FI Evening Grain Comments 09/26/22

PDF Attached includes updated corn and soybeans production estimates for US

 

Calls
Outside
markets will dictate, but from what we know as of this afternoon:

Soybeans
steady to 4 higher

Meal
steady to $0.50 higher

Oil
10-25 higher

Corn
1-3 higher

Wheat
steady to 4 higher

 

Harvest
running a touch behind for US corn and soybeans. US winter wheat plantings are in good shape but dry across the SW growing areas. Spring wheat is done. US soybean and corn conditions unchanged for combined good and excellent but don’t discount lower yields
reported by USDA next month after last week’s decline.

 

 

Grains
and soybean complex ended lower. US harvest pressure was weighing on CBOT ag futures on Monday, for the day session.
USD
was up sharply.US WTI crude oil was lower and US equities mixed, ending lower. US weather forecast improved for the Midwest and Delta than that of Friday. The upper Great Plains will see rain during the second half of the week. The Midwest will see rains for
the northeastern areas today and Tuesday, and far northwestern areas Thursday. Mostly dry weather is seen for the Delta and southwestern Great Plains all this week. USDA on Friday releases Grain Stocks and Small Grains Summary. Some analysts are looking for
price volatility.  We are looking for small changes for Sep 1 corn/soybean stocks.

 

 

if
the trade is correct, then a non-eventful report for nearby corn and soybean contracts. Wheat could be a surprise if we are close to what USDA reports. See below.

 

 

Link
to the USDA historical track records for soybean production (and other commodities)…page 194 for soybeans 
https://downloads.usda.library.cornell.edu/usda-esmis/files/c534fn92g/g158cn09g/zc77tv62q/croptr22.pdf

 

 

 

Weather

 

 

World
Weather, INC.

WEATHER
EVENTS AND FEATURES TO WATCH

• Tropical
  Storm Ian was 90 miles west southwest of Grand Cayman Island at 1200 GMT (0800 EDT) Sunday moving northwesterly at 14 mph and producing a maximum sustained wind speed of 75 mph. The storm was also 275 miles southeast of the western tip of Cuba near 18.7 north,
  82.4 west
• The
  storm will become a Category Three storm tonight just before moving across the western tip of Cuba
• The
  storm will remain a major hurricane until passing west of the Tampa Bay area where it will be downgraded to Category Two storm; however, for the day Wednesday it could be a Category 4 storm with 140 mph wind speeds
• Further
  weakening is expected as the storm approaches the Florida coast near Cedar Key Thursday night or early Friday morning. The storm should diminish to tropical storm status relatively soon after reaching the Florida coast, but the storm center will continue to
  move northeasterly into Georgia
• Flooding
  rain is expected in central and northern Florida and in parts of southeastern Georgia with moderate rain expected in the Carolinas and the remainder of Georgia during the latter part of this week
  
• Damage
  potential will be greatest from Tampa Bay northward through Cedar Key staying west of Interstate Highway 75 and then continuing north to near the Lake City and Valdosta, Ga. area.
  
• Some
  northwestern citrus is at risk of damage and the same is true for cotton and soybeans in northern Florida and Georgia
• Some
  cotton fiber quality decline may also occur in the Carolinas
• Interior
  Southern Brazil rainfall began increasing overnight and during the day on Sunday
• Moisture
  totals of 1.00 to 3.00 inches were already noted from southwestern Mato Grosso do Sul and eastern Paraguay into Parana and Sao Paulo
• Brazil’s
  center west and center south crop areas are still expecting significant rain this week and next week
• Soil
  moisture will be bolstered for early soybean planting and ongoing corn planting
• The
  moisture will also be good for cotton and rice planting, but not so good for winter wheat harvesting in Parana and neighboring areas
• Wheat
  harvesting will be delayed, and a quality decline is likely
• Wheat
  harvest was only complete on 19% of Parana and 20% of Sao Paulo as of Sep. 17.
• Rio
  Grande do Sul will not be as seriously impacted by the excessive moisture and wheat conditions there will remain good
• Some
  areas from Mato Grosso do Sul to Parana and Sao Paulo will end up with 2.00 to 6.00 inches of rain
  
