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Oilseed Highlights

Grain markets soften Tuesday following a massive leg higher on Mondays trading session
- Mondays session was upon renewed fears of a “No Deal” amongst the two main Black Sea shippers
- Ukraine and Russia are leaving it to last minute once again to ratify another agreement ahead of Thursdays Deadline.
- Canola picked up massive ground on Monday but last weeks losses were enough to square up the crop at unchanged for the week.
- Canola and Minneapolis wheat only two contracts trading higher this morning.
- Wheat still clinging onto weekly gains although.
Turkish election took place over the weekend with needing a little extra time.
- The runoff election between Erdogan and Kilicdaroglu will take place May 28th with just the two candidates remaining as neither one got the required 50% of the vote to secure leadership this past Sunday.
USDA WASDE Released last week.
- USDA bumped global soybean imports into China back to 100mmt which was around the 2021 record number. Imports fell to 92 million and 96 million respectively.
- USDA also suggested that new crop 2023/24 soybeans in Brazil will be a mega 163 mmt, up from this years very large 155 mmt.
- Suggesting a 48 mmt Argentinian crop. This years crop is estimated at a dismal 25 to 27 mmt.
- Aside from weather issues, supplies could be higher, keep in mind that Argentina was expected to put out a 40+ mmt crop at the beginning of the year before extreme drought. So it is a moving target stick.
- Wheat, Corn and Soybeans global ending stocks all came in above last months report and traders estimates heading into the report. So heavier stocks are keeping a cap on markets.
  - Heading into the “New Crop” 2023/2024, stocks for soybeans are expected to grow a massive 21 mmt or 20% roughly.
  - Corn stocks expected to grow 16 mmt to 313 mmt
  - Wheat stocks expected to drop 2mmt to 264 mmt.
MATIF Rapeseed down 23 euro or 5.4% for the week. Keeping a cap on its Canadian counterpart.
Another thing of note, the European Rapeseed crop looks good. The crop is currently flowering in many areas of Germany and France and looks good. EU rapeseed markets will focus heavier on its domestic production for the near future.
Risk of drought extending into growing season across prairies.
- Crop is still very young yet and producers still need a week or two to wrap up planting in North America. Soil moisture reserves are limited in many regions and consistent rains will be needed to keep the crop maintained.
US Planting Progress:
- 65% of the corn crop in vs 59% avg
- 49% vs 36% soybeans planted vs avg
- 40% of spring wheat planted vs 57% average (spring wheat planting has been slightly delayed due to heavy moisture in North Dakota this spring and a late melt.)
Brazil farmers estimated to be around half sold their current harvested crop, compared to 67% on average.
European soil moisture looks good in Northern Europe and into most FSU regions.
- The EU rapeseed crop came sitting in relatively good condition and could be another year of good production if crop conditions remain strong into July harvest. Crop is well into flowering in many of the winter rapeseed regions.
- See JRC comments immediately below.
European Rapeseed crop estimated at 21.1 mmt vs 19.5 mmt last year.
Malaysia kept its export tax for crude at 8% for the month of May
Over 20% of Argentina’s soy crop has been harvested.
- Latest report shows that leading into harvest, only 3% of the crop had been listed in good or excellent condition.
March ABARES Quarterly update: (Next Quarterly Update June 6th)
- ABARES increased some production estimates for the crop that came off in December and into January.
- Canola production was given a boost to a record shattering 8.3 mmt. 6.82 mmt was the prior record set last year and prior to that, 2-4mmt were common crop sizes out of Australia.
- Australia has been filling gaps in Europe with cheap canola where Canadian crops have fit in recent years. Canola port price Australia around the $685 per tonne level vs $880 at Vancouver.
UPDATED AMIS GLOBAL CROP MONITOR: (SEE MAP BELOW)
- Relatively few areas of concern for oilseed production outside of South America. More to watch as we get into Northern Hemisphere growing season in April/May

