FI Evening Grain Comments 12/23/22

PDF Attached

 

Happy
Holidays!

 

Main
CBOT agriculture markets open Tuesday morning after Christmas. Other selected

markets
do open Monday night. https://www.cmegroup.com/tools-information/holidaycalendar.html

 

Private
exporters reported the following sales activity:

-124,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

-150,000
metric tons of corn for delivery to Mexico during the 2022/2023 marketing year

 

USD
was down 11 points on Friday, WTI crude up $0.33, and US equities higher.
The
US released a good amount of economic data (below under macro section). Higher trade in soybeans, soybean products, corn and wheat. Frigid temperatures rolled across the US and heavy snow for some areas, forcing cutbacks on biofuel & meat production. It’s
also slowing US domestic transportation. Livestock stress will occur through late next week.
There
were no major surprises in the USDA Cattle & Feed and Hogs & Pigs reports.

 

 

 

Weather

US
mainland snow coverage across expanded from 44.3% to 53.7% over the last 24 hours. Snowfall will be critical to improve coverage for the northeast areas today through Saturday and northwest areas Sunday.

 

 

 

Temperatures
are well below normal across good portion of the US over the next 5 days before trending to above normal. The Great Plains will be dry Friday through Monday. Brazil’s Mato Grosso, Goias, Minas Gerais, Sao Paulo, and Bahia will see rain through Monday. RGDS
will see rain Sunday through Monday.  Argentina’s weather outlook is wetter with heavier rain this weekend before turning dry through early next week.

 

World
Weather, INC.

MOST
IMPORTANT WEATHER FOR THE COMING WEEK

• Bitter
  cold continued to grip much of North America from Canada to Texas and the central Gulf of Mexico Coast Thursday and early today.
  
• Extreme
  lows slipped to -40 degrees Fahrenheit near Havre, Montana while subzero degree readings occurred as far south as the Texas Panhandle, northern Oklahoma, northern Arkansas and western Tennessee
  
• Freezes
  occurred as far south as the southern tip of Texas and the Louisiana coast
• Damage
  to sugarcane, citrus and a number of fruits and vegetables was suspected to crops in southern Texas and Louisiana
• U.S.
  hard red winter wheat was vulnerable to a little damage in the past two days because of bitter cold and snow free conditions
• Southwestern
  Kansas, southeastern Colorado and areas south through the Texas Panhandle and western Oklahoma to West Texas experienced temperatures in the positive and negative single digits for 24-30 hours without snow on the ground
• Most
  likely the crop will survive with some damage to leaves, but there will still be some concern over possible winterkill due to the longevity of the coldest temperatures and lack of protection against the cold
• Full
  assessments of any damage will not be possible until spring when greening occurs
• A
  cool and wet late winter and early spring would help crops recover from any damage as long as winterkill did not occur
• Most
  soft wheat production areas in the Midwest had at least a dusting of snow on the ground to protect crops, but it is unclear how well the crop was covered because of strong wind speeds
• Temperatures
  in the soft wheat production areas of the Midwest slipped to the range of -12 to +3 with Ohio warmest and Illinois and Missouri coldest
  
• Central
  Florida citrus areas will experience upper 20- and 30-degree lows this weekend, but readings will not be cold enough to induce a serious bout of damage to citrus production areas
• Irrigation
  and portable heaters will be used to keep temperatures warm enough to minimize any potential for crop and tree damage
• The
  cool temperatures may stress fruit and trees just enough to induce greater sugar levels in maturing fruit and to set the stage for a more profuse flowering season in spring 2023
• Central
  Florida citrus damage was substantial this past summer as Hurricane Ian moved across the heart of the production region
• Northern
  Florida minor citrus and other fruit and vegetable crops may be more negatively impacted by the cold weather than central Florida and sugarcane in the state should be spared from the cold as well
• U.S.
  weather outlook for the coming week
• Bitter
  cold will continue in the eastern United States today and Saturday, but warming is expected to begin in the Great Plains and advance quickly into the eastern states late this weekend through the first half of next week
  
