FI Evening Grain Comments 08/31/22

Aug 31, 2022







PDF Attached

 

 

 

 


Statement
from FAS Administrator Daniel Whitley Regarding Weekly Export Sales Reporting

WASHINGTON,
Aug. 31, 2022 – USDA Foreign Agricultural Service Administrator Daniel Whitley issued the following statement today regarding weekly export sales reporting:

“As
a result of unanticipated difficulties with the launch of the new Export Sales Reporting and Maintenance System, USDA’s Foreign Agricultural Service will temporarily revert to the legacy system while we work to fully resolve the issues with the new system.
FAS will be unable to publish weekly export sales data on Thursday, Sept. 1 or Thursday, Sept. 8, but we expect to resume regular reporting on Thursday, Sept. 15.

“Since
the system relies on data submissions by exporters, FAS is working closely with individual exporters to ensure that past, current, and future export sales data are accurate. Our staff will continue to conduct outreach and provide support to both data reporters
and data users in anticipation of the re-launch of the new system.

“Data
integrity, credibility, and transparency are top priorities for FAS. The timely and accurate reporting of agricultural export sales data is vital to effectively functioning markets. The new Export Sales Reporting and Maintenance System is designed to assure
data security and availability. It will also provide a platform for future automations and enhancements that benefit both data reporters and data users.

“FAS
recognizes the impacts of the problems that arose from this rollout. Despite the measures taken over many months to transition to the new system, we understand that further action is necessary to ensure credible and accurate data reporting. We are working
to resolve the problems and are committed to keeping our stakeholders informed as we do so.

“Export
sales reporting is a partnership between USDA and U.S. agricultural exporters and we recognize data integrity and data quality are interrelated. As FAS rolls out the new system, we look forward to strengthening our partnership with the exporter community to
ensure overall compliance, accuracy, and functionality of the new system.”

###

 

 

Under
the 24-H reporting system, Private exporters reported sales of 167,000 tons of soybeans for delivery to China during the 2022-23 marketing year.

 

Grains
were mixed with a late rally in wheat. Soybean oil was higher on product spreading and concerns Argentina crush is slowing. Corn was lower on technical selling along with lower soybeans and meal.  Weekly export sales will likely be delayed again on Thursday,
according to USDA.

 

Net
drying is seen for much of the Corn Belt, The Midwestern north central areas will see rain Friday and south central areas Sunday. TX will see good rains through Friday before tapering off. NE and CO will remain dry.  EU’s weather outlook continues to improve
with additional rain across central and southern France, Italy, Romania and Bulgaria.

 

 

Weather

Map Description automatically generated

 

World
Weather Inc.

Source:
World Weather INC

 

 

Map Description automatically generated

Source:
World Weather INC

 

WEATHER
EVENTS AND FEATURES TO WATCH

  • Interior
    eastern China will be dry for the next ten days
    • Areas
      from the Yangtze River Basin to the North China Plain will receive little to no rain and temperatures will be seasonable
    • Drought
      conditions will not change much in the Yangtze River Basin leaving rice and a few other crops in central and southern parts of the basin too dry hurting production potentials
  • Far
    northeastern China will receive some heavy rain early next week due to the passing of Typhoon Hinnamnor which may end up over a part of the region for a few days
    • Changes
      in the forecast are possible, but if the storm settles over the province there could be some wind and flood damage.
  • 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 was located 102 miles south of Okinawa, Japan at 1200 GMT today moving west southwesterly at 15 mph and producing a sustained wind speed of 144 mph and gusts to 172 mph.
    • Typhoon
      force wind was occurring out 30 miles from the center of the storm while tropical storm force wind was occurring out 105 miles
    • The
      storm will slow its forward movement and should be near the southwestern Ryukyu Islands of Japan through Friday before turning to the north this weekend and threatening the Korean Peninsula with torrential rain and damaging wind speeds
    • The
      storm will stay far enough to the east of central and southern China to minimize any impact there
    • Western
      Japan’s main islands will feel the influence of Hinnamnor, but no direct adversity is currently expected
  • 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 very 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
  • Three
    tropical disturbances are being monitored in the Atlantic Ocean today that the U.S. National Hurricane Center says have potential to evolve into tropical cyclones
    • None
      of the disturbances are expected to threaten North America and most of them will remain over open water in the Atlantic Ocean through early next week
  • 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
    • Northern
      Russia will receive more significant rain with a part of the far northwest reporting 0.50 to more than 2.00 inches Tuesday and early today
  • Cooling
    in western Russia late this weekend and next week will bring the season’s first frost and freeze potential for next week, but the impact on unharvested spring and summer crops should be minimal and the same is true for the planting of winter crops
    • Today’s
      forecast has introduced more cloudiness for early next week which may limit the occurrence of frost and freezes to a very small part of the region
  • 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 later today 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
    • Increased
      rainfall from monsoonal precipitation is expected, though, and that will help ease some of the driest conditions
    • 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 +8.23 and it will move erratically higher over the next few days

Source:
World Weather INC

 

Map Description automatically generated

 

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

 

 

Reuters
trade estimates for USDA export sales for week ending 8/25

Table Description automatically generated

 

Macros

ivesquawk
Turkey Hikes Electricity, Natural Gas Prices As Much As 50%

 

108
Counterparties Take $2.251 Tln At Fed Reverse Repo Op (prev $2.189 Tln, 101 Bids)

 

