FI Mid Morning Grain Comments 02/06/23

PDF attached

 

Good
morning.

 

Private
exporters reported to the following sales activity:

-111,800
metric tons of corn for delivery to Japan during the 2022/2023 marketing year

-200,000
metric tons of corn for delivery to Mexico. Of the total, 100,000 metric tons is for delivery during the 2022/2023 marketing year and 100,000 metric tons is for delivery during the 2023/2024 marketing year

 

Lower
trade in soybeans and corn as Argentina crop conditions are stabilizing and speculation that China may back off post US buying post balloon incident.  We think the later is noneventful.  US wheat is lower on slowing NA demand but Black Sea production concerns
are limiting losses. CFTC COT is delayed, and maybe out early this week.

 

 

 

 

 

Weather

 

World
Weather, INC.

MOST
IMPORTANT WEATHER OF THE DAY

• U.S.
  hard red winter wheat areas were advertised wetter today for early next week on the 00z runs of both the GFS  and European forecast model as a disturbance  moves out of the southern Plains and into the Midwest
• However,
  the 06z GFS model run shifted this precipitation to the east as it should have been and that may be the best forecast, although eastern fringes of wheat country will still get some rain and/or snow
• The
  bottom line is that there is still very little moisture of significance that is expected in the  high  Plains region
• Eastern
  Oklahoma and north-central Texas will receive some welcome rain Tuesday into Wednesday, but only easternmost wheat areas will be impacted
• U.S.
  weekend weather
• Dry
  conditions occurred in most crop areas
• Some
  light rain fell erratically in the southeastern states, but resulting amounts were rarely more than 0.50 inch with Florida and coastal areas of the Carolinas wettest
• Locally
  heavy rain fell in southeastern Florida where 2.00 to more than 4.00 inches resulted
• California’s
  central and northern valleys reported light to moderate precipitation with amounts in the San Joaquin Valley staying under 0.63 inch while the Sierra Nevada received 0.20 to more than 1.00 inch of moisture and the Sacramento Valley reported up to an inch
• Blue
  Canyon California reported 2.08 inches of moisture
• Some
  light precipitation also occurred in the Pacific Northwest with most of the greatest amounts near the coast near and west of the Cascade Mountains
• Some
  moderate to heavy precipitation fell in northeastern Oregon where more than 1.00 inch occurred in the Blue Mountains
• Temperatures
  turned much warmer across the Plains and western and southern portions of the Midwest while they were brutally cold in the northeastern U.S. and eastern Canada
• Western
  U.S. hard red winter wheat areas are unlikely to receive substantial precipitation anytime soon
• A
  storm system will brush the eastern most parts of the region Tuesday into Wednesday of this week, but it will leave most wheat areas unaffected
• A
  second disturbance may also impact the far eastern parts of the region during early to  mid-week next week
  
• There
  is “some potential” for a little rain and snow in the high Plains region late this week (mostly Thursday), but resulting moisture totals will be very light, despite some light snow accumulation in a few areas
• The
  bottom line for U.S. hard red winter wheat areas remains one of concern over ongoing drought in the high Plains region. There will be no relief in western portions of this region over the next two weeks and temperatures will be warm early this week and again
  briefly early next week.
• U.S.
  Delta, the Tennessee River Basin, lower eastern Midwest and southeastern states will be wettest in the next ten days to two weeks maintaining wet field conditions
• Northern
  U.S. Plains, Canada’s Prairies and the northwestern Corn Belt is expected to be driest over the next ten days to two weeks, although some light precipitation is expected in these areas as well
• California
  will receive additional moisture along with the Cascade Mountains and areas to the west along the Washington and Oregon Coasts during the next two weeks
  
