FI Evening Grain Comments 08/30/22

PDF attached includes our 2022-23 update crop-year rolling average price forecast

 

Widespread
commodity selling over global economic and recession concerns sent US agriculture futures lower, although losses in the soybean complex were trimmed on talk China was in for US soybeans. Monitor China/Taiwan tensions as it seems to be escalating. 2022 has
certainly been a strange year of geopolitical problems after emerging out of Covid lockdowns.

 

Under
the 24-H reporting system, private exporters reported sales of 264,000 tons of soybeans for delivery to unknown destinations during the 2022-23 marketing year.

 

USDA
announced the weekly USDA export sales report will be delayed until further notice. Our target was for a Tuesday release. Bloomberg – Vilsack said separately the agency was seeking to fix crop export data that was retracted last week after problems with a

new
reporting system. “We’re trying to make sure it got fixed,” Vilsack said,

declining
to provide timeline on when information would be released.

FI
will be running export sales estimates for last week (8/25) later this week. 

 

Pakistan’s
flooding could amount to over 10 billion USD in damages. More than half a million people were displaced. The floods washed out infrastructure including textile mills. The morning weather forecast was largely unchanged for the US. The Midwestern areas will
see rain today, far north central areas Friday and south central areas Sunday. TX will see good rains through Friday before tapering off. NE and CO will remain dry.  The WCB corn belt in general will see net drying over the next week. EU’s weather outlook
improved a touch with additional rain across central and southern France, Italy, Romania and Bulgaria.

 

 

Weather

 

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• China’s
  Yangtze River Basin will fall back into a dry and warm weather mode over the coming week to ten days
• Recent
  relief from excessive heat and dryness was welcome, but parts of the lower basin and Sichuan failed to get much relief and drought remains serious
• Xinjiang,
  China weather is expected to trend warmer in the next ten days to two weeks and precipitation is expected to diminish
• This
  pattern will be very good for cotton and corn maturation as well as early harvesting
• Typhoon
  Hinnamnor is expected to become a super typhoon later today as it nears the Ryukyu Islands of Japan.
  
• The
  storm will be nearly stationary over the two days before beginning to move north toward the Sea of Japan.
  
• The
  storm will stay far enough to the east of China to minimize any impact there, but parts of Western Japan and South Korea could experience crop and property damage as the storm moves through those areas.
  
