FI Evening Grain Comments 09/06/22

PDF Attached

 

CBOT
soybeans, meal and oil declined from an increase in Argentina producer and crush product selling. Corn was higher on expectations for USDA to report tight 2022-23 US ending stocks next week and Chicago & KC wheat were higher on Ukraine nuclear plant radiation
concerns. MN type wheat ended lower following EU wheat and favorable weather for US spring wheat harvest progress. US soybean and corn G/E ratings were unchanged at 57 and 54 percent, respectively. US spring wheat harvest progress was better than expected.
Winter wheat plantings are off to a normal start.

 

Calls:

Soybeans
steady to 5 lower on  follow through selling from Argentina producer selling

Meal
steady to $1.00 lower

Oil
steady to 40 points lower

Corn
steady to 2 lower

Wheat
steady to 3 lower

 

 

 

 

 

 

 

Look
for light precipitation, if any, to develop across the northern Great Plains and some of the west central areas through Saturday. This week rains are forecast drier in the northwest. SD, NE into KS. IA will see rain. Precipitation will also fall across other
parts of the northern Corn Belt. The US southeast areas will see rain, slowing harvest progress and drying rates for corn. Europe will see additional rain this week bias western growing areas, Poland and Romania.

 

Weather

 

WEATHER
EVENTS AND FEATURES TO WATCH

• Europe
  will receive dryness easing rainfall this week, but more will be needed to fully restore soil moisture to normal
• Spain
  and Portugal will not get much of the moisture
• India
  will continue plenty wet across the central, southern and eastern parts of the nation this week
• Some
  forecast models are suggesting more rain in northwestern India and Pakistan for next week and if that occurs there could be some threat to maturing and open boll cotton and well as a disruption to early harvest progress
• Pakistan
  has benefited from drier weather recently and if rain develops again next week across parts of the nation there may be more damage done to cotton and rice after flooding in late August
• Russia
  and Ukraine precipitation is expected to slowly ramp up over the next couple of weeks with Russia’s Southern Region last to get rain in the second half of next week
• Moisture
  is needed for winter crop emergence and establishment
• Rain
  in the western CIS during the past three days was restricted and temperatures turned much cooler outside of Kazakhstan
• Highest
  temperatures in the CIS were limited to the 40s and 50s Fahrenheit in northern Russia and the 50s and 60s from southern Russia and Ukraine into the eastern New Lands
• In
  contrast, highest temperatures from southern parts of Russia’s Southern region through Kazakhstan ranged from the 90s to 105 degrees Fahrenheit
• Lowest
  morning temperatures slipped to the 30s and 40s in most of the CIS with frost and light freezes occurring in far western Russia and parts of Belarus which was little earlier than usual
  
• The
  impact of frost and light freezes was minimal
• Additional
  frost and light freezes are expected in parts of Russia over the next ten days
  
• The
  impact of cold weather is not likely to be very negative because of recent warm and drier biased weather moving many crops toward fully maturity.
  
• There
  may be some immature summer crops in northwestern and west-central Russia where rainfall was most abundant earlier in the summer keeping crops maturing at a slower pact
• Eastern
  China will continue to dry out over the next ten days
• Areas
  from the Yangtze River Basin to the North China Plain will receive very little rain
  
• Drying
  in the northern part of this region will be good for summer crops after a long summer of frequent rain
  
• Drought
  in the Yangtze River Basin is prevailing and another ten days of drought could further damage rice and a few other crops in the heart of the basin where the worst conditions are prevailing
• China’s
  weather was mostly dry biased from the southern Coastal provinces through the Yangtze River Basin to the North China Plains and interior northeastern provinces
• Drying
  was welcome in the North China Plain and northeastern provinces where it has been quite wet in recent weeks
• Drying
  was needed to promote summer crop maturation
• Drying
  was not welcome in the central Yangtze River Basin where late season crop stress is still impacting rice and many other crops
• 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
• Australia
  is still expected to see frequent bouts of rain over the next two weeks
• The
  moisture will be good for some crop areas in Queensland and South Australia, but New South Wales and Victoria may turn a little too wet over time
• Indian
  Ocean Dipole continues in its negative phase and will prevail there through November
  
