FI Evening Grain Comments 12/14/22

PDF Attached

 

Mixed
trade in the soybean complex. It was lower earlier on talk of improving South American weather until a rally in meal limited losses in soybeans. Grains finished mixed. The Fed increased rates by 50 points, as expected. News for the ags has not changed much.
Global wheat import demand picked up.

 

 

Weather

Argentina
will see light rain across Cordoba and eastern BA today, then again across Cordoba Saturday. Most other areas will see increasing crop stress from net drying. The second week of the outlook improves. Brazil will see rain in the northern and central crop areas
although the far south could see crop stress from net drying. The longer-term forecasts for northern Argentina/southern Brazil, are dry for the month of January. The US saw a large boost in snow coverage/soil moisture replenishment after a large storm swept
across the Great Plains. Temps will turn colder for the US over the next two weeks.

 

 

 

World
Weather, INC.

MOST
IMPORTANT WEATHER FOR THE DAY

• No
  theme changes today
• Argentina
  was dry Tuesday and precipitation over the next ten days will be restricted, although not completely absent
  
• A
  few showers will occur today into Thursday morning without much significance
• Rain
  will fall more significantly in northwestern Argentina this weekend with some dry bean, citrus and sugarcane areas impacted
  
• Most
  coarse grain and oilseed production areas will not receive significant rain from this event, but some crops in Salta will receive significant rain
• Argentina’s
  best potential rain event comes late next week and into the following weekend at which time 0.20 to 0.75 inch of rain and a few totals to an inch will be possible, but coverage of the greater amounts will be much too low to prove a break from crop moisture
  stress and worry over the long-term outlook for crop moisture and production.
• Argentina’s
  bottom line is mostly status quo with many crops in the nation experiencing net drying conditions and rising plant moisture stress during this first week of the outlook. The second week will offer some pockets of improving rainfall, but no generalized soaking
  is expected – at least not yet and crop stress will continue to be an issue. Temperatures will remain warm enough to keep drying rates strong. Planting may have increased following last weekend’s rain event, but without greater rainfall than that advertised
  today some of the crop that germinates and emergences may wither and could die if significant rainfall does not return again after germination and emergence have taken place.
  
• Brazil’s
  far south and southern Paraguay will experience net drying conditions over the next ten days to two weeks resulting in rising crop moisture stress
• Totally
  dry weather is not likely, but most of the rain that does evolve will not counter evaporation very well and that will lead to net drying
• Rio
  Grande do Sul will experience crop moisture stress first with western and southern parts of the state already trending too dry
• Parana
  and Paraguay will be drying down, but there is some potential for timely rainfall in a few areas to slow the drying trend
• Most
  other areas in Brazil are still doing well with rainfall and temperatures have been seasonable to slightly milder than usual and that is translating into very good production potentials
• Brazil’s
  bottom line remains mostly very good with the bulk of production from the nation on track for above average yields, despite below normal precipitation during the first half of the growing season in center west and far southern Brazil. The largest area of concern
  will remain in Rio Grande do Sul where rising crop stress is possible as time moves along this month. Timely rainfall in the latter part of this month and in early January will prove to be very important in protecting production potentials in Rio Grande do
  Sul and other areas in western and interior southern Brazil.
• South
  Africa rainfall is expected to be frequent and sufficient enough to support summer crops in a positive manner during the coming week with drier weather likely in the following week
• The
  weather mix will leaving summer crops in mostly very good condition with high production potentials
• Australia
  weather is expected to remain mostly good for winter wheat, barley and canola harvesting in the south and summer crop development in Queensland and northeastern New South Wales over the next ten days
• Restricted
  rainfall is expected in harvest areas and there should eventually be enough rain in cotton, sorghum and other summer crop areas in east-central parts of the nation to support a good outlook for development
• China
  weather has become rather quiet with little adversity impacting crop areas. Temperatures are cool and winter crops are either dormant or semi-dormant and unlikely to experience much development for a while
• Soil
  moisture is rated favorably and little change is expected
• Winter
  crops are dormant or semi-dormant with little change likely for a while
• Southeast
  Asia rainfall will continue most frequent and abundant in the Philippines, Indonesia and Malaysia during the next ten days to two weeks
• Crop
  development should advance well, despite a few areas of heavy rain
• India’s
  weather is mostly good, although parts of the far south are a little too wet
• Drier
  weather is expected in the south for a while and that should translate into improving crop and field working conditions
• Cold
  weather in Europe will continue this week and then begin to abate next week
  
