FI Evening Grain Comments 11/15/22

PDF Attached

 

Private
exporters reported the following sales activity:

-230,185
metric tons of corn for delivery to Mexico during the 2022/2023 marketing year

-261,272
metric tons of soybeans for delivery to Mexico during the 2022/2023 marketing year.

 

Wheat
began to rally late in the session after reports of Russian missiles landing in the NATO country pf Poland. The US Pentagon cannot corroborate the reports, at the time this was written.
https://www.express.co.uk/news/world/1697080/russia-poland-missle-dead-NATO-state-Ukraine-war-pictures-world-war-3  
Poland’s National Security Committee held an emergency meeting. Later a Russian defense minister denied reports that Russian missiles had hit Polish territory, adding there were no strikes on targets near the Ukraine—Poland border. Clarification is needed
on this matter.

 

Regardless,
buy stops were triggered in soybeans around the time the news circulated throughout the trade. Soybeans were already higher from strength in the products. Corn traded two-sided, ending higher but well-off session highs. The USD, which was sharply lower earlier,
was up 29 points by 1:15 pm CT (CBOT close). WTI crude rallied and was up $1.59 at the same time.

 

 

Weather

Temperatures
will be on the cooler side this week for the majority of the US. The Midwest will see light precipitation today across the central areas. The northeastern Midwestern states will see light precipitation during the second half of the workweek.  The US Great
Pains will be mostly dry through Saturday. South America will receive additional precipitation over the next week, but amounts may be lighter than over the past several days. Much of Argentina will trend drier through Wednesday. Argentina may see isolated
showers Thursday through Friday. Canada’s Alberta, Saskatchewan, and Manitoba will see isolated snow showers through Wednesday. Australia saw another round of heavy rain across the southeastern part of the country.

 

Reuters 
– “Heavy rain smashed parts of southwest New South Wales and northeast Victoria over the weekend. Cowra, which lies about 300 km (186 miles) west of Sydney, received 121 mm (4.8 inches) over 24 hours to Monday morning, the highest daily rainfall in 118 years,
data showed.”

 

 

World
Weather, INC.

MOST
IMPORTANT WEATHER FOR THE COMING WEEK

• Argentina
  rainfall will continue restricted over the next ten days, but showers will occur in many areas
• Resulting
  rainfall will be greatest in Buenos Aires Thursday into the weekend with 1.00 to 2.00 inches expected
• Rain
  elsewhere is unlikely to be nearly as great with 0.10 to 0.75 inch and local totals to 1.50 inches
  
• Brazil
  weather will continue dry biased from western Mato Grosso through Sao Paulo and Parana through the weekend while rainfall of 1.00 to 3.00 inches and locally more occurs from Espirito Santo through Bahia to Tocantins
• Some
  flooding rain is expected in Espirito Santo and eastern Bahia
• Center
  west and interior southern Brazil will get rain next week with 1.00 to 3.00 inches likely which should be sufficient to improve topsoil moisture after this first five days of net drying and restricted soil moisture for some areas in center west Brazil
• Rio
  Grande do Sul will experience net drying during much of the coming ten days, despite some rain late Sunday into Tuesday
• Brazil’s
  Mato Grosso, northern Mato Grosso do Sul and a few areas in Goias still need greater rainfall, but they will not receive it until early next week
• The
  moisture that occurs at that time will need to be closely monitored for sufficiency in easing the moisture deficits
• World
  Weather, Inc. sees improving monsoon moisture potential in Brazil next week and the weather trend may become a little more normal for a La Nina year from that point onward into early December
  
• Normal
  for a La Nina year includes below normal precipitation in far southern Brazil and above normal rainfall from Mato Grosso to Minas Gerais and Sao Paulo and northern Parana
• U.S.
  hard red winter wheat areas received snow Monday with accumulations of 1 to 5 inches in southwestern Kansas and up to 7 inches in western Oklahoma
• Less
  than 3 inches occurred elsewhere in Kansas
• Moisture
  content in the snow was too low to seriously change the status of drought
• Snow
  also fell in the upper U.S. Midwest and a part of the northern Plains as well as in parts of Missouri and Illinois overnight, although accumulations were light
• Another
  round of rain fell in the southeastern U.S. Plains and southern parts of the U.S. Delta overnight with amounts of 0.35 to 1.10 inches resulting
• Louisiana
  sugarcane production areas were wettest with 1.00 to 1.36 inches of rain disrupting the harvest
• U.S.
  temperatures were still cold across a big part of the nation Monday with readings cold enough to shut down winter wheat growth in the central Plains and recent cold weather also has winter crops dormant or semi-dormant form the Pacific northwest through the
  northern Plains
• Continued
  cold will likely slow or shutdown winter crop establishment in the Midwest and southern Plains as well
  
