FI Evening Grain Comments 09/24/22

PDF Attached

 

End
of week risk off with widespread commodity selling sent ags lower. Fundamental news was light. The USD was up 167 points by the end of Friday and WTI off $4.06/barrel. Equities were sharply lower. Many developing country central banks raised key interest rates
this week, an indication global recession might be on hand. US harvesting progress increased last week and should ramp up next week.
US
weather forecast was unchanged. Rains favor the northwest Midwestern growing areas today and north central/eastern areas Saturday this weekend. Overall net drying will be good for the Delta and Midwest over the next week. Temperatures will be warmer next week
than that of the cold air blast seen during the second half of this week for the upper US. The central and northern areas of the US Great Plains will see rain this weekend. Brazil will see rain over the next week while Argentina’s forecast is unchanged, calling
for light rain across La Pampa and southern BA Sunday into early next week.

 

 

 

 

Weather

Precip
last seven days

 

 

 

World
Weather, INC.

WEATHER
EVENTS AND FEATURES TO WATCH

• Not
  many changes overnight
• Rain
  was returned to the North China Plain and Yellow River Basin late in the ten days forecast period Thursday afternoon and has appeared in each model run since then
  
• Model
  agreement is much greater today over the predicted path of the tropical cyclone in the Caribbean Sea with influence on western Cuba and Florida’s Peninsula
• Frost
  and a few light freezes occurred in the upper U.S. Midwest this morning impacting northern and central Wisconsin and some areas in Minnesota, but there was no negative impact on crops
• Texas
  to the interior southeastern U.S. will be dry over the next ten days, although there is still some potential that rain from the developing Caribbean tropical cyclone may come into Georgia and/or the Carolinas next week depending on any predicted path adjustments
• U.S.
  hard red winter wheat areas received additional showers overnight after greater rain occurred Wednesday into Thursday morning
• The
  additional rainfall of a trace to 0.30 inch was welcome, but more rain will be needed to break the region’s drought and ensure the best winter crop development potential
• U.S.
  Midwest and northern Plains will experience some periodic showers over the next couple of weeks, but more sunshine than rain is expected which will favor good summer crop maturation and harvest conditions
• Rain
  is needed in the northwestern U.S. Plains for winter wheat planting and establishment
• Drought
  remains in Canada’s Prairies and the U.S. far western states with little change likely anytime soon
• Ontario
  and Quebec have been and will continue a little milder than usual recently and that may continue for a little while longer slowing summer crop maturation
• Soil
  moisture is favorable, but less rain might be best in promoting the harvest
• Tropical
  Depression Nine formed in the Caribbean Sea overnight and will become Tropical Storm Hermine later today or early Saturday
• The
  storm will intensify this weekend and should become a hurricane Sunday night or early Monday after it passes Jamaica and before it reaches western Cuba
• The
  storm will move across western Cuba and then turn toward the Florida Peninsula
• The
  hurricane may come inland to Florida as a Category 2 storm and that may result in damage to citrus and sugarcane depending on the storm’s structure and exact path
• Personal
  property damage resulting from excessive wind and flooding rain is also likely
• Landfall
  in Florida is possible Tuesday night or Wednesday
• Category
  Three Hurricane Fiona moved to a position 125 miles north of Bermuda this morning and was racing toward Nova Scotia, Canada
• Fiona
  will impact Nova Scotia , western Newfoundland and areas in the Gulf of St. Lawrence during the late weekend and early part of next week
• The
  storm will lose its tropical characteristics during the weekend, but it will still produce hurricane force wind when it reaches Canada
• Flooding
  rain, and widespread wind damage is expected
• Fiona’s
  tropical storm force wind is occurring out 345 miles from the center of the storm giving it a diameter of 690 miles which is huge and the impact on personal property in far eastern Canada could be great
• Tropical
  Storm Gaston is still posing no threat to land other than the Azores
• The
  storm will stay far removed from North America and Europe through the weekend
• Tropical
  Depression Talas will move through southeastern portions of Honshu, Japan today and Saturday producing some moderate to heavy rain, but no damaging conditions
• The
  system will not intensify and should remain a depression while impacting the nation
• Tropical
  Storm Noru was located well to the east of the northern Philippines today, but it will strength while moving west
  
• Landfall
  in northern Luzon is possible briefly Sunday, but it should be a weak storm that does not produce much more than some heavy rainfall and a brief period of tropical storm force wind speeds
• Noro
  will continue to the west next week and will impact Vietnam, central Laos and possibly a part of Thailand during the middle part of the week
  