• West
  and South Texas precipitation will be restricted over the next ten days to two weeks
• Dryness
  is becoming more of a concern in South Texas where planting of corn, sorghum and cotton can begin as early as the end of this month
• Some
  light precipitation is possible in South Texas next week, but more will be needed
• Texas
  coastal areas and a part of the Blacklands of Texas will get timely precipitation
• U.S.
  Temperatures will be quite warm this week east of the Rocky Mountains
• Eastern
  parts of the nation; including the Midwest, Delta and Atlantic Coast States, will continue warmer than usual through all of next week as well
• Cooling
  is expected in Canada’s Prairies and the far western U.S. next week with readings most anomalously cool in Canada
• Argentina
  will experience net drying conditions through Friday and probably into Saturday as well
• Totally
  dry weather is not expected, but the rain that falls will not be enough to counter evaporation
• Temperatures
  will be very warm to hot at times keeping evaporation rates strong
• Daily
  highs will be in the 90s to over 100 degrees Fahrenheit
• Rainfall
  for the week will rarely be more than 0.50 inch with coverage of amounts over 0.25 inch not much more than 30%
• There
  will be some potential for a highly localized rain amounts to 0.75 inch of or more, but they will be extremely rare
• Most
  of Argentina will get rain late Saturday into early next week with 0.30 to 1.30 inches common and a few amounts as great as 2.00 inches
  
• The
  precipitation should offer relief from recent hot and dry weather, but it will not likely be enough to end drought and follow up moisture will be imperative
  
• Western
  Argentina’s crop areas that had the best soil moisture late last week will likely see the least amount of crop stress this week, although there will be some
• This
  includes areas from La Pampa into Santiago del Estero and a few western Santa Fe locations.
  
• Northeastern
  Argentina crops are most seriously stressed since the soil moisture profile was already exhausted of usable moisture late last week and it will not rain there for another six days
• Buenos
  Aires, southern Entre Rios and eastern Santa Fe crops will experience steadily rising crop stress this week until rain evolves next Sunday and the early part of the week beginning Feb. 13
• Cooling
  is likely during the weekend and especially early next week as the rain evolves
• Argentina
  weather for Feb. 15-20 will include some sporadic showers and thunderstorms, but coverage and amounts of rain that results will not provide much additional relief to long term dryness
• Daily
  coverage will vary from 15-35% and rain totals will range from a trace to 0.65 inch
  
• Temperatures
  will be a little cooler than those of this week, but still warm enough to keep evaporation rates strong resulting in net drying
  
• Warming
  will return toward the end next week and into the following weekend
• The
  bottom line for Argentina is still one of great concern over general crop conditions this week. Rain that evolves later this coming weekend into early next week will help save crops in the west where soil moisture has held up relatively well recently and should
  continue that way this week for a while longer despite very warm and dry biased conditions. However, northeastern crops in the nation will continue seriously stressed. Most of the northeastern crops have a small role to play in total grain and oilseed production,
  but there is cotton and citrus in the region that are being impacted. It will be extremely important for all of Argentina to get follow up rain after the late weekend and early next week precipitation falls, but early indications suggest that may not happen.
• Northeastern
  and far southern Brazil were dry Friday through Sunday while showers and thunderstorms occurred in most other areas
• Paraguay
  was also dry
• Rainfall
  was greatest in Mato Grosso, eastern Mato Grosso do Sul, Sao Paulo and southern Goias
• Northern
  Rio Grande do Sul and Santa Catarina received a few showers and thunderstorms Friday into  Saturday, but their coverage was light and only a few soybean and corn areas benefited
  
• Temperatures
  continued warmer than usual in the drier areas of Rio Grande do Sul and Paraguay where extremes in the 90s and over 100 Fahrenheit were common
• Most
  other temperatures were in a more seasonable range
• Much 
  of southern Brazil and Paraguay will be dry through Monday, Feb. 13
• A
  few showers will be possible, but resulting rainfall will not be enough to counter evaporation
  
