FI Evening Grain Comments 10/11/22

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US
agriculture markets opened lower following weakness in outside related markets and sharply lower wheat after a Russian official said they may remove their grain-export quota. Typically, Russia limits grain exports late in the crop season. Recession concerns
kept many commodity market volatile. Soybeans and meal ended mostly higher on late fund buying and soybean oil lower. Grains finished lower. USDA is due out with its October S&D report on Wednesday.

 

USDA
US crop progress was bearish for soybeans, neutral wheat and semi-bearish for corn. US corn and soybean conditions improved 2 points from the previous week while traders were looking for unchanged. Harvest progress for the corn crop advanced 11 points to 31
percent, 3 points below trade expectations. Soybeans collected were 44 percent, 3 points above trade expectations. Both corn and soybean harvest progress are above their respected 5-year averages. US winter wheat plantings came in at 55 percent, at expectations,
and 3 points below a 5-year average.

 

Calls:

Soybeans
1-4 lower

Corn
steady to lower

Wheat
steady

 

US
weather forecast was unchanged. The Midwest will see light rain across the northern and southwestern areas today, and eastern and central areas Wed. & Thur. eastern KS, eastern NE, and central OK will see rain today. More rain for OK is expected to fall this
weekend. Brazil will see widespread rains this week while Argentina will be dry over the next ten days. Brazil will see rain bias west and interior south.

 

 

 

 

 

 

 

Weather

 

World
Weather, INC.

AGRICULTURAL
AREAS OF GREATEST CONCERN

• China’s
  Yangtze River Basin will remain drought stricken for the next two weeks
• Recent
  rain near and north of the Yangtze River was welcome, but it was not nearly enough to support long term crop needs
• Rapeseed
  planting is due to begin and it will require significant rainfall to be successful
• Southern
  Yangtze River Basin crop areas are critically dry with no rain in weeks and none likely for the next ten days and probably two weeks
• Argentina
  continues in drought with little precipitation of much meaning during the next ten days
• A
  few showers are expected, but they will likely be too brief and light to have a significant impact on soil moisture
• Winter
  wheat and barley conditions have been deteriorating after a favorable start to the season in Buenos Aires, Entre Rios and parts of eastern Santa Fe
• Wheat
  areas farther west have rarely seen good rainfall and are in the poorest condition
• Sunseed
  and early corn planting has advanced, but emergence and establishment have not gone well because of dryness and this too will prevail until greater rain falls
• U.S.
  far western states continue in a serious multi-year drought with very low water supply and a rising level of concern because of yet another few months of La Nina which usually restricts precipitation
• Irrigation
  restrictions remain in place which may impact the production of many fruits and vegetables
  
• U.S.
  Pacific Northwest remains in drought, although water supply from the Cascade Mountains is still sufficient for crop needs
• The
  biggest concern is over dryland wheat and barley production areas (especially in Oregon) where little to no planting and poor establishment is expected until significant rain falls
• The
  region will continue dry for at least the next ten days
• Canada’s
  central and southwestern Prairies remain in a significant drought with some areas in southwestern Saskatchewan and southern Alberta in a serious multi-year drought (lasting six years so far)
• Winter
  wheat plantings will be down once again because of dryness
• Excellent
  summer crop harvest progress has occurred this autumn because of dryness and that trend will continue in the coming ten days, despite some cooling
• Temperatures
  have been unusually warm throughout the past several weeks with a few brief exceptions
• U.S.
  hard red winter wheat production areas are still dealing with poor soil moisture and unfavorable crop emergence and establishment conditions
• The
  situation varies greatly from one region to another
• Not
  much relief is expected through the next ten days, although some computer forecast models have been advertising rain in Texas and a part of Oklahoma for this weekend and next week
• Confidence
  is low for generalized rain of significance, but a few areas will benefit from the pattern
  