• Snow
  will linger today in the northeastern United States and across the Great Lakes region, but most of the precipitation elsewhere will be minimal
  
• Weekend
  precipitation will be restricted except in the Pacific Northwest where rain and mountain snow is expected
• Snow
  will develop in the northwestern Great Plains today and another disturbance will evolve this weekend that will move through Canada’s Prairies and into North Dakota, northeastern South Dakota and Minnesota
• Snow
  accumulations will vary from 2 to 4 inches
• Some
  snow from the northern Plains will reach the Midwest briefly early next week with 1 to 4 inches possible from Iowa to Ohio and northern Kentucky
• Stormy
  weather will reach the northern California and Oregon coasts Monday into Wednesday with some of the rain and mountain snow spreading southward through the central valleys of California and the Sierra Nevada during mid-week next week
  
• Another
  boost in mountain snowpack will result
• California’s
  storm will move through the central and southern Rocky Mountain region during mid-week as well, but it will fail to produce significant precipitation in the high Plains region from western Texas to western Nebraska
• A
  new storm system is expected late next week (Thursday through Saturday, Dec. 31) that will impact the Midwest, Delta and southeastern states as well as the southeastern Great Plains
  
• Moisture
  totals of 0.40 to 1.50 inches are expected with a few greater amounts possible especially in the Mid-South region
• Much
  of the precipitation will occur as rain
• U.S.
  week two (January 1-6) weather
• A
  second storm will move into northern California Dec. 31-Jan. 1 producing more rain and mountain snow, but this system dissipates before getting any farther to the east
• A
  third storm reaches the Pacific Coast States Jan. 3-5 that moves through the southwestern desert region and southern Rocky Mountains Jan. 6-7
• This
  storm was advertised to move into the central and southern Plains Jan. 6-8, but it was likely overdone and unlikely to verify as presented overnight
• Relatively
  tranquil weather is likely in other U.S. crop areas and temperatures will be above normal in the east and below normal in the west.
  
• Rain
  in Argentina overnight occurred from Cordoba and southern Santa Fe into Buenos Aires and a part of both La Pampa and Entre Rios
• Moisture
  totals varied up to 0.40 inch most often, but local totals of 0.60 inch occurred in a few areas
• Dry
  weather occurred elsewhere
• Temperatures
  continued warm with highs in the 90s in the central and south and in the upper 90s to 110 degrees in the far north
• Rain
  in Argentina will continue into Sunday morning and the moisture boost expected along with that of the past two days should bring along better short term crop development potential and improved planting conditions
• Another
  0.20 to 0.75 inch of moisture is likely with a few totals of 1.00 to 1.50 inches
• The
  moisture will be welcome, but obviously not a general soaking
• Drought
  conditions will prevail, despite the rain, but some improved planting conditions are likely, and a short term burst in new crop development will be possible as well
• Temperatures
  should cool down over the weekend and remain in a more seasonable range next week
• Southern
  Brazil will be dry through the weekend
• Most
  areas from southern Mato Grosso and southwestern Sao Paulo through Paraguay and Parana into Rio Grande do Sul will receive restricted amounts of rain and temperatures will be briefly warm enough to accelerate drying
• Rain
  will then evolve next week, and sufficient amounts should eventually occur to bring relief back to much of the region that dries out of the next several days
• Not
  all of southern Brazil will do well with next week’s rain and pockets of dryness are expected for a while favoring Rio Grande do Sul
• Portions
  of northern Brazil will stay plenty wet over the next couple of weeks
• All
  of the north will be wet into mid-week next week, but the northeast will begin do dry down late next week and continue into the following weekend and early days of January
• Crop
  damage is not likely, but a few pockets of local flooding are possible
• Rain
  in the last days of December and early January may increase from Sao Paulo to Mato Grosso do Sul and northern Parana with moderate to locally heavy amounts possible
• Brazil
  rainfall Thursday was mostly concentrated on areas from Mato Grosso to Minas Gerais and a part of Bahia
• Rainfall
  varied from 0.05 to 0.50 inch with locally greater totals along the coast of Bahia where 2.00 to more than 4.00 inches resulted in a couple of locations.
  
