FI Evening Grain Comments 11/08/22

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US
election day. Overnight China will update their S&D’s (CASDE). On Wednesday Conab will issue updated new-crop production estimates. USDA will be out at 11 am CT. EIA inventories are due out at 9:30 am CT. Malaysia MPOB will be out late Wednesday night. USD
was down 54 points as of 2:18 pm CT, WTI crude oil was $2.63 lower and US equities higher. Soybeans, corn and wheat ended lower on long liquidation ahead of the USDA report, US crop progress results, China Covid lockdown concerns and Black Sea shipping movement.

 

Private
exporters reported the following sales (4) activity:

-338,600
metric tons of corn for delivery to Mexico during the 2022/2023 marketing year

-144,000
metric tons of soybeans for delivery to Mexico during the 2022/2023 marketing year

-138,700
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-132,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

 

Weather

US
weather forecast was largely unchanged. The US Great Plains is a slightly wetter Thursday. Light rain will fall across OK today, and eastern NE, eastern KS, and OK Thursday. The Midwest will see showers across the northwestern area through Friday. Many areas
of Brazil will see rain this week. Argentina should see rain return to western Santa Fe, Cordoba, La Pampa, and western Buenos Aires late Wed-Sat.

 

 

 

World
Weather, INC.

MOST
IMPORTANT WEATHER FOR THE COMING WEEK

• South
  America rain is expected to evolve later this week and continue into next week bringing back moisture to many areas and supporting summer crop development
• Some
  wheat harvest delay is expected, but the impact on grain quality should be low
• Rainfall
  will be highly varied with some areas getting much more rain than other areas and a close watch on the distribution will be warranted
• Soil
  moisture is still a little low in parts of Mato Grosso and Goias
• South
  America temperatures the remainder of this week will be warm in Argentina and mild in Brazil with next week being mild in both countries
• U.S.
  Weather will be mixed over the next week
• Much
  of the hard red winter wheat region will be dry or at least receive insignificant rainfall
• Not
  much rain will fall in the Delta or Midwest through early next week
• A
  blizzard will impact the northern Plains Wednesday night and Thursday with 6-12  inches of snow and local totals to 15 inches expected
• Moisture
  totals from rain and snow in the upper Midwest and northern Plains will vary from 0.50 to 2.00 inches and locally more
• California
  will receive some rain and mountain snow, although precipitation in the central Valleys will be light
• Snow
  accumulations in the Sierra Nevada will be significant in the highest elevated areas
• Waves
  of light rain and mountain snow will impact the Pacific Northwest over the next gen days, but mountainous areas will be wettest
  
• Tropical
  Storm Nicole will be impacting Florida, Georgia and the Carolinas during the latter part of this week and into the weekend
  
• Some
  minor crop and property damage is expected
• The
  storm will move inland near Fort Pierce, Florida as a hurricane and then weaken to tropical storm status again as it moves to Cedar Key, Florida Thursday and northward to Valdosta, Ga. Friday
  
• the
  storm will then turn northeast through the Carolinas thereafter
• Low
  damage is expected from the tropical storm, central coastal areas of Florida will be most impacted
• Some
  citrus fruit droppage is possible, although it should not be widespread
• Sugarcane
  will be blown down, but it should right itself again in time
• Cotton
  fiber quality declines are possible from Georgia to the Virginia because of rain, although amounts should not be excessive
• Very
  little cotton will be strung out of bolls to the ground, but some of the crop will be strung out
• U.S.
  Weather November 16-22
• A
  weather disturbance will move from the southeastern Plains through the Delta and into the southeastern states during mid-week next week
  
• More
  limited precipitation is expected elsewhere
• Net
  drying will continue in hard red winter wheat areas
• Restricted
  precipitation will continue in the eastern Midwest and northern Delta
• Waves
  of light precipitation will continue to  impact the Pacific Northwest, although it will be greatest in the mountains
• Ontario
  and Quebec, Canada weather will be mostly good for advancing corn and soybean harvesting and winter crop planting during this workweek
• Precipitation
  days will be limited, and moisture totals should be light
• A
  boost in precipitation is likely Nov. 11-12 with some cooling and showery weather likely thereafter
  
