $0.80 higher. 
  

·        
China cash crush margins as of this morning, using our calculation, were 71 cents per bushel (72 previous) and compares to 77 cents a week ago and 75 cents around this time last year. 
Early
April crush margins were over $2.00. 

·        
Malaysian palm:

 

Oilseeds
Export Developments

• None
  reported

 

Wheat

• CBOT
  July Chicago wheat was higher early Tuesday, KC higher and MN higher. USD is slightly supportive for US wheat futures. 
  
• 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. 
  
• Harvesting of winter wheat across TX and OK is expected to slow
  in the coming days from rain showers. 
• Paris December wheat futures were up 0.25 euro to 187.25 euros
  earlier this morning.
• 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.

• 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