• Eastern
  Australia has been dealing with frequent bouts of abundant rainfall in recent months and that pattern should not go away in the next few months
• La 
  Nina has brought on some significant rain at times in Queensland, New South Wales and Victoria
• New
  South Wales has been wettest most recently and will continue that way periodically into the end of this growing season
  
• The
  potential is moderately high for excessive rain to return to New South Wales and Queensland again later this season and the situation needs to be closely monitored
• If
  the heavier rain arrives while winter crops are maturing and being harvested there may be a serious decline in crop quality cutting into the amount of quality grain produced by the nation
• Summer
  crop planting (sorghum and cotton in particular) will be delayed if it stays too wet
• Portions
  of Southeast Asia have experienced bouts of heavy rain and flooding in recent months resulting mostly from La Nina and some Madden Julian Oscillation events
• This
  trend will continue over the next few months and a close watch on the situation is warranted.
  
• Flooding
  has impacted portions of Central America in recent weeks
• The
  wet bias has hurt production potentials for many crops
• The
  recent torrential rain and flooding from Tropical Storm Julia  induced damage to crops and property from Nicaragua to Guatemala
  
• Most
  of the heavy rain from the remnants of Julia will be abating in the next couple of days
• A
  tropical disturbance over the Yucatan Peninsula of Mexico is expected to drift over the Gulf of Campeche today and Wednesday where some organization is expected and the system could become a tropical depression or a weak tropical storm after being over warm
  water for a couple of days
• The
  system is expected to move over southern Mexico late this week and into the weekend resulting in some flooding rain
• No
  wind damage is expected, but some of the rain will not be welcome after wet weather has occurred in recent weeks
• A
  developing tropical cyclone near the Philippines today and Wednesday may produce some heavy rain across rice, sugarcane and other crop areas in Luzon Island
  
• Some
  local flooding might occur, but most of the storm’s organization will occur as the system departs the region later this week over the South China Sea
• This
  developing storm may move toward central Vietnam during the latter part of this week with landfall Friday into the weekend over central parts of the nation
• Flooding
  rain will be possible in coffee and other crop areas of the Central Highlands
  
• The
  storm should be watched to better determine its size and intensity when it reaches Vietnam late this week
• Early
  indications suggest only light damage will result, but that is based on the assumption that the storm will be weak
• Another
  tropical cyclone may evolve late this week and into the weekend near the Mariana Islands before moving toward Taiwan and southeastern China
• This
  storm will not impact any major landmass or agricultural area until next week and confidence in the movement and intensity of this storm is very low because it has not developed yet
• A
  final tropical cyclone may also evolve in the Bay of Bengal next week and could threaten the India and Bangladesh coast with torrential rain and strong wind
• This
  storm has not developed yet, but the early model data suggests India will be at risk
  
• U.S.
  navigable river levels are still quite low resulting in barge load restrictions resulting in increased freight costs in transporting agricultural products to key ports

 

WEATHER
IN THE REMAINDER OF THE WORLD

• Much
  of the U.S. Midwest, Delta and southeastern states will experience a good mix of weather during the next two weeks
  
• Harvest
  progress and some winter crop planting should advance favorably
• Recent
  drying in U.S. cotton areas of the southeastern states has improved fiber quality after being impacted by Hurricane Ian earlier this month
• West
  Texas rainfall is possible late this weekend into next week possibly raising a little fiber quality concern
  
• Cooler
  weather will slow crop maturation rates over the next couple of weeks
• Ontario
  and Quebec harvest weather will deteriorate as a frequent rainfall pattern occurs while temperatures cool off
  
