FI Evening Grain Comments 10/28/22

PDF Attached does not include daily estimate of funds as they were not available at the time this was sent

 

 

Private
exporters reported the following sales activity:

-126,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-198,000
metric tons of soybeans for delivery to Spain during the 2022/2023 marketing year

 

USD
was higher, WTI crude oil lower and US equities higher. US Feds meet mid next week and may increase rates by 75 points. CBOT futures were lower for SBO & grains, and higher for soybeans and meal, ahead of the weekend. Daylight savings time ends in the UK and
in much of Europe, including Germany, France, Italy and Spain, when clocks “fall back” by an hour.

 

 

Weather

The
southern Great Plains have an opportunity for rain today through Saturday before returning Tuesday. Parts of the US Midwest southwestern, central and southern areas will see rain sometime through Sunday. Argentina’s BA, eastern Santa Fe and Entre Rios will
see rain this weekend before turning drier next week. Brazil’s central and northern growing areas will continue to get rain for the balance of this week. Temperatures in Argentina and Brazil will fall early next week bringing potential frosts to some of the
growing areas.

 

Past
seven days

 

World
Weather, INC.

MOST
IMPORTANT WEATHER FOR THE COMING WEEK

• Damaging
  cold is still expected in Argentina, Uruguay and parts of Rio Grande do Sul, Brazil Monday and Tuesday
• Frost
  will occur as far north as northern Cordoba, northern Santa Fe and southern Corrientes, Argentina as well as northern Rio Grande do Sul and southeastern Santa Catarina, Brazil
• Light
  freezes will occur in central Cordoba, central Santa Fe, Uruguay and southern Rio Grande do Sul, Brazil
• Hard
  freezes are expected from parts of San Luis, through southern Cordoba and La Pampa to Buenos Aires
• There
  is still time for airmass modification, but early indications suggest some damage will occur to wheat, barley, corn and sunseed in Argentina. Some damage to rice, corn and wheat may also occur in Uruguay and central and southern Rio Grande do Sul.
  
• South
  America’s cold airmass will also push rain through eastern and northern Argentina briefly this weekend and then from southwest to northeast through Brazil late this weekend through mid-week next week
• Drier
  air will dominate Argentina for a week to ten days following this weekend showers
• Drier
  weather will occur in southern and center west Brazil during mid- to late-week next week and into the following weekend
  
• Drier
  weather will impact northeastern Brazil late next week and into the following weekend, although some scattered showers will linger
• All
  of Brazil will receive rain in this first week of the outlook with sufficient amounts to support spring planting and early-planted crop development for a while.
• There
  is “some” concern over lighter than usual rainfall in Mato Grosso and immediate neighboring areas, but planting progress will continue
• Greater
  rain will soon be needed in parts of this region, but only when temperatures start to heat up again after next week’s cold weather
• Drier
  weather coming next week in wheat areas will greatly improve crop maturation and harvest conditions
• Aggressive
  planting is expected to occur in Brazil summer crop areas following the late weekend and early to mid-week rain event next week
• Field
  progress may be aggressive for up to a week
• Seasonal
  rains will resume in Brazil in the second week of November
• Next
  week’s drying is not the beginning of an unusually dry period for center west, center south or northeastern Brazil, but drying is expected in far southern Brazil
  
• Recent
  30- to 45-day precipitation anomalies in South America have included well below normal precipitation from eastern Argentina through Uruguay to Rio Grande do Sul which is classic La Nina weather
• These
  conditions will prevail well into November
• Tropical
  Storm Nalgae will  move through the Philippines today and Saturday producing some very heavy rain and flooding
• The
  storm will be 261 miles east southeast of Manila Philippines at 1500 GMT today
• Rainfall
  of 6.00 to 12.00 inches and locally more will occur from Samar through all of Luzon Island where flooding is likely
• Damage
  to some crops and property is expected
• Nalgae
  will turn to the northwest after moving across Luzon and will approach southern China early next to mid-week next week, but it is expected to weaken before reaching Guangdong
  
• Cool
  air will slip into southern parts of Western Australia early next week, as well
• Patches
  of frost will be possible, but too much wind and some cloudiness should help to hold up temperatures above the damage threshold
• Eastern
  Australia will receive another round of generalized rainfall this weekend through Monday perpetuating worry over general crop and field conditions
• Net
  drying is expected today
• Multiple
  days of dry weather will evolve during mid- to late-week next week and temperatures should trend a little warmer with greater sunshine
• The
  change will be welcome, but it will take a while for flood water to recede and field conditions to return to normal – if they are going to do that
• More
  rain will occur across eastern Argentina later in November to restore concern over crop and field conditions
• Southern
  Oklahoma and north-central Texas will receive additional rain today before shifting to the Delta this weekend
  
• Rainfall
  through dawn today varied from 0.50 to 1.83 inches in southwestern Oklahoma and southward into central Texas.
  
