FI Morning Grain Comments 01/03/23

PDF attached

 

Good
morning

 

Calls:

Soybeans
up 1-4

Soybean
meal steady to $1.00 lower

Soybean
oil up 10-30 points

Corn
steady to 3 lower

Wheat
down 1-4 cents.

 

Some
other opening calls, we heard, are looking for a higher open for the five markets. The USD is sharply higher, WTI crude oil lower, gold higher and US equities leading to a higher open. Extremely important rain fell over the weekend across Argentina’s Santa
Fe, northern BA and Entre Rios. The weather outlook for Argentina calls for net drying through Saturday.  Global export business was slow over the long holiday weekend. Paris grains are lower and rapeseed higher. March palm oil on Tuesday traded at its highest
level since December 1, on ideas for tighter Malaysian palm oil stocks and an outlook for a decline in quarter one 2023 production. Offshore values were leading SBO higher by about 207 points earlier this morning and meal $5.10 short ton lower. The US Great
Plains and WCB saw god rain over the past 24 hours.

 

 

Weather

 

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 3, 2023

• Argentina
  received some welcome and much needed rain during the holiday weekend offering some short term relief to dryness
• Argentina’s
  weather will be dry over the next ten days
• Brazil
  will continue to see a good mix of weather during the next two weeks
• South
  Africa weather will continue rated well for the support of its summer crop development and production
• Australia
  still needs rain in interior unirrigated summer crop areas of Queensland and New South Wales
• India
  will be dry for the next two weeks except in the far north and extreme south
• China’s
  weather is unlikely to deviate much in the coming week to ten days from that of recent weeks
• Europe
  winter crops are dormant and mostly in good shape, though there is need for moisture in the southeastern corner of the continent and in parts of eastern Spain
• CIS
  weather will turn much colder later this week into next week, but snow cover should be present to protect wheat and rye from the cold
• California
  storminess will continue for another week bringing additional bouts of flooding rain and heavy mountain snow
• Winter
  snowstorm is expected from Colorado and northwestern Kansas to Minnesota, Wisconsin and western and northern Michigan this week with 6-12 inches and local totals over 18 inches expected
  
• Southwestern
  U.S. Plains will be dry biased over the next ten days
• Lower
  and eastern U.S. Midwest, Delta and southeastern states will be wet biased over the next ten days
  

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Tuesday,
Jan. 3:

• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• US
  Purdue Agriculture Sentiment
• USDA
  soybean crush, 3pm, USDA corn for ethanol use
• HOLIDAY:
  Japan

Wednesday,
Jan. 4:

• No
  major event scheduled

Thursday,
Jan. 5:

• Census
  Trade Balance
• EIA
  weekly US ethanol inventories, production
• Port
  of Rouen data on French grain exports
• Malaysia’s
  Jan. 1-5 palm oil exports

Friday,
Jan. 6:

• FAO
  Food Price Index
• Net-export
  sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options

Source:
Bloomberg and FI

 

 

 

 

 

Soybean
and Corn Advisory

2022/23
Brazil Soybean Estimate Unchanged at 151.0 Million Tons

2022/23
Argentina Soybean Estimate Unchanged at 43.0 Million Tons

2022/23
Brazil Corn Estimate Unchanged at 125.0 Million Tons

2022/23
Argentina Corn Estimate Unchanged at 46.0 Million Tons

 

Selected
Brazil December exports.

Commodity                     
December 2022      December 2021

CRUDE
OIL (TNS)                8,791,431             5,911,884

IRON
ORE (TNS)                 32,023,061            31,135,491

SOYBEANS
(TNS)                 2,019,645             2,711,640

CORN
(TNS)                     6,411,802             3,410,600

GREEN
COFFEE(TNS)              182,101               207,640

SUGAR
(TNS)                    2,223,053             1,943,623

BEEF
(TNS)                     152,798               126,895

POULTRY
(TNS)                  353,629               383,517

PULP
(TNS)                     1,527,308             1,643,000

 

CFTC
Commitment of Traders

Managed
money were big buyers of corn during the week ending December 27, of 50,100 for futures only and 45,600 contracts for futures & options combined.  Funds added to soybeans and wheat but at a much lesser extent. As a result of the heavier than expected long
buying in corn, the trade missed the traditional net long position by 23,100 contracts. Funds were not as long as expected in wheat and little longer than estimated for soybeans and meal. Soybean oil they were near expectations.

 

 

 

 

 

 

Macros

German
CPI Prelim Y/Y Dec:  8.6% (est 9.1%, prev 10.0%)

German
CPI Prelim M/M Dec: -0.8% (est -0.3%, prev -0.5%)

German
CPI EU Harmonized Y/Y Dec: 9.6% (est 10.2%, prev 11.3%)

German
CPI EU Harmonized M/M Dec: -1.2% (est -0.8%, prev 0.0%)

UK
Manufacturing activity slipped to a 31-month low in December – EY ITEM Club comments

China
Caixin Manufacturing PMI Dec: 49.0 (est 49.1; prev 49.4)

 

 

Corn

·        
CBOT corn futures
are
expected to open steady to lower from a sharply higher USD and lower energy prices. Paris corn and wheat futures are lower. Ongoing Black Sea shipping concerns could limit losses.