• Argentina’s
  rain chances are improving for next week, but the coming seven days will continue restricted for moisture
  
• Some
  showers occurred lightly during the weekend and more may occur this week, but the impact on wheat, sunseed and future corn planting will be low
• Next
  week’s rain may not be heavy, but it will offer some relief from recent drying
• Central
  America is expected to be too wet over the next couple of weeks resulting in a new risk of flooding and possible crop damage.
• Rice,
  coffee and sugarcane would all benefit from drier weather as would a few other crops
• U.S.
  weekend rainfall was light, but many areas in the Midwest were impacted
• Moisture
  totals were greatest in central and northeastern Minnesota and interior southwestern Wisconsin where more than 1.0 inch resulted
• Rain
  totals elsewhere varied up to 0.20 inch most often with a few amounts to 0.66 inch from northern Missouri to central Indiana
• The
  impact on summer crops was minimal, although crop maturation and harvest progress was slowed briefly
• Restricted
  rainfall occurred in the northern Delta and Tennessee River Basin with amounts to 0.53 inch and most of the interior southeastern states, Great Plains and far western United States were dry
• U.S.
  weekend temperatures were mild to warm with the coolest conditions in the Great Lakes region and northeastern states where 50- and 60-degree highs were noted and lows in the 30s and 40s
• The
  southern half of the Plains, southwestern Corn Belt, Delta, California and southwestern desert areas were warmest with 80- and 90-degree highs and a few extremes over 100
• U.S.
  weather this week……
• Rain
  will impact the Great Lakes region today and Monday as well as the northeastern states
• Most
  other areas will be dry until late this week and into the weekend when rain evolves in the Rocky Mountain region and northern Plains where 0.20 to 0.75 inch of moisture is expected from southern parts of Canada’s Prairies into Colorado and northwestern Kansas
  
• Tropical
  Storm Ian will bring excessive rain to Florida during the second half of this week with 5.00 to 15.00 inches expected and locally more
• The
  storm will also bring heavy rain to Georgia and the Carolinas late this week and into the weekend with 3.00 to 9.00 inches in Georgia and 2.00 to 6.00 inches in the Carolinas
  
• Southeastern
  Georgia and eastern South Carolina will be wettest
• Temperatures
  will be cool in the Midwest and northeastern states this week while the western United States is warm
• U.S.
  weather next week will be well mixed with bouts of rain and sunshine for many key crop areas
• Most
  of the precipitation will be light, but it could slow some the crop maturation and harvest down briefly
• Temperatures
  will trend warmer than usual next week in much of the nation
• The
  bottom line for the U.S. includes some risk of citrus fruit droppage later this week from Tropical Storm Ian and some cotton fiber quality decline in Georgia, and South Carolina become of too much rain. Wind damage in Georgia should be low, but damage from
  too much wind in northern Florida east of the Panhandle is possible. Weather elsewhere in the U.S. should be favorably mixed for late season crops and fieldwork. The southern Plains will be dry as will most of the Delta and the far western states away from
  the Cascade Mountains in the Pacific Northwest. A few winter wheat areas in Montana, the Dakotas, Nebraska, Colorado and northwestern Kansas will benefit from some light rain late this weekend into next week, although more will be needed to ease long term
  dryness.
• Tropical
  Storm Gaston has dissipated in the central Atlantic Ocean
• Hurricane
  Fiona dissipated in northeastern Canada early in the weekend
• Canada’s
  Prairies will see a mix of rain and sunshine in the south and west while northern areas are mostly dry during the next ten days
• Most
  of the southern showers of significance will occur late this week and more likely during the weekend
• Good
  harvest weather is expected until then
• Drought
  conditions will not abate from central or southwestern parts of the Prairies anytime soon
• Weekend
  precipitation in Europe was greatest in southern France and Italy while only light showers occurred in the North Sea region and from Ukraine into Belarus
• The
  heart of Europe did not receive significant moisture
• Temperatures
  were mild to warm
• Moderate
  to heavy rain fell in western Russia during the weekend with a large pocket of 1.00 to 2.78-inch rain totals noted
• Much
  lighter rain fell in Ukraine, Belarus, the Baltic States, Russia’s Southern Region, the eastern New Lands and Kazakhstan
  
