Soybean Morning Update & Commentary: Lower start but a big day ahead.
USDA Weekly Export Sales:
Est. (combined) Actual (old/new crop)
Corn .300-1.2 mmt .089 and .119
Wheat 200-600 tmt 497
Beans 50-800 tmt -120 and 127
Meal 50-250 tmt 24 and 48
Oil 0-20 tmt 1
Overnight grain markets traded weaker ahead of a slew of fresh data inputs for the markets to digest ranging from deliveries, weekly export sales, quarterly stocks and acreage, and the last session of the month/quarter where fund flows and have an increase influence. There were no corn or soy complex deliveries on first notice day while 1,658 srw and 1 hrw receipts came out. Weekly export sales were solid in wheat at 497 tmt but business was dismal elsewhere including corn sales of just 208 tmt, beans of -120 tmt in the old crop and +127 tmt in the new crop, meal 72 tmt, and oil 1 tmt. Quarterly stocks and acreage will be released at 11 am cst. Headed into the break, July beans are 5 lower, August 5 ½ lower, and new crop November beans are down by 8 ¾.
In the product trade, oil and meal are slightly weaker with oil gaining slightly in the oil share spreading. Board crush margins are mixed. Canola and Malaysian palm oil are also mixed. Outside markets feature crude oil trading $.50 lower with equities weaker and the dollar trading .30 higher.
Old crop bean sales were net negative 120 tmt - a marketing-year low - and down noticeably from the previous week and from the prior 4-week average. Increases primarily for the Netherlands (149, including 138 from unknown), Japan (49, including 48 from unknown), Canada (20), Costa Rica (17), and China (16, including 46 switched from Italy, 19 switched from unknown, and decreases of 66,000 MT), were more than offset by reductions primarily for unknown (288), Pakistan (55), and Italy (46). New crop sales of 128 were primarily for unknown destinations (70), Saudi Arabia (40), Barbados (7), Panama (6), and Indonesia (4).
Combined old crop soybean sales plus shipments marketing year to date now total 60.118 mmt or 2.209 billion bushels exceeding the USDA's marketing year projection of 2.170 billion bushels. China/unknown account for 5.762 mmt or 68% out of the 8.389 mmt remaining unshipped old crop commitments. There are 9 weeks remaining in the marketing year. New crop sales commitments total a record for this date of 13.498 mmt compared to 9.398 mmt this time last year - China/unknown account for 11.380 mmt or 84% mmt of these new crop commitments.
For the USDA reports at 11, the trade on average is estimating that beans lost around 400k acres from the March 31st report. Bean stocks on June 1 are estimated on average at 965 mb, well above last year's stocks of 769 mb.
In the news:
• Ahead of Friday's USDA monthly soybean crush report, analysts are expecting the May crush at 5.46 mln tons, that compares to the 5.43 mln tons in last month's report. End of May soyoil stockpiles are expected around 2.34 billion lbs compared to last month's 2.424 bln lbs. The data will be released at 2:00 pm CT.
• USDA census crush for May is expected to show crush of 181.9 mb on average, above the 180.9 mb processed in April but would be a fifth consecutive monthly decline in average daily crush rate. Oil stock are estimated at an eight-month low of 2.341 bln lbs, down from 2.424 bln bls in April.
• AmSpec Agri on Thursday estimated Malaysian June palm oil product exports at 1.179 mln mt down from their May export estimate at 1.361 mln mt.
• On Thursday, Intertek pegged Malaysian palm oil exports during June at 1.268 mln mt off -10.4% from their May export estimate
• Indonesian government officials say the administration is considering increasing the biodiesel mandatory blend rate to 35% from the current 30%, as a means to stimulate palm oil fruit purchases after exports have slowed.
• Top Argentina farm groups on said they will strike on July 13th and 14th to pressure the government to address the severe lack of fertilizers and diesel available to the ag industry.
• Survey of analysts, by reuters, released Wednesday shows they expect 22/23 Brazil soybean crop at 147.9 mln mt, that would be an increase of 20.0 mln mt over the prior year. They attributed the higher production forecast to better yields and larger expected planted acres.
• Survey of analysts, by reuters, released Wednesday shows they expect 22/23 Brazil soybean acres at 42.2 million hectares, if realized that would be 2.9% higher than this past season
• Grain traders Wednesday say Turkey announced a tender seeking 18,000 mt of Sunflower Oil, the offer deadline is July 5th. The vegoil is for delivery between July 20 to Aug 29t
• Russian media on Thursday reported the government may extende sunflower oil export duty from the end of 2022 to August 2023
• Ahead of today's USDA quarterly grain stocks data, analysts are forecasting as of June 1st Soybean stockpiles at 965 million bushels, that compares to March 1st stocks at 1.930 billion bushels, and the 769 mln bushels on June 1, 2021. The data will be released at 11:00 am CT, Thursday, June 30th.
