FI Evening Grain Comments 09/16/22

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CFTC COT and funds will be sent out in a separate email.

 

Soybeans
and meal traded lower Friday in part to seasonal harvest pressure. Soybean oil was very strong from product spreading and tight US stocks reported yesterday by NOPA. Grain and meal basis was steady to lower. Wheat was higher on renewed Black Sea shipping and
geopolitical concerns, which underpinned corn prices. Corn and Chicago wheat ended the week lower and the soybean complex appreciated.

 

 

 

Weather

Last
7 days

 

 

World
Weather, INC.

WEATHER
EVENTS AND FEATURES TO WATCH

• Typhoon
  Nanmodal will impact western Japan early to mid-week next week resulting in some serious wind and flood damage for a part of Kyushu
• Rice
  could be negatively impacted
• Some
  sugarcane in the northern Ryukyu Islands may also be negatively impacted by the storm
  
• Remnants
  of the storm will move across Honshu and Shikoku with less potential for damage, but citrus and rice may be impacted to some degree
• Tropical
  Storm Fiona will impact Hispaniola Sunday into Tuesday with heavy rain and windy conditions expected
• The
  storm will pass to the south of Puerto Rico, but rain from the storm will impact most of that island as well
• Damage
  to crops and property may occur, but the impact may be low
• Rice,
  coffee and sugarcane on Dominican Republic may be most at risk with minor impact on Puerto Rico
• 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 later next week
• 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
• Remnants
  of Tropical Storm Muifa are passing through northeastern China today
• The
  storm produced very heavy rain along most of the central and upper east coast of the nation and now into a part of Liaoning, Jilin and Heilongjiang
• Shanghai
  port activity has resumed
• Damage
  from the storm was suspected of being greatest in southern Jiangsu, Shanghai and northeastern Zhejiang
• Muifa
  should not have had a huge impact on agriculture, but the assessments are ongoing
• 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
• Thunderstorms
  Thursday and early today were welcome and produced a surprisingly great amount of rain
• Dodge
  City, Kan. received 1.89 inches, Amarillo, Texas had more than 1.00 inch as did Hill City, Kan.
  
• The
  heavier moisture was not widespread, but it will be of great use to livestock for grazing and for future wheat planting
• Some
  showers and thunderstorms will be possible in the next ten days, 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
• Tropical
  Storm Lester off the southwest coast of Mexico is predicted to move inland over west-central Mexico this weekend and some of the moisture will stream into the southwestern United States to induce some late season rainfall in Arizona, New Mexico and the central
  Rocky Mountain region.
• Northern
  U.S. Plains weather is expected to be mixed with a few showers and some periods of sunshine during the next two weeks
• 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, although some early to mid-week cooling is likely
• 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 this 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
• Rain
  is expected to fall in northern California, southern Oregon and neighboring areas as a low-pressure center evolves next week along that coast and slowly moves inland
• Some
  showers from the low will also impact Idaho and Wyoming crop areas later next week
• 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 the remnants of Typhoon Muifa will saturate the ground once again possibly leading to some local flooding and fieldwork delay this weekend
• 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
• Gujarat
  will finally start to dry out this weekend and next week after a long week of rain
• Net
  drying will occur in the far northwestern 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 in the coming week from Germany, Belgium and northeastern France to Ukraine, northern Romania, southern Belarus and parts of western Russia
  
• Rainfall
  will vary from 0.50 to 2.5 inches ensuring sufficient moisture for long term winter crop emergence and establishment
• There
  is potential for greater rain in the western fringes of the Balkan region near the Adriatic Sea coast
• Rainfall
  elsewhere will be more limited and net drying may occur more often than not
• Much
  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 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 in the central and north over the next ten days
  
• 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 +10.98 and it will move erratically over the next few days.