• Dry
  weather in Canada’s Prairies has supported a fast harvest this year, but dryness is raising worry over winter and spring crops
• Brazil’s
  center west and center south crop areas will see frequent bouts of rain during the next two weeks
• The
  greatest rain will occur from Santa Catarina, Parana and southern Sao Paulo to western Mato Grosso do Sul and some western Mato Grosso crop areas
• No
  excessive rain is expected and fieldwork will advance around the rain
• Argentina
  fieldwork will advance slowly in the next couple of weeks because of dryness limiting seed germination and plant emergence
• Winter
  wheat, early corn and sunseed development will be sluggish because of poor or limited soil moisture
• Central
  and eastern Europe will receive restricted amounts of rain in the next two weeks supporting fieldwork of all kinds
• Westernmost
  Europe will see an increase in rain frequency over the weekend and next week possibly slowing fieldwork, but the moisture will be good for water supply and long term crop development potential
• Western
  Russia, Ukraine, Belarus and Baltic States will experience mild to cool weather and brief periods of rain and some snow in the next ten days
• Winter
  crops will slowly be pushed toward dormancy in the north
• India
  rain will be frequent in central, southern and some eastern crop areas over the next week
• Monsoonal
  precipitation is expected to withdraw from central parts of the nation soon and that will be welcome after recent abundant rain
• Better
  crop maturation and harvest conditions should follow as the region dries out
• Much
  of eastern China will be dry or mostly dry during the next ten days
• Winter
  wheat and rapeseed planting will advance in areas that have good soil moisture and field conditions
• Rain
  must fall in the Yangtze River Basin before much planting can occur
• Xinjiang,
  China harvest weather should be favorable for most of the coming week with limited rainfall and seasonable temperatures
• Southeast
  Asia rainfall is expected to continue frequent and abundant over the next ten days resulting in flooding for some areas
• The
  excessive rain will be sporadic limiting the flooding to small regions
• As
  long as La Nina continues at this strong level the potential for flooding rainfall will continue and that should be for several weeks
  
• Western
  Australia continues to dry out and may require some timely rain soon to protect yield potentials
• Most
  of the state’s crops are in very good shape and expected to yield very well
• West-central
  Africa rainfall will occur periodically enough to support coffee, cocoa, sugarcane, cotton, rice and other crops during the next couple of weeks
• There
  is some evidence of a southward shift in seasonal rainfall which should help to support maturing cotton in the north
• East-central
  Africa rainfall will be sufficient to support coffee and cocoa as well as a few other crops
• Mexico
  rainfall will be greatest in the south through the weekend and possibly into early next week
  
• Much
  of this will come from the remnants of tropical storm Julia and from a new disturbance that is expected in the Gulf of Campeche in the next couple of days
• Central
  and northern Mexico rainfall will be more restricted
• Central
  America rainfall will become lighter and more sporadic for a while following the demise of Tropical Storm Julia
  
• North
  Africa showers and thunderstorms will continue to improve topsoil moisture for better planting conditions later this month and especially in November.
  
• Rain
  over the coming week could range from 0.30 to 1.00 inch of moisture with a few 1.50 inches
  
• Today’s
  Southern Oscillation Index was +20.26 and it will move erratically over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Tuesday,
Oct. 11:

• USDA
  export inspections – corn, soybeans, wheat
• US
  crop conditions and harvesting data for corn, soybeans and cotton; winter wheat planted
• France’s
  agriculture ministry releases monthly grain estimates
• Malaysian
  Palm Oil Board’s data on stockpiles, production and exports
• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  Oct. 1-10 palm oil export data

Wednesday,
Oct. 12:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• Bursa
  Malaysia Derivatives to host East Malaysia palm oil conference, day 1
• FranceAgriMer
  monthly grains outlook
• HOLIDAY:
  Brazil

Thursday,
Oct. 13:

• US
  CPI
• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysian
  Cocoa Board releases 3Q grind data
• Bursa
  Malaysia’s East Malaysia palm oil conference, day 2
• New
  Zealand Food Prices
• HOLIDAY:
  Thailand

Friday,
Oct. 14:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am

• China’s
  first batch of Sept. trade data, including soybean, edible oil, rubber and meat imports
• 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:
  Thailand

Source:
Bloomberg and FI

 

