FI Evening Grain Comments 08/22/22

PDF Attached

 

(not confident about US yields so will revisit, may lower)

 

Higher
start to the week led by SMB (soybean meal) on concerns over energy concerns slowing global crush rates.

 

 

 

 

 

Weather

ENSO
update not seen threatening, IMO, for start of SA growing season, but some would argue it could pose some harm. 
https://iri.columbia.edu/our-expertise/climate/forecasts/enso/current/?enso_tab=enso-cpc_update

 

 

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• Heavy
  rain fell central parts of India during the weekend as a monsoon depression brought heavy rain (more than 10.00 inches) over totally saturated soil
• The
  excessive rain was 100% runoff and that may have led to some significant flooding with both crop and property damage suspected.
  
• India’s
  greatest rain during the weekend also impacted occurred from western West Bengal and northeastern Odisha to eastern Madhya Pradesh where 2.50 to more than 7.00 inches was common
• Local
  totals reached 10.35 inches in Madhya Pradesh, 8.81 inches in West Bengal and 7.24 inches in northeastern Odisha
• Rain
  was also heavy in Uttaranchal where one location reported 13.43 inches
• Interior
  southern Pakistan received heavy rain during the weekend with local totals to 12.17 inches
• Some
  flooding resulted possibly damaging a few crops; including rice and early maturing cotton
• Heavy
  rain will move from Madhya Pradesh to Rajasthan and a part of Gujarat, India today with Pakistan impacted late Monday into Wednesday
• Sufficient
  rain will fall to induce at least some additional local flooding
• Less
  frequent and less significant rain will impact central India after the first part of this week and in Pakistan after mid-week
• The
  change to less frequent and less significant rain will be a boon for crop areas that have been dealing with excessive rainfall and some flooding for a few weeks
• Improved
  crop conditions will result over time
• Southern
  India will turn wetter while central areas are drier this week
• Some
  heavy rain is expected which should bolster soil moisture over a few days
• Excessive
  rain and flooding also occurred in a part of the North China Plain during the weekend resulting in some significant flooding in Hebei and immediate neighboring areas where the ground was saturated last week
• Rain
  totals of 2.75 to more than 6.00 inches resulted in 100% runoff causing the flood
• Rain
  also fell significantly from Guangdong to Yunnan where rainfall varied up to 10.55 inches along western coastal areas of Guangdong and varied up to 2.83 inches in areas away from the coast
• Net
  drying occurred in most other areas
• Hot
  weather continued in the Yangtze River Basin of east-central and southeastern China Friday through Sunday with high temperatures in the 90s to 108 degrees Fahrenheit
• Extreme
  highs to 111 occurred once again in Sichuan
• The
  heat and dryness continued to stress crops throughout the region where drought has been prevailing for a while
• China’s
  Yangtze River Basin is expected to receive a few showers and thunderstorms later in this coming week with some cooler temperatures
• Much
  of the precipitation will not counter evaporation very well
• The
  relief is not expected to come very quickly
• A
  better mix of rain and sunshine will occur in the second week of the outlook, but it may be a while before China’s soil moisture profile is returned to normal
• Drought
  will prevail for at least the next ten days
• U.S.
  weekend rainfall in the Midwest occurred most significantly in central and northern Illinois, southern Wisconsin, and eastern Iowa as well as more random locations in eastern South Dakota, north-central Iowa, southern Michigan and a few locations in central
  Ohio and central Kansas
• Rainfall
  in these wetter areas varied from 1.00 to 2.20 inches
• Significant
  rain fell from West Texas through the Red River Valley of the South in the southern Plains Friday through Sunday afternoon
• Rain
  totals near the Red River varied from 1.00 to 3.00 inches with a local amount of 4.81 inches in the northwestern corner of West Texas
  
• Many
  other areas in West Texas reported more varied rainfall varying from 0.36 to 1.24 inches with a few amounts of up to 2.61 inches
  
• Portions
  of both the Blacklands and Rolling Plains of Texas also reported rainfall of 1.00 to 4.74 inches
  
• Scattered
  showers occurred during the weekend in the U.S. Delta and southeastern states, but amounts were highly erratic with a few areas getting moderate rain while others only received light amounts of moisture
• Some
  of the greatest rainfall surpassed 2.00 inches, but areas not far away reported less than 0.50 inch
  