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Sunday,
Sept. 18: 

• China’s
  second batch of August trade data, including corn, pork, wheat imports

Monday,
Sept. 19:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for corn, soybeans and cotton; spring wheat, corn, cotton, soybean harvesting, 4pm
• MARS
  monthly crop conditions report
• USDA
  total milk production, 3pm
• HOLIDAY:
  UK, Japan

Tuesday,
Sept. 20:

• China’s
  third batch of August trade data, including soy, corn and pork imports by country
• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• Malaysia’s
  Sept. 1-20 palm oil export data
• World
  Agri-Tech Innovation Summit, London, Sept. 20-21

Wednesday,
Sept. 21:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Globoil,
  international edible oil conference, Agra, India, day 1
• Sugar
  and ethanol conference by Indian Sugar Mills Association and Datagro

Thursday,
Sept. 22:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• US
  cold storage data for beef, pork and poultry, 3pm
• Globoil,
  international edible oil conference, Agra, India, day 2
• International
  Grains Council monthly report
• USDA
  red meat production, 3pm
• Future
  Food Tech Conference, London, Sept. 22-23

Friday,
Sept. 23:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• Globoil,
  international edible oil conference, Agra, India, day 3
• FranceAgriMer
  weekly update on crop conditions
• Brazil’s
  Unica may release cane crush and sugar production data (tentative)
• US
  cattle on feed, poultry slaughter, 3pm
• HOLIDAY:
  Japan

Source:
Bloomberg and FI

 

 

 

 

 

Macros

99
Counterparties Take $2.187 Tln At Fed Reverse Repo Op (prev $2.176 Tln, 100 Bids)

 

US
Univ Of Michigan Sentiment Sep P: 59.5 (est 60.0; prev 58.2)

–
Current Conditions: 58.9 (est 59.4; prev 58.6)

–
Expectation: 59.9 (est 59.0; prev 58.0)

–
1-Year Inflation: 4.6% (est 4.6%; prev 4.8%)

–
5-10 Year Inflation: 2.8% (est 2.9%; prev 2.9%)

 

Canadian
International Securities Transactions Jul: 14.83B (prev -17.54B)

Canadian
Wholesale Trade Sales (M/M) Jul: -0.6% (est -0.4%; prev 0.1%)

 

UK
Retail Sales (M/M) Aug: -1.6% (est -0.5%; prev 0.3%)

UK
Retail Sales (Y/Y) Aug: -5.4% (est -3.7%; prev -3.4%)

UK
Retail Sales Ex Fuel (M/M) Aug: -1.6% (est -0.7%; prev 0.4%)

UK
Retail Sales Ex Fuel (Y/Y) Aug: -5.0% (est -3.5%; prev -3.0%)

 

China
Industrial Production Y/Y Aug: 4.2% (est 3.8%, prev 3.8%)

Industrial
Production YTD Y/Y Aug: 3.6% (est 3.6%, prev 3.5%)

China
Retail Sales Y/Y Aug: 5.4% (est 3.2%, prev 2.7%)

Retail
Sales YTD Y/Y Aug: 0.5% (est 0.2%, prev -0.2%)

 

Corn

·        
CBOT corn was lower earlier on ongoing global demand concerns and a favorable US weather forecast for harvesting bias southern US. Higher wheat and renewed Black Sea shipping concerns lifted corn higher.

·        
Coceral lowered their estimate of the EU corn crop to 51.9 million tons from a previous 66.0 million in May and compares to 70.2 million tons produced last year.

·        
French corn ratings for the week ending September 12 were unchanged from the previous week at 43 percent good/excellent, well off 89 percent year earlier. 14 percent of the corn crop had been harvested.  The French AgMin sees
a 11.33-million-ton crop, lowest since 1990.

·        
The temporary agreement to avoid a US railroad strike increased producer selling Thursday and Friday.

·        
Germany’s economy ministry announced the country had taken over Russian oil Rosneft’s subsidiaries set secure fuel supplies.  According to the economic minister, 12% of Germany’s oil refining capacity is controlled by Rosneft
Deutschland and RN Refining & Marketing.  Some fear this could lead to an escalation in trade relations. But both countries brokered a deal before the Friday announcement.

