FI Evening Grain Comments 01/10/23

PDF Attached

 

Private
exporters reported sales of 174,181 metric tons of soybeans for delivery to Mexico during the 2022/2023 marketing year.

 

Mixed
to lower trade in CBOT agriculture markets. Expiring January soybeans and meal ended higher. Rest of the complex was lower. Corn was mixed on bull spreading. US wheat futures sold off from Black Sea competition. March palm oil futures in Malaysian fell more
than 3.5 percent overnight on poor exports for the start of 2023 and lower than expected December exports. MPOB S&D data did show end of December palm oil stocks smallest since August to 2.19 million tons, but December exports fell more than expected, off
3.5% from November to 1.47 million tons. Egypt booked 60,000 tons of wheat. 120,000 was expected to be finalized.

 

 

Weather

Californians
are facing another round of flooding and power outages today.

https://origin.wpc.ncep.noaa.gov/discussions/hpcdiscussions.php?disc=pmdspd

 

 

 

The
morning weather outlook for Argentina was slightly less favorable than that of yesterday while the US Midwest improved. Argentina will see light rain across La Pampa, Cordoba, BA and northern Santa Fe today through Thursday, before drying down Friday. The
far southern areas will see restricted rain while the central areas should improve. Rain will fall across Mato Grosso, Goias, MGDS, Sao Paulo and lesser extent Parana, Santa Catarina, and Rio Grande do Sul. The far western Great Plains will see a wintery mix
mid this week while other areas of the GP will remain dry. Light precipitation will fall across south central and east central of the Midwest Wednesday through Thursday, and southeastern areas later this week. This should be beneficial for winter crops. US
Midwest temperatures will be mild through Thursday. Well above average temperatures will build into the southern Plains. Rain should favor many central and eastern European countries this week.

 

 

World
Weather, INC.

MOST
IMPORTANT WEATHER FOR THE COMING WEEK

• North
  Africa still has a big need for rain, but the situation is not a crisis yet because of winter crop semi-dormancy across the region
• A
  boost in soil moisture will be needed in February and March to stimulate new crop development and to support the best possible yield potentials
• Eastern
  Spain and the lower Danube River Basin in Europe are still carrying moisture deficits from last year, but with winter crops dormant today there is not much urgency in fixing the deficits
• Europe
  is expecting a stormier weather pattern this weekend and next week in particular with larger precipitation events and bouts of strong wind possible
• Soil
  moisture is adequate to abundant across much of the central and north and further increases in moisture are expected
• Russia’s
  New Lands experienced another bitter cold morning today with lows in the -40s and -30s with a few -20s in wheat country; however, snow cover was present to ensure adequate wheat protection against the cold
• Warming
  is likely in western Russia and Ukraine the remainder of this week with slowly increasing wind and precipitation expected over time
• Eastern
  winter crop areas in Russia and Ukraine will not see much precipitation this week, although it will not be completely dry
• Warming
  is expected and precipitation will develop more significantly in time from northwestern Ukraine, Belarus and the Baltic States to northwestern Russia
• The
  greatest precipitation is expected this weekend and next week
• Argentina
  is not expecting drought busting rain for a while, but some welcome rain will fall in the north benefiting cotton and minor grain and oilseed crops late Wednesday and especially Thursday
  
• Additional
  rain will be needed in the north, but temporary improvements are likely
• Central
  and southern Argentina are not likely to get much meaningful rain for at least a week
• Some
  increase in shower activity is expected during the second half of next week with 0.20 to 0.75 inch of moisture possible
• Buenos
  Aires will be driest
• Most
  of Brazil will experience waves of rain during the next week to ten days and the moisture that results will be good for most crops
• There
  has been some discussion in the marketplace about too much moisture in a part of center west and center south Brazil
  
• Some
  of that concern is real, but with less rain intensity and frequency possible next week the concern may be put down for a while
• Early
  harvesting has begun for soybeans and the process will slowly ramp up over the next few weeks
• Some
  Safrinha planting of corn and cotton has also begun and it will continue for a while during the next few weeks
• A
  boost in rainfall for far southern Brazil will be good for some of the drier areas of Rio Grande do Sul, Paraguay and Parana
• China
  rain and snow that develop later this week and into the weekend in east-central and southeastern crop areas will prove to be timely and beneficial
• Winter
  crops are still dormant, but wheat and rapeseed will benefit from the moisture
• Australia
  summer crop areas in southern Queensland and parts of New South Wales would benefit from greater rain
• Dryland
  western production areas in Queensland need rain more than any other area today and not much is expected for a while
• Rain
  will be increasing in central through northern Queensland crop areas during the next week to ten days benefiting sorghum and minor cotton areas as well as sugarcane
• South
  Africa will receive very little rain during the next few days and then some showers will begin late this weekend into early next week in south-central and southeastern parts of the nation
  