• Analysts and traders expect 2022 US Soybean seeded acres at 90.45 mln, that compares to the March 31st forecast at 90.96 mln acres, and the 87.19 mln acres in 2021. The data will be updated on Thursday, June 30th at 11:00 am CT.
• In front of today's USDA small grains report, analysts are expecting US all Cotton planted acres at 12.19 million acres, that compares to the late March USDA forecast at 12.23 mln acres.
• Euronext Paris August rapeseed futures on Thursday are trading +2.50 euros higher at 701.75 euros/mt
• Dalian Sept soybean futures on Thursday traded -6 yuan lower ending at 5,996 yuan/mt; Sept soymeal futures rose +14 yuan ending at 3,901 yuan/mt
• Dalian Sept vegoil futures on Thursday traded lower, soyoil lost -48 yuan ending at 10,292 yuan/mt, palm oil lost 58 yuan ending at 9,546 yuan/mt
• Malaysian Sept crude palm oil futures on Thursday traded +9 ringgit higher ending at 4,912 ringgit/mt
• Malaysian cash offers for Aug/Sep RBD palm oil and olein on Thursday traded +$5/mt higher at $1267.50/mt and $1,270.00/mt, respectively
• CBOT Deliveries: corn 0, srw 1,658, hrw 1, beans 0, meal 0, oil 0.
• Outside markets. Crude Oil -73c ; Gold -$7.70 ; Silver -39.8c ; US $ index +35 pts
World Weather Inc. Morning Highlights:
• Low soil moisture remains in parts of the U.S. Midwest and timely rain will be extremely important over the next couple of weeks
o Most forecast models are offering some timely rain, but its distribution may not be ideally suited leaving some areas drier biased while others get a little boost in moisture
o Second week rainfall potentials seem higher than those in this first week, but confidence is low
• No excessive heat is expected in the heart of the U.S. Midwest for the next couple of weeks, but some hot weather will occur briefly in the Plains and far western Corn Belt today and Thursday briefly
• Most longer range forecasting models for North America are still keeping the ridge of high pressure moving around between the high Plains and the Mississippi River and its frequent movement and change in intensity will help provide a variety of weather in key crop areas
• West Texas cotton, corn and sorghum areas do not get good rainfall during the next ten days to two weeks and dryness will prevail, despite a few showers
• A good mix of rain and sunshine is expected in the U.S. Delta and southeastern states during the next ten days
• Tropical Low off the Texas coast will bring significant rain to some of the Coastal Bend crop areas over the next few days
• No changes occurred overnight in the potential Tropical Cyclone Two that is interacting with northern Venezuela today before turning toward Nicaragua and Costa Rica this weekend
o Torrential rain will impact Central America resulting in some flooding, but damaging wind should be limited
• Tropical Cyclones may also impact southern China, Taiwan, western Japan and the Korean Peninsula in this coming week
o Heavy rain and windy conditions will accompany each storm, but none of these will be strong enough to induce serious damage - at least not based on recent data
o Western Luzon Island, Philippines will also be impacted by rain associated with Tropical Storm Chaba, although that storm is located farther to the west in the South China Sea today and will reduce some of the rain in the Philippines
• Europe rainfall is expected to be restricted for a while which will lead to some net drying
• Dryness in Europe is greatest from Hungary and extreme southwestern Ukraine into Romania and Bulgaria and limited relief is expected in the southern part of the region
• Russia's Southern Region and far eastern Ukraine are expected to stay drier biased for the next two weeks, but temperatures will be mild to cool through the first week which may help conserve soil moisture and protect production potentials
o Warming late next week could heighten some concern for the region
• China's weather will be favorably mixed for a while with no dryness issues. Much of the nation is wet and would benefit from drying especially in the northeast and south
• India's monsoon will continue to expand and intensify over the next week to ten days
o Some needed rain will reach Gujarat and Rajasthan over time
• Central and eastern Queensland, Australia and northeastern New South Wales will get rain today into the weekend stalling fieldwork and saturating the ground
• Argentina will stay dry through the next two weeks in key wheat areas
US Gulf steady +77
Brazil Paranagua off 5 to +155
Sioux City, IA up 20 to +45q
Mankato, MN steady +20q
Decatur, IL steady +140q
Claypool, IN steady +50n
Columbus, OH steady +75q