FI Evening Grain Comments 11/18/22

PDF Attached includes our updated US corn S&D

 

Commitment of Traders will be out this weekend or Monday morning

 

CBOT
agriculture futures ended mixed for the grains and higher for the soybean complex.
Another round of selling in WTI crude oil limited gains for back month soybean oil and nearby corn contracts.
Soybean
meal gained on soybean oil for this week. We could see that momentum continue into early next week if global SBO premiums soften on Monday. Paris wheat futures sold off well from session highs to settle 1.25 euros higher.

 

 

 

Weather

US
weather forecast was unchanged this morning. Temperatures will trend warmer over the next ten days after plunging late this weekend.  The Great Plains will see rain return to the far southern areas Saturday through Monday. Rest of the US Great Plains wheat
areas will remain dry. The Midwest will see snow across the northeast through Saturday. Other areas will be mostly dry. Some rain will fall across La Pampa and southwest BA Thursday through Friday and Cordoba Saturday. Brazil’s Mato Grosso, Goias, and Minas
should see rain through Sunday and MGDS, Parana and nearby surrounding and states early next week. Precipitation increases for the EU over the next week and the Black Sea will be active bias southern Ukraine and Volga Valley.

 

World
Weather, INC.

MOST
IMPORTANT WEATHER FOR THE COMING WEEK

• Not
  many changes were noted overnight
• Argentina
  is still expecting rain to be greatest Sunday and Monday with a few showers in southern and western areas this weekend
• All
  of the precipitation will be welcome, but resulting amounts will only provide a temporary boost in topsoil moisture
• Long
  term dryness will prevail in the subsoil
• Short
  term planting, emergence and establishment conditions will advance swiftly following the precipitation, but any missed rain and warmer than usual weather would raise the potential for some greater crop stress
• Watch
  the distribution of rain through Monday because there will be holes in the precipitation leaving some areas drier than others
  
• Most
  of Argentina will be dry after Monday next week for another several days lasting through the following weekend in many areas
• Brazil
  will experience a good mix of weather during the next ten days to two weeks with alternating periods of rain and sunshine
• The
  majority of grain, oilseed, cotton, rice, sugarcane, citrus and coffee production areas have sufficient soil moisture to support normal crop development and fieldwork will advance around the moisture
• A
  close watch on the drier biased areas of Mato Grosso, Goias and possibly northern Mato Grosso is warranted in case rainfall is lighter than expected
  
• These
  areas have limited soil moisture and dryness is stressing some crops already
• Rain
  late this weekend into next week will bring relieve, but there may be a need for greater rainfall since the rainy event Monday through Wednesday will be followed by several days of net drying again
  
• Rio
  Grande do Sul will also need to be closely monitored since its rainfall over the past two months was limited and there is a need for better long term moisture in the state
• Timely
  rainfall and mild temperatures this spring have helped to keep the moisture profile nearly ideal for crop development
• Any
  sudden warming and lack of rainfall over an extended period of time could lead to crop stress, but the situation today is still close to ideal
• U.S.
  weather will be tranquil over much of the coming week with only one weather system expected of significance and that will impact the eastern Midwest, a part of the Delta and the Atlantic Coast States late next week
  
• U.S.
  hard red winter wheat areas will be dry biased for at least the next ten days
• Recent
  cool weather has been inducing some dormancy and this will continue this weekend before conditions trend warmer again next week and into the following weekend
• Southern
  Plains temperatures will be warm enough again after early next week to raise soil temperatures for some additional  wheat establishment in areas that have sufficient moisture for that purpose
• Dry
  weather in U.S. cotton harvest areas of Texas will occur over the next ten days to two weeks favoring unlimited fieldwork
  
