FI Evening Grain Comments 04/27/22

PDF Attached

 

Indonesia
reversed their decision again, widening their ban on selected palm oil products. USD rallied. CBOT soybean complex ended higher. Corn reversed to settle higher and wheat was lower in the front months for Chicago wheat, lower for KC and higher for MN. South
Korea bought a combined 119,000 tons of soybean meal, SA and optional origin for September arrival. On Thursday Egypt and Turkey are in for vegetable oils. Algeria bought durum wheat. USDA export sales are due out Thursday morning and traders are looking for
a slowdown in commitments.

 

 

USD
as of 1:14 pm CT

Source:
Reuters and FI

 

Weather

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• Spring
  planting delays will remain the greatest issue of the day today in the U.S. northern Plains and Midwest with some disruption possible in parts of the Delta and southeastern states as well
• Moisture
  that falls in the lower Delta and southeastern states will be good for developing crops especially since precipitation in those areas is expected to be infrequent, brief and light
• Southwestern
  U.S. Plains will get some rain this weekend offering a little reprieve from dryness
• Moisture
  totals of 0.25 to 0.75 inch and local totals over 1.00 inch will be possible in the Texas Panhandle, western Oklahoma and southern Kansas while some greater rain occurs in central Oklahoma
• Some
  follow up precipitation may occur briefly next week
• The
  bottom line will be some short-term crop improvement for winter wheat, oats and canola produced in the region
• West
  Texas cotton, corn, sorghum and peanut country will only see precipitation in the Low Plains and Rolling Plains in this coming week
• Southwestern
  dryland areas will not likely get significant precipitation
• Showers
  and thunderstorms will be most likely from the Abilene and Wichita Falls, Texas region into the Texas Panhandle and western Oklahoma clipping only a few of the northeastern most counties of West Texas proper
• Western
  Oklahoma and the Rolling Plains of Texas should be wettest
• South
  Texas showers and thunderstorms Tuesday and early this morning produced highly varying amounts of rain with some heavy amounts near the Rio Grande and from the southern Blacklands to the upper Texas Coast where Doppler Radar suggested rainfall of 1.00 to more
  than 3.00 inches resulted
• The
  Texas Coastal Bend area, through reported less than 0.20 inch.
• Very
  little follow up precipitation is expected for a while
• U.S.
  southeastern states will receive below normal precipitation during the next two weeks especially in southern Georgia, Florida, South Carolina and southeastern Alabama
• U.S.
  Midwest rainfall will become frequent this weekend and last for about ten days resulting in a lengthy period of restricted field progress
• Temperatures
  will be cooler than usual keeping drying rates between rain events slow
• Frequent
  precipitation in the northern U.S. Plains will perpetuate flood conditions in North Dakota and neighboring areas of Manitoba, Canada
• Additional
  moisture in Montana and the western Dakotas will be great for use during the spring growing season, but some delay in fieldwork is likely until then
• Precipitation
  in the U.S. Pacific Northwest will be a little more restricted over the next ten days, but mountainous areas will get moisture while the Yakima and Colombia River Basins see more limited precipitation potential
• U.S.
  far west will continue dry from central and southern California through the southwestern desert region where cotton and other crops are grown
• Southwestern
  Canada’s Prairies will continue to see restricted rainfall over the next ten days maintaining concern over crop development and production potentials this year
• Relief
  from dryness is still expected late this spring and into the summer
• Ontario
  and Quebec, Canada will see a frequent occurrence of precipitation that should support planting and early season crop development from the middle of May through June
• Concern
  about Mato Grosso, Brazil Safrinha corn and cotton will continue over the next ten days
• Some
  showers are advertised early next week, but early indications suggest rainfall of 0.20 to 0.75 inch with a few local totals to 1.00 inch
• Crop
  moisture stress will rise until that precipitation evolves and once the showers begin, they may prove to be a little too light for a serious change in crop or field conditions
• Drier
  weather will resume during the second half of next week limiting the amount of benefit that will come
  
• Western
  Argentina is still drying down, but summer crops are not being harmed by the pattern
• Rain
  will be needed in the second half of May and June to support winter wheat and other winter crops that get planted at that time; until then, there is not much reason for concern over dryness
• Waves
  of rain will impact southern Paraguay, eastern Argentina, Uruguay and far southern Brazil during the next ten days maintaining wet field conditions in those areas
• The
  region to be impacted will include the south half of Parana and southern Paraguay into Chaco, Santa Fe and eastern Buenos Aires, Argentina
  