• Europe
  temperatures will be warmer than usual over the next two weeks
• Western,
  central and northern Europe will experience greater rainfall and a little mountain snow during the coming week to ten days
• Most
  of the precipitation will occur as rain with 1.00 to 2.50 inches and locally more in France, Germany, Belgium, Netherlands, and the U.K.
• Heavy
  rain will also continue for a while in northern Portugal and northwestern Spain into the weekend possibly expanding some flooding in the region
• Southern
  Europe precipitation will be more limited during the coming ten days and northern Europe’s precipitation should diminish over time late next week and into the following weekend as well
• Waves
  of snow and rain will impact the western CIS over the next ten days bolstering soil moisture and raising snow depths for a higher risk of flooding in the spring
• Temperatures
  will be warmer than usual through the next ten days
• India
  and China weather will be relatively quiet over the next couple of weeks with limited precipitation and seasonable temperatures
• A
  weak tropical cyclone may evolve in the Bay of Bengal today and Saturday and it will  need to be closely monitored for possible impact on India or Sri Lanka
• Most
  of the forecast models take the system through Sri Lanka late this weekend resulting in some locally heavy rain, but little other adversity
• Tropical
  Cyclone Ellie was moving inland through northwestern parts of Northern Territory, Australia today and will dissipate over the heart of the state this weekend
  
• Some
  minor sugarcane will be impacted in the far north; otherwise, no damage is expected
• Australia
  weather will continue to support good late season wheat, barley and canola harvest progress, although a few more periodic showers will pop up at times in the coming week
• Interior
  Queensland and  north-central New South Wales need significant rain to improve topsoil moisture in support of unirrigated summer crops
• The
  situation is not a crisis, though precipitation would help ensure the best early season crop development
• South
  Africa crop weather is expected to be very good over the next two weeks with alternating periods of rain and sunshine likely supporting aggressive crop development and some periodic fieldwork
• Some
  locally heavy rain is possible in the east
• Southeast
  Asia will continue to experience periodic rainfall and some periods of sunshine supporting most crops throughout the region
• Mainland
  areas of Southeast Asia will experience the driest conditions and that is normal for this time of year
• North
  Africa weather will continue to include an erratic rainfall distribution over the next week to ten days, but net drying may result
• Greater
  precipitation is still needed especially in southwestern and northeastern Morocco, northwestern Algeria and Tunisia where recent rain has not been well distributed
• West-central
  Africa temperatures have not been very warm this season and there have been not seriously strong Harmattan wind speeds noted protecting coffee, cocoa and sugarcane from any adversity.
• East-central
  Africa rain will continue routinely supporting coffee and cocoa
• Today’s
  Southern Oscillation Index was +15.98 today and it will move higher over the next few days
• Tropical
  Cyclone Ellie near Darwin, Australia is causing the SOI index to rise significantly, and this is a false signal for ENSO.  Once the storm moves inland and dissipates this weekend the index will fall once again

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Friday,
Dec. 23:

• ICE
  Futures Europe weekly commitments of traders report, 1:30pm (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• USDA
  hogs and pigs inventory, cattle on feed, 3pm

Monday,
Dec. 26:

• HOLIDAY:
  US, UK, Australia, Hong Kong, Singapore, several other countries
• CBOT
  hard open Tuesday morning, not Monday night as previously indicated
• https://www.cmegroup.com/tools-information/holiday-calendar.html
  

Tuesday,
Dec. 27:

• Malaysia
  Dec. 1-25 palm oil exports
• HOLIDAY:
  UK, Australia, Hong Kong

Wednesday,
Dec. 28:

• Weekly
  USDA Broiler Report

Thursday,
Dec. 29:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Vietnam’s
  general statistics department releases monthly coffee, rice and rubber export data

Friday,
Dec. 30:

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

• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• ICE
  Futures Europe weekly commitment of traders report, 1:30pm (6:30pm London)

Saturday,
Dec. 31:

• Malaysia’s
  Dec. 1-31 palm oil export data by cargo surveyor AmSpec

Source:
Bloomberg and FI

 

 

 

CFTC
Commitment of Traders

Traditional
funds are still net short Chicago wheat and long corn, soybeans and soybean products. Funds for the week ending December 20 trimmed their long positions for corn and KC wheat, and extended longs for soybeans, meal and oil. For Chicago wheat they added a small
number of net longs.

 

 

 

 

 

 

 

Reuters
table

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn               
42,544    -10,589    342,634     -4,203   -346,777     18,955

Soybeans           
86,286      8,323    121,350     -3,278   -171,758     -2,475

Soyoil             
28,028      9,193    100,524      1,612   -140,171     -9,189

CBOT
wheat         -67,107      4,090     96,691     -1,371    -26,794     -1,510

KCBT
wheat         -16,019     -6,131     46,032       -286    -29,585      5,911

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
113,815    -13,291    221,420     -8,115   -343,155     24,615

Soybeans          
123,569      3,989     71,399     -4,876   -161,427     -1,303

Soymeal           
121,263      6,777     78,092       -609   -240,117     -8,683

Soyoil             
58,130      4,781     86,426      2,069   -160,290     -9,639

CBOT
wheat         -59,311      3,693     65,365        635    -21,782     -1,551

KCBT
wheat           1,245     -7,294     34,678        -58    -30,876      5,901

MGEX
wheat          -4,427       -505      1,131       -630      2,447        926

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

Total
wheat        -62,493     -4,106    101,174        -53    -50,211      5,276

 

 

Live
cattle         65,465     -1,455     52,919       -267   -120,808      1,548

Feeder
cattle       -1,638       -892      2,603       -129      3,797       -222

Lean
hogs           36,386     -3,730     45,258     -1,595    -67,541      1,160

 

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
46,322        951    -38,401     -4,162  1,443,655    -13,908

Soybeans            
2,338      4,759    -35,879     -2,569    733,115    -11,592

Soymeal            
18,724       -562     22,038      3,076    453,264     14,865

Soyoil              
4,115      4,405     11,620     -1,617    445,456    -18,573

CBOT
wheat          18,520     -1,567     -2,791     -1,209    402,381     -2,670

KCBT
wheat          -4,621        946       -428        505    165,627        546

MGEX
wheat           2,698         47     -1,849        162     52,174      2,946

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

Total
wheat         16,597       -574     -5,068       -542    620,182        822

 

 

Live
cattle         10,739        170     -8,315          4    364,005      9,150

Feeder
cattle       -1,370        608     -3,392        636     56,154     -1,127

Lean
hogs           -2,870      5,295    -11,234     -1,129    232,254    -23,837

 

 

Macros

Canada
GDP M/M Oct: 0.1% (est 0.1%, prev 0.1%)

–
GDP Y/Y Oct: 3.1% (est 3.1%, prev 3.1%)

US
Personal Income Nov: 0.4% (est 0.3%, prev 0.7%)

–
Personal Spending Nov: 0.1% (est 0.2%, prev 0.R %)

–
Real Spending Nov: 0.0% (est 0.1%, prev 0.5%)

US
PCE Deflator M/M Nov: 0.1% (est 0.1%, prev R 0.4%)

–
PCE Deflator Y/Y Nov: 5.5% (est 5.5%, prev R 6.1%)

–
PCE Core Deflator M/M Nov: 0.2% (est 0.2%, prev R 0.3%)