USDA FAS OILSEEDS

Chinese Soy Import’s – USDA FAS Oilseeds

OILSEED TECHNICAL INDICATORS

July SOYBEAN OIL – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

July CANOLA – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

July PALM OIL – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

USDA WASDE DATA – May 2023

Special Crops

- US Grain Stocks March 1st:
  - Durum: 35.8 million bushels up 18% from 1 year ago
  - Barley: 88.7 million bushels, up 22% year over year
  - Oats: 42.9 million bushels, slightly below last years stocks. Of these stocks, on farm stocks were up 26% from 1 year ago while off farm stocks were down 12% year over year.
- US lentil acres expected to be down over 20% year over year.
- February exports of lentils from Australia set a monthly record.
- Spain, France and Italy durum production regions very dry. Spain is in worst shape. North African crop looking dry as well.
- US Pea Acreage expected to climb 9%
- Some analysts, in contrast, looking at a pea acreage drop in Canada for the year ahead.
- Poor Conditions in Northern African Durum production regions.
- Australian pea crop raised to 314,000 tonnes. Up 20% year over year
- ABARES Lentil crop size updated to 1.4 mmt from 1.05 mmt in their December update and 1 million tonnes last year.
- Early indications point towards more peas from the Black Sea region due to lower capital costs to plant.
- Canadian Flax offers into China still holding a price premium to Kazakh or Russian flax.
- 2023 EU Durum crop is forecasted to be upwards of 7.8 million tonnes. Which could be largest in over 5 years.
- Flax exports from Russia hit a record 975,000 tonnes in 2021/22
  - Russia has been flooding several markets with Flax this year so far as well and it is hurting North American export prospects.
- European Durum crop expected at to 6.9 mmt, 800,000 tonnes lower than last years production.
- Canadian Durum crop is high quality, over half as a #1.
- Canadian flax exports are slower, larger than expected ending stocks come in. Most since 2017/18

North American Soil Moisture – Year over Year

RUSSIA WEATHER ANOMALY – PAST 30 Days

Grains

Markets all watching for any word on the possible renewal of the Black Sea grain deal.
- Markets putting a high probability that it will renew as usual but there is a chance of doing otherwise. As of Tuesday morning, no official word has been received either way, leaving the markets unsure of what is taking place. Key date remains Thursday May 18th to see if we have a go on a deal extension
- Russian wheat exports have been coming in lower and just posted the worst week since February.
US Hard Red Winter Wheat tour began today, wraps up on Thursday Afternoon in Manhattan, Kansas.
- This will be the first real industry, non public, US winter wheat tour of the year. Expect the market to be watching this one closely.
US corn crop is 65% planted vs 59% average
Some dry areas appearing in Corn and Soybean belt. Take note in the maps above. Not a lot of rain forecasted this week other than a few tenths here and there in the corn region
US winter wheat region set to receive a bit more rain of actual quantity.
- Winter wheat is 49% headed. Once headed the kernels are set, one can only maintain fill and quality from this point forwards.
US planting is ahead of pace for corn and soybeans. Market placing little risk premium into planting with US crops as appears to be relatively open planting windows ahead.
Spring wheat facing some drought concerns on the outliers of production regions in United States. Canadian drought regions are growing in size and little precipitation is in forecast for the week ahead.
Private analysts have Russia’s 2023 wheat crop at around 85 mmt, this past years crop was estimated to be at well over 100 mmt. 85 mmt would be back to a “normal” production number.
China and Australia have reached a deal upon the ongoing Barley dispute a few weeks ago. Removal of the 80.5% import duty is to be dropped on imports going forwards.
Both Old and New crop Barley bids in North America have softened in recent weeks.
Ukrainian wheat production expected at 17 mmt down from last years 21 mmt and down from 25 mmt in 2020
Russian wheat exports to approach record high in April.
- Outstanding sales are at a several month low due to Russian exporters trying to place a bottom on their crop prices of $275 per tonne. Although appears to have dropped below that now. Lowest volume since November.
UPDATE: Runoff election to take place May 28th. Turkish election is set to take place May 14th, 3 days ahead of the Russian Ukraine export corridor negotiations. Keep in mind that Turkey is the nation that helps barter the Black Sea grain deal with the UN and all grains leaving the black sea need to sail through Turkish waters.
- It will be a tough election for the current government to win, with current leader Erdogan facing ongoing health issues in the weeks ahead of the main election.
Indian wheat estimated at 108mmt by the USDA while the Indian government sits at 112-114 mmt.
March ABARES report stated a record smashing 39.2 mmt crop being reported. 14.1 mmt barley crop as well, 3rd largest on record.
- Wheat crop is 2.6 mmt larger than the December report.
- 36.7 mmt crop size last year.
- 24.2 mmt five year average