• Fieldwork
  will be slowed in these areas and some crop quality concerns will arise over time
• Frequent
  rain from the northern half of the Amazon River Basin through Colombia, western Venezuela and Ecuador to parts of Central America will induce local areas of flooding in the next ten days
• Europe
  precipitation will occur most often from Spain, Portugal and parts of southern France into southern Belarus, central and western Ukraine and parts of western Russia over the next ten days to two weeks
  

No
heavy rain is expected, but enough will fall to support winter and spring crop development

• Some
  disruption to fieldwork will be possible periodically
• Temperatures
  in Europe and the western CIS are expected to be near to below normal during the next ten days while the eastern CIS New Lands and Kazakhstan are warmer than usual
• Parts
  of Central Asia will also be quite warm
• Western
  Commonwealth of Independent States weather will include frequent bouts of rain, drizzle and some snow during the next ten days
• Soil
  moisture will continue rated adequate to excessive with areas from southern Belarus and northwestern Ukraine into the middle Ural Mountains region wettest and carrying the greatest need for drier weather
• Fieldwork
  will advance a little slower than usual in some areas because of wet field conditions and some occasional precipitation. Drier and warmer weather would be best in promoting fieldwork, but big changes are not very likely for a while
• India
  weather will remain normal for this time of year
• Bouts
  of rain will occur from West Bengal through Bangladesh to the far Eastern States
  
• Some
  showers will also occur in far southern India, but they should be brief and very light
  
• Harvest
  progress should advance well
• North
  Africa rainfall over the next ten days will be greatest in northern Algeria and northern Tunisia where some areas will receive 1.00 to 3.00 inches while others receive 0.25 to 0.75 inches
• Morocco
  and Tunisia will be driest with only a few sporadic showers
• North
  central Algeria will be wettest
• Conditions
  will be good for reproducing and filling winter crops
• West-central
  Africa rainfall is expected to be frequent over the next ten days maintaining a very good environment for coffee, cocoa, sugarcane, citrus and some cotton
• A
  boost in rainfall would be welcome in cotton areas
• South
  Africa rainfall should be a little less frequent and less significant in this coming week to ten days relative to that of last week
• The
  nation needs net drying to support better summer crop maturation and harvest conditions
• Too
  much moisture in recent weeks has delayed harvesting and reduced cotton and some oilseed quality
• Crop
  maturation and harvest conditions should improve
• China
  weather is expected to be relatively normal for this time of year, during the next ten days to two weeks
• Rain
  frequency will be greatest near and south of the Yangtze River
• Precipitation
  in the Yellow River Basin and North China Plain will be most limited and net drying is expected, but that is not unusual for this time of year
• A
  brief bout of rain is expected in the coming week to offer a short-term break from the recent drying trend, but more rain will be needed
  
• Heilongjiang
  will also be wetter biased with precipitation both early this week and again during the weekend
• Soil
  temperatures are warm enough to plant spring wheat and sugarbeets in the northeast of China and warm enough for some corn planting across east-central parts of the nation. Fieldwork should advance around anticipated rainfall.
  
• Recent
  soil assessments show the Yellow River Basin and North China Plain becoming a little too dry, but much of the winter crop is irrigated and there will be some timely rainfall in the next ten days that should maintain a good outlook for winter crop and spring
  crops
• Planting
  is advancing swiftly after recent warm and dry biased conditions
• China’s
  rapeseed crops is in mostly good condition, but a close watch on rainfall is warranted because of the threat frequent rain might have on crop quality and harvest progress next month
• Australia
  rainfall Tuesday was greatest in northern New south Wales where 0.60 to 1.30 inches resulted through dawn today
• The
  impact was low, but harvest delays resulted
• Rain
  in eastern Australia will linger in New South Wales today, but Thursday will be dry before another bout of moisture arrives Friday into the weekend.
  
• The
  moisture will be good for future wheat, barley and canola planting this autumn while not quite so welcome in summer crop areas where harvest progress is under way
• Some
  Central New South Wales locations will receive 1.00 to 2.50 inches of rain between today’s rain event and that of this weekend
  
• Cotton
  quality might be briefly compromised
• Portions
  of Kazakhstan have need for more moisture and the region should be closely monitored for dryness later this growing season
• Xinjiang,
  China precipitation is expected to continue mostly in the mountains, but the precipitation will improve spring runoff potentials in support of better irrigation water supply
• Turkey,
  Iran and northern  Afghanistan will be the wettest Middle East countries over the next ten days
• Rain
  is still needed in Syria, Iraq and neighboring areas to the south
• Southeast
  Asia rainfall is expected to be abundant in Indonesia, Malaysia and Philippines while a little erratic in the mainland crop areas during the next ten days
• Overall,
  crop conditions will remain favorable
• A
  developing tropical cyclone is expected over the southern Philippines the next few days that will evolve into a tropical storm later in the week over the South China Sea
  
