FI Evening Grain Comments 09/15/22

PDF Attached

 

Early
this morning the Biden administration announced the US railroads and unions made a tentative deal after 20 hours of intense talks, according to Reuters. The deal goes to the unions to be voted on. But even if the votes do not go through, a strike will be averted
for several weeks due to the standard language included in the deal.

 

USDA
updated export sales. Bell report attached. Below are current crop year to date sales

 

Ongoing
talk China bought several Argentina soybean cargoes this week pressured soybeans. Meal traded higher and SBO lower. WTI was down more than $3.00. Corn followed wheat lower. Rains will fall across the northwestern Midwest areas through Saturday, north central
areas Sunday, and east central areas Monday. The Great Plains will see mostly dry weather.

 

 

Weather

 

 

 

World
Weather, INC.

WEATHER
EVENTS AND FEATURES TO WATCH

• Brazil’s
  center west and center south crop areas will experience a ramping up of rain during the next ten days that should be sufficient to get some early soybeans to start going into the ground a week from now and more likely in the following weekend
• The
  moisture will also be good for early corn being sown in southern Brazil
• Parana
  wheat may not welcome the precipitation boost especially since some rain already fell Tuesday and the higher frequency of rain may raise some concern over harvest progress and grain quality
• Brazil’s
  coffee, citrus and sugarcane areas will also get some rain over the next ten days
• Sul
  de Minas, Sao Paulo and Mato Grosso do Sul already reported rain in the past two days and more is expected
• New
  crop cane development is expected
• Some
  coffee flowering will be possible by the end of next week in Sul de Minas and Zona de Mata
• Citrus
  flowering is unlikely to begin quite yet, but flower bud swelling should be underway
• Argentina
  rainfall will be greatest in the south and eastern parts of the Nation Sunday into Tuesday
• Cordoba
  and western Santa Fe, as well as areas to the northwest, will not get sufficient rain to change soil moisture which is still quite limited
• The
  moisture will benefit wheat in La Pampa, Buenos Aires and Entre Rios and improve sunseed planting, emergence and establishment
• Tropical
  Storm Muifa was located 180 miles north northwest Shanghai, China at 0900 GMT today moving north northwesterly at 16 mph and producing maximum sustained wind speeds near 52 mph
• Tropical
  storm force wind was occurring out 55 miles from the storm
• A
  steady weakening trend is expected through Friday with remnants of the storm to move through eastern Shandong later today and then into Liaoning and Jilin in northeastern China Friday into Saturday
• No
  more wind damage is expected
• Shanghai
  port activity will slowly resume
• Damage
  from the storm was suspected of being greatest in southern Jiangsu, Shanghai and northeastern Zhejiang, but the damage assessments are just beginning
• Muifa
  should not have a huge impact on agriculture, although flooding rain has occurred near the coast in Jiangsu and eastern Shandong with similar conditions likely in southern Liaoning and southern Jilin.
  
• Tropical
  Storm Nanmadol is much farther to the southeast of Muifa in the western Pacific Ocean southwest of Iwo To, but it will track toward Kyushu, Japan over the next few days.
  
• The
  storm may bring heavy rain and strong wind speeds to Kyushu and the northernmost Ryukyu Islands of Japan late this weekend and early next week.
  
• Nanmadol
  might also impact portions of western Honshu and Shikoku
• Tropical
  Storm Fiona was located 805 miles east of the Leeward islands earlier today
• The
  system will reach Puerto Rico this weekend and could also impact Dominican Republic late this weekend into Monday
• The
  storm may turn to the north next week and intensify east of the Bahamas, but it should stay east of North America.
  
• Lower
  U.S. Midwest, Delta and southeastern states will experience little to no rain over the coming week and possibly the next ten days
• Good
  summer crop maturation and harvest conditions will result
• Rain
  in U.S. hard red winter wheat areas is not likely to be very great during the next ten days
• Some
  showers and thunderstorms will be possible, but very warm to hot temperatures are likely as well which should keep evaporation rates well above normal
• Follow
  up rain will be very important for the best wheat planting, emergence and establishment conditions
• Central
  U.S. temperatures will be well above normal next week
• Record
  and near record after temperatures are expected for a few days
• The
  heat will stress livestock and accelerate drying conditions in some summer crop areas
• U.S.
  NWS has released its 30-day outlook for October calling for warmer than usual weather in most of the contiguous United States
  
• Below
  normal precipitation was suggested for most of the central and southern Plains, central and lower Midwest, northern Delta and from northern California into the central Rocky Mountain region.
  
• Central
  and western Washington State was the only advertised wetter biased area  in the nation
• U.S.
  NWS 90-Day outlook for October through December suggested warmer than usual weather for all areas in the contiguous United States except the Pacific Northwest and northern Plains where there were equal chances for above, below and near normal temperatures.
  
