FI Evening Grain Comments 09/11/22

PDF Attached

 

Keep
an eye on the US railroad union issues. That could drive prices higher across the board if strikes slow transportation.

 

Sunday
Calls:

Good
rain fell across key late developing upper midwestern crop areas Sat into Sun.

 

Soybeans
down 3-5

Meal
$0.50-$1.00 lower

SBO
steady to 30 lower

Corn
1-4 lower

Wheat
down 3-8

 

 

CBOT
prices for the ags rallied on Friday in part to a sharply lower USD and higher energy prices. Positioning ahead of the USDA report was also seen. Private exporters reported sales of 104,000 metric tons of soybeans for delivery to Taiwan during the 2022/2023
marketing year.

 

 

Weather

 

24-hour
– Sunday 7 am CT

 

World
Weather, INC.

WEATHER
EVENTS AND FEATURES TO WATCH

• Not
  many changes today
• Central
  U.S. Plains will receive some needed rain today and Saturday easing a long week of hot, dry, conditions
• Rainfall
  of 0.05 to 0.40 inch with a few amounts to 0.75 inch will result, but coverage of more than 0.25 inch of rain will be less than 30% of the region
• Net
  drying will resume late this weekend and last for much of the following week to ten days
• Much
  more rain will be needed
• Cooling
  is expected for a little while, but it will get hot again next week
• Greater
  rain is needed to improve wheat planting prospects
• California’s
  heat wave is abating
• Extreme
  temperatures this week set many records and had a huge impact on water and electrical usage
• Drought
  remains very serious and with La Nina prevailing through the end of this year the odds are not good for much relief prior to the middle and latter parts of winter
• There
  will be some rain and mountain snow this autumn, but it will likely be lighter than usual
• Southern
  U.S. Plains will be mostly dry for the next ten days
• Any
  showers that occur will be too brief and light to have a notable impact on crop or soil conditions
• U.S.
  Delta weather will improve with less frequent and less significant rain after showers this weekend and early next week
• U.S.
  southeastern states will continue rainy into early next week with drier weather during the second half of next week
  
• Recent
  rain has slowed crop maturation and harvest progress and raised some concern over cotton boll rot
• U.S.
  Pacific Northwest will remain drier biased for the next ten days with temperatures near to above normal
• Low
  temperatures this morning slipped to 32 degrees Fahrenheit in southeastern Saskatchewan and 37 in northwestern North Dakota, but no damaging frost occurred
  
• Cooler
  air will continue spread across the north-central U.S. from Canada today and it will linger Saturday before a strong warming trend returns Sunday into next week
  
• No
  damaging frost is expected
• Highest
  temperatures will be confined to the upper 50s and 60s in Canada’s Prairies today and in the 60s and lower 70s in the northern Plains and upper Midwest through Saturday
  
• Next
  colder air mass in Canada’s Prairies will hold off until after September 18
  
• Frost
  and freezes may be more likely in that event
• Tropical
  Storm Muifa in the western Pacific  Ocean will move northwesterly over the next few days moving across or very near to the southwestern Ryukyu Islands of Japan and possibly impacting Taiwan early next week before moving close to the east-central China Coast
  during mid- to late-week next week
• The
  storm could impact eastern China, but will most likely move across North Korea and impact northeastern China a week from now
• Interior
  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 central 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
• Xinjiang,
  China weather is expected to be mild to warm with rain mostly impacting the far northeast periodically
• This
  pattern will be very good for cotton and corn maturation as well as early harvesting in most areas, but there will be some disruption due to the showers in the far northeast
  
• Europe
  will receive some dryness easing rainfall over the coming week, but more will be needed to fully restore soil moisture to normal
• Western
  France, Spain and Portugal may get some significant rain next week from the remnants of Hurricane  Danielle arrive from the west
• 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 middle to latter part of next week
• Moisture
  is needed for winter crop emergence and establishment
• Recent
  frost and light freezes in parts of western Russia have had a minimal impact on crops and additional bouts of cool weather will continue to have a low impact.
  
• A
  few lows in the upper 20s and 30s occurred this morning which may be the coldest morning for the region
• Australia
  is still expected to see periodic bouts of rain over the next two weeks
• Rain
  in Queensland, New South Wales and Victoria Thursday was welcome and beneficial in raising soil moisture – especially in Queensland where the ground had been a little dry
• Australia
  temperatures will be a little cooler than usual in the next ten days which will slow drying rates and raise the need for drier and warmer conditions to improve early season crop development
• India
  will continue plenty wet across the central, southern and eastern parts of the nation during the next ten days
• Local
  flooding will be possible especially in parts of Gujarat and Madhya Pradesh
• Pakistan
  has benefited from drier weather recently and it should remain mostly dry for the next ten days along with neighboring areas of far northwestern India
• Improved
  cotton, rice and sugarcane conditions are expected, but production losses in Sindh because of late August flooding will not be reversible in some areas
• 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 – especially in the west
• 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 and beyond mid-month in center west Brazil would be welcome if they verify, although early indications suggest the resulting rainfall will be sporadic and light which is normal for the first rain of the season
• 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
• Brazil
  coffee, citrus and sugarcane areas may get some rain after Sep. 18, but confidence is low
• Canada’s
  Prairies will continue drier biased during the next ten days favoring spring and summer crop maturation and harvest progress
• Soil
  moisture in the southeast is still favorable for late season crops
• Showers
  next week should be brief and light
• Greater
  rain may impact the eastern and southern Prairies after Sep. 18.
• 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
• South
  Africa precipitation is expected to be limited over the next ten days
• 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 as long as timely rain evolves late this month and in October.
  