• North
  America snow cover is expansive from the northern Plains and a part of the northwestern U.S. through most of Canada except the far southeast
• Snow
  is also on the ground in the southwestern U.S. Plains and in a part of the southwestern Midwest
• West
  Texas cotton areas will experience a mostly dry environment for harvesting over the coming week
  
• Rain
  will fall lightly in the southeastern U.S. today and then drier weather will occur for nearly a week improving harvest conditions and allowing winter crops to establish better after recent rain
• U.S.
  Pacific Northwest precipitation will be restricted over the next five days with light rain and mountain snow occurring again early next week
  
• California
  and the Great Basin as well as the southwestern states will be dry biased for much of the next ten days
  
• No
  rain of significance fell in Argentina Monday, but rain that fell during the weekend soaked into to ground to benefit late season wheat as well as corn, sunseed and early soybean planting
• Argentina
  rainfall will continue restricted over the next ten days, but showers will occur in many areas
• Resulting
  rainfall will be greatest in Buenos Aires Thursday into the weekend with 1.00 to 2.00 inches expected
• Rain
  elsewhere is unlikely to be nearly as great with 0.10 to 0.75 inch and local totals to 1.50 inches
  
• The
  environment will not be ideal, but sufficient to support planting and early season summer crop development
• The
  moisture will also be good for late season wheat development in the south
• Brazil
  rainfall Monday and early today was greatest from northeastern Minas Gerais into Espirito Santo with local totals to 3.85 inches resulting in east-central Minas Gerais not far from the Espirito Santo border
• Brazil
  weather will continue dry biased from western Mato Grosso through Sao Paulo and Parana through the weekend while rainfall of 1.00 to 3.00 inches and locally more occurs from Espirito Santo through Bahia to Tocantins
• Some
  flooding rain is expected in Espirito Santo and eastern Bahia
• Center
  west and interior southern Brazil will get rain next week with 1.00 to 3.00 inches likely which should be sufficient to improve topsoil moisture after this first five days of net drying and restricted soil moisture for some areas in center west Brazil
• Rio
  Grande do Sul will experience net drying during much of the coming ten days, despite some rain late Sunday into Tuesday

 

• Brazil’s
  Mato Grosso, northern Mato Grosso do Sul and a few areas in Goias still need greater rainfall, but they will not receive it until early next week
• The
  moisture that occurs at that time will need to be closely monitored for sufficiency in easing the moisture deficits
• World
  Weather, Inc. sees improving monsoon moisture potential in Brazil next week and the weather trend may become a little more normal for a La Nina year from that point onward into early December
  
• Normal
  for a La Nina year includes below normal precipitation in far southern Brazil and above normal rainfall from Mato Grosso to Minas Gerais and Sao Paulo and northern Parana
• Europe
  precipitation continued limited Monday with showers mostly in the western part of the continent.
  
• Drought
  remains in eastern Spain, southern France and the lower Danube River Basin where moisture is needed for improved crop establishment
  
• Waves
  of rain and some mountain snow will move through Europe during the next ten days bringing moisture to many areas.
  
• Relief
  from dryness is expected in southern France and eastern Spain and eventually in the lower Danube River Basin
  
• The
  relief comes a little too late for autumn crops in the lower Danube River Basin, but the moisture will be available to crops in the spring and that could lead to improved stands, new tillering and higher production potential for small grains
• The
  moisture in France will be good for improved winter crop establishment and the same may be true for parts of Germany
• Spain,
  Portugal  and Italy are still warm enough that winter crops will benefit greatly from the wetter conditions
• Colder
  temperatures in the northeast part of Europe over the coming week will raise energy demand from the Baltic Sea region into Ukraine and far western Russia.
  