• Northwestern
  Europe will trend stormy next week with waves of rain and strong wind expected as temperatures trend warmer
• Southern,
  central and eastern Europe and western Russia will experience frequent bouts of snow and rain
• Snow
  cover has improved across eastern parts of the continent protecting some crops, although there has been no threatening cold in recent weeks and none is expected
• Portions
  of western Russia and immediate neighboring areas will experience the greatest snowfall that will cause travel delays and livestock stress
• Some
  significant snow and some rain has been falling in Ukraine and southwestern Russia recently and that may be contributing to spring flood potentials since the ground was saturated prior to winter crop dormancy
• Travel
  disruptions and stress to livestock resulted
• Additional
  snowfall of 3 to 8 inches and local totals over 10 inches are likely
• No
  bitter cold is expected in western Russia or Ukraine during the next ten days, but it will be cool and stormy enough to raise concern over those without electrical power
  
• Crop
  conditions will be fine
• Northern
  Europe precipitation this week will be restricted while that in the south is heavy and could result in some flooding
• Western
  Spain, Portugal, western Italy and the eastern Adriatic Sea countries will be wettest while the Baltic Plains, northeastern France and Low Countries will be driest
• U.S.
  weather will be dominated by a significant cold surge into the central United States this weekend through the following seven days
• Some
  of the cold will move through the Midwest to the Atlantic Coast states during the middle and latter parts of next week and into the Christmas Holiday weekend
• Temperatures
  will plummet well below normal beginning in the Plains this weekend and early next week and then expanding to the east next week
• Western
  U.S. temperatures will trend warmer in the second week of the forecast with readings expected to rise back near normal as the eastern states trend much colder
• Significant
  snowfall has occurred in the past 24 hours in the northern Plains and a part of the upper Midwest
• Snowfall
  of 4 to 14 inches occurred from western Nebraska to North Dakota and the central and western parts of South Dakota
• Local
  totals reached 18-22 inches in south-central and southwestern South Dakota while southeastern North Dakota received up to 14 inches
• Central
  and northern Minnesota and western Wisconsin reported 3 to 6 inches of snow and local totals to 8 inches with central parts of Minnesota getting the greatest amounts
• Snow
  also fell in eastern Colorado and western Nebraska with accumulations to 12 inches at Burdette, Colorado while varying from 3 to 7 inches elsewhere
• Midwest
  Rain was greatest from the northern Delta and western Kentucky through southwestern Indiana, Illinois and Missouri to Iowa and southern Minnesota where 0.30 to 0.75 inch occurred often
• Several
  areas from southwestern Iowa and Missouri to southwestern Indiana and western Kentucky reported up to 1.57 inches
• Rain
  in the Delta ranged from 1.00 to 3.00 inches
• Many
  other areas in the U.S. crop regions were left dry or mostly dry
• At
  least one and possibly two other storm systems will evolve and impact the eastern United States during the weekend and more likely next week
• A
  nor’easter cannot be ruled out with heavy rain and snow preceding the coldest air
• Eastern
  portions of Canada’s Prairies received snow overnight and will continue to be impacted for a while today and Thursday
• Much
  colder weather is expected to resume throughout the Prairies this week with western areas coldest this weekend into next week and eastern areas coldest next week through the Christmas Holiday weekend
• Ontario
  and Quebec will receive additional waves of snow and rain over the coming week that will maintain moisture abundance in the region
• North
  Africa will receive additional precipitation into the weekend with a few other opportunities for rain in the following week
  