• Europe
  and western CIS temperatures will be warmer than usual over the next two weeks, although portions of Russia will turn colder next week
• Most
  of the cooling next week will be in the New Lands
• Restricted
  precipitation is expected across Europe and western Asia during the next ten days to two weeks
• Totally
  dry weather is unlikely, but the precipitation that falls should be light
• Western
  areas will be wetter than the east
• Snow
  cover will remain restricted in western Asia through much of the forecast period, although a little snow will accumulate in the New Lands over time next week when temperatures are colder
• China
  temperatures will be warmer than usual over the next ten days
• China
  precipitation Tuesday into Friday of this week will be greatest in the Yellow River Basin and north China Plain the remainder of this week
  
• This
  event will produce 0.20 to 0.80 inch of moisture with a few 1.00 to 2.00-inch amounts in a part of winter wheat country
  
• Winter
  crops will become better established because of this precipitation
• Some
  of this rain will reach the northern Yangtze River Basin this weekend with moisture totals of 0.10 to 0.75 inch
  
• Some
  moisture “may” reach the heart of rapeseed country in the Yangtze River Basin late next week and into the following weekend, but confidence is low
• Interior
  southeastern China will be drier than usual for another ten days which is classic for La Nina and confidence is high for dry biased conditions in this region
• Waves
  of rain are still expected in far southern India over the next ten days to two week keeping the ground abundantly wet
• Rainfall
  will vary from 3.00 to 6.00 inches and local totals over 8.00 inches
• Wettest
  along the lower east coast.
• Indonesia,
  Malaysia, Philippines, southern Vietnam, southern Cambodia and southern Thailand will be wet over the next ten days to two weeks
  
• Some
  areas of local flooding are likely periodically
• Australia
  rainfall will be limited this workweek, although some showers are likely
• Net
  drying will continue favoring winter crop maturation in northern and some central areas as well as the harvest in northern areas
• Rain
  will resume in eastern Australia this weekend, but it should not be excessively great
• Fieldwork
  will be disrupted, and rain amounts should vary from 0.65 to 2.00 inches
• No
  new flooding is expected
• A
  return of restricted precipitation is expected next week
• Western
  Australia will be colder than usual the remainder of this week and into the weekend before the cool air spreads east during the late weekend and next week
  
• Temperatures
  this week will be near normal in the far east and a little warmer than usual in south-central parts of the nation
• Western
  Australia winter crops are still well on their way to yielding very well with high quality as well.
  
• South
  Africa received rain during the weekend and more will fall periodically over the next two weeks
• Summer
  crop planting will advance around the moisture
• Some
  delay to farming activity will occur periodically, but progress will be made slowly
• Good
  harvest weather is expected for wheat and canola in the western part of the nation where rainfall is expected to be very limited over the next two weeks
• Temperatures
  will be seasonable
• 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 fall lightly in the southeast periodically in the coming week to ten days
  
• Central
  America precipitation is expected to continue periodically during the next ten days, but no large region of excessive rain is expected this week
• Some
  increase in rainfall may occur next week
• West-central
  Africa rainfall will occur periodically enough to support southern coffee, cocoa, sugarcane, rice and other crops during the next couple of weeks
• The
  precipitation will be greatest near the coast
• East-central
  Africa rainfall will be sufficient to support coffee and cocoa as well as a few other crops
• Rain
  will fall in portions of Ethiopia, Tanzania and Uganda
• Today’s
  Southern Oscillation Index was +11.57 and it will continue to move lower over the next few days

Source:
World Weather INC

 

 

Bloomberg
Ag Calendar

Wednesday,
Nov. 9:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• France
  AgriMer monthly grains outlook
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• EIA
  weekly US ethanol inventories, production, 10:30am
• Brazil’s
  Conab issues production, area and yield data for corn and soybeans

Thursday,
Nov. 10:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Malaysian
  Palm Oil Board’s data on stockpiles, production and exports
• Malaysia’s
  Nov. 1-10 palm oil export data
• Cane
  crush and sugar production data by Brazil’s Unica

Friday,
Nov. 11:

• ICE
  Futures Europe weekly commitments of traders report
• DELAYED:
  CFTC commitments of traders weekly report on positions for various US futures and options, usually released Fridays, will be published Monday, Nov. 14
• New
  Zealand Food Prices
• HOLIDAY:
  US, France, Canada