·        
Don’t discount new month/quarter money inflow.

·        
US feed demand is expected to be down about 20 million bushels for the Sep-Nov quarter from a year ago.

·        
Manufacturing data for selected countries showed a contraction.

·        
Reuters noted the Baltic Dry Index fell 17.5% to 1,250 after returning from holiday. It was at 1,515 points as of December 23.

·        
EIA reported October US ethanol production slightly above our working estimate. We left our corn for ethanol use unchanged at 5.250 billion bushels, 25 million below USDA.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
CBOT soybeans and soybean oil may open higher from higher outside related oilseed markets and offshore values suggesting a higher trade in soybean oil. Meal could open lower on product spreading and sharply higher USD. Don’t discount
a two-sided trade. New month/new money could support prices. USDA NASS will release November crush data this afternoon.

·        
Argentina’s weather outlook turned slightly negative than that of last Friday. Mostly dry weather is seen through Saturday.

·        
News is generally light for the start of the year.

·        
Brazil’s government launched a fuel tax exemption for 1 year for diesel, and 2 months for gasoline. This could help the agriculture sector lock in fixed costs for transportation.

·        
March palm oil on Tuesday traded at its highest level since December 1, on ideas for tighter Malaysian palm oil stocks and an outlook for a decline in quarter one 2023 production. Southern Peninsular Palm Oil Millers Association
estimated production in December fell 1.68% from the month before. Last week India extended a policy to allow imports of vegetable oils at lower taxes by a year until March 2024. Indonesia plans to reduce exports for palm oil from January 1. “Starting next
year, exporters will be allowed to ship six times their domestic sales volume, smaller than the current ratio allowed of eight times, Indonesian Palm Oil Association (GAPKI).” – Reuters

·        
Cargo surveyor SGS reported December Malaysian palm exports at 1,512,468 tons, 7,092 tons below the same period a month ago or down 0.5%, and 51,977 tons below the same period a year ago or down 3.3%. AmSpec reported Malaysia
December palm exports at 1.457 million tons, down 2.8% from November. ITS reported a 1.7% decrease to 1.553 million tons.

·        
March palm oil futures in Malaysian were up 79 ringgit to 4,253 and cash up $17.50/ton at $987.50.

·        
China soybean futures were up 1.0%, meal 1.1% higher, soybean oil unchanged and palm up 0.2%.

·        
Rotterdam vegetable oils were
mixed from early Friday morning. Rotterdam meal was 4-9 euros higher.

·        
Offshore values were leading SBO higher by about 207 points earlier this morning and meal $5.10 short ton
lower.

·        
EIA reported soybean oil for US biofuel production well below our working estimate. At 906 million pounds during the month of October, it was down from 934 million pounds for September and up from 832 million pounds for October
2021. Note EPA didn’t recommend the lower-than-expected mandates until late November, so the October figure was a surprise.
https://www.epa.gov/renewable-fuel-standard-program/news-notices-and-announcements-renewable-fuel-standard

·        
We lowered our soybean oil for biofuel use to 11.800 billion pounds from 11.850 billion previously. USDA is at 11.600 billion pounds for 2022-23. Last year 10.348 billion pounds was used.

 

 

Export
Developments

·        
South Korea’s state-backed Agro-Fisheries & Food Trade Corp. seeks 25,000 tons of GMO-free food-quality soybeans, optional origin, on January 4 for arrival between December 2023 and June 2024.

 

Wheat

·        
US wheat futures could open lower this morning from a lower lead in Parish wheat and a sharply higher US dollar.

·        
The US Great Plains and WCB saw god rain over the past 24 hours.

·        
Paris March wheat was 1.50 euros lower earlier at 307.75 euros a ton.
Some noted Russia export competition. On Friday SovEcon raised their Russian wheat export estimate for the 2022-23 crop year (July-June) by 200,000 tons to 44.1 million tons.

·        
Fighting escalated over the weekend across Ukraine with more Russian drone strikes.

·        
Turkey extended their zero percent tariff on wheat, corn and barley imports until April 30^th.

·        
India is looking to sell 2.1 million tons of wheat on the open market and a final decision will come mid next week.

 

Export
Developments.

·        
None reported

 

Rice/Other

·        
Results awaited: South Korea’s state-backed Agro-Fisheries & Food Trade Corp. seeks 113,460 tons of rice on December 29 from the United States for arrival in South Korea in 2023 between Feb. 1 and June 30.