• The
  storm may reach typhoon status before reaching the Vietnam coast.
• Tropical
  Storm Newton was located well west of the Mexico west coast in the eastern Pacific Ocean moving west northwesterly
  
• The
  system poses no threat to land
• Brazil’s
  weather will include waves of rain moving across center west and center south crop areas during the next ten days
• Sufficient
  rain will fall to bolster topsoil moisture for improved soybean planting, germination and emergence conditions
  
• Corn
  planting and establishment will also improve
• Wheat
  conditions may deteriorate in Parana and immediate neighboring areas because of too much moisture as the crop matures and is harvested
• Total
  rainfall in center west and center south by September 30 will vary from 1.00 to 3.00 inches with local totals of 3.00 to more than 6.00 inches from southern Mato Grosso do Sul into Parana and a part of Sao Paulo
  
• That
  much rain could damage maturing wheat and delay its harvest
• Eastern
  Paraguay will also receive some important rain
• Temperatures
  will be cooler than usual
• Additional
  rain is advertised for early October, although it may not be nearly as significant
  
• Brazil’s
  weather outlook is a boon to starting soybean planting and to supporting corn development and early rice and cotton planting. The moisture will be sufficient to support early planted corn, but it may raise some wheat quality concerns in areas where the crop
  is ready to be harvested.
• Brazil’s
  coffee, citrus and sugarcane areas from Mato Grosso do Sul to northern Parana, Sao Paulo and Minas Gerais should benefit from the coming two weeks of rain with flowering of coffee and citrus trees expected over time and new sugarcane development will evolve
  just as soon as significant rain has fallen.
• Argentina
  rainfall will be sporadic and light over the next ten days to two weeks Any showers that occur – and there will be some – will prove to be welcome and helpful in supporting wheat and sunseed, but greater rain will be needed
• Europe
  topsoil moisture has improved in many areas, but not in the far west where there is an ongoing need for rain
  
• Parts
  of Western Europe will continue drier than usual until late in the coming week, while other areas continue to see improving soil moisture
• There
  is need for greater rain in the lower Danube River Basin
• Rainfall
  in many areas over the next ten days will vary from 0.50 to 1.50 inches with portions of south-central Europe getting 2.00 to more than 5.00 inches
• Wettest
  in the Adriatic Sea region; including central and southern Italy
• The
  greatest rain will come in the second half of next week and into the following weekend
• Temperatures
  will be cooler than usual in the central and eastern parts of Europe over the next several days with most of the continent seeing near normal temperatures in the last days of September and early days of October
• Mid-week
  temperatures next week will be coldest
• Europe’s
  bottom line continues to be one of improvement for much of the continent with the exception of northern and western France which may continue too dry through much of the forecast period. Soil moisture is improving across most of the continent with rain noted
  in the past couple of weeks and it will continue this week. There will be an ongoing concern over France soil moisture and water supply until greater rain falls and a boost in precipitation will eventually reach there.
  
• Western
  CIS crop areas are still experiencing increasing soil moisture through periodic rainfall that will is going to lead to better winter crop establishment.
  
• Additional
  rainfall over the next ten days will vary from 0.25 to 1.00 inch in eastern Ukraine and 0.60 to 2.50 inches in most other areas west of the Ural Mountains; including Russia’s Southern Region.
  
• There
  is potential for more than 3.00 inches of rain in a few areas
• Drying
  is expected east of the Ural Mountains where spring wheat and sunseed harvesting should be advancing swiftly
• The
  bottom line for CIS crop areas is still good for improved wheat and rye planting, emergence and establishment conditions. Weather farther to the east will be equally good for sunseed and late spring wheat harvest progress except in a part of West Siberia where
  rain and snow are expected, but fieldwork should be winding down in that region.
  
• Gujarat,
  Rajasthan and Punjab, India northwest into Pakistan will be seasonably dry over the next ten days favoring good summer crop maturation and harvest progress
• India
  rainfall will be greatest over the next ten days from Madhya Pradesh to Uttar Pradesh, Bihar, Bangladesh and the far Eastern States as well as areas southward into West Bengal and Odisha
• Rain
  totals will vary from 1.50 to more than 4.00 inches over the next ten days with a few amounts getting up over 8.00 inches, but mostly in northeastern India
• Far
  southern India will experience net drying conditions
• China
  will continue to experience poor rainfall in the Yangtze River Basin for the next ten days, despite a few showers
• Northeastern
  China received some rain overnight and a little more will occur today before drier weather resumes this weekend and prevails next week
  
• The
  drier weather will be great for harvest progress
• Temperatures
  will be warmer than usual over the next two weeks in southern China’s crop areas and more seasonable in the north
• China’s
  Yellow River Basin needs rain and it may evolve in the first weekend of October
• The
  moisture will improve wheat planting, germination and emergence conditions
• Xinjiang,
  China weather is expected to be mild to warm with limited rainfall
• This
  pattern will be very good for cotton and corn maturation as well as early harvesting in most areas
  
• 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.
  