• U.S.
  Delta and southeastern states will experience dry biased weather for a while in the coming week, but rain is predicted for late next week and into the following weekend for a brief period of time
• Some
  disruption to farming activity will result, but it should not last long
• U.S.
  Pacific Northwest will begin warming up after recent cool weather the change may not stimulate much new crop development, though
• Winter
  crops are dormant or semi-dormant
• Bitter
  cold temperatures occurred this morning in the northwestern U.S. Plains resulting in extreme lows of -10 Fahrenheit in central Montana
  
• The
  cold induced no harm to dormant winter crops because of adequate snow cover
• Heavy
  U.S. “Lake Effect” snowfall is expected in the Great Lakes region
• U.S.
  navigable river levels will not rise much in the next two weeks leaving barge restrictions in place and maintaining concern over barge traffic and higher freight costs
• South
  Africa summer crop planting and winter grain harvesting seems to be advancing quite favorably with little change likely during the next two weeks
  
• Alternating
  periods of rain and sunshine are expected that should bode well for both fieldwork and early season crop development
• Australia
  weather will be more favorable for New South Wales and Queensland into the early days of December than that previously feared
• Totally
  dry weather is not expected, but the few showers that occur periodically should not be great enough to induce new flooding or threaten crops with additional quality declines
• Many
  areas will experience net drying and that will likely lead to receding flood water, drier soil in well-drained areas and improved field working conditions
• Harvesting
  of winter crops should improve as the ground firms
• Planting
  of summer crops should advance at its fastest pace of the season with improved emergence and establishment
• some
  low-lying areas will remain too wet
• China’s
  Yangtze River Basin and areas southward to the coast will receive waves of rain during the next couple of weeks that should increase topsoil moisture and improve rapeseed and other winter crop establishment
• Some
  delay to farming activity will be possible, but after months of drought the delays will be welcome
• Other
  areas in China will experience relatively tranquil weather during the next ten days, although some precipitation is advertised for areas between the Yellow and Yangtze Rivers next week
• Northern
  China will trend colder late next week and into the last days of November, but there is no sign of threatening cold
• Southern
  India will remain wet, but no crop damage is expected
• Northern
  and central India crop weather will be seasonably dry and warm supporting summer crop harvesting and winter crop planting
• A
  tropical disturbance in the eastern Bay of Bengal will be closely monitored for possible impact on southern India early next week
• The
  system may briefly become a tropical cyclone over the next few days, but it could dissipate as it approaches the lower India Coast
• Landfall
  is possible in Andhra Pradesh, but not prior to early next week and most likely it will be a minimal event if and when the system moves inland
• Europe
  weather is expected to become more active during the next week to ten days with waves of rain raising soil moisture and disrupting farming activity
• The
  moisture should bring relief to drought in southern France, eastern Spain and the lower Danube River Basin in time
• Eastern
  Spain will be last to get a good soaking of rain and will need to be closely monitored
• River
  and water storage levels are expected to improve as well
• Ukraine
  weather is still advertised to turn wetter especially late next week and into the following weekend
  
• Colder
  weather advertised for northeastern Europe this weekend and early next week will be short lived and the impact is expected to be low
• No
  winterkill is expected because of cloudiness and precipitation helping to hold up the temperatures a bit
• Indonesia,
  Malaysia, Philippines, southern Vietnam, southern Cambodia and southern Thailand will be wet over the next ten days to two weeks
  
• Flood
  potentials may rise next week and into the last days of this month as a robust Madden Julian Oscillation (MJO) event evolves
• The
  event will need to be closely monitored
• 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 abundantly in Tanzania, southwestern Kenya and Uganda while it becomes more sporadic and light in Ethiopia
• Today’s
  Southern Oscillation Index was +7.84 and it will move erratically over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Friday,
Nov. 18:

• Malaysia
  closed for holiday
• 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

Monday,
Nov. 21:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop harvesting for corn and cotton; winter wheat plantation and condition, 4pm
• MARS
  monthly report on EU crop conditions
• Malaysia’s
  Nov. 1-20 palm oil exports
• USDA
  total milk production, 3pm
• HOLIDAY:
  Argentina