• Additional
  rainfall of 0.50 to 2.25 inches will impact south-central Oklahoma through north-central and eastern Texas by Saturday afternoon
• The
  moisture will be good for winter wheat planting, emergence and establishment
• Drying
  is expected this weekend through much of next week with another storm possibly behaving similarly during the following weekend
• West
  Texas showers overnight produced a trace to 0.44 inch of moisture and another trace to 0.25 inch is expected the remainder of today before drier weather evolves and prevails for the following week.
  
• Drier
  weather will then occur for a full week thereafter
• U.S.
  northern and western Midwest and northern and central Great Plains will receive very little rain of significance during the coming full week
• U.S.
  central and northern hard red winter wheat areas received a few showers overnight with rainfall of up to 0.28 inch in south-central Nebraska and areas southward into eastern wheat areas of Kansas.
  
• Greater
  rain occurred in southwestern Oklahoma as noted above where 0.50 to 1.83 inches resulted
• These
  areas will be dry this weekend through much of the week next week, although some additional showers are possible at the end of the week
• Western
  North America temperatures are advertised to be cooler biased over the next two weeks, but no intense cold is anticipated
• Central
  and eastern U.S. weather may become a little more active in the second week of the outlook, Nov. 3-11.
  
• There
  is potential for a storm system in the northern Plains and upper Midwest late next week and a possibility for another to evolve in the southeastern Plains that would move into the central Midwest Nov. 4-6
• Confidence
  is low on this second precipitation event
• U.S.
  southeastern states rainfall is expected to be infrequent and light during the next couple of weeks
• The
  bottom line for U.S. rivers will continue to be one of concern.  A short-term rise in water levels on the Mississippi and lower Missouri rivers is occurring in response to recent rain, but the change will not be great enough to seriously impact barge traffic.
  Additional rain in the Delta and Tennessee River Basin this weekend will have a similar impact. Overall, any rises in river levels may allow some slight change in barge traffic, but the changes are not likely to be great enough or sustainable to seriously
  reduce shipping delays or greatly reduce the high expense for barge freight.
  
• U.S.
  Pacific Northwest will receive some periodic showers, but the greatest moisture will fall in the mountains
• The
  Yakima Valley will be driest
• Tuesday
  into Thursday of next week and Nov. 8-10 will be wettest in crop areas
• Dryland
  winter wheat, especially in Oregon, needs greater moisture
• Restricted
  northern and central U.S. Plains, western and northern Midwest and southeastern states rainfall during the next ten days will result in aggressive farming activity, but winter crops will be seeking greater rainfall in time
• Canada
  Prairies weather will trend warmer over the coming five days with restricted precipitation
• Western
  Alberta will be the exception where some periodic rain and snow is likely
• Week
  2 weather will turn much colder in western parts of the Prairies and there will be at least some potential for rain and snow in the eastern Prairies
  
• Snowmelt
  is expected in Canada’s central Prairies over the next few days as temperatures rebound back above normal after this week’s snowstorm
• Soil
  moisture either has or soon will improve in far southern Alberta and southern and interior eastern Saskatchewan where the greatest snow fell this week
  
• Some
  areas will have to wait for the snow to melt before soil moisture increases
• Many
  areas in the central and southwestern Prairies still have need for more moisture of significance
• Ontario
  and Quebec, Canada weather will be mostly good for summer crop harvest progress and winter grain planting during the coming ten days
• Less
  frequent and less significant rain is predicted with temperatures rising above normal
• South
  Africa weather will continue to be well balanced over the next two weeks favoring fieldwork and crop development
  