• The
  combined impact of persistent La Nina and negative Indian Ocean Dipole is likely to lead to too much rain a part of eastern Australia later this year and that could threaten wheat and spring planting of some crops
• October
  will likely be wettest, but some of the wetter bias may already be evolving in late September
• This
  could threaten wheat, barley and canola later in the growing season
• Western
  and South Australia would not be impacted by too much moisture
• Argentina
  rainfall is expected to be quite restricted over the next ten days raising concern very early summer crop planting prospects later this month and next
• Dryness
  will also be a concern for the nation’s wheat crop
• Brazil
  is expecting waves of rain in the southern part of the nation during the next ten days which should translate into ongoing good wheat development in the far south, but drier weather may soon be needed in wheat areas of Parana
• Showers
  advertised near mid-month in center west Brazil would be welcome if they verify, although early indications suggest the resulting rainfall will be sporadic and light
• The
  precipitation may offer some sign that seasonal rainfall will begin on time, but World Weather, Inc. urges a little caution because October rainfall is expected to be lighter and more sporadic and usual
• Canada’s
  Prairies will continue drier biased during the next ten days to two weeks favoring spring and summer crop maturation and harvest progress
• Soil
  moisture in the southeast is still favorable for late season crops
• Two
  shots of cooler air are expected in Canada and the north-central U.S. this week
• Frost
  may occur in parts of Canada’s Prairies, but no hard freezes are expected
• Friday
  and Saturday will be coldest with
• Some
  chilly temperatures will occur Wednesday morning in the eastern Prairies, but most temperatures will be above the frost threshold
  
• Some
  soft frost might occur
• U.S.
  upper Midwest and northeastern Plains temperatures will be no cooler than middle and upper 30s with no freeze expected, but a few patches of soft frost will be possible this weekend
• Much
  cooler air will slip in to Canada’s Prairies and the north-central United States late this week and into the weekend inducing high temperatures in the 50s and 60s Fahrenheit in Canada and in the 60s and lower 70s in the northern U.S. Plains and upper Midwest
  followed by lows in the middle and upper 30s and 40s in the U.S. and 30s and lower 40s in Canada
• Rain
  is possible late this week in a part of the western U.S. Corn and Soybean production areas, but most of the precipitation will be brief and light
• Pockets
  of soybean production areas may not get much precipitation over the next couple of weeks leading to some concern of poor filling conditions in a part of the western production areas
  
• U.S.
  weather will be dominated by a trough of low pressure over the southeastern United States during the next ten days
  
• This
  pattern will restrict northbound moisture from the Gulf of Mexico from reaching into much of the western Midwest or Great Plains
• Moisture
  will also be restricted into Canada’s Prairies where net drying is likely
• Rain
  will fall frequently in the mid-south and especially the southeastern United States with some rain continuing periodically in the lower eastern Midwest
  
• Texas
  and Oklahoma weather is advertised drier this week than advertised last Friday
  
• Restricted
  rain will fall in the Great Plains over the next ten days allowing topsoil moisture in hard red winter wheat areas to become depleted
• Texas
  and Oklahoma weather dried out during the weekend and restricted rain is expected this week
  
• The
  change will be good for summer crops that received significant rain in late August
• The
  drier bias will also be good for winter wheat planting – at least for a while
• U.S.
  Midwest rainfall during the weekend was greatest in the Ohio River Basin with southern Illinois, southern Indiana, western, central and southwestern Ohio and portions of Kentucky receiving 1.00 to 3.00 inches with local totals to 5.44 inches
  
• Flooding
  occurred in a part of this region with southwestern Ohio and northwestern Kentucky into southeastern Illinois and southwestern Indiana wettest
• Relief
  occurred to dry soybean and corn fields in southeastern Iowa and northwestern Illinois improving soybean pod filling conditions
• Dry
  weather occurred in the much of the western Corn and Soybean Belt and from northern Indiana and northeastern Illinois  into a part of Michigan
• U.S.
  rainfall was also significant in the southeastern states with heavy rain reported in portions of Alabama, Georgia, Tennessee and from Louisiana into eastern Texas
• Some
  significant rain also fell in south-central Missouri into central Arkansas.
  