• Rainfall
  was advertised below normal for the central and southern Plains, southwestern desert region, southern Rocky Mountain region and from the lower Mississippi River Valley into the southeastern states
• Wetter
  biased weather was advertised for areas from western Montana to Washington and northern Oregon.
  
• A
  tropical cyclone evolving off the southwest coast of Mexico is predicted to move more to the west than north after reaching southern parts of Baja California reducing the risk of bringing moisture into the southwestern U.S. and eventually into the central
  and southwestern U.S. Plains next week
• Northern
  U.S. Plains weather is expected to be mixed with a few showers and some periods of sunshine during the next two weeks
• Eastern
  Canada’s Prairies will get some rain early today and then drier weather will follow for a couple of days before a few more showers evolve ahead of cooler air
• Canada’s
  Prairies precipitation will continue lighter than usual over the next ten days allowing fieldwork to advance favorably
• Temperatures
  will be warmer than usual
• Drought
  will remain over central and southwestern parts of the Prairies for the next few weeks
• Western
  U.S. Corn Belt crop areas will get some rain tonight through the weekend followed by some drier weather
• The
  moisture will be good for late season soybean filling and for raising soil moisture in the driest areas
• No
  significant drought relief is expected in California or the U.S. Pacific Northwest through the next two weeks
• Significant
  frost and freezes will be possible late next week in parts of Canada’s Prairies
  
• Drought
  continues in China’s central Yangtze River Basin where more damage continues to unirrigated rice and other crops
• No
  change is expected for the next ten days
• Recent
  drying in North China Plain and interior northeastern China has been ideal in speeding along summer crop maturation and supporting some early season harvesting
• Central
  and eastern Heilongjiang, southeastern Jilin and southeastern Liaoning are still rated too wet on, but should be drying down
  
• Moisture
  from Typhoon Muifa could re-saturate the ground with moisture again possibly leading to some flooding and fieldwork delay late this week into the weekend
• China’s
  weather will change little over the next ten days; however, Tropical Storm Muifa will move along the upper portion of the east-central China coast today before turning into the northeast Friday and Saturday producing some heavy rain and flooding from eastern
  Shandong to Liaoning
• Most
  interior areas of eastern China will continue to dry out over this forecast period.
  
• Drought
  conditions will prevail in the heart of the Yangtze River Basin
• Beneficial
  drying will continue in portions of the North China Plain while remnant moisture from Muifa impact parts of the northeastern provinces into the weekend
• Rain
  totals will vary from 3.00 to more than 8.00 inches will occur from eastern Shandong into Liaoning by Saturday night
• China’s
  weather bottom line will be good for the start of winter wheat planting in the Yellow River Basin and North China Plain and for the maturation and early harvest of summer crops in interior parts of the northeast. Flooding rain has already impacted a part of
  the central east coast and flooding is expected from eastern Shandong to Liaoning possibly inducing a little crop damage.  Heavy rain in Shandong, southern Liaoning to southeastern Heilongjiang will delay farming activity.
  
• 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
  
• India
  will continue plenty wet across the central and eastern parts of the nation during the next ten days
• Some
  Local flooding is possible especially in parts of Gujarat, northern Maharashtra and Madhya Pradesh as well as areas from northern Chhattisgarh to Bangladesh, West Bengal and northeastern Odisha
  
• Net
  drying will occur in the far northern and southernmost parts of the nation, despite some light showers
• Temperatures
  will continue quite warm to hot in northwestern India and Pakistan
• 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 many areas
• CIS
  weather over the next ten days will spread rain from western Russia, Belarus and Ukraine into the remainder of Russia west of the Ural Mountains
  
• Some
  rain totals will vary from 0.50 to 1.50 inches in Russia’s Southern Region
• Sufficient
  rain will fall to improve winter wheat and rye emergence and establishment
• Some
  delay to summer crop maturation and harvest progress is expected as a result of the predicted rain.
  
• Europe
  rainfall will be greatest later this week through mid-week next week from Germany, Belgium and northeastern France to Ukraine, northern Romania, southern Belarus and parts of western Russia
  
• Rainfall
  will vary from 0.75 to 2.5 inches ensuring sufficient moisture for long term winter crop emergence and establishment
• There
  is potential for 2.50 to more than 5.00 inches of rain in the western Balkan region, southwestern Ukraine and in a few northeastern Romania locations
• Rainfall
  elsewhere will be more limited and net drying may occur more often than not
• Central
  and western France and the U.K. will not receive much rain of significance for a while
• Europe’s
  bottom line looks good for improving soil moisture and long term winter crop emergence and establishment from northeastern France and Germany into Ukraine and far western Russia. Locally heavy rain in from Albania to northeastern Italy and Croatia could lead
  to a little flooding and a minor amount of crop damage. In contrast, more rain will be needed in France, the United Kingdom and northern Germany as well as in the lower Danube River Basin where relief to dryness will only be partial.
  