Saturday,
Nov. 12:

• Atlantic
  Council Global Food Security Forum, Bali, day 1

Sunday,
Nov 13:

• Atlantic
  Council Global Food Security Forum, Bali, day 2

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

Due
out November 9

 

 

Macros

US
EIA Cuts Forecast For 2023 World Oil Demand Growth By 320,000 Bpd, Now Sees 1.16 Mln Bpd Yr-On-Yr Increase

–
EIA Raises Forecast For 2022 World Oil Demand Growth By 140,000 Bpd, Now Sees 2.26 Mln Bpd Yr-On-Yr Increase

101
Counterparties Take $2.233 Tln At Fed Reverse Repo Op(prev $2.241Tln, 107 Bids)

Gold
earlier in the day hit $1,716.82, highest since Oct. 6.

 

Corn

·        
Corn futures were lower on technical selling ahead of the USDA report and harvesting pressure. We look for USDA to lower US corn exports on Wednesday by 50 million bushels and leave its soybean export estimate unchanged. US export
developments have been light so far this week and inspections yesterday were poor. Year to date corn inspections are running about 28 percent below same period year ago, at 4.448 billion bushels (6.134 billion year earlier). USDA’s corn export projection is
currently estimated at 2.150 billion bushels, down from 2.471 billion for 2021-22.

·        
US harvest for corn and soybeans should be completed sometime over the next two weeks.

·        
CIF corn and soybeans were weaker from yesterday. November Gulf corn basis fell 3-5 cents and November soybeans down 8-25 cents.

·        
US WCB basis for corn remains firm.

·        
Look for positioning tonight and early Wednesday ahead of the USDA report.

·        
Note US CPI inflation data will be released on Thursday. 

·        
France’s AgMin lowered their estimate of the corn crop to 10.74 million tons from 11.15 million last month, 29.4% below last year and 21.4% below average. 

·        
Ukraine is hopeful the Black Sea grain deal will be expanded for a least a year. A decision might be made next week. Since Russian inspectors returned, about 12 vessels are getting cleared on average per day.

·        
A Russia deputy foreign minister today said that Russia has not yet decided whether to extend its agreement with Turkey and the United Nations, that is set to expire on November 19.

·        
Soybean and Corn Advisor lowered their estimate for the Argentina corn production by 0.5 million tons to 50 million tons. They see Brazil at 125.5 million tons.

·        
USDA reported US corn harvest progress at 87 percent, up 11 points from the previous week and 1 point above expectations.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 1,000 thousand to 1039k (1022-11055 range) from the previous week and stocks up 25,000 barrels to 22.257 million.

 

Export
developments.

·        
Under the 24-hour announcement system, USDA reported 338,600 tons of corn sold to Mexico for 2022-23 delivery.

 

 

 

 

Updated
11/8/22

December
corn is seen in a $6.50-$7.00 range. March $6.50-$7.50 range.

 

Soybeans

·        
CBOT soybeans traded two-sided, ending lower in the non-expiring months as the US soybean harvest advances. Renewed concerns over China Covid lockdowns surfaced. China’s Covid epicenter apparently shifted to Guangzhou as the outbreak
widened. Earlier this week China confirmed they are not easing Covid-19 rules. Many think China imports of vegetable oil and soybeans will remain slow, but China did buy soybeans overnight. USDA reported 24-H export sales to Mexico, China and unknown. Later
we heard China was in for up to 20 cargoes of soybeans.

·        
Many South American growing areas will see rain later this week that should support early crop development.

·        
Conab reported Brazil’s soybean planting progress at 57.5% complete as of Friday, 10 points above the previous week and below 67 percent year ago. Summer corn was 43 percent, 11 points below average.

·        
Separately, Deral reported Brazil’s Paraná state was 79 percent complete for soybean plantings, below 88 percent at this time last year. First crop corn was 93% complete, slightly below year ago.

·        
Anec see Brazil soybean exports during November at 2.43 million tons.

·        
Soybean meal traded two-sided, ending higher in large part to a reversal in oil share. Soybean oil traded lower on fund long liquidation and China Covid lockdown concerns. December oil shed 130 points. Recall December soybean
oil last week increased 538 points.

