FI Evening Grain Comments 01/13/23

PDF Attached

 

The
soybean complex ended mixed, with soybeans higher and products lower. Corn finished higher on follow through buying and wheat closed mixed. CBOT agriculture products open at 7:00 PM CT Monday.
https://www.cmegroup.com/trading-hours.html#foi=F&tradeDate=2023-01-16&pageNumber=1&sortBy=name&subGroups=5

 

 

Weather

Largely
unchanged SA and US weather forecast updated Friday. Argentina will see some light rain across Cordoba and Santa Fe through early today before dry weather sets in through Tuesday. Argentina may see rain late next week. Brazil will see rain favoring Mato Grosso,
Goias, Mato Grosso do Sul, Sao Paulo, Parana, Santa Catarina, and the dry southern state of Rio Grande do Sul. Brazil’s west central and southern areas will generally see good rain through early next week. The US Midwest will see snow across the northwest
Monday and rains for the centra and southern areas. The ECB will see additional rain next week. The US Great Plains will see light rain for northern NE on Monday while other areas will remain dry. Later next week the GP may see precipitation.

 

 

 

 

 

World
Weather, INC.

MOST
IMPORTANT WEATHER FOR THE COMING WEEK

• U.S.
  hard red winter wheat production areas will encounter precipitation events during mid-week next week and in the following weekend
• The
  precipitation is expected to be light and welcome, but not enough to break down drought
• Colder
  air developing in the region during the second week of the forecast will shut down the precipitation chances and allow drying to occur again for a while
• No
  serious change to drought is likely in West or South Texas during the next couple of weeks
• Rain
  and snow will impact a part of the U.S. Midwest and central through the northeastern Plains next week and the moisture will be welcome, but could leave behind a little strip of significant snow
• U.S.
  Delta, Tennessee River Basin, southeastern states and eastern Midwest will encounter periods of rain during the next two weeks improving soil moisture for some areas and maintaining moisture abundance in other areas
• California’s
  stormy weather pattern will prevail for another week, but a turn toward colder and drier air will evolve late next week and into the following weekend
• Watch
  for possible freezes in southern California late next week that might threaten some fruit and vegetable crops
• Northwestern
  U.S. Plains and Canada’s Prairies precipitation will be limited for a while in this coming week to ten days
• North
  America temperatures will be warmer than usual for another week except in the western U.S. where readings will be near to below average
• Colder
  weather is expected in central and eastern parts of North America during the final days of January and early February
• This
  change should also induce below average precipitation in the western and central parts of the nation
  
• Northern
  Argentina received some significant rain Thursday and early today
• Areas
  from Tucuman, southern Salta and northern Cordoba to Chaco and Corrientes were impacted
• Rainfall
  of 0.30 to 1.30 inches occurred most often with more than 4.60 inches occurring near the Tucuman/Santiago del Estero border
• A
  few other showers occurred in southern Santa Fe and neighboring areas with rainfall of 0.30 inch or less while most of central and southern Argentina was dry
• Argentina’s
  hot weather abated Thursday except in the far north where a few extremes of upper 90s to 106 Fahrenheit occurred one last day
• Some
  afternoon temperatures in Cordoba were limited to the upper 60s and lower 70s
• Northern
  Argentina rain will end today with dry weather likely in most other areas through the middle of next week
• Argentina’s
  next best opportunity for rain comes late next week and into the following weekend at which time 65% of the nation will get rain with most amounts of 0.15 to 0.85 inch and a few greater totals – wettest in the west and south part of the nation
  
• Some
  additional showers are possible Jan. 23-26
• Argentina’s
  bottom line is one of relief for far northern parts of the nation because of rain overnight and that which lingers today. However, most of the central and southern parts of the nation will continue too dry through most of next week to seriously change crop
  or field conditions. Crop moisture stress will continue until the rain event of late next week and early in the following weekend evolves. That event will provide “some” relief to dryness, but no general soaking that will break the drought. Follow up precipitation
  Jan. 23-26 will be welcome, but it may not be sufficient to seriously change the bottom line either. Temperatures will trend warmer than usual once again later this weekend into next week until the next rain event develops. In the meantime, reproducing early
  season corn and sunseed continues to low production potential.
• Brazil
  will see a good mix of rain and sunshine over the next two weeks to support most of its summer grain, oilseed, cotton, rice, citrus, sugarcane and coffee production areas
• There
  will be an ongoing need for greater rain in far southern parts of the nation where some “partial” relief to dryness is expected during the weekend and next week
• Rio
  Grande do Sul will remain a region of concern until a general soaking of rain evolves which is not likely occur for a while
• Enough
  rain will occur periodically to slow the deteriorating crop situation and for parts of the state enough rain will fall to induce some short-term bouts of improvement
• Brazil’s
  soybean harvest and Safrinha crop planting prospects are good with most of the excessive rainfall of late expected to slowly wind down while the wetter bias briefly drifts more to the west
• India
  needs improved rainfall for its winter crops, but not much moisture is expected outside of the far north and extreme south for at least another week
  