• U.S.
  temperatures were seasonable in many areas during the weekend, although readings continued warmer than usual in the far western states and in particular in the Pacific Northwest
• Rain
  will continue into Tuesday from eastern portions of West Texas and southern Oklahoma to the central Delta with another 1.00 to 3.00 inches possible with the Texas Blacklands wettest and West Texas lightest
• Some
  areas in West Texas will not get more than another 0.75 inch of rain
• Rain
  will also continue today and Monday in the eastern Midwest and southeastern states with 0.15 to 0.75 inch and a few amounts of 1.00 to 2.00 inches
• U.S.
  weather from Wednesday of this week through the end of next week will include scattered showers and periods of sunshine resulting in a mostly favorable mix of conditions supporting ongoing crop development
• There
  will be some pockets of drying and some pockets of short term soil moisture increases
• Temperatures
  will be mostly in a seasonable range except from Texas to the Delta where readings will be cooler than usual this week and from California to the Pacific Northwest where readings will be warmer than usual
  
• Temperatures
  will continue warmer than usual in western North America next week while close to normal in the east
• U.S.
  Pacific Northwest and parts of California and the Great Basin will continue very warm to hot and mostly dry for while
• Some
  cooling is expected next week
• The
  bottom line for the United States will be mostly good. Rain that has already fallen in Texas and Oklahoma has increased soil moisture for better crop development for those crops not seriously damaged or destroyed by this year’s drought. Weather in the Midwest,
  Delta and southeastern states will be mostly good for summer crop development, although there will be pockets that are still a little too dry, but very few areas are critically dry and the bottom line for production this year is expected to be favorable.
  
• Canada’s
  Prairies will see greater rain in southern Alberta early this week disrupting farming activity and raising some concern over crop quality
• Alternating
  periods of rain and sunshine most other days through the first days in September throughout the Prairies will slow fieldwork at times, but most of the rain will be brief and light
• Sufficient
  rain will fall to support late season crops in a favorable manor, although some areas will not get as much rain as other areas. Harvest progress will advance around periods of rain with the biggest concern over rain great enough to induce harvest delays of
  significance occurring in southern Alberta this week.
• Weekend
  rain in Canada’s Prairies was mostly confined to northern Alberta with amounts of 0.15 to 1.00 inch with a few amounts to 1.48 inches
• Temperatures
  were warm with highs in the upper 70s and lower 80s Fahrenheit in the east and in the 80s and lower 90s in the west
• Europe
  weather included scattered showers and warm temperatures Friday through Sunday
• The
  greatest rain occurred from the western Balkan Countries to eastern Germany and western Poland where 0.40 to 2.15 inches and local totals well over 3.50 inches were noted
• Highest
  temperatures were in the upper 70s and 80s northwest and in the 80s and 90s elsewhere.
  
• Warmest
  in the east and south
• Europe
  rainfall over the coming ten days will be greatest from Greece to Poland with rainfall of 0.75 to 1.50 inches with local totals over 3.00 inches
• Austria,
  Czech Republic and Slovakia will be among the wetter areas as will parts of Poland, western Romania and western Bulgaria
• Temperatures
  will be warmest this weekend into early next week at which time readings will be well above normal
• Temperatures
  before and after that period will be closer to normal
• Western
  Europe is unlikely to get much rain in the coming week to ten days, although showers will produce 0.20 to 0.75 inch with poor coverage
• Showers
  will be most numerous and significant during the weekend and on into next week
• Europe
  weather during the weekend and that expected this week will be mixed, but there will be no areas in Western Europe that will experience a general improvement in crop or soil conditions. Eastern Europe will likely experience a more favorable pattern of increased
  soil moisture and better late season crop conditions, although the changes will come slowly.
  
• Western
  CIS crop areas will continue to dry out over the next ten days
• Areas
  from Ukraine, southeastern Belarus through the entire Volga River Basin to Russia’s Southern Region, Ural Mountains and Western Kazakhstan will be driest, although not completely dry
• Rainfall
  will be less than 0.60 inch
• Warmer
  than usual temperatures will occur through mid-week next week and then will trend cooler during the balance of next week and into the following weekend
• CIS
  rainfall during the weekend was greatest in the eastern New Lands and from central Ukraine into interior western parts of Russia with rainfall varying up to 0.43 inch
  
• Temperatures
  were relatively close to normal
• The
  bottom line to western CIS crop areas is still one of late season drying that will slowly expand dryness in the soil and stress to late season crop development. Most of the late season crops have not likely been seriously harmed by the late season drying trend,
  but rain will be needed soon to support winter wheat planting and establishment.
  