·        
Gevo breaks ground on Lake Preston fuel production facility

https://brookingsregister.com/article/gevo-breaks-ground-on-lake-preston-fuel-production-facility

·        
China’s November hog futures are near contract highs. China plans to sell 15,000 tons of pork from reserves on September 17. AgriCensus noted China plans to sell combined 200,000 tons during the month of September.

 

 

U
of I: Mulling Over Margin, Part 1: Introduction and Historical Background

Coppess,
J., J. Janzen, C. Zulauf, G. Schnitkey, K. Swanson, N. Paulson and J. Baltz. “Mulling Over Margin, Part 1: Introduction and Historical Background.”
farmdoc
daily
(12):142,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, September 15, 2022.

https://farmdocdaily.illinois.edu/2022/09/mulling-over-margin-part-1-introduction-and-historical-background.html

 

Export
developments.

·        
None reported

 

Updated
9/7/22

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

 

Soybeans

·        
Soybeans and
meal traded lower on US harvest pressure and Argentina exports. Soybean oil was strong after NOPA yesterday reported tighter than expected end of August US stocks and firm US basis. With crush margins favorable, the seasonal increase in US soybean crush should
boost meal and soybean oil supplies.

·        
There were rumors US importers were inquiring over Argentina soybean oil imports. We are not confident Argentina soybean oil will reach the US, at least in large quantities, unless import duties are lowered and RIN credits are
granted for biofuel producers. Argentina soybean oil is offered at a steep discount to US soybean oil.

·        
Argentina’s “soy dollar” has benefited producers and exporters since its launch early September. AgriCensus noted they tracked 31 soybean cargoes of Argentina soybeans, nearly 2.0 million tons, have been sold to China between
September 5-14 for prompt shipment. Prior to September Argentina sold nearly 10 cargoes.

·        
US weather will be unusually warm this weekend well into next workweek, benefiting late developing soybean development.

·        
Malaysia was closed for public holiday.

 

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 higher on renewed Black Sea shipping concerns despite a slowdown in global demand and favorable US weather for US winter wheat planting progress and spring wheat harvesting. Some traders and wires noted the
drought in Argentina may reduce grain supply. Wheat conditions in Argentina are worsening, according to a Bloomberg article. The UN late August predicted a rare “triple-dip” La Nina in 2022. A La Nina event for the US tends to yield a drier bias for the southwestern
Great Plains. 

·        
We don’t look for Russia to back out of the safe passage deal but it does expire

·        
Russian President Vladimir Putin said Russia was ready to supply more than 300,000 tons of Russian fertilizers stuck in European ports to the developing world for free. Later the president said again that he’s unhappy that not
much grain exported from Ukraine was destined for poor countries. He also called for resolution of remaining problems of Russian exports, including fertilizers, citing financing and freight logistics. Resident Putin also called on the removal of export restrictions
on Belarusian fertilizers.

·        
Paris December wheat was up 2.00 euros at 333.75 per ton after trading lower earlier this morning, essentially rebounding from a 1-week low.  

·        
Coceral lowered its estimate for EU soft wheat to 140.5 million tons from 143.0 million early in the crop season and compares to 143.4 million last year.

 

US
Wheat Associates

With
harvest complete, this is the final weekly report for HRW data; sample analysis continues. SW harvest is winding down under dry conditions and data still reflect low protein, low moisture and good test weight. HRS harvest is nearly 90% complete and this year’s
crop currently grades at U.S. No. 1 Northern Spring. Northern durum is more than three-quarters harvested and currently grades at U.S. No. 1 Hard Amber Durum.

 

 

Export
Developments.

·        
Results awaited on Saudi Arabia seeking 535,000 tons of wheat for arrival from November 10 to February 25 arrival. 

·        
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