• Typhoon
  Hinnamnor may eventually reach the high latitudes in the northwestern Pacific  Ocean where it may merge with a deepening mid-latitude trough of low pressure inducing a very intense storm west of the Aleutian Islands
• A
  very strong ridge of high pressure may briefly evolve late next week and into the following weekend over the Gulf of Alaska pushing much colder air southward through Canada to the north-central United States Sep. 10-14
• This
  may bring the season’s first frost and light freeze event to a part of Canada’s Prairies
• The
  impact of frost and freezes should be relatively low, but some negative impact is possible on late season canola and some corn, flax and soybean crops in the eastern Prairies
• Confidence
  over the cold surge is still low, but the logic is in place and close monitoring of Typhoon Hinnamnor and Canada’s Prairies is warranted
• Drying
  in western Canada, the U.S. Pacific Northwest, the northern half of the U.S. Plains and western Corn Belt over the coming week to ten days will be ideal for maturing spring and summer crops and supporting their harvest
• Eastern
  U.S. Midwest weather is expected to trend drier over the coming week
• Rain
  will fall frequently in the southern U.S. Plains, Delta and southeastern states during the coming ten days to two weeks
• Two
  tropical cyclones are expected to evolve in the Atlantic Ocean during the remainder of this week and the weekend
• Both
  storms will stay over open water and do not pose a threat to eastern North America
• Western
  Europe rainfall will continue restricted in central and northern France, Germany, Belgium, the Netherlands and U.K. until late this weekend and especially next week when rainfall is expected to increase
• Rain
  would fall too late for most summer crops, but late season improvements to sugarbeets is possible
• The
  moisture would be best for bolstering soil moisture for better rapeseed and eventual winter wheat planting
• Interior
  eastern Europe rainfall in recent weeks has been great in improving topsoil moisture for better late season crop development and for improved winter wheat and rye planting prospects
• Russia’s
  winter wheat and rye region is quite dry, but some showers are expected to evolve during the next two weeks that should improve the prospects for some crops
• Greater
  rain will be needed
• Cooling
  in western Russia late this weekend and next week will bring the season’s first frost and freeze, but the impact on unharvested spring and summer crops should be minimal and the same is true for the planting of winter crops
• North
  Africa showers at this time of year are always welcome, but have a minimal impact and that will be the case over the next ten days
• Northwestern
  India and Pakistan are drying down and that will be good for early planted cotton and other early season crops
• Pakistan
  is cleaning up from its recent flooding and crop damage assessments will continue for a few weeks
• Central,
  southern and eastern India will continue to experience periods of rain during the next two weeks
• Precipitation
  should slowly increase over the next two weeks
• Argentina
  rainfall will return again Wednesday into Friday, but it will continue to disfavor the west leaving crop areas in that region quite dry
• Eastern
  crop areas will remain in very good condition
• Southern
  Brazil rainfall will be limited through mid-week this week and then southern parts of the nation (Parana southward) will receive rain and the moisture will maintain a good outlook for winter crops
• Ontario
  and Quebec weather remains mostly good for corn and soybeans with little change likely
• Rain
  will linger during mid-week this week; otherwise , the next full week will be dry
• the
  environment will be good for late season crop development and for maturation and early season harvesting
• Mexico’s
  drought in the northeast continues and will not likely end without the help of a tropical cyclone
• Some
  computer forecast models have suggested a tropical weather system is possible early next week, but confidence in that event is very low
• Western
  and southern Mexico rainfall is expected to be sufficient to support crop needs for a while, but summer monsoon has not been as good of a performer as predicted and greater rain is needed to prevent drought from being ongoing into 2023
• Central
  America rainfall has occurred routinely and will continue to do so favoring many crops
• Rain
  in Australia is expected to be favorably mixed over the next two weeks
• The
  bottom line still looks very good for most of the nation’s crops
• Temperatures
  will be seasonable
• 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
  
• Local
  flooding is expected
• South
  Africa will receive erratic 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
• The
  outlook is not unusual for this time of year and crops are poised to perform well in the spring if timely rain evolves
• Central
  Africa showers and thunderstorms have recently increased in some key coffee and cocoa production areas during the next two weeks.
  
• Recent
  rain Ivory Coast and Ghana has brought relief to seasonal drying will likely support mid-crop flowering if follow up rain occurs as needed
• Nigeria,
  Cameroon, Benin and other coffee and cocoa production areas should see relatively good crop weather over the next couple of weeks
• East-central
  Africa rainfall will continue to occur most frequent and significantly in Ethiopia, Uganda and southwestern Kenya over the next two weeks
• Good
  coffee, cocoa and other crop development conditions will prevail
• Today’s
  Southern Oscillation Index was +8.08 and it will move erratically higher over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Wednesday,
Aug. 31:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysia’s
  August palm oil export data
• US
  agricultural prices paid, received, 3pm
• HOLIDAY:
  India, Malaysia

Thursday,
Sept. 1:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Cocoa
  Association of Asia hosts International Cocoa Conference, day 1
• Australia
  Commodity Index
• USDA
  soybean crush, DDGS production, corn for ethanol
• HOLIDAY:
  Vietnam

Friday,
Sept. 2:

• FAO
  world food price index, grains supply and demand outlook
• 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
• Cocoa
  Association of Asia hosts International Cocoa Conference, day 2

Source:
Bloomberg and FI

 

Soybean
and Corn Advisor

2022
U.S. Corn Yield Lowered 3.0 bu/ac to 170.0 bu/ac

2022
U.S. Soybean Yield Unchanged at 50.5 bu/ac

 

(Reuters)
– A Farm Futures magazine survey of U.S. planting intentions for 2023 indicated that producers expect to expand their plantings of corn and wheat acres in the coming crop year while paring soybean acreage.