• The
  moisture has been and will continue be good for improving wheat and barley emergence and establishment with some increase in planting possible
• Greater
  rain will still be needed in parts of Morocco and northwestern Algeria which have been driest recently
• Mexico’s
  rain is expected to be very erratic and light over the next two weeks which is not unusual for this time of year
• Any
  precipitation that falls will be good for winter rice and citrus, but may disrupt some late season harvest activity
• Most
  of the precipitation will be light and have little to no impact of significance
• 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 with rain totals rising above normal
• Nicaragua
  and Honduras will experience lighter than usual precipitation
• West-central
  Africa rainfall should be mostly confined to coastal areas during the next two weeks
• Net
  drying is likely in most coffee, cocoa, rice, sugarcane and cotton production areas away from the coast which is normal for this time of year
  
• 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, southern Kenya and Uganda while it is more sporadic and light in Ethiopia
• Monday’s
  Southern Oscillation Index was +9.05 and it will move lower over the next few days
  

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Thursday,
Dec. 15:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Malaysia’s
  Dec. 1-15 palm oil exports

Friday,
Dec. 16:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options

Saturday,
Dec. 17:

• No
  major event scheduled

Sunday,
Dec. 18:

• China’s
  second batch of November trade data, including corn, pork and wheat imports

Source:
Bloomberg and FI

 

 

Macros

97
Counterparties Take $2.193 Tln At Fed Reverse Repo Op (prev $2.181 Tln, 98 Bids)

US
Import Price Index (M/M) Nov: -0.6% (est -0.5%; prev -0.2%)

US
Import Price Index Ex Petroleum (M/M) Nov: -0.3% (est -0.5%; prev -0.2%)

US
Import Price Index (Y/Y) Nov: 2.7% (est 3.2%; prev 4.2%)

US
Export Price Index (M/M) Nov: -0.3% (est -0.5%; prev -0.3%)

US
Export Price Index (Y/Y) Nov: 6.3% (est 5.7%; prev 6.9%)

Canadian
Manufacturing Sales (M/M) Oct: 2.8% (est 2.0%; prevR 0.1%)

 

 

Corn

·        
Corn futures traded
two-sided, ending lower on talk of improving South American weather forecasts.

·        
About a third of Ukraine’s corn crop was thought to be stranded in fields. A combination of a wet fall season and rolling blackouts have hindered harvesting progress, according to Reuters. 23.1 MMT was estimated by the AgMin,
down from 25.8 for their previous forecast.

·        
Ukraine grain exports through mid-December are running about 31.5 percent below year earlier.

·        
73 percent of the Argentina 2021-22 corn crop had been sold, down from 76 percent year ago.

·        
The USDA Broiler Report showed eggs set in the US up slightly and chicks placed up 1 percent. Cumulative placements from the week ending January 8, 2022 through December 10, 2022 for the United States were 9.22 billion. Cumulative
placements were up 2 percent from the same period a year earlier.

 

US
ethanol production for the week ending December 9 decreased 16,000 barrels (BB estimate was calling for down 16k) to 1.061 million barrels per day and stocks increased a large 1.152 million barrels (Est. +32k) to 24.409 million. Production over the past four
weeks averaged up 13,000 barrels and stocks average up 778,000 barrels. Crop-year to date (Sep – Dec 12) ethanol production is running 4.1% below same period year ago and 1.7% below pre-pandemic level in 2019. US gasoline stocks increased 4.5 million barrels
to 223.6 million and are up for the fifth consecutive week. Implied US gasoline demand fell 103,000 barrels to 8.255 million, still well below this time year ago and below the previous 4-week average between mid-November through early December. Finished motor
gasoline that contained ethanol was running at a 91.1 percent blend rate, up from 90.2 percent previous week.  There were no ethanol imports for the week ending December 12.