• Rain
  in Australia this week will be greatest through Tuesday from Victoria and southeastern South Australia to New South Wales
• Not
  much other precipitation of significance will occur elsewhere in the nation through Sunday
• Some
  increase in rain may occur in parts of the south and east briefly next week
• The
  bottom line still looks very good for most of the nation’s crops even though Western Australia will experience net drying for the next ten days
• Temperatures
  will be seasonable
• Ontario
  and Quebec, Canada will see alternating periods of rain and sunshine over the next two weeks supporting crop develop.
• Rainfall
  may be a little light and sporadic in Ontario while greater in Quebec
• Brazil
  drying is expected over the next ten days in most areas except southern Rio Grande do Sul where some light rain is likely Friday into the weekend
  
• Western
  Argentina will continue struggling for good moisture over the next two weeks
• Net
  drying is expected and temperatures will be rising a little warmer than usual both this week and next week
  
• Showers
  are expected in eastern Argentina periodically and that will prove to be good for future winter crop development
• Argentina
  experienced net drying during the weekend and similar conditions are expected through Tuesday
• Brazil
  rainfall during the weekend was confined to coastal areas of Brazil
• Rainfall
  ranged up to 0.40 inch
• Temperatures
  were mild to cool in southern Brazil and warm in the north
• Lowest
  temperatures slipped near and below freezing in southeastern wheat areas of Parana with frost into Rio Grande do Sul
• The
  impact of frost on winter crops should have been low
• Xinjiang,
  China precipitation is expected to continue mostly in the mountains and temperatures will trend a little warmer.
  
• Southeast
  Asia rainfall is expected to be frequent and significant during the next ten days to two weeks
  
• All
  areas are expected to be impacted and sufficient rain is expected to bolster soil moisture for long term crop development need
  
• South
  Africa will receive periodic showers of limited significance in the south, west and east leaving north-central areas dry
• Most
  of the resulting rain is not likely to be great enough for a serious impact on soil moisture, but some southern areas will get enough to maintain favorable early spring crop development potential
• Central
  Africa showers and thunderstorms will continue most frequent and significant in the northern coffee, cocoa and cotton production areas, but over time the rainy pattern should shift to the south
  
• Southern
  coffee and cocoa areas are not likely to get significant rain for a while especially not in Ivory Coast or Ghana
• North
  Africa precipitation over the next two weeks will be sporadic and light having little to no impact on soil moisture
  
• Mexico’s
  drought in the northeast will persist through the next ten days
• Rain
  will occur more routinely in western and southern Mexico where crop and soil conditions will be best
• Central
  America precipitation will continue frequent and significant keeping some rice, coffee, sugarcane, citrus and other crop areas plenty wet
  
• Some
  net drying might be welcome
• Today’s
  Southern Oscillation Index was +9.47 and it should drift erratically over the next several days.

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
Aug. 22:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• MARS
  monthly EU crop conditions report
• US
  crop conditions for spring wheat, corn, soybeans and cotton; winter wheat harvesting, 4pm
• USDA
  total milk production, 3pm
• EU
  weekly grain, oilseed import and export data
• US
  cold storage data for pork, beef and poultry, 3pm

Tuesday,
Aug. 23:

• Sinofert
  1H results briefing

Wednesday,
Aug. 24:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Brazil’s
  Unica may release cane crush, sugar production data (tentative)
• US
  poultry slaughter

Thursday,
Aug. 25:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Malaysia’s
  Aug. 1-25 palm oil export data
• USDA
  red meat production

Friday,
Aug. 26:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

Corn

·        
Corn futures were mixed early but turned higher on higher energy prices. The USD was higher so don’t discount a slower upside.

·        
The annual Pro Farmer crop tour starts today. The WCB legs will be closely monitored. Early tweets suggest variable yields.  Past history would suggest that yields will be variable, but at the end of week US estimate does give
a general idea where the crop will end up at. We are bullish yields.

·        
USDA US corn export inspections as of August 18, 2022 were 740,508 tons, within a range of trade expectations, above 539,336 tons previous week and compares to 766,758 tons year ago. Major countries included Mexico for 290,356
tons, China for 198,331 tons, and Japan for 195,874 tons.