• Corn
  plantings for 2023 were forecast at 94.282 million acres, up 5% from the U.S. Department of Agriculture’s 2022 estimate of 89.8 million and the most since 2013
• Soybean
  plantings seen at 87.331 million acres, down 0.8%
• All-wheat
  seedings seen at 48.842 million acres, up 3.9%
• Winter
  wheat seedings seen at 36.553 million acres, up 7.5%
• Spring
  wheat plantings (including durum) seen at 12.289 million acres, down 5.4%
• Farm
  Futures surveyed 692 producers from July 13 to Aug. 1 via an email questionnaire

 

 

Macros

US
FHFA House Price Index (M/M) Jun: 0.1% (est 0.8%; prevR 1.3%)

US
House Price Purchase Index (Q/Q) Q2: 4.0% (prevR 4.7%)

US
CoreLogic CS 20-City (M/M) SA Jun: 0.44% (est 0.90%; prevR 1.22%)

US
CoreLogic CS 20-City (Y/Y) NSA Jun: 18.65% (est 19.20%; prevR 20.51%)

 

US
JOLTs Job Openings Jul: 11.239M (est 10.375M; prev R 11.040M)

 

US
CB Consumer Confidence Aug: 103.2 (est 98.0; prev R 95.3) 

–
Present Situation: 145.4 (prev R 139.7) 

–
Expectations: 75.1 (prev R 65.6)

 

US
Crude Oil Futures Settle At $91.64/Bbl, Down $5.37 Or 5.54%

 

Corn

·        
Global economic concerns, specifically US and China, sent many commodity market lower led by the energy space. This weighed on US CBOT grains. Corn also saw technical selling after rallying to a 2-month high yesterday. China is
again locking down heavily populated areas over Covid outbreaks. In Hebei, specialists ordered almost four million people to stay at home until the end of the week .

·        
Funds sold an estimated net 6,000 corn contracts.

·        
WTI crude oil and HO traded sharply lower. WTI dipped below $91 and looks to break the $90 mark sometime this week. Nearby WTI crude did close above $91.

·        
US equities attempted to rally early but traded sharply lower during the day session.

·        
Bloomberg: “An estimated 1m acres (404.7k hectares) were taken out of the US’s Conservation Reserve Program, or CRP, and will return to agricultural production in 2023, Agriculture Secretary Tom Vilsack told reporters Tuesday
at the Farm Progress Show in Iowa.

·        
The US 2023 corn area will depend on availability of fertilizer, but prices suggest over 90 million acres at the moment. Some estimate 89-90 million acres, while a Farm Futures survey today showed 94.3 million acres. KSU ag extension
in a webinar today made a good point, high corn prices favor plantings, but all commodity prices are higher.

·        
CBOT corn deliveries are expected to be low, if any, for FND. Registrations stand at zero as of Monday night. 

·        
Agritel called the French corn crop “catastrophic”, estimating production at a 15-year low of 53.8 million tons.

·        
Europe’s grain harvest started earlier than normal allowing supplies to soon hit the domestic and export market.

·        
Anec: Corn exports during August 7.142 million tons, down from 7.529 million previous.

·        
South Africa’s CEC looks for SAf corn production to end up near 15.004 million tons, above last months’ 14.713 million and below 16.315 million produced last season. Yellow was estimated at 7.367 million and white at 7.637 million
tons.

·        
The Baltic Dry Index fell 6 percent to 1,017 points.

·        
Additional corn and wheat vessels were recently approved to leave Ukraine ports, 6 vessels of 121,500 tons. About 1.5 million tons of grain/food has sailed from Ukraine since the safe passage agreement.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 16,000 thousand (950-992 range) from the previous week and stocks up 70,000 barrels to 23.877 million.

 

Export
developments.

·        
South Korea’s NOFI bought 137,000 tons of corn for December arrival. One cargo was bought of 69,000 tons was bought at 182 cents c&f over the December and another 68,000 tons was bought at an estimated premium of 184.85 cents
c&f over the  December.

 

 

 

 

 

 

Updated
8/29/22

December
corn is seen in a $6.00-$7.00 range. Next level of resistance is seen at $7.25.

 

Soybeans

·        
The soybean complex traded sharply lower, but losses were trimmed on talk of Chinese buying of US soybeans (after USDA announced 246,000 tons to unknown) and bottom picking.

·        
Funds sold 5,000 soybeans, 4,000 soybean meal and were flat in soybean oil.