• Temperatures
  will continue warm
• Rain
  will fall throughout the drier areas early to  mid-week next week and sufficient rain will fall to ease crop moisture stress that may have evolved by that time
• Northeastern
  Brazil will also continue in a drier biased pattern through the next ten days; including central and eastern Bahia, northeastern Minas Gerais and Espirito Santo
• Rain
  is expected in parts of Piaui, Maranhao, western Bahia and Tocantins with sufficient rain to support most crop needs
• Brazil’s
  greatest rain over the coming ten days will be from southern Minas Gerais and Sao Paulo into Mato Grosso resulting in some delay to farming activity; including the harvest of soybeans and planting of Safrinha corn
• Some
  progress is expected, but it will not be as fast as desired
• Local
  flooding is expected in northeastern Sao Paulo, southeastern Minas Gerais and southern Rio de Janeiro
• Southern
  Brazil and Paraguay will get some needed rain during the earlyh to middle to latter part of next week (Feb. 14-16) with 0.50 to 1.50 inches most likely and possibly a little more
• Relief
  from heat and dryness is expected, but additional rain will be imperative to continue the trend
• Brazil’s
  bottom line is about the same as it was Friday…with southern parts of the nation along with Paraguay having the greatest need for rain and that which is expected may not occur for another week.  Rio Grande do Sul and parts of Paraguay will be most negatively
  impacted by the dry and warm conditions and rain next week will be of critical importance for parts of the region. Rain in Mato Grosso and areas southeast to southern Minas Gerais and Sao Paulo will slow down field progress once again after some improvement
  occurred last week. Already some of the weekend precipitation brought fieldwork to a halt.
  
• Europe
  weather will be cool for a little while this week and then warmer than usual during the weekend and next week
• There
  is no risk of crop damaging cold during the next two weeks
• Weekend
  weather was mild to cool with rain and snow falling in the east from eastern Germany and Poland south into Romania and western Bulgaria
• Europe
  precipitation will continue unusually limited for the next ten days
• Dry
  soil is already present in parts of eastern Spain and a part of the lower Danube River Basin
• North
  Africa weekend precipitation was minimal and it will remain that way through Tuesday
• Some
  rain is expected over northeastern Algeria and northern Tunisia later this week and into the weekend with moisture totals of 1.00 to 2.00 inches near the coast
  
• Interior
  Tunisia, northwestern Algeria and Morocco precipitation will continue limited for the next ten days and possibly longer
• Dryness
  is already a concern in these areas, although winter crops  are dormant or semi-dormant and do not have much moisture requirement for now
• The
  need for moisture will be steadily rising this month as crop areas trend warmer and crops are stimulated to develop
• Western
  CIS crop areas will experience light and sporadic precipitation in this first week of the  outlook and then experience some boost in rain and snowfall next week
• Winter
  crops are dormant
• Temperatures
  will be warmer than usual and there is no risk of winterkill during the next two weeks
• India
  was mostly dry during the weekend and no rain is expected in key crop areas over the next ten days to two weeks
• Winter
  crop areas will need rain soon to ensure the best production potential
• Winter
  crops mostly reproduce in February continue filling in March
• China
  will experience waves of rain this week and next week in the Yangtze River Basin and areas to the south coast
• The
  southern rapeseed areas will be wettest and should experience the best improvement in soil moisture supporting early spring crop needs
• Rice
  planting will begin in early March or as soon as soil temperature permit and rapeseed will be breaking dormancy soon if it has not already
• Wheat
  areas in the  North China Plain and Yellow River Basin may get some needed rain briefly late this week and into the weekend
  
• China
  already received some rain near and south of the Yangtze River during the weekend while other areas were dry
• Up
  to 3.00 inches of moisture occurred in Jiangxi while 0.15 to 1.34 inches occurred in most other areas
  
• Australia
  weekend precipitation was minimal in summer crop areas and temperatures were seasonably warm
• Some
  rain fell in Victoria and southern most New South Wales with rainfall to  0.35 inch
• Australia
  rainfall is expected to occur erratically over the next ten days impacting central and  southeastern Queensland most often
• Greater
  rain would be welcome in key summer crop areas, especially those not irrigated
• Rain
  did fall significantly along the upper coast impacting some sugarcane production areas with more than 3.00 inches and only location along the  coast getting nearly 7.00 inches
• South
  Africa rainfall was scattered in nearly 50% of the nation with amounts mostly light and temperatures seasonable
• Rain
  will stay erratic and light for a while this week and then increase during the second half of this week into next week 
  