• Some
  moderate to locally heavy rainfall is likely in the central and southern Philippines over the next couple of days as the disturbance pushes through central areas
• The
  tropical cyclone could move across Luzon island or Taiwan early during the middle part of next week after becoming better organized in the South China Sea this weekend
• Confidence
  is low
• Eastern
  Mexico will receive sporadic showers over the coming week
• Western
  areas will be dry biased
• Recent
  rain in the east has improved soil moisture to some crop areas
• Central
  America precipitation will slowly expand northward in the next few weeks
• the
  moisture will be good for most crops
• Today’s
  Southern Oscillation Index was +18.61 and it will continue rising for a while longer.
  
• New
  Zealand weather has been mostly good recently, but central parts of the nation have been drier than usual and precipitation in the next ten days will be very limited

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Wednesday,
April 27:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Geneva
  Sugar Conference, day 2
• EARNINGS:
  Bunge, Pilgrim’s Pride

Thursday,
April 28:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Brazil’s
  Conab releases production numbers for sugar, cane and ethanol (tentative)

Friday,
April 29:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Vietnam’s
  General Statistics Office releases coffee, rice and rubber export data
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  agricultural prices paid, received, 3pm
• HOLIDAY:
  Japan, Indonesia

Source:
Bloomberg and FI

 

 

 

Macros

US
Wholesale Inventories (M/M) Mar P: 2.3% (est 1.5%; prev 2.5%)

US
Advance Goods Trade Balance Mar: -$125.3Bln (est -$105.0Bln; prev -$106.6Bln; prevR -$106.3Bln)

US
Retail Inventories (M/M) Mar: 2.0% (est 1.4%; prev 1.1%)

US
DoE Crude Oil Inventories (W/W) 22-Apr: +691K (est 0K; prev -8020K)

–
Distillate Inventories: -1449K (est -1000K; prev -2664K)

–
Cushing OK Crude Inventories: +1298K (prev -185K)

–
Gasoline Inventories: -1573K (est 1000K; prev -761K)

–
Refinery Utilization: -0.70% (est 0.00%; prev 1.00%)

EIA:
US Distillate Inventories Fell To Lowest Since May 2008 In Latest Week

84
Counterparties Take $1.803 Tln At Fed Reverse Repo Op (prev $1.819 Tln, 84 Bids)

 

Corn

·        
July corn traded in a wide two-sided range, ending on a strong note led by nearby contracts. Funds bought an estimated net 9,000 contracts.  The rally in the USD initially pressured corn but that fizzled away after wheat started
to pair losses and soybeans rallied.

·        
News was light and global corn export developments are slowing. 

·        
Argentina producers sold 880,000 tons of corn for the week ending April 20, bringing 2021-22 sales to 22.6 million tons, near the same about at this time last year.

·        
China plans to buy another 40,000 tons of pork for state reserves on April 29, sixth such purchase this year.

·        
The USDA Broiler Report showed eggs set in the US up slightly and chicks placed up slightly from a year ago. Cumulative placements from the week ending January 8, 2022, through April 23, 2022 for the United States were 2.98 billion.
Cumulative placements were down slightly from the same period a year earlier.

·        
We lowered our 2021-22 US corn for ethanol use from 5.400 billion bushels to 5.380 billion, 5 million above USDA.

 

Iowa
lawmakers OK bill mandating sale of E15 at gas stations

https://apnews.com/article/business-iowa-kim-reynolds-cc6bd64ce6e80a2b9e55d85066b92c6d

 

Weekly
EIA ethanol production increased a more than 16,000 barrels per day to 963,000 and stocks decreased 377,000 barrels to 23.965 million. This is the first weekly production increase and first decrease in stocks since the May 25. For reference, a Bloomberg poll
looked for weekly US ethanol production to be up 5,000 barrels and stocks down 78,000 barrels. Early September 2021 to date US ethanol production is running 9.6% above the comparable period year earlier and 4.9% above the comparable period two years ago. Gasoline
stocks saw a draw of 1.6 million barrels to 230.8 million, and US gasoline demand fell 129,000 barrels to 8.74 million barrels.

 

 

 

Potential
Disruptions in Nitrogen Fertilizer Trade

Schnitkey,
G., C. Zulauf, K. Swanson, N. Paulson and J. Baltz. “Potential Disruptions in Nitrogen Fertilizer Trade.”
farmdoc
daily
(12):57,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, April 26, 2022.

https://farmdocdaily.illinois.edu/2022/04/potential-disruptions-in-nitrogen-fertilizer-trade.html

 

Export
developments.