• Australia
  is still expected to see periodic bouts of rain over the next two weeks
• Rainfall
  may be a little too great in portions of Victoria and New South Wales, but no imminent problems are expected
• Australia’s
  bottom line still looks very good for winter wheat, barley and canola development. As long as the crop region warms up a little more in coming weeks and rain frequency does not get excessive, this year’s production will be huge. There is some concern about
  a wet bias in October and November that could harm the quality of some crops.
  
• Argentina
  rainfall is expected to erratic over the next ten days maintaining concern over early season crop planting prospects later this month and next
• Dryness
  will also be a concern for the nation’s wheat crop – especially in the west
• Some
  showers are expected Sunday into Tuesday, but they are not likely to be great enough for a lasting boost in soil moisture in Cordoba, San Luis or Santiago del Estero. Chaco will also be left dry.
  
• Ontario
  and Quebec, Canada weather remains mostly good for corn and soybeans with little change likely
• Alternating
  periods of rain and sunshine will continue along with seasonable temperatures
• 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 in some areas and beginning to green up and resume development in other areas
• Showers
  will be infrequent and light in the central and north while temperatures are warm which will stimulate some additional development
• Rain
  will fall more significantly in Eastern and Western Cape and Natal this weekend into early next week
• 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
• 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 has fallen over the past two weeks in portions of the dry region
• This
  coming week’s rainfall will be trending lighter than usual once again
• Southern
  and western Mexico will get some rain periodically through the next couple of weeks with sufficient amounts to maintain moisture abundance
• 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
• West-Central
  Africa showers and thunderstorms will continue frequently benefiting coffee and cocoa production areas during the next two weeks.
  
• Some
  rice, cotton and sugarcane will also benefit from this pattern
• Weekend
  precipitation was minimal, but it will be increasing later this week and next week
• 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 +10.07 and it will move erratically over the next few days.

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

From
Wednesday night

 

 

Macros

100
Counterparties Take $2.176 Tln At Fed Reverse Repo Op (prev $2.226 Tln, 99 Bids)

US
Retail Sales Advance (M/M) Aug: 0.3% (est -0.1%; prev 0.0%)

US
Retail Sales Ex Auto (M/M) Aug: -0.3% (est 0.0%; prev 0.4%)

US
Retail Sales Ex Auto And Gas Aug: 0.3% (est 0.5%; prev 0.7%)

US
Retail Sales Control Group (M/M) Aug: 0.0% (est 0.5%; prev 0.8%)

US
Initial Jobless Claims Sep 10: 213K (est 227K; prev 222K)

US
Continuing Claims Sep 3: 1.403Mln (est 1.478Mln; prev 1.473Mln)

US
Empire Manufacturing Sep: -1.5 (est -12.9; prev -31.3)

US
Philadelphia Fed Business Outlook Sep: -9.9 (est 2.3; prev 6.2)

US
Import Price Index (M/M) Aug: -1.0% (est -1.3%; prev -1.4%)

US
Import Price Index Ex Petroleum (M/M) Aug: -0.2% (est -0.6%; prev -0.7%)

US
Import Price Index (Y/Y) Aug: 7.8% (est 7.7%; prev 8.8%)

US
Export Price Index (M/M) Aug: -1.6% (est -1.1%; prev -3.3%)

US
Export Price Index (Y/Y) Aug: 10.8% (est 12.5%; prev 13.1%)

Canadian
Existing Home Sales (M/M) Aug: -1.0% (est -1.6%; prev -5.3%)

US
Industrial Production (M/M) Aug: -0.2% (est 0.0%; prev R 0.5%)

–
Capacity Utilization: 80.0% (est 80.2%; prev R 80.2%)

–
Manufacturing (SIC) Production (M/M): 0.1% (est -0.1%; prev R 0.6%)

 

EPA
on August RIN generation

U.S.
GENERATED 453
MLN BIODIESEL
(D4) BLENDING CREDITS IN AUGUST, VS 422 MLN IN JULY -EPA

U.S.
GENERATED 1.26
BLN ETHANOL
(D6) BLENDING CREDITS IN AUGUST, VS 1.21 BLN IN JULY -EPA

 

2021 
-year ago

U.S.
GENERATED 421
MLN BIODIESEL
(D4) BLENDING CREDITS IN AUGUST, VS 359 MLN IN JULY -EPA

U.S.
GENERATED 1.2
BLN ETHANOL
(D6) BLENDING CREDITS IN AUGUST, VS 1.3 BLN IN JULY -EPA

 

 

 

Corn

·        
CBOT corn traded two-sided, ending lower. The USD was up 11 points and crude oil fell $3.50/barrel. Sharply lower wheat and lack of fresh news added to the negative undertone.