• Most
  of the nation’s greatest rain will continue from Uttarakhand northward into Jammu and Kashmir during the next two weeks
  
• Some
  light showers will occur briefly from northern Uttar Pradesh to Punjab with two week rain totals no more than 0.50 inch and many areas getting less than 0.25 inch
• Any
  rain will be welcome, but more is needed
• India’s
  second week forecast is a little wetter today for central and eastern parts of the nation, though confidence in the change is still a little low
• Some
  showers are likely, but how significant the resulting rain will be is still debatable with much of it expected to be light
• Any
  moisture would be welcome as winter crops approach reproduction
• Western
  and central Europe will be stormy in this coming week followed by a drier week of weather
• Temperatures
  will be warmer than usual into next week, but will trend cooler with some temperatures in the west slipping below average late next week
  
• Soil
  moisture continues to improve in many areas, although moisture deficits remain in eastern Spain and the lower Danube River Basin
• Eastern
  China will receive light rain and snow through Saturday before trending drier again next week.
  
• The
  moisture will be great for winter wheat and rapeseed, though crops will remain dormant or semi-dormant for a while
• The
  moisture should be available in the spring to support early season crop development
• Follow
  up precipitation will be needed
• East-central
  Philippines received additional heavy rain again Thursday
• Some
  flooding has occurred recently because of frequent bouts of excessive moisture
• A
  strong monsoonal flow pattern will promote additional bouts of rainy weather throughout the central and eastern parts of the nation during the next two weeks
• Additional
  flooding is possible periodically
• Another
  1.00 to 3.00 inches of rain fell from southeastern Luzon Island into Samar Island with local totals reaching 5.83 inches Thursday
• North
  Africa rain potentials are expected to improve next week as direr and cooler air pushes southward across Europe
• The
  moisture is needed to improve conditions for spring crop development
• Far
  western Russia, Belarus and the Baltic States will experience waves of snow and rain during the next ten days resulting in a boost in both snow cover and spring runoff potential
• Limited
  precipitation is expected in other winter crop areas in the western CIS
• 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 another week
• Rain
  has increased recently in central Queensland benefitting some corn, soybean, cotton and other crops along with some sugarcane
• Key
  summer crop areas in southern Queensland and northern New South Wales may start seeing rainfall a little more often late next week and into the following weekend
• South
  Africa will receive very little rain during the next few days and then some showers will begin next week in south-central and southeastern parts of the nation
  
• The
  precipitation may be a little erratic and light initially raising the need for greater rainfall later this month and into February
• Southeastern
  areas should be wettest while precipitation to the northwest in summer crop areas is lightest
• The
  second week outlook is wetter today than that of Wednesday
• Southeast
  Asia (Indonesia and Malaysia in particular) rainfall has diminished 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
• Wetter
  conditions are expected to return to the Maritime Province during the second week of the forecast
• Western
  Turkey received some welcome rain earlier this week, but more is needed especially in central and eastern parts of the nation where dry weather prevailed
• Restricted
  precipitation is expected again for the coming week
• Middle
  East rainfall is expected to trend drier 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 are beginning to evolve and may continue into the latter part of this month
• 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 earlier this week
• Today’s
  Southern Oscillation Index was +21.44 and the index is expected to begin a steady fall over the next week to ten days

 

Source:
Bloomberg and FI

 

Bloomberg
Ag calendar

Monday,
Jan. 16:

• Malaysia’s
  Jan. 1-15 palm oil exports
• Malaysia
  CPO export tax for February (tentative)
• HOLIDAY:
  US

Tuesday,
Jan. 17:

• USDA
  export inspections – corn, soybeans, wheat, 11 am (10 am CT)
• NOPA
  12 pm (11 am CT)
• China
  4Q pork output and inventory levels
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data

Wednesday,
Jan. 18:

