FI Mid Morning Grain Comments 02/09/22

PDF attached

 

USDA
report day.  I will be traveling through Thursday, returning Friday.

 

Private
exporters reported sales of 240,000 metric tons of soybeans for delivery to China during the 2022/2023 marketing year.

 

EIA-U.S.
WEEKLY ETHANOL OUTPUT OFF 47,000 BPD TO 994,000 BPD

EIA-U.S.
WEEKLY ETHANOL STOCKS OFF 1.05 MLN BBLS TO 24.8 MLN BBLS

 

 

Weather

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• GFS
  and ECMWF divergence in South America has been huge and that raises at least some market doubt as to the direction of weather in the second half of next week
• The
  GFS model has an aggressive trough of low pressure moving through southern Brazil and eastern Argentina starting in eastern Argentina a week from now and reaching southern Brazil on the following Thursday and Friday, Feb. 17-18.
• The
  European model has a meager trough of low pressure with very little precipitation associated with it leaving southern Brazil, eastern Argentina, Paraguay and Uruguay in a limited precipitation pattern
• World
  Weather Inc. favors the ECMWF (European) model run limiting precipitation at that time period
• Today’s
  mid-day GFS and European model runs will be important to watch to see which model might change
• The
  GFS has had this wetter bias for the past 3 model runs and the European model has been drier biased in the past two model runs
• Argentina’s
  best crop development conditions will continue from southern Cordoba and southern most Santa Fe through central Buenos Aires where subsoil moisture is good and where some timely showers will occur briefly Thursday and Friday
• Central
  and northern Santa Fe, northern Entre Rios, Corrientes, Chaco and Formosa will get some shower activity briefly during the weekend, but resulting rainfall will not be enough to change crop status
  
• Crop
  moisture stress will be highest in these areas with further downward pressure on yields possible
• Dry
  weather then resumes in these areas at least into mid-week next week. That is when the model divergence kicks in with the GFS making rain late next week and the European model keeping it dry
  
• Southern
  Brazil soil moisture will decline over the coming week, despite some shower activity this weekend and possible again late next week
• The
  precipitation will help to slow the drying rate and offer a little temporary relief from the dryness that precedes and follows the precipitation
• Greater
  rain will still be needed and it may evolve, but probably not before
• Crop
  stress will be highest in southern Paraguay and western Rio Grande do Sul where soil conditions are driest
• Northern
  Brazil rain will continue to fall frequently and significantly enough to maintain wet field conditions and some concern over the condition of crops  in the region
• Minas
  Gerais will be wettest and most likely to encounter some flooding
• Coffee
  and sugarcane areas may be wetter than corn and soybean areas, but then entire state will get too much moisture
• Goias
  and Mato Grosso will also receive enough rain to keep the ground saturated and field progress moving slowly at times, but some harvest and Safrinha crop planting progress is likely
  
• U.S.
  hard red winter wheat areas are still going to get a few showers of snow and rain during the middle to latter part of next week, but the high Plains region will not likely receive enough moisture to seriously bolster soil moisture
• Most
  of the significant moisture will be in the southeastern corner of wheat country
  
• A
  below average precipitation bias will continue over the next couple of weeks
• West
  Texas cotton and grain areas will not receive much precipitation over the next two weeks, although a few showers may occur infrequently and mostly in an insignificant manner
• Any
  moisture will be welcome, but no trend changing moisture is expected
• U.S.
  Delta, lower eastern Midwest, Tennessee River Basin and southeastern states will experience periods of precipitation next week, but any precipitation that falls until then will be too light and brief to have much impact
• The
  middle and especially the second half of next week will be wettest
• U.S.
  precipitation in this first week of the outlook will be mostly limited to the northeastern Plains and the northern Midwest favoring the Great Lakes region and then farther to the east into the northeastern states
• South
  Texas precipitation is expected to be erratic and mostly light during the next ten days
• Coastal
  Bend cotton areas of the U.S. have good soil moisture for use in the spring
• U.S.
  temperatures will be warmer than usual in most of the western states from the central and northwestern Plains and western Canada’s Prairies to the Pacific Coast.
  