• U.S.
  temperatures the past few days were well above normal in the western states from California and Arizona into the Pacific Northwest, Montana and Wyoming where highs were in the upper 90s to 112 degrees Fahrenheit
• Extreme
  highs in Montana were rarely warmer than 103
• Extreme
  highs in California and Arizona reached 117
• Canada
  Prairies precipitation was also limited Friday through this morning with high temperatures peaking in the 90s Fahrenheit
• Good
  spring and summer crop maturation and harvest progress occurred, although soil moisture for late season crops decreased
• North
  America temperatures will be warmer than usual on average during the next two weeks in the western and central parts of the U.S. and across Canada’s Prairies
• This
  first week’s temperatures will be most anomalously warm in the western half of the continent
• Next
  week’s temperatures will be above normal mostly in the Plains and western Midwest
• South
  Africa precipitation is expected to be limited over the next ten days, but winter crops are still semi-dormant and unlikely to develop aggressively until later this month leaving time for improved rainfall before the reproductive season arrives
• Winter
  crops are still poised to perform well this spring
• Central
  America, Colombia and parts of Venezuela are expected to trend wetter than usual in the next few weeks due to the persistent La Nina influence on the region
• Tropical
  Storm Hinnamnor was located over the central parts of the Sea of Japan this morning and racing toward the southeast coast of Russia
  
• The
  storm’s intensity was decreasing quickly
• Damage
  to some rice and personal property was suspected in South Korea, but confirmation has not been received.
  
• Typhoon
  Hinnamnor is no longer expected to have much impact on cold air moving southward from Canada this week or next week because of its weaker intensity and quick demise
• Hurricane
  Danielle was located 835 miles west northwest of the Azores at 42.1 north, 41.9 west moving northeasterly at 8 mph at 0500 EDT today.
  
• Danielle
  will change little over the next couple of days, but will gradually weaken back to tropical storm status
  
• The
  storm poses no threat to land
• Tropical
  Storm Earl was located 345 miles north of St. Thomas in the western Atlantic Ocean at 23.4 north, 65.4 west moving northerly at 7 mph and producing maximum sustained wind speeds of 65 mph.
  
• Earl
  will turn to the north northeast during mid-week this week after continuing in a northerly direction today. The storm will eventually turn to the northeast later this week
• The
  storm will intensify to hurricane status in the next couple of days, but poses no threat to land.
  
• 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
• Ontario
  and Quebec weather remains mostly good for corn and soybeans with little change likely
• the
  environment will be good for late season crop development,  maturation and early season harvesting
• Mexico’s
  drought in the northeast continues and will not likely end without the help from a tropical cyclone
• With
  that said some significant rain fell during the weekend in a few locations
• This
  week’s weather will be drier biased after some rain early this week
• Southern
  and western Mexico will get some rain periodically. through the next couple of week
  
• Central
  America rainfall has occurred routinely and will continue to do so favoring many crops
• 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
• Central
  Africa showers and thunderstorms have recently increased in some key coffee and cocoa production areas during the next two weeks.
  
• Recent
  rain in Ivory Coast and Ghana has brought relief to seasonal drying and 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 +8.05 and it will move higher over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Wednesday,
Sept. 7:

• China’s
  first batch of August trade data, including soybean, edible oil, rubber and meat imports
• Canada’s
  StatCan releases wheat, durum, canola and barley stockpile data, 8:30am
• HOLIDAY:
  Brazil

Thursday,
Sept. 8:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Black
  Sea Grain and Oilseeds conference, Rostov-on-Don, Russia
• EIA
  weekly US ethanol inventories, production, 11am
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans

Friday,
Sept. 9:

• 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
• Vietnam’s
  customs department releases August coffee, rice and rubber exports
• Brazil’s
  Unica to release cane crush and sugar output data (tentative)
• HOLIDAY:
  Korea

Source:
Bloomberg and FI

 

NASS
announced they will review all US acreage information that
will include soybeans and corn, that are normally addressed in the October update. NASS “will review all available data, including survey data, satellite-based data, and the latest information from USDA’s Farm Service Agency and Risk Management Agency for
planted and harvested acreage.”  This means we could see changes in corn and soybean plantings.

https://www.nass.usda.gov/Newsroom/Notices/2022/09-06-2022.php

 

USDA
inspections versus Reuters trade range

Wheat                 
477,657                 versus   400000-625000  range

Corn                     
518,373                 versus   500000-825000  range

Soybeans           
495,845                 versus   400000-800000  range

 

FI
summary table unavailable as USDA split the crop years. Will be resumes next week.