·        
We raised our corn for feed estimate for 2022-23 by 100 million bushels to 5.4 billion, 75 million above USDA, based on good US domestic demand for chicken and higher cattle on feed inventories.

 

Export
developments.

·        
None reported

 

 

Updated
8/16/22

September
corn is seen in a $5.70 and $6.60 range

December
corn is seen in a $5.50-$7.00 range

 

Soybeans

·        
Soybean meal was the largest talked about commodity this morning into today’s trade. US crush margins are very good, and US old crop soybean inventories are shrinking, as seen with Decatur, IL, soybean basis rising to 200 over
last week. Argentina is still facing lack of producer selling. The EU energy crises may result in power rationing, slowing oilseed crush rates. Separately China power shortages across the southern areas that may reduce oilseed crush rates. Note China meal
futures were higher Monday. With riverbeds drying up across parts of China, fishmeal supplies could shrink, resulting in higher demand for oilmeal.

·        
CBOT soybeans were higher as a result of strength in meal. Ongoing addition of longs by the investment funds, as seen mid last week, added to the bullish undertone.

·        
The rally in soybeans and meal lifted SBO higher, along with WTI crude oil rebounding from session lows.

·        
Some traders are eyeing US weather as parts of the WCB remain dry.

·        
For this past Sunday, 50 SBO registrations were cancelled out of Cargill Creve Coeur.

·        
USDA US soybean export inspections as of August 18, 2022 were 686,583 tons, within a range of trade expectations, below 768,328 tons previous week and compares to 240,520 tons year ago. Major countries included China for 359,000
tons, Mexico for 114,179 tons, and Japan for 55,526 tons.

·        
Power troubles for China’s southwest is affecting fertilizer and crush production. The weather does not appear to improve over the short term.

·        
SGS reported Malaysian palm exports for the 1-20 Aug period at 718,291 tons, down 0.8%.

·        
Trade News Service: “IL crude was easier at a nominal 600 over. Eastern cash was steady at a nominal 450 over, with western cash easier at a nominal 1,000 over. Gulf crude degummed oil was nominally 500 over. Fully refined soybean
“salad” oil for Aug was easier at 2,350 over and Sep.”

 

Export
Developments

·        
USDA this week seeks 1,500 tons of vegetable oil for the AMS/CCC to use in export programs. Shipment was set for Oct 1-31, later if from plants at the port.

·        
Passed: Tunisia was in for 6,000 tons of crude degummed vegetable oil for August 27 to September 10 shipment.

 

Updated
8/18/22

Soybeans
– September $13.75-$15.25

Soybeans
– November is seen in a $12.50-$16.00 range

Soybean
meal – September $405-$480, December $380-$445

Soybean
oil – September 66.50-70.00, December 61.00-72.00

 

Wheat

·        
US wheat
futures traded two-sided this morning, ending higher, in part to higher CBOT soybeans despite lack of news that supports a bullish trade.

·        
The euro hit parity versus the USD today. One would need to go back to about 2003 for last time that happened. Key takeaway is that the recent rally in the USD will not help exports. US wheat export developments have been slow
since the USD started its rally on August 12.

·        
USDA US all-wheat export inspections as of August 18, 2022 were 594,273 tons, within a range of trade expectations, above 389,914 tons previous week and compares to 729,288 tons year ago. Major countries included Japan for 179,283
tons, Mexico for 71,219 tons, and Philippines for 56,100 tons.

·        
Paris September wheat was up 0.25 euro at 310.25 per ton as of 8:00 am CT.

·        
Results of Iraq’s import tender might be out this week. Bids ranged from $520 to $560 per ton for US wheat.

·        
UGA lowered their estimate of the Ukraine grain production to 64.5 million tons for 2022 from previous 69.4 million. 

 

Export
Developments.

·        
Taiwan Flour Millers’ Association seek 34,025 tons of grade 1 milling wheat from the United States on August 25 for shipment out of the PNW between October 12 and October 26.

·        
Bangladesh seeks 50,000 tons of milling wheat on September 1, optional origin, for shipment within 40 days of contract signing.

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on September 6.

 

Updated
8/18/22

Chicago – September $7.00 to $8.25 range,
December $7.00-$10.50

KC – September $7.80 to
$9.00 range, December $7.00-$10.75

MN – September $8.00‐$9.25, December $8.00-$11.50