• South
  Africa precipitation has been and will continue to be beneficial for winter wheat, barley and canola
  
• Most
  of the precipitation will be confined to the southern and eastern parts of the nation
  
• Some
  early corn and other crop areas may receive some needed rain, but more will be necessary to support planting in October and November.
  
• Winter
  crops are still poised to perform well this spring as long as continues late this month and into 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 recent 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 +16.10 and it will move erratically over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
Sept. 26:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for corn, soybeans and cotton; spring wheat, corn, cotton, soybean harvesting, 4pm
• Malaysia’s
  Sept. 1-25 palm oil export data
• HOLIDAY:
  New Zealand

Tuesday,
Sept. 27:

• EU
  weekly grain, oilseed import and export data
• G20
  Agriculture Ministers Meeting in Bali, day 1

Wednesday,
Sept. 28:

• EIA
  weekly US ethanol inventories, production, 10:30am
• G20
  Agriculture Ministers Meeting in Bali, day 2

Thursday,
Sept. 29:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• G20
  Agriculture Ministers Meeting in Bali, day 3
• Vietnam
  General Statistics Dept. releases Sept. coffee, rice and rubber exports data
• USDA
  hogs & pigs inventory, 3pm

Friday,
Sept. 30:

• USDA’s
  quarterly stockpiles data for wheat, barley, corn, oat, soybeans and sorghum
• US
  wheat production data, noon
• 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
• US
  agricultural prices paid, received, 3pm
• HOLIDAY:
  Canada

Source:
Bloomberg and FI

September
30^th report estimates

 

USDA
Boosts 2022 Grocery Price Inflation at Highest Since 1974

All
food prices up most since 1979

https://www.ers.usda.gov/data-products/food-price-outlook/

 

Commitment
of Traders

No
major surprises other than to see Chicago wheat futures near flat as of last Tuesday.

 

 

 

 

Macros

Canadian
Retail Sales (M/M) Jul: -2.5% (est -2.0%; prev 1.0%)

Canadian
Retail Sales Ex Auto (M/M) Jul: -3.1% (est -1.0%; prevR 0.6%)

Canada
Retail Sales Rise 0.4% In August: StatsCan Flash Estimate

Brazilian
Central Bank Announces FX Intervention With Auctions To Sell, Buy Dollar

102
Counterparties Take $2.319 Tln At Fed Reverse Repo Op (prev $2.359 Tln, 102 Bids)

US
Crude Oil Futures Settle At $78.74/Bbl, Down $4.75 Or 5.69%

Brent
Crude Futures Settle At $86.15/Bbl, Down $4.31 Or 4.76%

 

Corn

·        
CBOT corn fell 11.50 cents to end the week slightly lower from a week ago. Widespread commodity selling was the major influence.

·        
Funds sold an estimated net 11,000 contracts.

·        
Crude oil fell below $80 a barrel for the first time since early January from global economic concerns. It was down $4 at last trade.

·        
France collected 26 percent of their corn crop as of September 19, above 14 week earlier and compares to only 1 percent year ago. French corn production is expected to be lowest since 1990.

·        
Belgium reported a H5N1 bird flu outbreak on a poultry farm near the border with the Netherlands. 29,919 birds are on the farm but it’s not known how many will be culled.

·        
China was to release 14,400 tons of pork from state reserves today. For the entire month, China was thought to release a combined 200,000 tons of pork, according to AgriCensus.

·        
Argentina corn plantings are delayed due to persistent drought. Some areas saw rain last week but more is needed for planting season.

 

USDA
Cattle on Feed

 

Cattle
and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.3 million head on September 1, 2022. The inventory was slightly above September 1, 2021. This is the second highest September 1 inventory
since the series began in 1996.

 

Placements
in feedlots during August totaled 2.11 million head, slightly above 2021. Net placements were

2.06
million head. During August, placements of cattle and calves weighing less than 600 pounds were 430,000 head, 600-699 pounds were 320,000 head, 700-799 pounds were 465,000 head, 800-899 pounds were 532,000 head, 900-999 pounds were 270,000 head, and 1,000
pounds and greater were 95,000 head.