• Sufficient
  rain will fall to maintain an excellent planting outlook
• Western
  wheat, barley and canola areas will experience good maturation and harvest weather
• Mexico’s
  seasonal rains have largely diminished for the season and good crop maturation and harvest weather is expected into next week
• Some
  rain will evolve in the east and south briefly during the second week of the forecast
• Central
  America precipitation is expected to be light and sporadic for a while, but some increase in rainfall may occur later next week as a tropical wave or a tropical depression advances toward the region
• China’s
  weather will remain largely dry or at least free of major storm systems except in a few west-central crop areas
• Lower
  parts of the Yangtze River received some rain earlier this week
• The
  moisture improved rapeseed planting conditions, but drought remains especially near and south of the Yangtze River where more rain is needed to support long term crop development.  The next greatest rain event is expected in about ten days, but that looks
  to be another meager event
• Xinjiang,
  China harvest weather has been and will continue favorable
• Field
  progress has likely advanced quite well with little change likely
• Harvesting
  should be winding down in some areas
• Seasonably
  dry weather will continue in China’s North China Plain and Yellow River Basin supporting fieldwork of all kinds; including wheat planting and summer crop harvesting
• Most
  areas in India will be dry during the next ten days, although some rain will fall periodically in the far south which is not unusual for this time of year
• Europe
  precipitation will be limited over the next week except in the North and Baltic Sea regions and from the Baltic States through Belarus to eastern Ukraine where waves of rain are expected.
  
• Weather
  in the second week of the forecast should trend wetter in west-central and central parts of the nation
  
• Western
  Russia precipitation will be infrequent, but occasional
• Eastern
  parts of Russia will see periods of snow that will raise snow cover and help reinforce future colder biased weather in eastern Asia
• North
  Africa weather has trended drier for a while and not much precipitation is expected in the coming ten days
• Rain
  will be needed in November and December to support planting of wheat and barley
• A
  few showers will occur near the Mediterranean coast late next week and into the following weekend
• Interior
  Thailand and northern Laos will experience limited rainfall over the next ten days
• Drier
  weather is expected in parts of Vietnam and that will be welcome
• Indonesia,
  Malaysia will experience frequent rain with some bouts of heavy accumulations
• Local
  flooding will still be possible, but no widespread serious problems are anticipated
  
• West-central
  Africa rainfall will occur periodically enough to support coffee, cocoa, sugarcane, rice and other crops during the next couple of weeks
• The
  precipitation will be greatest in the south with Cameroon getting some heavy rainfall
• There
  is a southward shift in seasonal rainfall occurring which should be helping 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
• Limited
  rainfall is expected in Tanzania until late next week when some rain may develop
• Today’s
  Southern Oscillation Index was +18.56 and it will move erratically over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
Oct. 31:

• Malaysia’s
  Oct. 1-31 palm oil export data

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Agricultural
  prices paid, received, 3pm
• US
  crop conditions and harvesting for corn, cotton, soy; winter wheat planting, 4pm
• HOLIDAY:
  Chile

Tuesday,
Nov. 1:

• Australia
  commodity index
• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• Purdue
  Agriculture Sentiment. 9:30am
• USDA
  soybean crush, DDGS production, corn for ethanol, 3pm
• US
  winter wheat condition, 4pm
• Honduras,
  Costa Rica monthly coffee exports
• International
  Cotton Advisory Committee releases monthly outlook
• HOLIDAY:
  France, Chile

Wednesday,
Nov. 2:

• Indonesian
  Palm Oil Conference in Bali, day 1

• EIA
  weekly US ethanol inventories, production, 10:30am
• HOLIDAY:
  Brazil

Thursday,
Nov. 3:

• Indonesian
  Palm Oil Conference in Bali, day 2

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

Friday,
Nov. 4:

• Indonesian
  Palm Oil Conference in Bali, day 3

• FAO
  World Food Price Index
• FranceAgriMer
  weekly update on crop conditions
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm

Source:
Bloomberg and FI

 

 

 

CFTC
Commitment of Traders

Traditional
funds were more long than estimated for corn, meal and soybean oil, and near expectations for soybeans and wheat.

 

 

 

 

Reuters
table

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
184,704      8,471    361,488      5,367   -491,168    -21,900

Soybeans           
26,882     16,252    115,544      2,385   -119,071    -23,236

Soyoil             
57,005     13,599    102,163      4,137   -172,000    -15,189

CBOT
wheat         -50,607     -9,124    102,544     -1,606    -45,686     10,715

KCBT
wheat           5,827     -2,272     46,995     -1,298    -51,982      3,059

FUTURES
+ OPTS     Managed                 Swaps              Producer

                    
   Net        Chg        Net        Chg        Net        Chg

Corn              
264,374     10,112    218,630     -1,162   -476,353    -21,099

Soybeans           
75,411      8,548     73,937      1,875   -113,354    -22,564

Soymeal            
86,030     15,234     80,383        930   -216,583    -22,717