• Temperatures
  will fall notably below average for a few days, but warming is expected again late next week and into the following weekend
• Eastern
  Russia – outside of crop areas – will remain bitterly cold for the next ten days to two weeks
• Some
  of the cold will drift closer to northeastern China in the second week of the outlook, but the coldest conditions should stay to the north China’s agricultural areas
• China’s
  Yangtze River Basin is expecting some notable rainfall over the next few days
• Rain
  is needed most in the southern parts of the basin where drought has dominated the late summer and autumn
• Improved
  rapeseed development and establishment is expected as a result of this moisture
• East-central
  Australia will experience net drying weather into the weekend favoring improved field conditions and possibly supporting some receding river flooding
• Victoria
  will receive rain late this week and into the weekend  with moderate to heavy rainfall expected which may induce local flooding
• Western
  Australia crop conditions remain very good with little change expected
• Australia
  temperatures remain colder than usual and summer crops would benefit from warmer conditions
• A
  brief bout of warming occurred during the weekend which was welcome, but temperatures should trend cooler in this coming week once again
  
• Southern
  India will be vulnerable to heavy rain from an approaching tropical cyclone late this weekend into early next week
• The
  system will need to be closely monitored for possible flooding and wind damage when it eventually comes inland
• The
  remainder of India will experience a good environment for summer crop harvesting and winter crop planting and establishment
• 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
• South
  Africa has received rain frequently in recent weeks 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
  
• Rainfall
  this week may be lighter than usual allowing greater fieldwork to advance
• 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 with a slight warmer bias
• Week
  two weather may trend a little wetter
• Mexico’s
  seasonal rains have largely diminished for the season and good crop maturation and harvest weather is expected into next week except along the east coast where periods of rain are expected
• The
  moisture will be good for winter rice and citrus, but may disrupt some farming activity
• Central
  America precipitation is expected to continue periodically during the next ten days, but no large region of excessive rain is expected this week
• Panama,
  Costa Rica and portions of southern and eastern Nicaragua will be wettest
• 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 +8.60 and it will move erratically over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Tuesday,
Nov. 15:

• World
  Rice Conference in Phuket, Thailand – day 1
• Global
  Grain Geneva conference – day 1
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  Nov. 1-15 palm oil export data
• Bloomberg
  New Economy Forum in Singapore, through Nov. 17
• HOLIDAY:
  Brazil

Wednesday,
Nov. 16:

• EIA
  weekly US ethanol inventories, production, 10:30am
• World
  Rice Conference in Phuket – day 2
• Global
  Grain Geneva conference – day 2
• Panel
  on global food crisis at Bloomberg New Economy Forum

Thursday,
Nov. 17:

• International
  Grains Council’s monthly report
• USDA
  weekly net- export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• World
  Rice Conference in Phuket – day 3
• Global
  Grain Geneva conference – day 3

Friday,
Nov. 18:

• China’s
  second batch of Oct. trade data, including corn, pork, wheat imports
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options
• FranceAgriMer
  weekly update on crop conditions
• US
  cattle of feed, 3pm

Sunday,
Nov 20:

• China’s
  third batch of October trade data, including soy, corn and pork imports by country

Source:
Bloomberg and FI

 

Macros

Two
Stray Rockets Hit Polish Village Near Ukraine, Kill 2 – ZET

US
Intelligence Official: Russian Missiles Crossed Into Poland, Killing 2 People – AP

US
PPI (M/M) Oct: 0.2% (est 0.4%; prevR 0.2%)

US
PPI Core (M/M) Oct: 0.0% (est 0.3%; prevR 0.2%)

US
PPI (Y/Y) Oct: 8.0% (est 8.3%; prevR 8.4%)

US
PPI Core (Y/Y) Oct: 6.7% (est 7.2%; prev 7.2%)

US
Empire Manufacturing Nov: 4.5 (est -6.0; prev -9.1)

Canadian
Manufacturing Sales (M/M) Sep: 0.0% (est -0.5%; prevR -1.9%)

99
Counterparties Take $2.087 Tln At Fed Reverse Repo Op (prev $2.165 Tln, 103 Bids)

 

Corn

·        
Corn futures fell
to a 2-month low before rallying on headlines a Russian missel apparently crossed over the Poland border, striking and killing two people.  Earlier corn was lower after a Bloomberg article mentioned Russia is expected to extend the Black Sea shipping deal.
Futures settled 7.0-10.0 cents higher, but well-off session highs.

·        
The US corn and soybean harvest is nearly complete.

·        
Corn basis is very firm across the US western Corn Belt. Basis at a processor in Cedar Rapids, IA, increased 20 cents to 15 under. But basis at other locations are much higher. Blair, NE is 80 over the December and an ethanol
plant in Council Bluffs, IA, is 50 over the December.

·        
Bloomberg: US Cattle on Feed Placements Seen Down 3.6%.  October placements onto feedlots seen falling y/y to 2.17m head, according to a Bloomberg survey of ten analysts. That would be the lowest October reading since 2012.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 4,000 thousand to 1047k (1020-1063 range) from the previous week and stocks up 126,000 barrels to 22.318 million.