• Western
  CIS crop areas will see an abundance of rain return later this week into next week, but a diminishing trend in rainfall may occur for a little while early to mid-week this week
• The
  moisture is ensuring a well-established winter crop which may be needed this year because of anticipated cold biased temperatures during at least a part of winter
• Winter
  crops need to be well established to survive the cold
• China
  weekend weather was generally dry except in the northeastern provinces where rainfall of 1.00 to 2.14 inches occurred from southern Jilin to southeastern Heilongjiang
• Rain
  also fell in Sichuan with amounts of 1.22 to more than 4.00 inches in the eastern part of the province
• Dry
  and mild to warm conditions occurred elsewhere
• China’s
  Yangtze River Basin is still advertised to be dry for another ten days and possibly for two weeks
• The
  region’s drought is a big concern for main season rice which likely yielded poorly along some other crops in the region
• Winter
  rapeseed planting should occur in October and early November making the need for rain during that period of time critical
• China’s
  Yellow River Basin and North China Plain are advertised to get rain during the coming weekend and a part of next week
  
• The
  moisture will be extremely beneficial and welcome, although winter crop planting and summer crop harvesting will be disrupted for a while
• The
  moisture is needed to improve winter crop emergence and establishment conditions
  
• Xinjiang,
  China harvest weather should be mostly good over the next ten days except in the northeast part of the province where rain is expected periodically and that may slow fieldwork
• Northeastern
  China will see a favorable mix of weather over the next couple of weeks allowing some fieldwork to occur between periods of rain
• Drier
  weather might be welcome for a while
• Tropical
  Storm Noru was located 317 miles west northwest of Manila, Philippines at 1500 GMT moving westerly at 14 mph and producing maximum sustained wind speeds of 92 mph
• Tropical
  storm force wind was occurring out 155 miles from the center of the storm while hurricane force wind (greater than 74mph) was occurring out 45 miles
• The
  storm moved across northern Luzon Island, Philippines during the weekend producing some heavy rain and strong wind speeds
• Rainfall
  reached over 10.00 inches in a part of the island
• Damage
  assessments are under way, but the losses are suspected of being low
• Noru
  will continue to the west this and will impact central Vietnam, central Laos and possibly a part of Thailand late Tuesday through Thursday
• Heavy
  rain and damaging wind speeds will impact coastal areas from near Da Nang northward through Hue and possibly north of Quang Tri while also impacting central Laos
  
• Most
  of the wind will diminish after the storm reaches Da Nang, but heavy rain will continue into Thailand impacting sugarcane and some rice areas
• No
  serious impact is expected on crops in the Central Highlands of Vietnam, but areas to the northeast could be damaged
• Tropical
  Depression 19W was located well to the southeast of Japan today and will not threaten land even though it becomes a tropical storm and moves toward Japan for a little while over the next couple of days
• The
  storm will start paralleling Japan long before it is close enough to induce any threatening weather.
  
• Excessive
  rain fell in northern India during the weekend impacting Punjab, Haryana and a few immediate neighboring areas
• Moisture
  totals of 2.50 to 5.43 inches resulted which should not have bided well for cotton, rice or other maturing crops in the region
• Some
  declining crop quality might have resulted, but drier weather is forthcoming
• India’s
  rainfall this week will be greatest over eastern and south-central parts of the nation
  
• Rain
  totals will vary from 1.00 to 3.00 inches with a few areas in the southeast to get upwards to 5.00 inches
  
• Net
  drying is expected in the north
• Australia
  is still expected to see periodic bouts of rain over the next two weeks
• Western
  Australia will be driest, but crop conditions will be nearly ideal across the state
• Less
  frequent rain in eastern parts of the nation this week will be welcome, but next week looks wetter again
• The
  nation has potential for a huge winter wheat, barley and canola crop, but there is concern over its quality if rain falls too often in October and November
• 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 rain continues periodically late this month and into October.
  