 

 

GRAINS
INSPECTED AND/OR WEIGHED FOR EXPORT

                 
REPORTED IN WEEK ENDING SEP 01, 2022

      
                     — METRIC TONS —

————————————————————————-

                                                  
CURRENT     PREVIOUS 

             ———–
WEEK ENDING ———-  MARKET YEAR  MARKET YEAR

 
GRAIN      09/01/2022  08/25/2022  09/02/2021    TO DATE     TO DATE  

 

BARLEY             
0         147           0        1,214        6,550 

CORN         
518,373     689,451     338,716      109,584       39,453 

FLAXSEED           
0           0           0            0           24 

MIXED              
0           0           0            0            0 

OATS               
0           0           0        6,386          100 

RYE                
0           0           0            0            0 

SORGHUM       
58,242      22,471       5,350        1,294        1,317 

SOYBEANS     
495,845     439,811      93,653       49,582       30,354 

SUNFLOWER        
192         288           0            0            0 

WHEAT        
477,657     631,326     412,649    5,602,812    6,616,276 

Total      
1,550,309   1,783,494     850,368    5,770,872    6,694,074 

————————————————————————–

CROP
MARKETING YEARS BEGIN JUNE 1 FOR WHEAT, RYE, OATS, BARLEY AND

FLAXSEED; 
SEPTEMBER 1 FOR CORN, SORGHUM, SOYBEANS AND SUNFLOWER SEEDS.

 

Due
out Wednesday

 

US
area/ supply estimates.

IHS
Markit September:

Corn: 

Yield: 
171.6 bpa from 176.9 bpa AUG

Prod: 
14.040 bbu from 14.497 bbu AUG

Soybeans:

Yields: 
51.3 bpa from 51.8 bpa AUG

Prod: 
4.471 bbu from 4.530 bbu AUG

 

Macros

US
ISM Non-Mfg PMI Aug: 56.9 (est 55.1; prev 56.9)

–
Biz. Activity: 60.9 (est 57.0; prev 59.9)

–
Employment: 50.2 (est ; prev 49.1)

–
New Orders: 61.8 (prev 59.9)

–
Prices Paid: 71.5 (prev 72.3)

 

103
Counterparties Take $2.189 Tln At Fed Reverse Repo Op (prev $2.173 Tln, 107 Bids)

 

Corn

·        
CBOT corn ended higher on technical buying after USDA announced they will include additional methods to revise their planted and harvested area estimates for the September USDA crop production report. Trade estimates will be out
as early as Wednesday afternoon as newswires are collecting revised estimates after today’s NASS press release.

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

·        
Argentina producers are selling soybeans after the rollout of the new “soybean dollar,” so less corn and wheat was expected to be sold.

·        
China corn was up 0.6% on Tuesday. Earlier it hit its highest level since June.

·        
AgRural reported 9 percent of the first Brazil corn crop had been planted, down slightly from 10 percent last season. But on a volume basis, plantings are running slightly above, as AgRural looks for 2022-23 1st corn production
to end up near 28.2 million tons, up from 24.8 million last season.

·        
(Bloomberg) — North American fertilizer prices are spiking as plant closures in Europe squeeze supplies. An index of weekly North American fertilizer prices by Bloomberg’s analysis organization Green Markets rose by over 11%
Friday, the most since March, as an energy crunch in Europe forces some plants to close or curtail production. Natural gas is the No. 1 input for most nitrogen fertilizer. The common nitrogen fertilizer ammonia in the US Corn Belt saw prices rise nearly 24%.

 

Export
developments.

·        
South Korea’s MFG bought 135,000 tons of animal feed corn in two consignment for arrival in South Korea in December, 2022 (178 cents over the Dec), and January, 2023 (182 cents over the Dec). Ukrainian and Russian origin is excluded.