US
DoE Crude Oil Inventories (W/W) 26-Aug: -3.326M (est -950K; prev -3.282M)   

–
Distillate: +112K (est -750K; prev -662K)   

–
Cushing: -523K (prev +426K)   

–
Gasoline: -1.172M (est -1.000M; prev -27K)   

–
Refinery: -1.1% (est -0.5%; prev +0.3%)

EIA:
US SPR Crude Stocks Fell To Lowest Last Week Since Dec 1984

 

US
ADP Employment Change Aug: 132K (est 300K)

UK
Consumer Confidence Falls To Lowest Since Nov 2020, Biggest Drop Since April 2020 – Bank Of America Survey

Canadian
GDP (M/M) Jun: 0.1% (est 0.1%; prev 0.0%)

Canadian
GDP (Y/Y) Jun: 4.7% (est 4.9%; prev 5.6%)

Canadian
Quarterly GDP Annualized Q2: 3.3% (est 4.4%; prev 3.1%)

 

Corn

·        
CBOT corn was lower on global macro concerns. There is little bearish news for corn futures other than energy and USD fluctuations.

·        
Look for trading activity to slow soon ahead of the upcoming US holiday weekend.

·        
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.

·        
USDA reported US broiler-type eggs set in the United States up 5 percent, and chicks placed in the United States up 4 percent. Broiler-type eggs set in the United States: 2022.

·        
Weekly ethanol production slowed last week on plant downtime and perhaps high US domestic corn basis and lack of supplies for selected Midwest locations. The drop in production by 17,000 barrels was as expected, according to a
Bloomberg survey (down 16k estimated). Stocks dropped 274,000 barrels, contrary to a survey calling for a 70,000-barrel increase. Gasoline implied demand rose 157,000 barrels to 8.591 million, after dropping sharply by 914,000 week before (4-week average about
near normal), meaning about the same number of drivers on the road from this time last month. US gasoline stocks are down 1.172 million barrels from the previous week to 214.5 million, and 0.5% decrease from the previous week. 90.7 percent was the rate of
ethanol blended into gasoline, down from 92.5% for the week ending Auf 19, but still above required levels.

 

US
DoE Crude Oil Inventories (W/W) 26-Aug: -3.326M (est -950K; prev -3.282M)   

–
Distillate: +112K (est -750K; prev -662K)   

–
Cushing: -523K (prev +426K)   

–
Gasoline: -1.172M (est -1.000M; prev -27K)   

–
Refinery: -1.1% (est -0.5%; prev +0.3%)

 

EIA:
US SPR Crude Stocks Fell To Lowest Last Week Since Dec 1984

EIA:
US Crude Oil Production Rose 201K Bpd In June To 11.816M Bpd (Vs Revised 11.615M Bpd In May)

 

 

 

 

Export
developments.

·        
SK’s MFIG group bought 135,000 tons of corn from either South America or South Africa ay 178.50 cents over the December contact, C&F, for arrival around December 5.

·        
SK’s KFA bought 63,000 tons of corn from either South America or South Africa  at 191.00 cents over the December contract for arrival around December 5.

·        
Taiwan’s MFIG group seek 65,000 tons of corn on September 7 for November and/or early shipment from the US.

 

 

 

 

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

·        
Soybeans and meal ended lower on lower meal despite higher soybean oil.

·        
News was light.

·        
BB – Indonesia Keeps Palm Oil Export Tax at $74/Ton for Sept. 1-15

(Bloomberg)
— Indonesia revises crude palm oil reference price to $929.66/ton for Sept. 1-15, Musdhalifah Machmud, deputy for food and agriculture at the Coordinating Ministry for Economic Affairs, says in text messages. Govt previously said reference price set at $930.02/ton
for the period

·        
There is little bullish to be for SBO other than slowing Arg crush.  2.0 million toms are expected to date for August rush, below 2.1-2.3 MT estimates.

·        
Gulf soybean oil hit a premium of $665/ton over RBD palm oil on Tuesday.

·        
Argentina is expected to make a special farmland financial currency announcement Thursday, detailing how to get farmers to cooperate in selling soybeans to crushers and other end users at a higher FX rate to increase Foreign reserves
to comply with IMF obligations.

·        
My IMO, this will do lit

·        
Malaysia and India was on holiday. For the month Malaysian futures lost 3.6%, fourth monthly consecutive loss.

 

SBO
futures are expensive vs. palm and other vegetable oils.

 

Export
Developments

·        
Under the 24-H reporting system, Private exporters reported sales of 167,000 tons of soybeans for delivery to China during the 2022-23 marketing year.

·        
For China’s 14th 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 were higher after reports of missiles hitting Ukraine’s second biggest port, Mykolaiv. 

·        
Other news was light.

·        
Paris December wheat was up 0.50 euros at 342.50 per ton.

 

Export
Developments.

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

·        
Jordan bought 60,000 tons of barley at $323.50/ton for LH Feb. shipment.

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

·        
Jordan seeks 120,000 tons of barley on September 7 for Feb-Mar shipment. 

·        
Japan seeks 95,497 tons of food wheat form the US and Canada 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

·        
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

 

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International
One Lincoln Center
18 W 140 Butterfield Rd.

Oakbrook Terrace, Il. 60181

W: 312.604.1366

treilly@futures-int.com

ICE IM: 
treilly1

Skype: fi.treilly

 

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