FI Morning Grain Comments 01/06/23

PDF attached

 

Good
morning

 

USDA
reported private exporters sales activity:

-112,000
metric tons of corn for delivery to Mexico. Of the total, 89,600 metric tons is for delivery during the 2022/2023 marketing year and 22,400 metric tons is for delivery during the 2023/2024 marketing year; and

-132,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year.

 

US
jobs report was supportive for US equity futures. USD turned slightly lower and WTI crude is higher. USDA US export sales numbers were poor. Sharply higher trade for soybeans and meal. Soybean oil is following soybeans higher. CBOT corn and wheat are despite
a higher USD. Some noted bottom picking after both markets dropped hard earlier this week. News reported overnight was seen bearish with exception to negative weather outlooks for Argentina. Look for positioning to pick up today ahead of next week’s USDA reports.

 

 

Weather

Argentina’s
weather forecast is mostly unchanged. Dry weather is seen through Monday before light rain should fall across La Pampa Tuesday. Brazil’s Mato Grosso, Goias, Bahia, Minas, northeast MGDS, and Sao Paulo will see rain through Monday. Parts of center-south Brazil
will see too much rain though mid next week. Rio Grande do Sul will dry down through the middle of next week. The Midwest will be dry through Tuesday with exception of the southwestern areas Saturday and southeastern areas Sunday. The Great Plains and WCB
will trend drier through Monday. Eastern and central TX will see rain this weekend.

 

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 6, 2023

• ECMWF
  model removed precipitation from Argentina for mid-week next week
• 00z
  and 06z GFS model runs increased Argentina rainfall for mid-week next week
• World
  Weather, Inc. anticipates a few showers with a frontal passage through Argentina next week, but a poor distribution of rain is expected and a more significant bout of rain will still be needed to change drought status
• Brazil
  weather outlook is mostly unchanged today
• California
  and portions of the interior west (including the Pacific Northwest) will see waves of rain and mountain snow during the next ten days
  
• Excessive
  precipitation is still advertised for California where flooding is possible near the central and upper coast and in the interior north while excessive snow accumulates in the Sierra Nevada
• Most
  of U.S. hard red winter wheat country is dry for the next ten days, although some showers will occur in the extreme east
• U.S.
  Delta and southeastern states get a couple of rain events one this weekend and the other late next week
  
• Limited
  U.S. Midwest and northern Plains precipitation is likely next ten days and the same is true for Canada’s Prairies
• Some
  increase in precipitation is expected in these areas after Jan. 16
• Europe
  temperatures will be warm over the next ten days while waves of precipitation impact the continent
• Western
  CIS will be cold this weekend, but no threat to winter crops is expected; Bitter cold will occur farther to the east outside of winter crop areas in central Asia
• East-central
  and northeastern China is still expecting an increase in rain and snowfall after mid-week next week
  
• Queensland,
  Australia will receive some scattered thunderstorms next week, but the distribution may leave some summer crop areas dry
• India’s
  outlook continues dry for much of its winter crop region
• Middle
  East Weather will be active with frequent opportunities for light precipitation next ten days
• North
  Africa precipitation is restricted over the next ten days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
Jan. 9:

• Nothing
  major scheduled
• HOLIDAY:
  Japan

Tuesday,
Jan. 10:

• Malaysian
  Palm Oil Board’s Dec. data on stockpiles, production and exports
• Malaysia’s
  Jan. 1-10 palm oil exports
• EU
  weekly grain, oilseed import and export data

Wednesday,
Jan. 11:

• EIA
  weekly US ethanol inventories, production
• New
  Zealand Commodity Price

Thursday,
Jan. 12:

• USDA’s
  World Agricultural Supply & Demand Estimates (WASDE), 12pm
• China’s
  agriculture ministry (CASDE) releases monthly supply and demand report
• International
  Grains Council report
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans
• Net-export
  sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports

Friday,
Jan. 13:

• 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

 

 

 

 

 

 

USDA
export sales

USDA
export sales numbers were poor. Soybean complex came in near the low end of expectations and grains below a range of trade estimates. Soybean sales included China for 421,800 tons but included 71,400 switched from unknown. The Philippines bought less than
expected soybean meal. Corn sales didn’t factor in the 170k 24-hour sale for Japan (it was counted in the previous week). Wheat sales were a marketing year low.