Marketings
of fed cattle during August totaled 2.00 million head, 6 percent above 2021.

 

Other
disappearance totaled 53,000 head during August, 10 percent below 2021.

 

Export
developments.

·        
None reported

 

 

Updated
9/20/22

December
corn is seen in a $6.40-$7.30 range.

 

Soybeans

·        
The soybean complex was sharply lower in a risk off trade. US harvesting progress increased this week and should ramp up nest week with favorable weather conditions. The increase in US supplies should soon pressure domestic basis
and boost exports.

·        
Soybean oil fell 114 points and meal was off $6.00 for the October positions. Soybean oil lost ground to meal over the last five trading days. (Oct meal up 2.4% for the week and Oct SBO down 2.4%).

·        
Not much news was released on Friday.

·        
Funds sold 12,000 soybeans, sold 4,000 meal and sold 7,000 soybean oil.

·        
There was talk China was in Thursday for US soybeans out of the PNW. No USDA 24-H was announced.

·        
China soybean meal was up about 10 percent this week on talk of shortages. Don’t discount another fresh round of buying by China over the next couple of weeks.

·        
Malaysian palm oil prices were lower Friday from weaker mineral oil and Dorab Mistry warning palm oil prices could erode 30 percent by the end of this year due to rising production and demand destruction. They had a low target
of 2,500 ringgit ($547.30 per ton). December futures closed the second session at 3,736 ($816 per ton).

·        
For India imports, palm oil is offered at $950 a ton including cost, insurance and freight (CIF) to India for October shipment, compared with $1,250 for crude soyoil, according to a Reuters article.

 

Export
Developments

·        
None reported

 

Updated
9/20/22

Soybeans
– November is seen in a $14.00-$16.00 range

Soybean
meal – December $400-$490

Soybean
oil – December 64.00-73.00

 

Wheat

·        
Wheat ended sharply lower on large Russian wheat production estimates and a fresh 20-year high in the USD, up 85 points earlier this morning. Chicago wheat ended Friday 30.25 cents lower and for the week was up 2.4%. Dec KC ended
the week 1.6% higher and Dec MN up 1.1%.

·        
Funds sold an estimated net 10,000 Chicago wheat contracts.

·        
World commodity risk off trade was also pressuring wheat futures.

·        
IKAR raised their Russian grain harvest outlook for 2022 to 150 to 152 million tons, including 99 to 100 million tons for wheat. Previous IKAR was at 147-148 and 97 million tons for grain and wheat production, respectively. SovEcon
sees a record 100 million ton Russia wheat crop. USDA is at 91 million tons. IGC is at 93.4 MMT.

·        
Russian Deputy Prime Minister Victoria Abramchenko expects grain harvest to total 140-142 million tons in 2022.

·        
Paris December wheat was down 3.25 euros earlier at 346.25 per ton, still near a multi-month high. 

·        
French soft wheat protein content was estimated by FranceAgriMer at 11.4%, below a 5-year average of 11.9%. About 59 percent of the crop was rated superior to premium quality.

·        
A UN chartered ship carrying 30,000 tons of wheat left Ukraine destined for Afghanistan.

·        
Ukraine’s AgMin reported 7.2 million tons of grains had been exported so far this season, down from 12.762 MMT last season. This season vs. last season:

wheat                          
2,451,000             7,740,000

barley                          
622,000                 3,431,000

rye
                 2,600                     28,700

corn                              
4,134,000             1,394,000

TOTAL
grain                7,235,000             12,762,000

·        
Bloomberg – Ruble adds 2.7% versus dollar in Moscow trading to 57.2750, poised to gain 5.3% in week

 

US
Wheat Associates

“This
is the final weekly report for SW harvest and indicates another No.1 SW wheat crop in 2022. HRS harvest is winding down and this year’s crop currently grades at U.S. No. 1 Northern Spring. Northern durum is almost 90% harvested and currently grades at U.S.
No. 1 Hard Amber Durum.”

 

Export
Developments.

·        
The Philippines bought 45,000 tons of Australian feed wheat at $335 per ton c&f for Dec-Feb shipment.

·        
Pakistan seeks 300,000 tons of wheat on September 26 for October shipment.

·        
Jordan opened a new import tender for 120,000 tons of wheat set to close Sep 27 for March and April shipment. 

·        
Jordan is back in for barley on September 28.

 

Rice/Other

·        
Vietnam said they are not in a deal with Thailand to raise rice export prices.

 

Updated
9/20/22

Chicago
– December $8.00-$10.50

KC
– December $8.75-$11.00

MN
– December $8.75-$11.00