• 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
• Typhoon
  Noru will bring flooding rain central Vietnam and central Laos later this week
• Some
  excessive rain already occurred in northern Luzon Island Philippines during the weekend from Noru
• 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 +18.82 and it will move a little higher over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

USDA
inspections versus Reuters trade range

Wheat                 
520,464                 versus   200000-800000  range

Corn                     
459,420                 versus   500000-800000  range

Soybeans           
257,547                 versus   385000-800000  range

 

 

 

GRAINS
INSPECTED AND/OR WEIGHED FOR EXPORT

                 
REPORTED IN WEEK ENDING SEP 22, 2022

                           
— METRIC TONS —

————————————————————————-

                                                  
CURRENT     PREVIOUS 

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

 
GRAIN      09/22/2022  09/15/2022  09/23/2021    TO DATE     TO DATE  

 

BARLEY             
0           0           0        1,414        6,550 

CORN         
459,420     549,476     705,288    1,606,639    1,327,329 

FLAXSEED           
0           0           0            0           24 

MIXED              
0           0           0            0            0 

OATS               
0           0           0        6,486          200 

RYE                
0           0           0            0            0 

SORGHUM       
20,260       8,565     136,758       76,632      151,808 

SOYBEANS     
257,547     519,698     486,179    1,171,257      989,999 

SUNFLOWER        
288           0           0          672            0 

WHEAT        
520,464     836,620     383,584    7,778,572    8,134,820 

Total      
1,257,979   1,914,359   1,711,809   10,641,672   10,610,730 

————————————————————————-

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

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

INCLUDES
WATERWAY SHIPMENTS TO CANADA.

 

 

Macros

103
Counterparties Take $2.299 Tln At Fed Reverse Repo Op (prev $2.319 Tln, 102 Bids)

US
Crude Oil Futures Settle At $76.71/Bbl, Down $2.03 Or 2.58%

 

Corn

·        
Corn was lower on favorable US harvesting weather and global recession fears. Several developing countries plan to raise interest rates over the next quarter, and that is keeping some commodity traders on edge. On the bright side,
lower CBOT corn futures are starting to attract import tender business.

·        
China will be on holiday next week and we would not be surprised if they shop around for grain/oilseeds this week, but it’s harvest season.

·        
Mostly dry weather is seen for the Delta and southwestern Great Plains all this week except for a tropical storm delaying some fieldwork for the lower Delta and SE as early as Saturday.

·        
The US House will vote this week on the Global Food Security Act
https://www.congress.gov/bill/117th-congress/house-bill/8446

·        
Bloomberg  –  The US hog herd as of Sept. 1 seen falling 0.8% from a year earlier to 74.25m head, according to the average in a Bloomberg Survey of seven analysts. Story attached.

 

FI
yield estimate for US corn: 170.1 versus 170.4 last week.  USDA at 172.5

 

 

Export
developments.

·        
South Korea’s NOFI bought 135,000 tons of optional origin corn for Jan arrival at $1.7275/bu over the Dec and $1.8140 over the Dec contract, c&f.

·        
South Korea’s NOFI bought 12,000 tons of optional origin barley for Jan arrival at $329.55/ton c&f.

 

 

 

Updated
9/20/22

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

 

 

 

Soybeans

·        
CBOT soybeans traded lower following weakness in vegetable oils and follow through selling in outside commodities. China futures traded lower despite concerns over food security. Palm oil futures hit multi month lows (15-M) and
China ag futures were weaker.

·        
US harvesting pressure is starting to pounce on US soybean basis at selected US elevator and processor locations. Cincinnati, OH soybean basis fell 12 cents to 18 over the November. Morristown, IN was down 15 to 5 under and Lafayette,
IN down 25 to 10 under.

·        
China meal futures hit a record overnight before closing lower. Look for China to step up soybean imports. China soybean meal stocks declined ten straight weeks to only 493,000 tons (as of Sep 17-JCI).

·        
Brazil soybean planting pace increased over the past week. Safras & Mercado estimates 2% of the national soybean area has been planted so far for the 2022-23 cycle, more than twice as much as last year’s 0.8% of the area. (Reuters)

·        
APK-Inform estimated Ukraine sunflower oil production at 3.5 to 4.9 million tons, a wide range, and down from 5 million tons for 2021-22. Exports could be between 3.0 and 4.6 million tons.