*US
ending stocks were revised by Reuters on Friday

 

 

World
ending stocks estimates

 

USDA
inspections versus Reuters trade range

Wheat                 
614,371                 versus   400000-750000  range

Corn                     
457,366                 versus   400000-725000  range

Soybeans           
969,212                 versus   400000-1250000                range

 

 

 

 

GRAINS
INSPECTED AND/OR WEIGHED FOR EXPORT

                 
REPORTED IN WEEK ENDING OCT 06, 2022

                           
— METRIC TONS —

————————————————————————-

                                                  
CURRENT     PREVIOUS 

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

 
GRAIN      10/06/2022  09/29/2022  10/07/2021    TO DATE     TO DATE  

 

BARLEY          
   0           0       1,597        1,414        8,147 

CORN         
457,366     672,835     850,831    2,827,028    3,119,720 

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       
20,665       5,531      70,304      104,543      299,863 

SOYBEANS  
   969,212     585,271   1,744,264    2,760,951    3,583,819 

SUNFLOWER        
144         288           0        1,104            0 

WHEAT        
614,371     667,577     446,896    9,130,644    9,198,027 

Total      
2,061,758   1,931,502   3,113,892   14,832,170   16,209,800 

————————————————————————–

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

100
Counterparties Take $2.222 Tln At Fed Reverse Repo Op (prev $2.227 Tln, 101 Bids)

Brent
Crude Futures Settle At $94.29/Bbl, Down $1.90 Or 1.98%

 

Corn

·        
Corn futures traded lower on weakness in wheat, higher USD and lower WTI crude oil. Losses limited from a shrinking EU corn crop.

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

·        
News was light after the day session open.

·        
USDA US corn export inspections as of October 06, 2022, were 457,366 tons, within a range of trade expectations, below 672,835 tons previous week and compares to 850,831 tons year ago. Major countries included Mexico for 195,505
tons, Japan for 137,023 tons, and China for 78,627 tons.

·        
France lowered their corn crop to 11.15 million tons from 11.33 projected last month, 27% below last season. Yield was estimated at 8.18 tons per hectare versus 8.44 last month.

·        
USDA US S&D expectations are of a 171.8 corn yield with ending stocks next year at 1.124BB bushels and a 50.6 bean yield with ending stocks of 248MM bushels. Wheat stocks are expected to be a very low 554MM bushels.

·        
Mississippi River barge rates are starting to ease after two locations reopened on Sunday.

 

 

Export
developments.

·        
Taiwan’s MFIG seeks up to 65,000 tons of corn on October 12, optional origin, for December and/or early January shipment.

 

Updated
10/09/22

December
corn is seen in a $6.50-$7.15 range. March $6.50-$7.50 range.

 

Soybeans

·        
The soybean complex ended mixed with soybeans and soybean meal finding strength on late fund buying. Soybean oil traded lower from bearish Malaysian palm oil data and lower US WTI & gasoline futures. Palm oil futures on Tuesday
snapped a 7 day winning streak, ending over 3 percent lower.

·        
Bloomberg mentioned the Miss. River barge backup is loosening up, but problems are building up along the Ohio River.

·        
Funds bought 2,000 soybeans, were flat in meal and sold 1,000 soybean oil.

·        
China plans to auction off 500,000 tons of soybeans from reserves on October 14, consisting of the 2019, 2020, and 2021 crop years.

·        
USDA US soybean export inspections as of October 06, 2022, were 969,212 tons, within a range of trade expectations, above 585,271 tons previous week and compares to 1,744,264 tons year ago. Major countries included China for 690,073
tons, Mexico for 94,639 tons, and Egypt for 60,542 tons.

·        
AmSpec reported October 1-10 palm oil exports at 373,030 tons, a 0.5% increase from Aug 1-10.

·        
GAPKI reported Indonesia palm oil exports during August at 4.33 million tons, up from 2.71 million tons during July, and up 1.4% from year ago. Production during August was 4.31 million tons versus 3.8 million in July.