·        
Widespread commodity selling and an unchanged USDA soybean rating initially sent prices lower.

·        
Talk of China economic slowdown and an expectation for a 75 point increase in US interest rates send many commodities south today.

·        
A Reuters poll calls for the US crush for July at 180.5 million bushels, above 174.1 for June and 166.3 million for July 2021. Soybean oil stocks were seen at 2.221 billion, a 10-month low, down from 2.316 at the end of June and
compare to 2.070 billion at the end of July last year.

·        
Russia plans to extend its export tax on soybeans until Aug. 31, 2024, and a partial ban on rapeseed exports (from the Zabaikalsk region) until Feb. 1, 2022. The current export tax on soybeans is 20% but not less than $100 per
ton.

·        
We look for no FND deliveries for soybeans and meal. Soybean oil deliveries are expected to be zero to 100.

·        
Malaysia is on holiday Wednesday so for the month futures lost 3.6%, fourth monthly consecutive loss.

·        
Anec: Brazil Aug soybean shipments 5.284 million tons versus 5.504 million previous.

 

Export
Developments

·        
Under the 24-H reporting system, private exporters reported sales of 264,000 tons of soybeans for delivery to unknown destinations during the 2022-23 marketing year.

·        
For China’s 14^th weekly soybean auction set for September 2, they look for sell 500,000 tons.

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 30,000 tons of GMO-free soybeans on September 6 for arrival in SK between November 12 and Dec 12, and another arrival period of October 30 and November 30.

·        
USDA’s AMS CCC seeks to sell 3,150 tons of vegetable oil on September 7 for shipment for Oct 1-31 (Oct 16 to Nov 15 for plants at ports).

 

 

 

 

Updated
8/23/22

Soybeans
– November is seen in a $13.75-$16.00 range

Soybean
meal – December $390-$445

Soybean
oil – December 63.00-71.00

 

Wheat

·        
US wheat futures traded lower by investment fund selling in Chicago. Prices started lower led by spring wheat after USDA reported an improvement in high protein conditions, but widespread commodity selling took control during
the day session. Wheat futures were up nearly 5 percent on Monday so some of this is a correction.

·        
Funds sold an estimated net 6,000 Chicago wheat contracts.

·        
Chicago wheat registrations Monday night were at zero but there could be some Chicago deliveries tonight. 0-100 is our current range. KC deliveries are expected at zero based on registration but would not be surprised if we see
some put out. MN are expected be 0-50.

·        
Agritel increased their estimate of the French soft wheat crop at 33.63 million tons, up from 33.44 million projected a month ago, but below the average.

·        
The Baltic Dry Index fell 6 percent to 1,017 points.

·        
Paris December wheat was down 7.50 euros at 322.75 per ton.

·        
Parts of HRW wheat country will see rain on and off bias the southwestern areas over the next 5 days. Rain will be heavier today through Friday then start to taper off this weekend. Not all areas will see rain. NE, CO, and surrounding
areas may see little or no precipitation.

 

Export
Developments.

·        
Algeria started buying milling wheat and prices were around $364-$365/ton for LH Sep through Oct 31 shipment.

·        
The Philippines passed on 100,000 tons of feed wheat Oct-Dec shipment.

·        
Jordan bought 60,000 tons of wheat at $376.50/ton c&f for shipment in the second half of January 2023.

·        
Jordan seeks 120,000 tons of wheat on September 6.

·        
Jordan seeks 120,000 tons of barley on August 31 for Dec-Feb shipment. 

·        
Japan seeks 95,497 tons of food wheat form the US and Canada later this week for arrival by December 31.

·        
Bangladesh delayed their 50,000 ton import tender of milling wheat set to close on September 1, to September 18.  It’s for optional origin with shipment within 40 days of contract signing.

 

Rice/Other

·        
(Reuters) – Vietnam’s rice exports are expected to rise to 6.3 million-6.5 million tons this year from 6.24 million tons last year on strong demand, the chairman of the country’s food association said on Tuesday.

·        
Taiwan and Vietnam plant to raise their export price of rice but no details have been set.

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

 

Updated
8/29/22

Chicago
– December $7.25-$10.00

KC
– December $8.00-$11.00

MN – December
$8.00-$11.50