·        
Some traders noted US corn harvest pressure. We look for US harvesting progress to end up around 11 percent at the end of this week, above 8 percent average.

·        
2022-23 US corn export sales commitments are off to their lowest start in four years. The average weekly sales for the Aug 28-Sep 8 were below average for this time of year.

·        
Funds sold an estimated net 4,000 corn contracts. 

·        
The Rosario grains exchange mentioned some of Argentina’s corn belt is facing some of its driest conditions in around 30 years. The drought is stalling corn planting progress. 

·        
Strategie Grains lowered its EU corn crop to 52.9 million tons from 55.4 million last month, a 15-year low. They also noted EU feed grain demand could be down 5% for the 2022-23 season.

·        
China plans to sell 15,000 tons of pork from reserves on September 17.

 

Export
developments.

·        
None reported

 

Updated
9/7/22

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

 

Soybeans

·        
Soybeans fell
on ongoing talk Argentina sold a large number of soybeans to Argentina (10 cargoes as of yesterday). Soybean oil was lower in large part to lower energy prices. Traders sold the oil share, which in turn allowed meal to settle higher.

·        
Late season US crop weather is favorable, bias ECB.

·        
US 2022-23 US soybean commitments are off to a good start, running 13.4% above this time last year.

·        
NOPA reported a friendly reports, but traders shrugged it off on macro-economic developments.

·        
Funds sold an estimated net 3,000 soybean contracts, bought 3,000 meal and sold 2,000 soybean oil.

·        
Soybean deliveries were 322 Wednesday night.

·        
Argentina’s central bank announced a rate hike to 75 percent.

·        
Indonesia’s September 16-30 crude oil reference price was set at $843.32//ton, down from $929.66/per previously.

·        
Malaysia’s palm oil market will be closed for public holiday on Friday.

·        
Malaysia left its October export tax for crude palm oil unchanged at 8% and raised its reference price, to 4,033.51 ringgit ($890) per ton. The September reference price was 3,907.51 ringgit ($862.20).

·        
Cargo surveyor SGS reported month to date September 15 Malaysian palm exports at 646,070 tons, 129,998 tons above the same period a month ago or up 25.2%, and 193,463 tons below the same period a year ago or down 23.0%. ITS reported
Malaysian palm September 1-15 exports at 659,997 tons, up 23.8 percent from 533,050 tons during FH August. AmSpec estimated 583,446 tons versus 490,375 tons. 

·        
NOPA’s reported was seen supportive for soybean oil futures given end of August soybean oil stocks were well off the average trade average while the yield ticked higher (11.98-record for month of Aug.).   Soybean oil stocks of
1.565 billion pounds were lowest since June 2021. The US soybean crush came in 0.6 million bushels below expectations at 165.5 million, above year ago. We did hear a good amount of crush downtime during August.  The adjusted daily crush was lowest since September
2021. Year over year, the southwest and IL regions saw an increase.

 

 

Export
Developments

No
developments.

 

Updated
9/13/22

Soybeans
– November is seen in a $13.25-$15.50 range

Soybean
meal – December $390-$480

Soybean
oil – December 63.00-72.00

 

Wheat

·        
Wheat futures ended sharply lower on lack of fresh news, higher USD and below average USDA weekly export sales. Mid Aug through first week of September weekly export sales for all wheat were just over 350,000 tons. 350,000 tons
per week was at the low end of our expectations.

·        
After the US dodged a railroad strike, producer selling is expected to pick up. Earlier in the session December Chicago wheat hit a 2-month high.

·        
Funds sold an estimated net 15,000 Chicago wheat contracts. 

·        
Russia is actively loading wheat for the Middle East and African Nations.

·        
A Ukraine Deputy Agriculture Minister said Russian attacks and occupation in Ukraine’s south and east reduced the country’s grain storage capacity by 15 million tons.

·        
Paris December wheat was down 3.75 euros at 332.25 per ton.

 

Export
Developments.

·        
Saudi Arabia seeks 535,000 tons of wheat on Friday for arrival from November 10 to February 25 arrival. 

·        
Japan’s AgMin bought 97,373 tons of food wheat from the US and Canada for arrival by Dec 31.

·        
Jordan is back in September 20 for 120,000 tons of wheat.

·        
Jordan seeks 120,000 tons of barley on September 21.

·        
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

·        
None reported

 

Updated
9/6/22

Chicago
– December $7.25-$10.00

KC
– December $7.50-$10.75

MN
– December $8.00-$11.00