FI Morning Grain Comments 06/02/20

 

PDF attached

 

Morning. 
China bought at least three cargoes of US soybeans Monday for Q4 out of the Gulf and PNW.  WTI was up about $0.90 earlier this morning after Russia and other members were said to favor a 1-month extension to OPEC+ cuts. USD was 25 lower.  Taiwan is in for
corn and Jordan for wheat.  US soybean oil stocks were reported well above trade expectations. 

 

 

 

 

 

 

 

 

 

 

 

Weather

 

Source:
World Weather Inc. and FI

 

Source:
World Weather Inc. and FI

 

Seven-day
outlook:

 

Bloomberg
Ag Calendar

TUESDAY,
June 2:

• U.S.
  Purdue Agriculture Sentiment, 9:30am
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data (delayed because of holiday)

WEDNESDAY,
June 3:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• China’s
  CNGOIC to publish monthly forecast on crop output, supply and demand
• EARNINGS:
  Tereos

THURSDAY,
June 4:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, 8:30am
• FAO
  world food price index, 4am
• Port
  of Rouen data on French grain exports
• New
  Zealand commodity price

FRIDAY,
June 5:

• 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
• Malaysia’s
  palm oil export data for June 1-5

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
499,353         versus   350000-600000  range

Corn             
1,128,091     versus   800000-1200000                range

Soybeans   
396,387         versus   350000-600000  range

 

Macros

 

 

Corn.

• Corn
  futures
  were unchanged to slightly higher early on lower wheat and higher soybeans. The improvement in US corn conditions and improving US weather could send prices lower.   Temperatures will warm up to above normal this week across the Corn Belt this week which is
  what the corn crop needs for establishment and growth. 
• USDA
  reported US corn conditions at 74 percent, up 4 points from the previous week, 3 points above an average trade guess and 3 points above average. 
  
• FC
  Stone lowered their Brazil winter corn crop estimate to 71.4 million tons from 72.6 million last month. Total production was seen at 98.8 million tons, down 1.2 percent from their May estimate. 
  
• CBOT
  corn open interest was up 14,498 contracts on Monday.  Yesterday funds sold 9,000 lots. 
  
• USDA
  US corn export inspections as of May 28, 2020 were 1,128,091 tons, within a range of trade expectations, above 1,097,249 tons previous week and compares to 744,840 tons year ago. Major countries included Japan for 443,160 tons, Mexico for 226,930 tons, and
  Korea Rep for 136,964 tons.
• Soybean
  and Corn Advisor:
  • 2019/20
    Brazil Corn Estimate Unchanged at 96.0 Million Tons
  • 2020
    Argentina Corn Estimate Unchanged at 49.0 Million Tons

 

Corn
Export Developments

• Taiwan’s
  MFIG seeks up to 65,000 tons of corn (US, Brazil, Argentina or South Africa) on June 3 for Sep-Oct shipment.
  

 

 

USDA
NASS reported the April corn for ethanol use at 245 million bushels during April, below 410 million during the month of March, and also well below 410 million during April 2019.  DDGS production dropped to 1.014 million short tons from 1.858 million year
earlier.  Sorghum use was about halved from a year ago. 

 

 

Soybean
complex.

• Follow
  through buying was seen in the soybean complex today after China bought at least three cargoes of US soybeans and US soybean planting pace of 75 percent as of Sunday came in 4 points below expectations.  A great start to US soybean crop conditions of 70 percent
  may limit gains, and possibly create a two-sided trade if the USDA 24-hour announcement system fails to yield Chinese buying.  We thought soybean oil would be lower today after USDA reported soybean oil stocks at their highest level since April 2018.  The
  products were higher early led by soybean oil.  Vegetable oil prices in general are higher. Argentina soybean oil reached $653/ton, a three-month high. India continues to support palm oil, up over 2% basis the futures today.  Lower crush estimates for SA are
  supporting the CBOT complex in general. 
• The
  US will see a drier bias in many areas over the coming week with temperatures warmer than usual.
  