Soyoil             
95,161     20,187     84,970       -385   -191,348    -14,443

CBOT
wheat         -36,052    -14,001     61,235        515    -37,828      9,608

KCBT
wheat          24,626     -1,644     27,503        357    -48,141      2,539

MGEX
wheat           3,483       -326      1,009        172     -5,403        503

                
———- ———- ———- ———- ———- ———-

Total
wheat         -7,943    -15,971     89,747      1,044    -91,372     12,650

Live
cattle         65,722     28,423     52,884        135   -129,725    -23,145

Feeder
cattle       -5,871      3,147      3,058       -543      5,052     -1,029

Lean
hogs           55,433     19,646     46,126       -870    -84,799    -13,283

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
48,372      4,087    -55,023      8,062  1,862,587      6,299

Soybeans          
-12,639      7,541    -23,355      4,599    721,646   -126,131

Soymeal            
22,649      4,216     27,521      2,337    426,681     12,185

Soyoil             
-1,616     -2,811     12,832     -2,547    482,923     23,802

CBOT
wheat          18,895      3,864     -6,250         14    411,948      7,561

KCBT
wheat          -3,147     -1,763       -840        511    174,982         65

MGEX
wheat           2,380        -54     -1,469       -296     58,197       -307

                
———- ———- ———- ———- ———- ———-

Total
wheat         18,128      2,047     -8,559        229    645,127      7,319

Live
cattle         18,618     -1,074     -7,499     -4,339    346,666     25,512

Feeder
cattle       -1,325        545       -913     -2,119     61,690        918

Lean
hogs           -4,486     -1,311    -12,274     -4,182    256,898      9,645

 

Macros

99
Counterparties Take $2.183 Tln At Fed Reverse Repo Op (prev $2.152 Tln, 97 Bids)

US
Personal Income Sep: 0.4% (est 0.4%; prev 0.3%)

US
Personal Spending Sep: 0.6% (est 0.4%; prev 0.4%)

US
Real Personal Spending Sep: 0.3% (est 0.2%; prev 0.1%)

US
Employment Cost Index Q3: 1.2% (est 1.2%; prev 1.3%)

US
PCE Deflator (M/M) Aug: 0.3% (est 0.3%; prev 0.3%)

US
PCE Deflator (Y/Y) Aug: 6.2% (est 6.3%; prev 6.2%)

US
Core PCE Deflator (M/M) Aug: 0.5% (est 0.5%; prevR 0.5%)

US
Core PCE Deflator (Y/Y) Aug: 5.1% (est 5.2%; prev 4.9%)

Canadian
GDP (M/M) Aug: 0.1% (est 0.0%; prev 0.1%)

Canadian
GDP (Y/Y) Aug: 4.0% (est 3.7%; prevR 4.4%)

 

US
Univ. Of Michigan Sentiment Oct F: 59.9 (est 59.6; prev 59.8)

–
Current Conditions: 65.6 (est 65.0; prev 65.3)

–
Expectations: 56.2 (est 56.1; prev 56.2)

–
1-Year Inflation: 5.0% (est 5.1%; prev 5.1%)

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

US
Pending Home Sales (M/M) Sep: -10.2% (est -4.0%; prev R -1.9%)

–
Pending Home Sales NSA (Y/Y): -30.4% (prev -22.5%)

 

Corn

·        
Corn prices ended lower on selling in outside markets, lower wheat, and weakness in WTI crude oil. News was light.

·        
South Korea bought 134,000 tons of corn from either South America or South Africa.

·        
Yesterday a Reuters article said Mexico still plans to ban genetically engineered corn by 2024, potentially halving US imports of yellow corn when the ban goes into effect. Mexico is US’s largest customer.

·        
Temperatures in Argentina and Brazil will fall next week bringing potential frosts to some of the growing areas. Commodity weather group warned Brazil’s Rio Grande do Sul and Santa Catarina states, along with Argentina could see
risks for emerged corn and wheat.

 

 

 

Export
developments.

·        
South Korea’s Major Feedmill Group (MFG) bought an estimated 134,000 tons of corn sourced from South America or South Africa for arrival in South Korea in February 2023. One consignment of 68,000 tons was bought at $329.98 a ton
c&f and another 66,000 tons at $330.99 a ton c&f.

 

Updated
10/27/22

December
corn is seen in a $6.60-$7.15 range. March $6.50-$7.25 range.

 

Soybeans

·        
CBOT
soybeans rallied from strength in meal and spreading against grain futures.