Tuesday,
Nov. 22:

• EU
  weekly grain, oilseed import and export data
• US
  cold storage data for beef, pork and poultry, 3pm
• EARNINGS:
  Sime Darby Plantation

Wednesday,
Nov. 23:

• EIA
  weekly US ethanol inventories, production, 10:30am
• USDA
  red meat production, 3pm
• HOLIDAY:
  Japan

Thursday,
Nov. 24:

• Port
  of Rouen data on French grain exports
• Cane
  crush and sugar production data by Brazil’s Unica (tentative)
• HOLIDAY:
  US

Friday,
Nov. 25:

• 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
• Malaysia’s
  Nov. 1-25 palm oil export data

Source:
Bloomberg and FI

 

 

US
EPA RIN Generation

U.S.
GENERATED 477 MLN BIODIESEL (D4) BLENDING CREDITS IN OCT., VS 502 MLN IN SEPT.

U.S.
GENERATED 1.24 BLN ETHANOL (D6) BLENDING CREDITS IN OCTOBER, VS 1.13 BLN IN SEPTEMBER

VS.
2021

U.S.
GENERATED 420 MLN BIODIESEL (D4) BLENDING CREDITS IN OCT 2021., VS 385 MLN IN SEPT.

U.S.
GENERATED 1.2 BLN ETHANOL (D6) BLENDING CREDITS IN OCTOBER 2021, VS 1.16 BLN IN SEPTEMBER

 

 

 

Macros

95
Counterparties Take $2.113 Tln At Fed Reverse Repo Op (prev $2.114 Tln, 103 Bids)

US
Existing Home Sales Change Oct: 4.43M (est 4.40M; prev 4.71M)    

–
Existing Home Sales (M/M): -5.9% (est -6.6%; prev -1.5%)

–
Median Home Price (Y/Y) (USD): 379.1K or +6.6% (prev 384.8K or +8.4%)

US
Leading Economic Index (M/M) Oct: -0.8% (est -0.4%; prev R -0.5%)

Canadian
Industrial Product Price (M/M) Oct: 2.4% (est 0.5%; prev 0.1%)

Canadian
Raw Materials Price Index (M/M) Oct: 1.3% (est 0.1%; prev -3.2%)

US
Baker Hughes Rig Count 18-Nov: 782 (prev 779)

–
Rotary Gas Rigs: 157 (prev 155)

–
Rotary Oil Rigs: 623 (prev 622)

 

Corn

·        
Corn futures traded
two-sided, ending moderately higher in the nearby contracts. Higher soybeans and lower wheat left corn futures in limbo. A higher USD limited gains for corn futures.  For the week December corn increased 9.75 cents to $6.6775 or 1.5 percent.

·        
Look for a slowdown in late US harvest progress across the northern ECB states over the next several days.

·        
Two key US railroad unions are set to vote November 20 on the White House brokered labor agreement. Results of that are expected to be announced the following day (Monday). If they vote against the deal, Congress could assemble
and pass legislation to avoid a standstill within the industry. So far, three unions voted against ratifying the deal and seven accepted it.

·        
China corn imports during October were 550,000 tons, 58 percent below what was imported a year earlier. Year to date China corn imports were 19.01 million tons, a 28 percent decrease.  Pork imports for the January – October period
are down 59 percent from same period during 2021 and wheat imports are running 3 percent below year earlier.

·        
Ukraine harvested 18 percent of their 2022 grain crop or 39.1 million tons as of November 17.

·        
Kenya approved their first GMO corn imports after lifting their ban. The government opened a 6-month window to allow imports of 10 million bags of GMO and non-GMO corn.