·        
Abiove raised their 2021-22 Brazil soybean production to 127 million tons from 126.9 million previous, and left exports unchanged at 77 million tons. Crush was raised 100,000 tons to 49 million, resulting in an increase to meal
output by 100,000 tons to 37.5 million and SBO unchanged at 9.9 million tons.

·        
Safras estimated the Brazil 2022-23 soybean production at 151.5 million tons, up 20 percent from 125.9 million last year. Conab is at 152.35 million tons and USDA at 149.0 million (126 last year).

·        
Conab: 2022-23 Brazil soybean plantings 11 percent complete versus 12% year ago.

 

 

Nearby
oil share versus third month palm oil

 

Export
Developments

·        
Tunisia bought 8,000 tons of soybean oil for November 21-December 5 shipment, at an estimated $1,355 a ton c&f, optional origin. Other offers were $1,359 a ton c&f and $1,490 a ton c&f.

 

Updated
10/09/22

Soybeans
– November is seen in a $13.00-$14.50 range, January $13.25-$15.00

Soybean
meal – December $375-$440, January $360-$475

Soybean
oil – December 63.00-75.00, January wide 60.00-73.00 range

 

Wheat

·        
US wheat futures traded sharply lower led by Chicago after a Russian official stated they may drop their grain export quota program for this crop year after a bumper crop was realized. Russia tends to limit grain exports late
in the crop season to ensure domestic supplies. Technical selling was also seen.

·        
Funds sold an estimated net 28,000 Chicago wheat contracts after buying 20,000 Monday.

·        
USDA US all-wheat export inspections as of October 06, 2022, were 614,371 tons, within a range of trade expectations, below 667,577 tons previous week and compares to 446,896 tons year ago. Major countries included China for 87,396
tons, Korea Rep for 68,678 tons, and Philippines for 63,625 tons.

·        
Paris December wheat was off 9.25 euros at 356 per ton.

·        
The UN is asking shipping parties to speed up grain inspections conducted in Istanbul. Currently it takes about 10 days to complete inspections per ship.

·        
Argentina will dry down this week.

·        
Australia’s heavy rains over the past week may have impacted wheat quality for the far eastern areas, according to a Reuters article interviewing traders and analysts.

·        
Kazakhstan increased their grain harvest to 19 million tons, up from 16.3 million year ago.

 

Export
Developments.

·        
Algeria bought 400,000 to 480,000 tons of soft milling wheat for November shipment at around $380-$384/ton c&f. Russia and France (one cargo) was thought to be origin.

·        
Japan seeks 94,140 tons of food wheat from the US, Canada and Australia later this week for arrival by January 31.

·        
Turkey bought 495,000 tons of feed barley for LH Oct through December shipment. Lowest offer was believed to be $321.90, highest $338.33.40/ton.

·        
Jordan passed on 120,000 tons of wheat. 

·        
Jordan seeks 120,000 tons of barley on October 12 for March and April shipment.

·        
China plans to sell 40,000 tons of wheat from reserves on October 12, from the 2014-2017 crops.

·        
Mauritius seeks 25,800 tons of wheat flour, optional origin, on October 28 for January through September 30, 2023, shipment.

 

 

Rice/Other

·        
South Korea plans to buy 450,000 tons of rice for reserves this year October 20 through December to stabilize domestic prices. This would be up from 350,000 tons last year.

·        
South Korea seeks 90,100 tons of rice from the US, Vietnam and other origins on October 19 for arrival between Jan 20 and Apr 30.

·        
Mauritius seeks 6,000 tons of rice on October 20, optional origin, for Jan-Mar shipment.

 

Updated 10/7/22

Chicago – December $8.16-$10.00, March $8.00 to $10.25

KC – December $9.25-$10.50, March 8.50-$10.50

MN – December $9.25-$10.50, March $9.00 to $10.50