• USDA
  US soybean export inspections as of May 28, 2020 were 396,387 tons, within a range of trade expectations, above 342,571 tons previous week and compares to 510,482 tons year ago. Major countries included Egypt for 136,878 tons, Indonesia for 72,619 tons, and
  Japan for 64,903 tons.
• Brazil
  May soybean exports reached 15.5 million tons versus 10 million for March 2019. 
  
• Yesterday
  Rotterdam was on holiday.  This morning soybean oil was up 20 euros, rapeseed oil unquoted, and soybean meal when imported from South America mixed. 
  
• Offshore
  values this morning were leading CBOT soybean oil 31 points higher and meal $1.50 higher. 
  

• China
  

• China
  cash crush margins as of this morning, using our calculation, were 76 cents per bushel (67 previous session) and compares to 67 cents a week ago and 79 cents around this time last year. 
  
• India’s
  Indian Vegetable Oils Producers’ Association (IVPA) projected vegetable oil imports in June could rise to 1.14 million tons, up from an average of 865,000 tons during April-May.
• Malaysian
  palm:
  Higher on expectations for May production of palm oil to decline from April. 
  

• Soybean
  and Corn Advisor:
  • 2019/20
    Brazil Soybean Estimate Unchanged at 121.0 Million Tons
  • 2020
    Argentina Soybean Estimate Unchanged at 50.0 Million Tons

 

Oilseeds
Export Developments

• Today
  the USDA seeks 12,500 tons of packaged vegetable oil for July shipment. 
  
• The
  CCC under the PL 480 program seeks 5,000 tons of vegetable oils in 4-liter cans for July-September shipment on June 3. 
  

 

NASS
crush report

• USDA
  reported the April 2020 soybean crush at 183.4 million bushels, 0.4 bushel below trade expectations, below 192.1 million during March and above 171.5 million for April 2019.  The daily crush rate was 6.11 bushels per acre, second largest behind the record
  established during March of 6.20 million bushels per day.
• US
  soybean oil stocks at the end of April were reported at a very large 2.602 billion pounds, 190 million above trade expectations, 274 million above the previous month and 344 million above April 2019.  Last month US soybean oil stocks were near this level were
  April 2018 of 2.869 billion bushels.  The April soybean oil yield was 11.45, up from 11.46 pounds previous month.  Implied soybean oil use during April, even with the extra day, was much less than expected. 
  
• US
  soybean meal stocks at the end of April fell to 386,000 short tons from 415,000 short tons.  The meal yield was unchanged from the previous month at 47.03 pounds per bushel from the previous month and compares to 46.90 pounds a year ago. 
  

 

 

Wheat

• Wheat
  was lower in the US on a weather forecast calling for more rain this week across the Black Sea region, but priced paired some losses after Paris reversed to trade higher by 6:40 CT. 
  
• Results
  are awaited on Egypt’s wheat import tender.  Lowest offer was $210/ton for Ukraine wheat.  Note the freight is not part of this quote. 
  
• Paris
  December wheat futures were up 0.25 euro early this morning at 189 euros.
• Federal
  Customs Service data showed Russia exported 600,000 tons of wheat during May to bring season to date exports to 31.6 million tons. 
  
• ProAgro
  raised their Ukraine wheat crop to 26.65 million tons from 25.36 million and increased corn to 37.59MMT from 37.3MMT. 
  
• USDA
  US all-wheat export inspections as of May 28, 2020 were 499,353 tons, within a range of trade expectations, above 464,857 tons previous week and compares to 593,137 tons year ago. Major countries included China Main for 189,001 tons, Philippines for 79,745
  tons, and Nigeria for 38,502 tons.
• India
  started evacuating parts of the west coast as a cyclone approaches Mumbai.  Landfall is likely Wednesday afternoon. 
  

 

Export
Developments.

• Egypt seeks wheat for July 10-25 shipment. 
  
• Jordan’s state grains buyer seeks 120,000 tons of optional origin hard milling
  wheat on June 3.
• Syria looks to sell 100,000 tons of feed barley.  Offers are due June 23. 
  

 

Rice/Other

• The Philippines seeks 300,000 tons of rice on June 8.