• Global
  Forum for Food and Agriculture, Berlin, Jan. 18-21
• Asia
  4Q 2022 cocoa grinding data

Thursday,
Jan. 19:

• European
  cocoa grindings
• North
  America cocoa grindings
• EIA
  weekly US ethanol inventories, production
• Port
  of Rouen data on French grain exports
• New
  Zealand Food Prices
• USDA
  red meat production, 3pm

Friday,
Jan. 20:

• Malaysia’s
  Jan. 1-20 palm oil exports
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options
• US
  net- export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• US
  cotton ginnings
• US
  cattle on feed

 

 

 

 

Macros

103
Counterparties Take $2.180 Tln At Fed Reverse Repo Op (prev $2.203 Tln, 101 Bids)

US
Univ. Of Michigan Sentiment Jan P: 64.6 (est 60.7; prev 59.7)

–
Current Conditions: 68.6 (est 60.0; prev 59.4)

–
Expectations: 62.0 (est 59.0; prev 59.9)

–
1-Year Inflation: 4.0% (est 4.3%; prev 4.4%)

–
5-10 Year Inflation: 3.0% (est 2.9%; prev 2.9%)

US
Import Price Index (M/M) Dec: 0.4% (exp -0.9%; prev -0.6%)

–         
Import Price Index Ex-Petroleum (M/M) Dec: 0.8% (exp -0.3%; prev -0.3%)

–         
Import Price Index (Y/Y) Dec: 3.5% (exp 2.2%; prev 2.7%)

–         
Export Price Index (M/M) Dec: -2.6% (exp -0.7%; prev -0.3%)

–         
Export Price Index (Y/Y) Dec: 5.0% (exp 7.3%; prev 6.3%)

 

CFTC
Commitment of Traders

No
major surprises in the CFTC COT report. The corn position was less long than expected. Money managers were heavy sellers of corn for the week ending January 10. They unloaded 46,900 corn futures and options contracts. They also reduced net long positions for
soybeans and soybean oil.

 

 

 

 

 

 

 

Reuters
table

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn               
77,454    -36,354    355,818     -5,252   -378,783     46,136

Soybeans           
96,363     -3,829    121,780     -2,932   -178,269      5,976

Soyoil             
28,241     -7,798     95,562     -4,779   -133,651     13,368

CBOT
wheat         -73,459    -10,660     98,234     -2,792    -22,747     11,399

KCBT
wheat         -23,951     -7,807     46,519       -458    -22,046      6,853

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
149,605    -46,852    218,958     -4,568   -372,866     46,347

Soybeans          
131,704    -11,290     67,821         61   -166,462      7,385

Soymeal           
142,711        833     72,065     -5,097   -250,120        462

Soyoil             
54,614     -9,147     88,727      1,476   -156,604      9,793

CBOT
wheat         -63,134    -10,420     65,072     -1,566    -19,196      9,896

KCBT
wheat          -8,023     -9,780     36,345      1,174    -23,553      6,238

MGEX
wheat          -2,704        127      1,574        162        794      1,288

                
———- ———- ———- ———- ———- ———-

Total
wheat        -73,861    -20,073    102,991       -230    -41,955     17,422

 

Live
cattle         91,489      8,727     48,008     -3,796   -137,100     -4,320

Feeder
cattle           42       -302      2,531          5      3,004       -336

Lean
hogs           22,735    -27,624     47,085        269    -61,408     18,175

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
58,792      9,603    -54,489     -4,530  1,481,932     11,999

Soybeans            
6,810      3,060    -39,874        784    727,769     23,773

Soymeal            
12,549        576     22,796      3,224    454,472      8,859

Soyoil              
3,415     -1,331      9,848       -791    408,665      1,711

CBOT
wheat          19,287         37     -2,028      2,051    394,847      6,675

KCBT
wheat          -4,247        956       -522      1,412    176,931     11,977

MGEX
wheat           1,747       -733     -1,411       -844     57,437      2,366

                
———- ———- ———- ———- ———- ———-

Total
wheat         16,787        260     -3,961      2,619    629,215     21,018

 

Live
cattle          9,584       -796    -11,982        186    385,715    -13,678

Feeder
cattle       -1,026      1,010     -4,551       -379     56,237      1,852

Lean
hogs           -2,708      1,663     -5,704      7,518    255,641      7,767

 

 

Corn

·        
CBOT corn
traded higher on follow through buying after
USDA reported a cut in 2022 US corn production and lower than expected December 1 corn stocks. News was light. The US will have a long holiday weekend and markets will reopen Monday evening.