·        
China reported 7,691 new COVID-19 infections on Nov. 7, of which 890 were symptomatic and 6,801 were asymptomatic. (Reuters)

·        
European Union soybean imports so far for the 2022-23 season (July 1-November 6) reached 3.88 million tons versus 4.29 million previous season. EU rapeseed imports were 2.49 million tons compared with 1.76 million tons a year
earlier.  Soybean meal imports were 5.60 million tons, unchanged from last year. Palm oil imports were 1.21 million tons vs. 2.10 million at this time last year.

·        
A majority of the US will turn colder (below normal) for the second week of the forecast.

·        
CBOT deliveries Monday night for November soybeans were zero.

·        
USDA reported US soybean harvest progress at 94 percent, up 6 points from the previous week and at trade expectations.

 

U
of I: South American Corn and Soybeans in US Perspective

Zulauf,
C., G. Schnitkey, J. Colussi, N. Paulson and J. Janzen. “South American Corn and Soybeans in US Perspective.”
farmdoc daily (12):167, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, November 7, 2022.

https://farmdocdaily.illinois.edu/2022/11/south-american-corn-and-soybeans-in-us-perspective.html

 

Export
Developments

·        
Under the 24-hour announcement system, USDA reported 138,700 tons of soybeans to China for 2022-23, 132,000 tons of 2022-23 soybeans sold to unknown destinations and 144,000 tons of soybeans sold to Mexico for 2022-23. USDA also
reported 338,600 tons of corn sold to Mexico.

·        
Egypt’s General Authority for Supply Commodities (GASC) seeks 30,000 tons of soyoil and 10,000 tons of sunflower oil on Thursday for Dec. 20, 2022, to Jan. 5, 2022, arrival. They are looking for payment via 180-day letters of
credit.

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

 

 

Updated
11/8/22

Soybeans
– January $13.50-$15.00

Soybean
meal – December $400-$435, January $400-$475

Soybean
oil – December 73-77, January wide 67.00-76.00 range

 

Wheat

·        
US wheat futures traded lower (for the second consecutive day) after USDA reported a 2-point improvement in US winter wheat conditions, a decline in Euronext wheat futures, and long liquidation ahead of the USDA report. Traders
noted competitive prices of Russian wheat in tenders from Egypt and Algeria. Comments from Ukraine and Turkey official renewed optimism over a possible extension of the grain trade deal.

·        
Six ships passed through the Black Sea safe passage corridor. 13 are waiting for inspection clearance in Turkey and another 80 are waiting for permits. The JJC group noted 10 vessels will be inspected on November 9.

·        
China will get rain in wheat areas of the Yellow River Basin and North China Plain later this week.

·        
US winter wheat conditions for the combined good and excellent categories at 30 percent were one point below a Reuters trade estimate, but well below 45 percent last year and 51 percent average. 

·        
TX improved 10 points, OK was up 3 and KS up 2.

·        
European Union soft wheat exports so far for the 2022-23 season (July 1-November 6) reached 12.52 million tons versus 11.92 million previous season.

·        
Paris December wheat settled at its lowest level since September 20, down 7.00 euros earlier at 330.00 euros a ton.

·        
Ukraine 2022-23 winter grain plantings reached 90 percent at 4.3 million hectares as of November 7, including 3.6 million hectares of wheat. Area is down from last year. 6.09 million hectares of winter wheat were planted at this
time a year ago.

·        
The upper US will see snow later this week.

 

Source:
World Weather Inc.

 

Export
Developments.

·        
Algeria started buying wheat for Dec 1-31 shipment. At least 400,000 tons was reported by Reuters. The tender is valid through Wednesday. Initial purchases were reported around $367 to $368 a ton c&f. Highest price was $368.50/ton.

·        
Japan is in for 94,603 tons of wheat later this week for arrival by February 28.

·        
Iraq seeks 50,000 tons of US wheat. Details are lacking.

·        
Jordan issued an import tender for 120,000 tons of hard milling wheat set to close November 15 for March/April shipment.

·        
Jordan is back in for 120,000 tons of barley for March/April shipment on November 16 for March/April shipment.

 

Rice/Other

·        
None reported

 

Updated
11/8/22

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

KC
– December $9.00-$10.15, March 8.50-$10.50

MN
– December $9.00-$10.30, March $9.00 to $10.50