• 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
• Hurricane
  Earl was well south southeast of Bermuda at 0500 EDT today
• Earl
  will continuing moving to the northeast in the next couple of days and will intensify while losing some of its tropical characteristics
  
• The
  system will pass southeast of Bermuda today into Saturday
• Earl
  will lose all of its tropical characteristics next week and become a large mid-latitude storm well to the east of Newfoundland
• 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
• 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 last weekend in a few locations bringing some notable relief.
  
• This
  coming week’s weather will be trending drier again
• 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 +9.71 and it will move higher over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
Sept. 12:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• Malaysian
  Palm Oil Board’s data on stockpiles, production and exports
• International
  Dairy Federation hosts World Dairy Summit, Sept. 12-15, New Delhi
• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for corn, soybeans and cotton; spring wheat, corn, soybean harvesting, 4pm
• HOLIDAY:
  China, Hong Kong, Korea

Tuesday,
Sept. 13:

• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• EU
  weekly grain, oilseed import and export data
• France’s
  agriculture ministry updates 2022 production estimates
• New
  Zealand Food Prices

Wednesday,
Sept. 14:

• EIA
  weekly US ethanol inventories, production, 10:30am
• France
  AgriMer monthly grains outlook

Thursday,
Sept. 15:

• UkrAgroConsult’s
  Agro&Food Security Forum, Warsaw
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Malaysia’s
  Sept. 1-15 palm oil export data

Friday,
Sept. 16:

• 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
• HOLIDAY:
  Malaysia

Source:
Bloomberg and FI

 

 

 

 

Bloomberg
estimates for USDA

 

 

 

 

Commitment
of Traders

 

 

 

Corn

·        
Pre USDA report positioning lifted corn higher on Friday.  Look for USDA to reduce global corn stocks on Monday. We are bullish with US production at the low end of trade estimates, but don’t discount a good reduction in EU corn
production as well. Either way, global stocks will eventually tighten further, beyond this report, IMO.

·        
(Bloomberg) — Corn production in the EU-27 nations has declined 20.8% y/y to 55m tons, farm lobby Copa-Cogeca says in an emailed report on the 2022 harvest. 

·        
Funds bought an estimated net 8,000 corn contracts. 

·        
Keep an eye on the CBOT corn spreads as they are widening, a signal stocks will remain tight. $6.8500 Dec and $6.8925 March looks cheap.

·        
French crop ratings for corn dipped 2 points to 43 percent, lowest in recorded history for this time of year, and compares to 89 percent last year. Harvesting of corn in France started with about 10 percent complete as of today.

 

Export
developments.

·        
Taiwan’s MFIG passed on 65,000 tons of US/SA corn.

 

Updated
9/7/22

December
corn is seen in a $6.00-$7.25 range.

 

Soybeans

·        
The soybean complex traded higher on Friday with help from higher US energy markets and positioning ahead of the USDA report.  Higher wheat and corn amid Black Sea supply concerns lent support.

·        
Funds bought an estimated net 8,000 soybeans, bought 3,000 meal and 2,000 soybean oil.

·        
As of Friday afternoon, 3.66 million tons of soybeans were sold by Argentina producers, but the trade has yet to learn what was sold for the products by crushers.

·        
The surge in Argentina soybean sales has slowed US Gulf soybean export interest.

·        
MPOB Malaysian palm oil S&D data will be released September 12 and traders are looking for stocks to increase to just over 2 million tons.

·        
ITS reported palm Malaysian palm oil exports for the 1-10 period up 16.2 percent at 423,912 tons from 364,910 tons from the same period month. AmSpec reported 371,091 tons, versus 339,669 previous.

 

 

USDA
Attaché: Brazil Biofuels Annual

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Biofuels%20Annual_Sao%20Paulo%20ATO_Brazil_BR2022-0047.pdf

 

Export
Developments

·        
Private exporters reported sales of 104,000 metric tons of soybeans for delivery to Taiwan during the 2022/2023 marketing year.

·        
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.

 

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

·        
Wheat traded higher on Friday. USD was sharply lower by 73 points. Ukraine grain supply concerns were noted on Friday with the uncertainty over the Russian-occupied nuclear reactor. 

·        
Funds bought an estimated net 13,000 Chicago wheat contracts. 

·        
We see nothing bullish in the wheat market other than supply disruptions out the Black Sea and caution funds that went long the Chicago market.

 

US
Wheat Associates: “With only a few HRW fields remaining, all samples are in the lab and laboratory and baking analysis continues. The SW, HRS and durum harvests are progressing quickly under hot, dry conditions. SW testing data reflect a crop much-improved
over last year that currently grades a U.S. No. 1 SW. High yields and good quality are reported for the HRS and northern durum crops, each grading a U.S. No. 1.”

 

 

“This
week, basis was mixed in the Gulf and Pacific Northwest (PNW). In the Gulf, HRS basis was down while SRW and HRW basis were both up. In the PNW, HRW basis was up while HRS basis was flat. Prices for soft white wheat were up. Grain traders said wheat exports
remain slow due to price factors. This week, volatility in the futures market was apparent when Russia’s president complained about the destination of some Ukrainian wheat exports, causing wheat futures to rally on Wednesday; before Putin’s comments, wheat
prices had softened from their multiyear highs.”

• U.S.
  Wheat Price Report

 

Export
Developments.

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

·        
Jordan seeks 120,000 tons of barley on September 14 after passing September 7 for Feb-Mar shipment. 

·        
Japan in a SBS import tender seeks 70,000 tons of feed wheat and 40,000 tons of barley on September 14 for arrival in Japan by February 24.

·        
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

·        
Yesterday India announced they imposed a 20 percent duty on rice exports of various types.

 

 

Updated
9/6/22

Chicago
– December $7.25-$10.00

KC
– December $7.50-$10.75

MN – December
$8.00-$11.00