• Cooler
  than usual temperatures will impact the northeastern Plains, and Midwest as well as a part of the mid-south region and Atlantic Coast States
• Temperature
  deviations from normal will not be very great outside of the northeastern Plains and Great Lakes region
• U.S.
  week two temperatures will be similar to this first week, but with less anomalously warm conditions in the western states and less coolness compared to normal in the east
• There
  is no threatening cold weather for Europe or any part of Asia during the next two weeks
  
• Winter
  crop conditions are mostly good
• India,
  China and much of Europe should have a good start to the growing season this year based on today’s soil moisture
• Spain
  and northwestern Africa are still too dry and need rain in the next few weeks to support crop improvement as seasonal warming stimulates new crop development in the next few weeks
• West-central
  Africa coffee and cocoa production areas will see some increase in shower activity this weekend, but most of the rain is not expected to be enough to greatly increase topsoil moisture
• Additional
  showers are expected in the Feb. 16-22 period that may stimulate a few areas of localized flowering
• The
  rainy season is expected to begin relatively well
• East-central
  Africa precipitation has been and will continue to be most significant in Tanzania which is normal for this time of year.
  
• Ethiopia
  is dry biased along with northern Uganda and that is also normal
• South
  Africa weather includes a restricted amount of rainfall over the next ten days and that along with seasonably warm temperatures will eventually lead to firming ground
• Crop
  conditions will stay good
• Southeast
  Asia precipitation will continue erratic from one day to the next, but most of Indonesia and Malaysia precipitation will continue frequent and abundant
• Mainland
  areas of Southeast Asia seem poised to see an early start to scattered showers and thunderstorms during the next couple of weeks with next week wettest
• Eastern
  Australia sorghum, cotton and other crop areas; including some sugarcane areas, will see net drying over the next ten days to two weeks.
  
• The
  environment will reduce soil moisture and could stress some dryland crops in the interior parts of the region
• Coastal
  showers are expected, but rainfall will be lighter than usual
• Any
  showers that occur in key cotton and sorghum areas will fail to produce enough rain to bolster soil moisture
• China’s
  weather will continue to support frequent bouts of snow and rain from the Yangtze River Basin to the south coast over the next ten days
• The
  moisture abundance will be good for early rice and other early season crops that get planted in late February and especially March
• Winter
  rapeseed and wheat are still rated in good condition with the bulk of wheat dormant and rapeseed in a state of semi-dormancy
• Xinjiang
  China will see a few waves of snow during the next ten days
• The
  precipitation will be greatest in the northeast, but the mountainous areas throughout the west will get some moisture as well
• This
  precipitation is needed after the early to middle part of winter was drier than usual
• Middle
  East snow cover has been decreasing recently
• Rain
  and snow will move across Turkey today and then to Iraq, Syria and eventually Iran later this week and into the weekend
  
• The
  moisture will be good for winter crops
• Drier
  weather is expected next week
• Today’s
  Southern Oscillation Index is +8.82 
• The
  index will move a little higher this week and then level off for a while
• New
  Zealand will continue to receive significant rain in North Island and in some western and northern parts of South Island this week
  
• Drier
  weather is expected next week
• The
  moisture will be welcome and help to raise topsoil moisture
• Temperatures
  will trend a little a little warmer after the rain passes
• Mexico
  will experience cooler than usual weather with rain in some of the east-central and southeastern parts of the nation periodically over the coming week
  
• The
  moisture will be good for early season crop development late this month and in March
• Sugarcane,
  citrus and winter rice will benefit most, but some other fruits and vegetable crops will also benefit
  
• Early
  season sorghum and corn planting will occur well this year if the precipitation is great enough
  
• The
  remainder of the nation will be dry
• Central
  America precipitation will be greatest along the Caribbean Coast during the next seven to ten days
• Guatemala
  will also get some showers periodically
• Western
  Colombia, Ecuador and Peru rainfall may be greater than usual during the balance of this week and early into the coming weekend
• Western
  Venezuela will also experience a boost in rainfall
• The
  remainder of Venezuela will remain dry

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Wednesday,
Feb. 9:

• EIA
  weekly U.S. ethanol inventories, production
• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm

Thursday,
Feb. 10:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Malaysian
  Palm Oil Board’s data on palm oil reserves, output and exports
• French
  agriculture ministry releases 2022 winter grain and rapeseed planting estimates
• Brazil’s
  Conab report on yield, area and output of corn and soybeans
• Brazil’s
  Unica releases sugar output and cane crush data (tentative)
• IKAR
  grain conference in Moscow
• Vietnam’s
  customs department to publish data on coffee, rice and rubber exports in January
• Malaysia’s
  Feb. 1-10 palm oil exports

Friday,
Feb. 11:

• ICE
  Futures Europe weekly commitments of traders report, ~1:30pm
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• March
  ICE white sugar contract expiry
• HOLIDAY:
  Japan

Source:
Bloomberg and FI

 

 

 

 

Bloomberg
Conab Brazil supply poll

 

Macros

 

 

Corn

·        
Corn is higher on rumors China will need to secure corn from the US in the event of a SA production shortfall but that has yet to be seen. Brazil’s second crop plantings are still in progress with only 16 percent of the soybean
crop reaped at the end of last week. 

·        
Third day of the Goldman roll.

·        
China’s CASDE was mostly unchanged for corn and soybean demand but they did raise the import price forecast for corn. 

·        
BALTIC EXCHANGE’S MAIN INDEX RISES 13.8% TO 1,711 POINTS – Reuters News

 

Export
developments.

·        
South Korea’s Major Feedmill Group (MFG) bought 68,000 tons of corn at an estimated $341.89 a ton c&f for arrival in South Korea around May 18.

·        
South Korea’s KFA passed on 68,000 tons of corn. Lowest offer was $347.74/ton c&f.

·        
Taiwan’s MFIG seeks up to 65,000 tons of corn on Thursday, Feb 10 for April 1-20 shipment. 

 

 

 

Soybeans

·        
Soybeans are higher after taking a break on Tuesday. Flooding in Malaysia’s palm oil production regions rallied that market which spilled into CBOT soybean oil. Offshore values were also leading both products higher.   

·        
(Reuters) – Brazil’s soybean crop in 2022 was estimated at 133.3 million tons, a reduction of about 5 million tons compared to the January forecast, hEDGEpoint Global Markets said on Wednesday, citing a drought.

·        
China – 

·        
Malaysia palm futures were 145 MYR higher and cash up $20/ton at $1395.00/ton.

·        
Offshore values this morning was leading CBOT soybean oil about 205 points higher and meal $0.70 short ton higher. 

 

 

Export
Developments

• USDA
  announced private exporters sold 240,000 tons of soybeans to China for 2022-23 delivery.
  
• Iran’s
  SLAL seeks up to 60,000 tons of animal feed barley and 60,000 tons of soybean meal. Shipment for both the barley and soymeal was sought between Feb. 15 and March 15.

 

Wheat

·        
US wheat futures are higher on technical buying and renewed global import demand. Global weather still looks good, with exception of the US drying down through at least Sunday.    

·        
EU wheat futures are trading down 0.50 euro at 264 euros per ton at the time this was written.

 

Export
Developments.

·        
South Korea’s FLC bought 65,000 tons of feed wheat at an estimated $330.98 a toe c&f for arrival in South Korea is around May 20.

• Iran’s
  SLAL seeks up to 60,000 tons of animal feed barley and 60,000 tons of soybean meal. Shipment for both the barley and soymeal was sought between Feb. 15 and March 15.

·        
Japan seeks 80,000 tons of feed wheat and 100,000 tons of barley on Feb 16 for arrival by July 28.

·        
Jordan seeks 120,000 tons of feed barley on February 22 for late July through FH September shipment. 

·        
The Philippines seeks feed wheat from Australia and soybean meal from Argentina on February 11. Amounts are unknown.

·        
Bangladesh seeks 50,000 tons of wheat set to close February 14.

·        
Syria seeks 200,000 tons of wheat on February 14, open for 15 days.

 

Rice/Other

·        
(Bloomberg) — U.S. 2021-22 cotton ending stocks seen at 3.29m bales, slightly above USDA’s previous est., according to the avg in a Bloomberg survey of ten analysts.

Estimates
range from 3.0m to 3.7m bales

Global
ending stocks seen at 84.95m bales vs 85.01m bales