·        
None reported

 

Updated
4/22/22

July
corn is seen in a $7.25 and $8.65 range

December
corn is seen in a wide $5.50-$8.50 range (unchanged, up 50 cents high end)

 

Soybeans

·        
Soybean oil traded sharply higher on Indonesia palm oil export ban concerns and a large rally in the palm oil market. Malaysian palm oil hit a 7-week high. July CBOT oil share hit a record contract high, settling near 49.03%.
Soybeans and meal settled higher after seeing a two-sided trade. The Indonesia palm oil export ban starts Thursday. Today Indonesia widened their list of products, including crude palm oil, to the export ban. Selected RBD and cooking oils were already considered.

·        
Funds bought an estimated net 11,000 soybeans, 4,000 soybean meal and 9,000 soybean oil.

·        
July soybean meal tested its 100-day MA and bounced off of it, then rallied to trade higher. Much of this was technical buying after CBOT soybean meal futures prices broke earlier this week. Adding to the positive undertone was
South Korea taking advantage of the price drop by buying a combined 119,000 tons of soybean meal, at about $20/ton cheaper than what NOFI paid earlier this week.

·        
The CBOT nearby crush firmed with the rally in soybean oil, with July up 14 cents to $2.1050.

·        
(Reuters) – Indonesia’s planned export ban on cooking oil’s raw material will cover crude palm oil, refined palm oil and used cooking oil, among other palm oil products, its chief economic minister said on Wednesday. The announcement
was a reversal of the minister’s statement a day earlier, in which he had said the export ban would only cover refined, bleached, and deodorized palm olein. The ban comes into force at midnight (1700 GMT Wednesday).

·        
Argentina producers sold 13.6 million tons so far for the 2021-22 crop-year, compared to 15.5 million tons year earlier. 

·        
Malaysia is on holiday May 2-4, returning May 5.

 

Export
Developments

·        
South Korean groups FLC and MFG bought 59,000 tons and 60,000 tons of soybean meal, respectively, at $571.95/ton C&F and $569.30/ton, for September arrival. Earlier this week NOFI paid $591.80.

·        
Egypt’s GASC seeks vegetable oils for June and/or July arrival on Thursday, April 28. A minimum of 30,000 tons of soybean oil and 10,000 tons of sunflower oil, in the international market, is for arrival between June 10 and 30.
Locally they seek 3,000 tons of soybean oil and 2,000 tons of sunflower oil with delivery from June 10 to 30.

·        
Turkey seeks 18,000 tons of sunflower oil on April 28 for shipment between May 16 and June 16.

·        
China looks to auction off another 500,000 tons of soybeans April 29.

 

Updated
4/22/22

Soybeans
– July $16.00-$18.50

Soybeans
– November is seen in a wide $12.75-$16.50 range (unchanged, up $1.00 high end)

Soybean
meal – July $420-$5.20

Soybean
oil – July 75-90

 

Wheat

·        
US wheat traded
two-sided, ending lower in the nearby contracts for Chicago, lower for KC, and higher for Minneapolis. The USD was up again, by 63 points by 1:25 pm CT.  Chicago and KC were under pressure from profit taking and technical selling. MN found strength on slow
seeding progress for US and Canadian spring wheat and Algeria picking up at least 230,000 tons of durum wheat. Taiwan passed on feed wheat. A weaker euro supported Paris wheat futures.

·        
Funds sold an estimated net 2,000 soft red winter wheat contracts.

·        
September EU wheat futures were 3.75 euros higher at 378.25 euros.

·        
Russia announced they are ready to increase wheat shipments to Africa.

 

Export
Developments.

·        
Algeria bought at least 230,000 tons of Mexican durum wheat for second half of May and June shipment at around $570 a ton c&f for shipment in large panama bulk carriers and about $590 a ton for shipment in smaller handysized vessels.

·        
Thailand passed on feed wheat for June-October shipment. Lowest offer was around $380/ton c&f.

·        
Jordan passed on 120,000 tons of wheat for Jun and/or Aug shipment.

·        
 Jordan seeks 120,000 tons of feed barley on May 10 for Aug/Sep shipment.

·        
Turkey seeks 210,000 tons of international red milling wheat on Friday and another 210,000 tons of wheat already in warehouses for delivery between May 17 and August 10.

 

Rice/Other

·        
None reported

 

Updated
4/22/22

Chicago – July $10.50 to
$12.50 range, December $8.50-$12.50

KC – July $10.25 to $12.50
range, December $8.75-$13.50

MN – July $10.75‐$13.00,
December $9.00-$14.00