 

US
corn S&D. US
gasoline demand has been lagging year ago levels over the past few months. Even though we have seen an improvement in corn for ethanol use this fall, it’s still below its peak before the pandemic. We lowered our US corn for ethanol use by 25 million bushels,
25 million below USDA. We took US feed use up 75 million from our previous estimate (5.400 billion, 100 above USDA) and lowered exports by 50 million to 2.050 billion bushels, 100 million below USDA. Our STU ratio is near USDA and would suggest prices to average
around $6.00 per bushel, but after incorporating inflation, the price of Chicago wheat, and the soybean / corn relationship, we are penciling a nearby crop year average of $6.75 for the time being, with a bias to lower that estimate if demand erodes.
We took the US yield from 171.4 to 172.0, slightly below USDA. Attached is out updated US corn S&D.

 

 

Export
developments.

·        
None reported

 

Updated
11/17/22

December
corn is seen in a $6.50-$6.80 range. March $6.00-$7.15 range.

 

Soybeans

·        
CBOT soybeans,
meal and soybean oil were higher on fund buying, but another round of selling in WTI crude oil may limited gains. US demand remains fairly good for soybeans. We saw large export sales in soybeans yesterday that we don’t think was worked into the market because
of the focus around the Black Sea region. Soybean oil found support on bottom picking after dropping hard over the past two sessions. Soybean meal saw bull spreading.  PNW shipments of soybean meal are steady. Earlier this week we heard Asian importers were
shopping around for US soybean meal.

·        
Soybeans for the week were down 1.5 percent, meal up 0.7% and SBO 5.5%.

·        
The Argentina AgMin sees the soybean area at 16.5 million hectares.

·        
The Buenos Aires grains exchange reported 12% of the Argentina soybean crop planted versus 29 percent year ago. They are using a 16.7-million-hectare area.

·        
Offshore values this morning were leading soybean oil 213 points higher earlier this morning (51 higher for the week to date) and meal $1.50
higher ($9.00 higher for the week).

 

Export
Developments

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

 

Updated
11/17/22

Soybeans
– January $13.50-$15.00

Soybean
meal – December $390-$420, January $375-$450

Soybean
oil – December 70.00-75.00, January 67.00-74.00 range

 

Wheat

·        
US wheat futures traded mixed, ending lower after fund buying dried early in the morning. News was light. Follow through selling was seen from the Black Sea grain deal but concerns over the size of the Argentina wheat crop limited
losses.

·        
Chicago wheat for the week was down 1.3%, KC off 1.0% and MN up 0.7%, all basis the December contracts.

·        
Paris December wheat was up 1.25 euros, well off session highs, at 325.75 euros a ton.

·        
France is nearly complete with their 2023-24 soft wheat planting progress. 87 percent of the soft wheat crop is emerged. 98% of soft wheat and winter barley crops were in good or excellent condition. 74 percent of the durum crop
had been planted.

·        
India wheat plantings are running 15 percent above this time year ago. Producer sowed 10.1 million hectares since October 1 through November 18.

·        
Argentina’s AgMin estimated the wheat production at 13.4 million tons, down 39.4% from 22.1 million for 2021-22. USDA is at 15.5 million tons, BA grains exchange at 12.4 million and Rosario exchange at 11.8 million.

 

Export
Developments.

·        
Tunisia bought 75,000 tons of barley (not wheat) at $339.91 and $344.89/ton c&f for December and late January shipment.

·        
Egypt’s GASC bought one cargo of wheat at $361.50/ton in a private deal on Thursday. No details were provided. On Wednesday GASC contracted for 300,000 tons of Russian wheat in a private deal at an estimated $362/ton for Dec-Jan
shipment.

·        
Japan was in for 94,687 tons of food wheat this week from the US and Canada later this week for arrival by February 28. Original details below.

·        
China will auction off 40,000 tons of wheat from reserves on November 23.

·        
Pakistan is in for 500,000 tons of wheat on November 28.

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

 

Rice/Other

·        
None reported

 

Updated
11/17/22

Chicago
– December $7.75-$8.50, March $7.75 to $10.00

KC
– December $9.00-$9.75, March 8.50-$10.50

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