• The
  precipitation may be a little erratic and light for a while raising the need for greater rainfall later this month and into February
• India’s
  weather will be wettest in the far north from Uttarakhand northward to Jammu and Kashmir during the next week to ten days
• The
  moisture will be good for wheat and other winter crops, but many other areas in India will likely stay dry or mostly dry raising the need for significant rain
  
• Southeast
  Asia (Indonesia and Malaysia in particular) rainfall has diminished greatly because of the suppressed phase of Madden Julian Oscillation and that will continue for a little while longer
  
• Soil
  moisture will decrease for a while until rainfall increases again which may not occur until late this month
• Totally
  dry weather is unlikely, and the showers expected will help slow drying rates and key crop conditions very good
• California
  and some western portions of Washington and Oregon will experience frequent rain and mountain snowfall during the next week
• Substantial
  precipitation is still expected in California’s central and north resulting in some rising flood potentials near the coast and in much of the Sacramento Valley
• Heavy
  mountain snowfall will raise the snowpack further above normal raising the spring and summer runoff potential
• The
  state will need this wet biased pattern to last into spring to make a huge difference in long term drought
• Other
  U.S. Great Basin, Pacific Northwest and northern Rocky Mountain areas will also experience above normal precipitation in the coming ten days raising mountain snowpack for better runoff in the spring
• Drought
  remains, but should be eased
• U.S.
  Midwest precipitation will begin increasing late this week through all of next week
  
• Central
  and eastern areas will be wettest
• Temperatures
  will be above normal through the next two weeks
• U.S.
  Delta and Tennessee River Basin will be plenty moist for a while with waves of precipitation expected through the next ten days to two weeks
• Temperatures
  will be warmer than usual
• U.S.
  hard red winter wheat areas in the central and southwestern Plains are unlikely to see much precipitation over the next ten days to two weeks
• Some
  moisture will impact parts of the region, but resulting amounts should be light and sporadic having no impact on drought status
• West
  Texas crop areas will not likely see much precipitation over the next ten days to two weeks
• Texas
  Blacklands and Coastal Bend will get a few showers in the next two weeks, but no general soaking is expected
• South
  Texas precipitation will be quite limited for a while
• Northern
  U.S. Plains, Canada’s Prairies precipitation potentials will be low for the next ten days and then there may be some increase later this month
• Some
  precipitation is expected briefly during mid-week this week, but resulting amounts will not have much impact on the region overall
• Very
  warm temperatures will continue in North America over the next week to ten days
• Some
  cooling is expected in late January and February
• Western
  Turkey will receive some needed rain and mountain snow the remainder of this week while central and eastern parts of the nation are relatively dry
• Most
  of the wheat and other winter crops are rated favorably due to good autumn precipitation, but there is need for greater precipitation in all of the nation
• Middle
  East rainfall is expected to be favorably mixed over the next ten days although the resulting precipitation should be mostly light to locally moderate
• Some
  rain will return to central and eastern Turkey next week ending a ten day period of dry weather
• Iraq
  and Syria will not get much precipitation for a while and the same may occur in Jordan and few neighboring areas
  
• East-central
  Africa precipitation is expected to be abundant in Tanzania over the next ten days to two weeks while that which occurs in Uganda, southwestern Kenya and Ethiopia is more sporadic and light.
  
• Coffee
  and cocoa conditions should remain favorable in all production areas, despite the anomalies
• West-central
  Africa dryness will continue through the next ten days to two weeks
• Dry
  conditions are normal at this time of year
• No
  excessive heat is expected in this coming week, although warmer than usual conditions may begin to evolve a week from now and continue into January 18.
  