·        
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.

 

 

Soybeans

·        
Soybeans, meal and soybean oil ended lower from an increase in Argentina soybean producer/crusher selling. More and more cities in China are going into lockdown from rising covid cases. Malaysian palm oil hit a 6-week low.

·        
Funds sold 9,000 soybeans, 5,000 meal and 5,000 SBO.

·        
A surge in Argentina producer soybean sales was negative for CBOT soybean futures. Upwards to 1.75 million was sold over the past day and half, and more will likely be done before the end of Tuesday.

·        
Look for Argentina soybean product sales to increase as well.

·        
End of August Argentina producer sales for soybeans were 10% lower than the same period year ago.

·        
ITS reported Sep 1-5 Malaysian palm shipments at 249,102 tons, up 17.8% from month earlier.

·        
Reuters survey for Malaysian palm oil S&D

·        
Over the Mon-Tue period, Malaysia
palm traded 118 ringgit lower to 3,797 and cash was down $30/ton to $942.50/ton. On Monday futures were up 1 ringgit and cash down $5.00.

·        
Argentina’s central bank is expected to increase its interest rate sometime this week, according to a Reuters article. Interest rates are at 69.5% with inflation running around 70% on an annual basis. They may increase the interest
rate to 75%.

 

Export
Developments

·        
Egypt bought 27,000 tons of sunflower oil. They are also in for soybean oil and local vegetable oils but passed. Lowest offer for soybean oil is $1,405/ton for 6k. Traders reported the following:

• 11,000
  tons at $1,300 C&f for arrival Nov 11-30.
• 10,000
  tons at $1,300 C&f for arrival Nov 11-30.
• 6,000
  tons at $1,300 C&f for arrival Nov 11-30.

·        
Results awaited. 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
9/6/22

Soybeans
– November is seen in a $13.00-$15.50 range

Soybean
meal – December $350-$440

Soybean
oil – December 62.50-70.00

 

Wheat

·        
US wheat was higher for KC and Chicago on Ukraine nuclear reactor radian concerns. MN closed lower on good weather for US spring wheat harvesting progress. Paris December wheat was down 3.00 euros at 318.75 per ton. A sharply
higher USD limited gains for KC and Chicago.

·        
Funds bought an estimated net 3,000 Chicago wheat contracts. 

·        
Egypt reported wheat reserves were sufficient for 6.7 months.

·        
The Russian export duty on wheat was set at 3,368.9 rubles ($66.58) per ton from September 7 to 13, 2022, based on an indicative price of $329.3 per ton.

·        
Russia’s wheat harvest reached 75 percent for 82.2 million tons expected, according to the AgMin, compared with 66.4 million tons last year. 

·        
Australia producers are expected to see record earnings this season from large production (wheat) and high global prices.

·        
ABARES forecast Australian wheat production of 32.2 million tons and 6.6 million tons for canola, just shy of their records hit last year. 

 

Export
Developments.

·        
South Korea’s Major MFG bought about 65,000 tons of feed wheat from Australia at an estimated $351.75 a ton c&f for shipment between Dec. 19 and Jan. 20.

·        
Taiwan Flour Millers’ Association seeks 55,375 tons of US grade 1 milling wheat on Sept. 8 for shipment Nov. 2 and Nov. 16. Types sought include dark northern spring, hard red winter and white wheat.

·        
Iraq bought 100,000 tons of US hard red wheat at $494.00 per ton C&F. 

·        
Jordan bought 60,000 tons of wheat at $347/ton for LH February shipment.

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

·        
Jordan seeks 120,000 tons of wheat on September 13 for March and April shipment.

·        
Bangladesh seeks 50,000 tons of milling wheat on September 18.  It’s for optional origin with shipment within 40 days of contract signing.

 

Rice/Other

·        
Bangladesh will buy 200,000 tons of rice from Myanmar in a government to government deal at $645.50/ton CIF for delivery within 2 months.

·        
Lowest price offer for Bangladesh seeking 50,000 tons of rice was $439.11 a ton CIF.

 

Updated
9/6/22

Chicago
– December $7.25-$10.00

KC
– December $7.50-$10.75

MN – December
$8.00-$11.00