• Summer
  crop conditions will remain good and some will improve with the greater rain forthcoming
• Middle
  East precipitation is expected to increase this week, although not all areas will benefit
• Turkey
  will be wettest along with northern Iraq, northern Syria and portions of western and northern Iran
• Greater
  precipitation will still be needed in some areas
• Southern
  Syria and much of Iraq away from the far north will be dry and moisture in parts of Iran will be lighter than usual  as well
• Eastern
  Africa precipitation will be greatest in Tanzania during the next ten days which is not unusual at this time of year
• West
  Africa rainfall is expected to be mostly confined to coastal areas during the next ten days, but a few showers will occasionally reach into a few coffee and cocoa production areas
• Seasonal
  rains should begin over the next few weeks.
• Today’s
  Southern Oscillation Index was +9.70 and it will move erratically this week

Source:
World Weather and FI

 

Bloomberg
Ag calendar

Monday,
Feb. 6:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• HOLIDAY:
  Malaysia, New Zealand

• Suspended
  – CFTC commitments of traders weekly report on positions for various US futures and options

Tuesday,
Feb. 7:

• New
  Zealand commodity prices
• EU
  weekly grain, oilseed import and export data
• Canada’s
  StatCan to release wheat, soybean, canola and barley reserves data, 8:30am
• New
  Zealand global dairy trade auction

Wednesday,
Feb. 8:

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

Thursday,
Feb. 9:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports

Friday,
Feb. 10:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• Malaysian
  Palm Oil Board’s January data on stockpiles, production and exports
• Brazil’s
  Unica to release sugar output, cane crush data (tentative)
• Malaysia’s
  Feb. 1-10 palm oil export data

Source:
Bloomberg and FI

 

 

 

 

CFTC
Statement on ION and the Impact to the Derivatives Markets

https://www.cftc.gov/PressRoom/SpeechesTestimony/cftcstatement020223

 

 

Macros

 

Corn

·        
CBOT corn is lower on widespread commodity selling but losses are limited to a pickup in US export demand.

·        
USDA due out later this week is expected to cut Argentina corn and soybean crop production, but er think it will be more than the trade average expects.

 

Export
developments.

·        
Late last week Egypt bought 60,000 tons of corn, origin unknown, for LF Feb/FH March shipment.

·        
Private exporters reported to the following sales activity:

111,800
metric tons of corn for delivery to Japan during the 2022/2023 marketing year

200,000
metric tons of corn for delivery to Mexico. Of the total, 100,000 metric tons is for delivery during the 2022/2023 marketing year and 100,000 metric tons is for delivery during the 2023/2024 marketing year

 

 

Soybeans

·        
Soybean complex was lower early this morning on positioning and Chinese selling.

·        
Malaysian markets will be closed on Monday for holiday.

·        
China soybeans decreased 0.3%, meal up 1.2%, SBO up 0.5% and palm oil futures off 1.7%.

·        
Nearby Rotterdam vegetable oils were
down 5-30 euros from Friday morning and meal was mixed.

·        
Offshore values were leading SBO lower by about 58 points this morning and meal $3.70 short ton
lower.

·        
Late last week Safras reported forward sales of Brazil’s soybean crop reached 30.5%, or 46.7 million tons of the expected production of 153.3 million tons. This compares to 44.1% of the crop year earlier and five-year average
of 44.8%.

 

Export
Developments

·        
None reported

 

 

Wheat

·        
Chicago wheat is mixed
to lower on light positioning and following weakness in soybeans.

·        
Paris March wheat was 2.25 euros higher earlier at 286.75 per ton. 

Export
Developments.

·        
SK bought 65,000 tons of feed wheat, optional origin, at $334.50/ton for arrival around LF August.

·        
Algeria seeks 50,000 tons of wheat for March and April shipment, Feb 7-8, and may double down on the import tender.

·        
Jordan seeks 120,000 tons of optional origin milling wheat on February 7 for May-June shipment.

·        
Taiwan seeks 48,100 tons of milling wheat from the US on February 9 for March 29 and April 12 shipment.

 

 

Rice/Other

·        
South Korea seeks 79,439 tons of rice on February 8 for May 1-Dec 31 arrival.