• Eastern
  Philippines received some locally heavy rain Monday with amounts of 3.00 to nearly 10.00 inches over Samar Island
• Some
  additional heavy rain is possible in the region today and Thursday
• Vietnam
  central and lower coastal areas may receive bouts of rain in the coming week with some of it possibly reaching into the Central Highlands
• Light
  showers were noted in these same areas Monday and early today
• Today’s
  Southern Oscillation Index was +20.982 and it will likely begin weakening this week and could fall more significantly for a while later this month

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Tuesday,
Jan. 10:

• Malaysian
  Palm Oil Board’s Dec. data on stockpiles, production and exports
• Malaysia’s
  Jan. 1-10 palm oil exports
• EU
  weekly grain, oilseed import and export data

Wednesday,
Jan. 11:

• EIA
  weekly US ethanol inventories, production
• New
  Zealand Commodity Price

Thursday,
Jan. 12:

• USDA’s
  World Agricultural Supply & Demand Estimates (WASDE), 12pm
• China’s
  agriculture ministry (CASDE) releases monthly supply and demand report
• International
  Grains Council report
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans
• Net-export
  sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports

Friday,
Jan. 13:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Soybean
and Corn Advisory

2022/23
Argentina Soybean Estimate Lowered 2.0 mt to 41.0 Million

2022/23
Brazil Soybean Estimate Unchanged at 151.0 Million Tons

2022/23
Argentina Corn Estimate Lowered 1.0 mt to 45.0 Million

2022/23
Brazil Corn Estimate Unchanged at 125.0 Million Tons

 

CBOT
December 2022 Agricultural Options Review

https://www.cmegroup.com/newsletters/agricultural-options-update/ag-options-monthly-update-december-2022.html?utm_source=cmegroup&utm_medium=email&utm_campaign=ag_options_2023&utm_kxconfid=vpwpdpbbo#.Y72e5eU3rm8.linkedin

 

Macros

102
Counterparties Take $2.193 Tln At Fed Reverse Repo Op (prev $2.199 Tln, 103 Bids)

 

US
Wholesale Inventories (M/M) Nov F: 1.0% (est 1.0%; prev 1.0%)

–
Wholesale Trade Sales (M/M) Nov: -0.6% (est 0.2%; prev R 0.4%)

 

EIA
STEO Current Yr Crude F’cast (Bpd) Jan: 12.41 (prev 11.87)

–
Forward Yr Crude F’cast (Bpd): 12.81 (prev 12.34)

–
Current Yr Dry NatGas F’cast (Bcf/d): 100.34 (prev 98.13)

–
Forward Yr Dry NatGas F’cast (Bcf/d): 102.29 (prev 100.38)

 

Corn

·        
CBOT corn futures
started
lower but turned higher on corn/wheat spreading and bottom picking after the nearby contract hit a three week low (technical buying). The front three months ended higher and back months lower. Some noted the poor state of corn conditions north of BA in Argentina,
where a good amount of the corn is in the silking stage.

·        
There was talk the spread between spot South America and US corn is narrowing, so traders are becoming more optimistic US corn exports will increase over the medium term with Brazil starting to run out of exportable supplies ahead
of their new crop, second crop, harvested around June.

·        
Look for positioning Wednesday ahead of the USDA reports.

·        
The trade is looking for US exports to be revised lower by 25 to 50 million bushels, and its possible USDA may lower corn for ethanol by 25 million bushels. We are unsure if USDA will decrease their export projection.

·        
Anec: Brazil January corn exports seen reaching 5.024 million tons vs. 4.326 million tons week ago.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 115,000 thousand barrels to 959k (944-995 range) from the previous week and stocks down 130,000 barrels to 24.313 million.

 

Export
developments.

·        
Taiwan’s MFIG bought about 65,000 tons of corn from South America for February 10 and March 1 shipment at an estimated $339.79/ton c&f.

 

 

Updated
01/03/23

March
corn $6.35-$7.10 range. May
$6.25-$7.25

 

Soybeans

·        
CBOT soybeans,
meal and soybean oil traded lower as longs lifted positions ahead of the USDA report. Expiring January soybeans and soybean meal ended higher. March soybean oil finished down 78 points. Argentina and southern Brazil are set to see some rain this week, but
some crops in Argentina are past the stage to see a significant improvement in yields.
Soybeans saw pressure from lower SBO, rising Covid concerns with outbreaks across China renewing demand concerns, and slowing USDA soybean export inspections.

·        
US domestic soybean meal was unchanged to mixed on Tuesday from Monday.

·        
March palm oil futures in Malaysian on Tuesday fell more than 3.5 percent overnight on poor palm exports for the start of 2023 and lower than expected December exports.

