-Canadian spring wheat area lowered from previous expectations
-Indian planting activity extremely fast amid excellent monsoon rains
-South Korea buys South American corn
-More US rains ahead of warmer/drier period
-USDA reports tomorrow – trade estimate summary included
USDA’s Grain Stocks and Acreage reports will be out tomorrow at 11.00 AM CT. Our pre-report commentary/analysis can be found on Market Insights at https://portal.rjobrien.com/MarketInsights/Blog/Read/40539. A summary of the average trade estimates in on the following page. Tomorrow is first notice day for July deliveries. Grain markets will have an early close on Thursday at 12:05 PM CT and be closed on Friday for the Independence Day holiday.
Statistics Canada reported all wheat planted acreage at 24.97 million acres, slightly below the average trade estimate of 25.2 million acres (24.2-25.8 million range of ideas) and down modestly from 25.4 million previously estimated, but still up slightly from 24.6 million last year. Durum area was estimated at 5.7 mil acres vs the average trade estimate of 5.5 mil acres (5.0-5.8 mil range) and was up from 5.2 mil previous and 4.9 mil last year. Spring wheat area was put at 17.93 million acres, down from 18.77 million previously estimated and 18.78 million last year. Canola area was estimated at 20.78 mil acres, in line with the average estimate of 20.7 million (20.1-21.3 mil range) and compared to 20.6 mil previously and 21.0 mil last year, while oats area was put at 3.84 mil acres vs 3.9 mil expected (3.7-4.2 mil range) and 3.8 mil in previously/3.6 mil last year. Barley area was higher than expected at 7.50 mil acres vs the average estimate of 7.2 mil acres (6.7-7.4 mil range)
and up from 7.2 mil previously and 7.4 mil last year, with soybean area put at 5.07 mil acres vs 5.3 mil expected (5.2-5.4 mil range) and 5.2 mil previously/5.7 mil last year, while corn was estimated at 3.56 mil acres vs 3.6 mil expected (3.5-3.9 mil range) and 3.8 mil previously/3.7 mil last year.
India’s rapid monsoon rains advancement has spurred a very fast and strong start to this year’s planting activity with total oilseed planted area already reaching 8.33 million hectares (20.6 mil acres) as of Friday vs only 1.33 mil hectares (3.3 mil acres) planted at the same time last year. Coarse grains planted area reached 4.79 mil hectares (11.8 mil acres) vs 2.44 mil hectares (6.0 mil acres) last year, while cotton planted area hit 7.16 mil hectares (17.6 mil acres) vs 2.70 mil hectares (6.7 mil acres) so far last year.
French ag consultant Agritel put the Ukrainian wheat crop at 26.25 MMT following a June 15-19 crop tour, comparable to the USDA’s latest estimate of 26.5 MMT, but down from last year’s 29.2 MMT. They see wheat export potential at 17.8 MMT (USDA 17.5 MMT/20.5 MMT last year), but may be limited by the Ukraine’s decision on this year’s export memorandum to be provided in July.
Sovecon estimates Russian wheat exports in June were 350k tonnes vs 1.075 MMT last year and down from 1.5 MMT in May, putting 2019/20 total wheat exports at 33.75 MMT vs 35.28 MMT last year.
Algeria tendered for an unspecified amount of milling wheat for September shipment (Aug if South American), with offers due by tomorrow. A South Korean feedmill tendered for 70k tonnes of feed wheat for Oct-Nov shipment.
South Korean feedmills bought 60k tonnes of South American corn at $189.97/tonne c&f for August shipment, with another 66k tonnes bought at $184.22/tonne c&f to be sourced from South America or South Africa for Aug-Sept shipment.
Friday afternoon’s CFTC Disaggregated COT data for futures/options combined for the week ended 6/23/20 showed fund modestly adding to their net short in corn by 6.7k contracts to 277.5k (record net short is 322.2k), while also being net sellers in CBOT wheat of 18.0k contracts (net short 48.3k) and KCBT wheat of 9.8k contracts (net short 37.3k). Funds were net buyers in the soybean complex of 23.1k contracts in soybeans (net long 44.3k), 4.1k SBO (net short 0.7k) and 2.2k SBM (net short 46.0k). Funds were also net buyers in MPLS wheat of 3.2k contracts, reducing their net short to 13.9k contracts.
Rains fell across all but the NW ½ of MN over the weekend. Totals were in the .65-1.2” range in most cases, with 1-2” totals occurring in SE IA, northern and eastern IL, southern WI and central IN. Waves of showers and thunderstorms look to bring combined totals of .75-1.5”, with areas of 1.5”+, to the eastern 1/3 to ½ of IA, the eastern ½ of MO, most of WI, IL and IN, as well as the far SW corner of OH though Wednesday of this week. Totals in MN and western IA look to be in the .50” range or less and little to no rains are seen for MI and much of OH. The 6-10 day period shows ridging to build in and bring limited rains to much of the region. There will be some shower and thunderstorm activity across the northern side of the ridge, but the models differ on the amounts and coverage, with the GFS indicating totals of .65-1.35” in areas north of I-80, while the European indicates little in the way of rains anywhere. The 11-16 day period shows the ridging to continue, bringing average to below average rainfall to the north of I-80, with below average rains south. Temps look to run above average, although widespread severe heat (95 deg. F) would not occur, just pockets of it from time to time.