·        
March corn was up 4 cents and December up 2.50 cents.

·        
Ukraine’s grain harvest reached 94% complete or 51 million tons. It includes 23.5 million tons of corn. We look for total Ukraine corn production to end up near 26.1 million tons, below USDA’s 27.0 million ton estimate.

·        
Reuters research department in a note mentioned US Corn Belt ethanol margins reached a 9-year high as of Thursday when the average margin hit $0.43/gallon. They look for US ethanol production to increase over the next few weeks.
We agree, but that would be in large part to plants catching up to their average pace prior to the late December cold snap. Inventories remain high.

·        
China approved imports of eight genetically modified (GMO) crops, including GMO alfalfa and a canola variety.

 

 

Export
developments.

·        
Late Thursday MFG bought 68,000 tons of corn from the US or SA at $338.79/ton c&f for shipment between February 24 to March 15. Earlier in the week they bought corn from South America.

 

 

Updated
01/12/23

March
corn $6.30-$7.00 range. May
$6.25-$7.20

 

Soybeans

·        
CBOT soybeans,
meal and soybean oil traded two-sided. March soybean finished 9.25 cents higher, and September was down 0.25 cent. Positioning was noted. Soybean meal ended lower led by the nearby contracts. Soybean oil traded sharply lower early but recovered to finish 13-19
points lower. Palm oil was lower overnight. For the week Malaysian palm oil fell 5.2 percent.

·        
A good amount of new-crop crush traded.

·        
Rain is expected in southwest Argentina next week, but the rest of the crop areas will see ongoing stressful conditions.

·        
China customs reported China soybean imports during December at 10.56 million tons, up 19 percent from a year ago, and is also highest since June 2021. Annual 2022 China soybean imports reached 91.08 million tons, down 5.6% from
2021. Some analysts don’t see much of an improvement in China soybean imports during 2023 due to low slower livestock production growth and reduced used for soybean meal in feed formulas.

·        
NOPA is due out Tuesday and the average trade guess is 182.9 million bushels, below 186.4 million year earlier. Some have noted the crush could end up well below that level after the cold spell hit the US around Christmas time.

 

 

 

Export
Developments

·        
South Korea bought 12,000 tons of soybean meal from China at $602/ton c&f for arrival by April 30.

·        
Turkey bought 24,000 tons of sunflower oil for February 15 to March 20 delivery at $1,218.80 to $1,228.80/ton.  

 

Updated
01/12/23

Soybeans
– March $14.75-$15.75, May $14.75-$16.00

Soybean
meal – March $460-$525, May $425-$550

Soybean
oil – March
60.00-68.00, May 59-70

 

Wheat

·        
US wheat futures were mixed. Chicago ended higher in the nearby position and lower in the back months. KC rallied from a US weather outlook calling for restricted precipitation across a majority of the US Great Plains. MN ended
mixed with back months higher, supported by new-crop crop concerns for the US despite higher than expected US winter wheat seedings survey by USDA.

·        
CBOT markets reopen Monday night as the US observes the MLK holiday.

·        
Paris March wheat was down 2.75 euros earlier at 288.75 per ton.

·        
Russia will lower their wheat export tax rate for the January 18-24 period to 4,719.4 rubles per ton from 4,766.3 current.

 

Export
Developments.

·        
Taiwan Flour Millers’ Association bought 45,200 tons of milling wheat from the United States for shipment from the PNW between March 8 and March 22.

-27,600
tons of dark northern spring wheat of a minimum 14.5% protein content at $395.75 a ton FOB

-11,650
tons of hard red winter wheat of a minimum 12.5% protein content at $380.75 a ton FO

-5,950
tons of soft white wheat of a minimum 8.5% to maximum 10% protein at $321.75 a ton FOB.

·        
South Korea’s MFG bought about 130,000 tons of feed wheat in two private deals this week.  One 65,000 ton consignment was from the US or Australia was purchased at an estimated $343.00 a ton c&f for shipment between April 15 and
May 15. Another 65,000 tons was from the US, Australia or Canada at $344.40 a ton c&f for between April 26 and May 15.

 

Rice/Other

·        
None reported

 

Updated
01/12/23

Chicago
– March $7.00 to $8.25, May $7.00-$8.50

KC
– March $7.75-$9.25, $7.50-$9.50

MN
– March $8.75 to $10.00,
$8.00-$10.00