·        
MPOB S&D data did show end of December palm oil stocks smallest since August to 2.19 million tons, but December exports fell more than expected, off 3.5% from November to 1.47 million tons.

·        
Anec: Brazil January soybean exports seen reaching 1.969 million tons vs. 1.314 million tons week ago.

·        
Anec: Brazil January soybean meal exports seen reaching 1.403 million tons vs. 1.337 million tons week ago.

 

USDA
Attaché on Brazil soybeans: 153MMT production (1 MMT above USDA) and 51.5MMT crush.

Note:

·        
Only 0.4 percent of the soybean crop had been collected as of late last week, compared to 0.2 percent previous year. 2.3 percent of the center-south crop had been collected, below 3.1% this time year ago.

·        
Some trade estimates are near 151 million tons for production.

 

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Brasilia_Brazil_BR2022-0070

 

Export
Developments

·        
Turkey seeks about 24,000 tons of sunflower oil on January 13 for February 15 to March 20 delivery.

·        
USDA reported private exporters reported sales of 174,181 tons of soybeans for delivery to Mexico during the 2022-23 marketing year.

 

 

 

Updated
01/07/23

Soybeans
– March $14.60-$15.50

Soybean
meal – March $465-$525

Soybean
oil – March
59.00-70.00

 

Wheat

·        
US wheat futures traded lower in part to uncompetitive US export prices. Chicago wheat hit a 15-month low and Paris wheat hit a 10-month low on Tuesday. Egypt received offers for wheat and Black Sea was cheapest. India may see
a record wheat crop, adding to the list of large supplies by Australia and Russia.

·        
The Indian Institute of Wheat and Barley Research told Reuters that the 2023 India wheat production could reach a record 112 million tons versus 106.84 million tons a year ago and 109.59 million for 2021. Higher yield variety
seeds and favorable weather have favored early crop establishment.

·        
Interfax Russia reported five ships left Ukraine over the past three days carrying 158,550 tons of foodstuff as part of the Grain initiative. 17 million tons have been exported since the beginning of August under the initiative.

·        
IKAR reported wheat prices for Russian 12.5% protein from Black Sea ports were around $306 per ton for FOB delivery in the first half of February, near unchanged from late December.

·        
China gave local companies the green light to pursue trade with Australia as political relationships improved. They already resumed coal import and are looking for Australia to drop complaints at the World Trade Organization on
Chinese tariffs on wine and barley.

·        
Pakistan received a shipment of Russian wheat. It arrived in Karachi city of the southeastern Sindh province. Pakistan aims to import 750,000 tons of Russian wheat by March 30.

·        
China will auction off 140,000 tons of wheat from reserves on January 11. The sale includes 100,000 tons bought in 2015, 2016 and 2017 under its minimum purchase price policy, and another 40,000 tons of 2014 and 2015 wheat from
its temporary reserve. (Reuters)

·        
Anec: Brazil January wheat exports seen reaching 446,105 tons vs. 280,715 tons week ago.

 

 

Export
Developments.

·        
Egypt bought 60,000 tons of wheat via World Food Bank for February 10-25 shipment. 120,000 tons is expected to be finalized. Lowest offer was $337/ton C&F. 6 Russian offers were presented, one Romanian and one French. Russia was
lowest offer. Reuters table:

·        
Turkey seeks 565,000 tons of milling, including red, wheat on January 12 for February through March shipment.

·        
Taiwan is in for 45,200 tons of US wheat on January 13 for March shipment. Wheat types sought include dark northern spring, hard red winter and white wheat.

·        
Japan seeks 89,735 tons of food wheat later this week.

 

Rice/Other

·        
Russia extended their ban on rice exports through June 30. It applies to exports outside of the Eurasian Economic Union (EAEU). There are no restrictions on exporting these products to other EAEU countries.

·        
Vietnam’s coffee exports in December were up 53.5% from the month before at 197,077 tons. For 2022, Vietnam exported 1.78 million tons of coffee, up 13.8% from a year earlier.

·        
(Bloomberg) — US 2022-23 production seen slightly lower than USDA’s previous estimate, according to the avg in a Bloomberg survey of eight analysts.

-Production
seen down 96,000 bales, while exports seen down 131,000 bales

-Ending
stocks seen mostly unchanged at 3.5m bales

-World
production seen down by 151,000 bales

 

Updated
01/04/23

Chicago
– March $7.00 to $8.25

KC
– March 8.00-$9.40

MN
– March $8.50 to $9.75