·        
Meal traded sharply higher from good US exports off the PNW and South Korea buying 120,000 tons of meal overnight. Correction to the oil share was noted.

·        
SBO was lower from weakness in palm oil (down 3.9%), decrease in South American fob offers (they rose earlier this week) and lower WTI crude oil. Argentina N/D fob values declined $30/ton from Thursday to $1351, according to one
source.

·        
We are looking for a pull back for December soybean oil to the 69-70 cent area if NASS reports a higher than expected end of September ending soybean stocks on Tuesday. We see soybeans in a sideways trading range over the short
term.

·        
USDA announced sales to China and Spain.

·        
Palm oil futures fell 2.8% for the week.

·        
Indonesia may set their November 1-15 palm oil reference price at $771.88 / ton, up from current $713.89 per ton.

·        
First Notice Day deliveries for November soybeans is seen in a 0-50 range.

·        
Paraguay finished soybean plantings.

·        
Brazil elections are this weekend and in general producers would like to see Bolsonaro to win, per recent chat board.
https://www.npr.org/2022/10/28/1131962073/brazil-presidential-election-bolsonaro-lula

·        
China plans to auction off 500,000 tons of 2019, 2020 & 2021 soybeans from reserves on November 11.

·        
China sold 290,000 tons out of just over 500,000 tons earlier today at an average price of 5,351 yuan per ton.

·        
CNGOIC reported China’s soybean crush volume slipped last week to 1.61 million tons. AgriCensus noted its down 650,000 tons from the previous month and unchanged from the previous year. Soybean meal stocks were a low 260,000 tons
and soybean oil stocks were 750,000 tons.

 

 

We
look for US soybean crush for the month of September to average 5.59 million bushels per day versus 5.65 million during August and 5.47 million September 2021.

 

Export
Developments

• USDA
  announced private exporters reported the following sales activity:

• 126,000
  metric tons of soybeans for delivery to China during the 2022/2023 marketing year
• 198,000
  metric tons of soybeans for delivery to Spain during the 2022/2023 marketing year

• South
  Korea’s MFG bought 120,000 tons of soybean meal at an estimated net $528.49/ton c&f and $515.95/ton c&f for arrival around March 21.
  

 

 

 

We
look for US soybean crush for the month of September to average 5.59 million bushels per day versus 5.65 million during August and 5.47 million September 2021.

 

 

Export
Developments

• None
  reported

 

Updated
10/27/22

Soybeans
– November is seen in a $13.40-$14.10 range, January $13.25-$15.00

Soybean
meal – December $380-$430, January $360-$475

Soybean
oil – December 68.50-74.00, January wide 60.00-73.00 range

 

Wheat

·        
US wheat futures trended lower, to a five week low, after recent rain fell across the dry areas of the southern Great Plains.

·        
Argentina may see frost events early next week and this could impact late developing wheat, along with emerged spring crops. Argentina has seen some rough weather past couple of years, although wheat was a record last season.

·        
Argentina’s Rosario grains exchange looks for only 1.34 million tons of wheat to be produced throughout its “core” wheat growing region, an 83% decline from 7.82 million tons produced year ago. They look for the total crop to
come in around 13.7 million tons. We are hearing as low as 10.5 million tons. Brazil will likely source NA wheat this crop-year for imports. How much really depends on what the Argentina government will do with the current 8.8 million tons of wheat export
licenses.

·        
French soft wheat plantings reached 63% complete as of October 24, above 58 percent year ago.

·        
Paris December wheat was up 0.75 euro at 337.50 euros a ton.

·        
China plans to auction off 40,000 tons of wheat from state reserves on November 2.

·        
We did not hear any updates on the safe passage agreement on Friday. Look for ships to start unwinding sailing into Ukraine by mid next week.

·        
Russia claims only 3 percent of the exports under the Ukraine deal went to the poorest countries.

 

Export
Developments.

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

·        
Iraq seeks 50,000 tons of wheat on October 30, nearly one week later than their original close date.

·        
Jordan seeks 120,000 tons of hard milling wheat on November 1 for March/April shipment.

·        
Jordan is back in for 120,000 tons of barley on November 2 for March/April shipment.

 

Rice/Other

·        
None reported

 

Updated
10/27/22

Chicago
– December $8.15-$9.00, March $8.00 to $10.00

KC
– December $9.25-$10.00, March 8.50-$10.50

MN
– December $9.30-$10.00, March $9.00 to $10.50