·        
IKAR reported Russia sunflower oil export prices eroded $40 per ton at the end of last week to $1,230 per ton (week over week).

·        
Argentina’s “soybean dollar” is expected to expire at the end of this workweek.

·        
AmSpec reported Sep 1-25 Malaysian palm oil exports at 1.075 million tons, up 18.6 percent from 906,470 tons during the same period month ago.

·        
ITS reported Sep 1-25 Malaysian palm exports at 1.169 MMT, up 20.9% from 966,655 tons Aug 1-25.

·        
With the wide cash spread in (Indonesia) palm oil versus US soybean oil, we like this to erode, eventually, but caution competition looking at India import margins.

 

US
soybean yield estimate versus last week: 39.8 versus 39.9 last week.  USDA at 50.5

 

Export
Developments

·        
USDA bought 2,750 tons of vegetable oils for use in the export program last week @ $2,327.76 to $3,034.69 per ton.

 

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 was lower from a higher USD and slowing global demand. Higher Ukraine and Russian grain production prospects were also weighing on the market(s). Both EU and US wheat fell with traders noting global recession fears. Prices
are expected to stabilize for Chicago wheat. The Chicago wheat net long position for the investment funds reported by the CFTC were less than expected as of last Tuesday and low relative to net longs for corn and soybeans. Any dip we see for global wheat prices
might be an opportunity for major importers. Locking in hedges might be good with uncertainty over the Argentina crop size, US becoming uncompetitive (USD), and Canada naturally selling out.

·        
EU’s MARS raised their estimate for Russian 2022 wheat production to 95.0 million tons from 88.8 million seen back in June, a large 25 percent increase from 2021 they added.  USDA @ 91 MMT for Russian 2022-23 wheat. Some groups
are as high as 100 MMT. We look for USDA to increase global production and stocks next month. MARS also increased barley to 21.7 MMT from 19.7 MMT, and lowered corn to 16.4 MMT from 16.7.

·        
Russian wheat prices for 12.5% protein Black Sea export rose $8 per ton to $325 per ton, fob, at the end of last week.  Russia exports were good at 900,000 tons compared with the improved 1 million tons week earlier. IKAR reported
that. SovEcon reported $315-$319 per ton, up from $310-$314 per ton previous week. Both agency price updates confirm Russia is very competitive with the rest of the world.

·        
APK-Inform raised their Ukraine 2022 grain harvest to between 54.1 to 55.7 million tons compared with 52.5-55.4 previous, including 19 million tons of wheat, 30 million tons of corn and 5.5 million tons of barley. This is down
from a record 86 million tons last year.

·        
Russia producers could pair back on winter grain sowings if the heavy rains they encountered do not let up, according to a Reuters story.

·        
Ukraine’s AgMin estimated seaports shipped 4.7 million tons of food under the safe passage agreement. 8 ships were due to leave ports on Saturday (an improvement in volume). Seven left on Sunday, bringing a total of 218 since
the deal.

·        
Paris December wheat was off 2.50 euros at 343.75 per ton.

·        
Canada Outlook for Principal Field Crops

https://agriculture.canada.ca/en/canadas-agriculture-sectors/crops/reports-and-statistics-data-canadian-principal-field-crops

 

Export
Developments.

·        
Taiwan seeks 51,800 tons of US wheat on September 29 for mid to LH November shipment.  Various classes are sought.

·        
Pakistan saw only two offers for 300,000 tons of wheat, with lowest at $398.92/ton c&f for October shipment. The high prices raise the prospect for cargoes to be rejected. 

·        
The UN seeks 100,000 tons of wheat on September 28 on September 30 for late October and/or November delivery. Destinations included east Africa, Asia and the Middle East.

·        
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’s coffee belt is expected to see heavy rains from a typhoon.

·        
World Weather Inc. graph below

Updated
9/20/22

Chicago
– December $8.00-$10.50

KC
– December $8.75-$11.00

MN
– December $8.75-$11.00