–
PCE Core Deflator Y/Y Nov: 4.7% (est 4.6%, prev 5.0%)

US
Durable Goods Orders NovP: -2.1% (est -1.0%, prev R 0.7%)

–
Durable Ex Transportation NovP: 0.2% (est 0.0%, prev R 0.1%)

–
Cap Goods Orders Nondef Ex Air NovP: 0.2% (est 0.0%, prev R 0.3%)

–
Cap Goods Ship Nondef Ex Air NovP: -0.1% (est -0.3%, prev R 1.4%)

US
Univ. Of Michigan Sentiment Dec F: 59.7 (est 59.1; prev 59.1)

–
Current Conditions: 59.4 (est 60.3; prev 60.2)

–
Expectations: 59.9 (est 58.5; prev 58.34)

–
1-Year Inflation: 4.4% (est 4.6%; prev 4.6%)

–
5-10 Year Inflation: 2.9% (est 3.0%; prev 3.0%)

US
New Home Sales Change Nov: 640K (est 600K; prev R 605K)

–
New Home Sales (M/M) Oct: +5.8% (est -5.1%; prev R +8.2%)

–
Median Sale Price (Y/Y) (USD): 471.2K or +9.5% (prev 493.0K or +15.4%)

US
Nov Housing Permits Revised To 1.351 Mln Unit Rate (prev 1.342 Mln)

–
Nov Housing Permits Revised To -10.6% (prev -11.2%)

105
Counterparties Take $2.216 Tln At Fed Reverse Repo Op (prev $2.223 Tln, 96 Bids)

 

Corn

·        
CBOT corn futures were
higher from unfavorable US temperatures increasing feed demand and slowing transportation. Higher wheat was lending support. For the week March corn was up 2.0%.

·        
USDA reported sales to Mexico.

·        
The Buenos Aires Grain Exchange reported 15% of Argentina’s corn crop conditions good to excellent, down 2 points from the previous week. 52% of the corn has been planted, down from the five-year average of 68%.

·        
The Baltic Dry Index fell 8.2% to 1,515 points. Overall ocean freight (all goods) rates are back below pre-pandemic levels.

·        
Ukraine collected 75 percent of their 2022 corn crop out of 4.2 million hectares.

 

USDA
Hogs and Pigs

USDA
reported December 1 all hogs inventory at 73.119 million head, down 1.8 percent from December 1, 2021, and down 1 percent from September. The December inventory is lowest for that month since 2016. The inventory was slightly below trade expectations. Breeding
inventory was higher than year ago and an average trade guess while kept for market fell 2 percent from a year ag, down 1 percent from last quarter and slightly below trade expectations.

 

 

https://www.nass.usda.gov/Newsroom/Executive_Briefings/2022/12-23-2022.pdf

 

USDA
Cattle on Feed

USDA
reported December cattle on feed at 11.673 million head, slightly above an average trade guess and lowest for the month of December since 2017. Marketings were near expectations and highest in more than the past decade for the month of November. Cattle placements
came in above expectations.

 

 

Export
developments.

·        
Under the 24-hour report system, USDA reported 150,000 tons of corn sold to Mexico for 2022-23 delivery. 

·        
South Korea’s MFG passed on corn for arrival by April 10-15.

 

 

Updated
12/6/22

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

 

Soybeans

·        
The soybean complex was higher from a rally in soybean oil and meal. Unscheduled processing downtime in Iowa Falls and Sioux City, IA, were a result from the cold weather. Soybeans ended the week down 0.1%. soybean oil up 4.1%
and meal down 1.7%.

·        
The weather forecast calls for rain across Argentina this weekend.

·        
Frigid temperatures are rolling across the US and heavy snow for some areas are also forcing cutbacks on biofuel and meat production. Livestock stress will occur through late next week.