 

Export
developments.

·        
Under the 24-hour announcement system, USDA reported 230,185 tons of corn to Mexico for 2022-23 delivery. 

 

 

 

Updated
11/15/22

December
corn is seen in a $6.45-$6.75 range.
March $6.50-$7.50 range.

 

Soybeans

·        
CBOT soybeans
were lower to start before trending higher by late morning trading. There were initially lower on US harvesting pressure, increase in Brazil’s soybean planting pace and lower grains. But as products rallied, so did soybeans. Buy stops were hit later in the
session in part to a sharply rally in grains after an apparent Russia missel strike in Poland.

·        
NOPA October US crush and soybean oil stocks came in at or near expectations.

·        
Traders are waiting for Argentina to announce a new soybean dollar program. Producer selling in Argentina has been very light.

·        
Argentina producers soybean sales were 72.2% for the 2021-22 crop, slightly behind 74.2% year earlier. Producers sold 249,300 tons of soybeans from November 3-9.

·        
Brazil was on holiday today.

·        
AgRural: Brazil soybean plantings 69% versus 57% week earlier and 78% year ago.

·        
Oil World today noted soybean oil shipments from combined Argentina, Brazil and the US fell to a 21-month low of nearly 500,000 tons during October, citing high global prices relative to competing vegetable oils.

·        
India raised their base import price on selected commodities, including crude palm oil.

·        
AmSpec reported Malaysian November 1-15 palm oil exports at 657,896 tons, up 10.7 percent from 594,282 tons previous period month earlier. SGS reported a 3.5% increase to 662,816 tons. ITS reported a 12.7% increase to 714,518
tons.

·        
NOPA reported the October soybean crush at 184.5 million bushels, at expectations, up 12.9 percent on a daily adjusted basis from September and up 0.3 percent from year ago, daily adjusted. Soybean oil stocks increased 68 million
pounds from the previous month to 1.528 billion pounds, only 7 million below an average trade guess.  We slightly increased our US soybean crush estimate to 2.241 billion bushels, 4 million below USDA and compares to 2.204 billion for 2021-22. Graphs attached
after the text.

 

 

Export
Developments

·        
Under the 24-hour announcement system, USDA reported 261,272 tons of soybeans to Mexico for 2022-23 delivery. 

·        
China plans to auction off 500,000 tons of soybeans from reserves on November 25.

 

 

Updated
11/15/22

Soybeans
– January $13.50-$15.00

Soybean
meal – December $390-$420, January $390-$470

Soybean
oil – December 75.00-77.50, January wide 69.00-76.00 range

 

Wheat

·        
US wheat futures were lower early on renewed hopes over an extension of the Black Grain deal. But that sentiment eroded after unconfirmed reports a Russian missel hit Polish territory. Russia is denying it was a missel while Poland
is raising readiness of military units.  One report mentioned the missel killed two people. The trade obviously needs more clarification on this.

·        
Overnight Bloomberg reported Russia is expected to extend the Black Sea shipping deal, citing “people familiar with the situation”. The trade still does not know if the UN and Russia discussed any specific conditions. Separately
a Reuters story said Russia will announce a decision “at the appropriate time.”

·        
US winter wheat ratings improved 2 percentage points to 32 percent, one point above expectations but lowest for this time of year since USDA began reporting conditions in 1988.  Note 2012 the winter wheat rating was 36 percent.
74 percent of the US winter wheat area is experiencing some type of drought.

·        
Ukraine 2022-23 winter grain plantings reached 92 percent complete.

·        
December Paris milling wheat settled 4.50 euros lower or 1.4% lower at 319.50 euros ($331.55) a ton.

 

 

Export
Developments.

·        
China bought 2 cargoes of French wheat over the past week for January and March shipment.

·        
Jordan passed on 120,000 tons of hard milling wheat for March/April shipment. They had five offers.

·        
Japan seeks 94,687 tons of food wheat from the US and Canada later this week for arrival by February 28.

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

·        
Jordan seeks 120,000 tons of hard milling wheat on November 29 for March/April shipment.

·        
Japan in a SBS import tender seeks 70,000 tons of wheat and 40,000 tons of barley on November 16 for arrival by February 24.

 

Rice/Other

·        
None reported

 

Updated
11/15/22

Chicago
– December $7.90-$8.50,
March $8.00 to $10.00

KC
– December $9.30-$9.75,
March 8.50-$10.50

MN
– December $9.50-$10.10,
March $9.00 to $10.50