 

EIA:
US Crude Stocks See Biggest Jump Since March 2021

US
DoE Crude Oil Inventories (W/W) 09-Dec: +10.231M (est -3.500M; prev -5.186M)

–
Distillate: +1.364M (est +2.500M; prev +6.159M)

–
Cushing: +426K (prev -373K)

–
Gasoline: +4.496M (est +2.500M; prev +5.319M)

–
Refinery Utilization: -3.3% (est 0.0%; prev +0.3%)

 

 

 

Bird
Flu disease across the US is still rapidly spreading 

https://www.audacy.com/wbbm780/news/national/latest-iowa-bird-flu-cases-push-december-total-near-700-000

 

University
of Illinois – Corn and Soybean Yields in 2022

Schnitkey,
G., N. Paulson, C. Zulauf and J. Baltz. “Corn and Soybean Yields in 2022.”
farmdoc
daily
(12):188,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, December 13, 2022.

https://farmdocdaily.illinois.edu/2022/12/corn-and-soybean-yields-in-2022.html

 

Export
developments.

·        
None reported

 

Updated
12/6/22

March
corn $6.00-$7.15 range. May
$5.80-$7.10

 

Soybeans

·        
CBOT soybeans traded two-sided, ending mixed. Soybean meal rallied on renewed concerns over the Argentina soybean crop and soybean oil fell from product spreading despite higher WTI crude oil.

·        
A morning weather forecast called for rain to reach most of Brazil’s growing areas, although the far south is still expected to miss out on beneficial rain.

·        
Second round of the Argentina soybean dollar yielded about 2.5MMT in producer sales for soybeans. Official AgMin data showed 812,000 tons of 2021-22 soybeans sold during the week of December 1-7. At 44 million tons, that puts
76% of the 2021-22 crop sold.

·        
India palm oil imports were 1.14 million tons during November, up 29 percent from October. Soyoil imports fell 31% to 229,373 tons last month and sunflower oil imports rose 8.8% to 157,709 tons. India’s overall vegetable oil imports
in November rose 10.6% to 1.55 million tons, according to SEA.

·        
NOPA will release November crush on Thursday and the trade sees a record, for the month of November, crush of 181.4 million bushels. That would be a record for the adjusted daily crush (6.049 million bushels), down from 184.5
million during October and up from 179.5 million year earlier. The record daily crush rate was set November 2020 with 6.034 million crushed each day. End of October soybean stocks are estimated to increase 6 percent to 1.528 billion from 1.528 billion at the
end of October.

 

 

Export
Developments

·        
None reported

 

Updated
12/13/22

Soybeans
– January $14.00-$15.15, March $14.15-$15.25

Soybean
meal – January $425-$480, March $4.00-$500

Soybean
oil – January 61.00-68.50 range,
March 55.00-70.00

 

 

Wheat

·        
US wheat futures traded lower led by the KC wheat contract after the US Great Plains saw good precipitation over the past two days. There was also talk of grain vessels resuming departures out of Ukraine, amounting to about 240,000
tons. Eight ships left Odessa on Tuesday. Another 23 are awaiting loading (nearly 700k tons).

·        
Paris March wheat was lower by 3.50 euros at 302.50 euros a ton.

 

Export
Developments.

·        
Algeria bought about 500,000 tons of wheat for February shipment at around $348-$349 per ton c&f.

·        
Iraq seeks 50,000 tons of milling wheat on Sunda, December 18.

·        
Tunisia seeks 100,000 tons of durum wheat on Thursday for Jan 10 and Feb 25 shipment.

·        
Japan received no offers for feed wheat and barley for arrival in Japan by March 9. Tunisia seeks 100,000 tons of durum wheat on December 15 for Jan 10-Feb 25 shipment.

·        
Japan is in for 154,942 tons of wheat later this week.

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on December 21 for shipment with 40 days of contract signing.

·        
Bangladesh also seeks 50,000 tons of rice on December 27.

 

Updated
12/6/22

Chicago
– March $7.00 to $8.50

KC
– March 7.75-$9.75

MN
– March $8.25 to $10.00