·        
AgriCensus noted Argentina producers sold about 5.1 million tons of soybeans so far during the second rollout of the “soybean dollar,” less than half that was sold during the September program. Most of the soybeans were sold to
domestic crushers. The program is set to expire at the end of this month. Initial estimates were in the 5-6 million ton range, from what we heard from brokers.

·        
The BA Grain Exchange said Argentina will see its first major rain event over the next three days after seeing some rain over the past two. This might be limiting gains in soybeans and pressuring meal futures.

·        
The BA Grains Exchange also warned they may lower their estimate of the Argentina soybean planted area by 200,000 hectares if rain does not improve.

·        
The BA Grains Exchange reported Argentina was about 51% complete for soybean plantings and conditions were only 19% combined good and excellent compared to 85% last year.

·        
Brazil may see localized flooding over the next several days with good rains falling across the northern growing areas. Brazil’s wettest weather will shift southwest into Sao Paulo, northeastern Parana and Mato Grosso do Sul in
early January, according to World Weather Inc.

·        
Historically low soybean meal inventories in China are seen per a Reuters article and CNGOIC data.

·        
Russia’s Rusagrotrans agency estimated the oilseed crop for 2022 increased 18 percent from 2021 at a record 29.2 million tons, including 16.4 million tons of sunflower.

·        
March Malaysia palm oil was down 68 ringgit to 3830 and cash down $12.50/ton at $927.50.

·        
Palm oil futures logged a second weekly drop, down 2.2% for this week.

·        
This morning offshore values were leading SBO higher by about 39 points earlier this morning (141 lower for the week to date) and meal $3.30 short ton higher
($8.60 higher for the week).

 

Export
Developments

·        
Turkey bought 24,000 tons of crude sunflower oil at $1,218.80/ton and $1,199.80/ton for delivery between January 2 and February 15, 2023.

·        
Under the 24-hour report system, USDA reported 124,000 tons of soybeans sold to Unknown for 2022-23 delivery. 

 

Updated
12/20/22

Soybeans
– January $14.50-$15.10, March $14.15-$15.25

Soybean
meal – January $445-$485, March $4.00-$500

Soybean
oil – January 62.00-68.00 range,
March 55.00-70.00

 

 

Wheat

·        
Chicago wheat traded
higher from an increase in Russian wheat export duties and
potential winterkill damage for the US winter wheat crops across the central and lower growing areas.
Some US winter wheat areas are lacking snow coverage. The cold temperature stretch should last until early Sunday before temperatures start to warm up. Temperatures will return at or above normal in about 5-7 days for the US Great Plains and Midwest. 

·        
For the week, Chicago wheat was up 3.0%, KC up 3.6% and Mn appreciated 2.4%.

·        
Funds for Matif Paris wheat went net short which is considered rare. March Paris milling wheat officially closed up 8.50 euro, or 2.8%, at 311.75 euros a ton ($330.95/ton).

·        
Russia’s export duty on wheat will increase 24.8% to 4,160.9 rubles per ton on December 28 from 3,333.8 rubles per ton the previous week. In 2023 look for Russia to search for additional export destinations. Brazil is a candidate
after Argentina realized a short crop.

·        
Ukraine weekly grain exports increased to 838,000 tons, a 21 percent increase from the previous week, led by corn shipments.

·        
Japanese Insurers To Halt Ship Insurance For All Of Russia (ICE). This comes after some other insurers earlier said they will not renew annual contracts at the beginning of the year.

·        
India recently bought Australian wheat and will eventually re-export flour.

 

Export
Developments.

·        
None reported

 

Rice/Other

·        
Indonesia May Import 991,000 Tons of White Sugar in 2023: CNBC

·        
Results awaited: 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.

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seek 83,672 tons of rice from the United States for arrival in South Korea in 2023 between Feb. 1 and June 30. 

 

Updated
12/16/22

Chicago
– March $7.00 to $8.50

KC
– March 8.00-$9.50

MN
– March $8.50 to $10.00