 

 

 

Macros

US
Change In Non-Farm Payrolls Dec: 223K (exp 202K, R prev 256K)

–         
Unemployment Rate Dec: 3.5% (exp 3.7%, R prev 3.6%)

–         
Average Hourly Earnings (M/M) Dec: 0.3% (exp 0.4%, R prev 0.4%)

–         
Average Hourly Earnings (Y/Y) Dec: 4.6% (exp 5.0%, R prev 4.8%)

US
Change In Private Payrolls Dec: 220K (exp 183K, R prev 202K)

–         
Change In Manufacturing Payrolls Dec: 8K (exp 8K, R prev 8K)

Fed
Swaps Show 36Bps Of Hikes Priced For February, Sees Cycle Peak 5.05%

Canadian
Money Markets Raise Bets On 25Bps Hike By BoC This Month

Canada
Net Change In Employment Dec: 104.0K (exp 5.0K, prev 10.1K)

–         
Unemployment Rate Dec: 5.0% (exp 5.2%, prev 5.1%)

–         
Participation Rate Dec: 65.0% (prev 64.8%)

 

 

Corn

·        
CBOT corn futures
are
higher on technical buying after plunging throughout the week.

·        
Mexico is buying a good amount of corn from the US ahead of President Biden’s visit to Mexico.

·        
Look for positioning to pick up today ahead of the USDA reports due out January 12.

·        
The Buenos Aires Grain Exchange reported 13% of Argentina’s corn crop was rated good to excellent, down 2 points from last week. 70% of the corn was planted, compared to the 5-year average of 84%.

·        
Ukraine harvesting progress reached 93 percent as of January 6, or 49.5 million tons (10.7 million hectares). That includes 22.1 million tons of corn and 32.2 million tons of wheat.

·        
US weekly ethanol production plunged 119,000 barrels to 844,000 barrels. This was the largest weekly decrease since February 19, 2021. Ethanol production of a low 844,000 barrels was also lowest since the same date in February
2021, the height of the US Covid pandemic. The figures are way off from trade estimates.

 

Export
developments.

·        
USDA reported 24-hour sales of 112,000 tons of corn were sold to Mexico for 2022-23 delivery. Of that 89,600 tons for 2022-23 delivery and 22,400 tons for 2023-24.  

 

 

Soybeans

·        
CBOT soybean complex is higher led by soybean meal on Argentina crop concerns and technical buying as some traders shore up shorts ahead of the weekend. Argentina will see hot temperatures this weekend. Net drying in southern
Brazil and Argentina is seen, over the next four days.

·        
The Buenos Aires Grain Exchange reported 8% of Argentina’s soybean crop is rated good to excellent, down from 50% a year ago. 82 percent of Argentina’s soybean crop had been planted, down from 93% for the 5-year average.

·        
Bloomberg: Twenty vessels left Brazilian ports for the China since the start of December, according to Anec.

·        
China looks to increase its oilseed acreage by 667,000 hectares or 10 million mu, allowing for the total soybean area to increase to more than 350 million mu. 20.3 million tons of soybeans were produced last year, above USDA’s
18.40 million tons.

·        
March palm oil futures in Malaysian were down 38 ringgit to 4,052 and cash unchanged at $960.

·        
China soybean futures were up 0.1%, meal 1.1% lower, soybean oil off 0.3% and palm down 0.6%.

·        
Rotterdam vegetable oils were
10 euros higher from early yesterday morning. Rotterdam meal was unchanged to 10 euros higher.

·        
Offshore values were leading SBO higher by about 10 points earlier this morning (261 higher for the week to date) and meal $4.70 short ton
higher
($0.50 higher for the week to date).

 

Export
Developments

·        
USDA reported 24-hour sales of 132,000 tons of soybeans were sold to unknown for 2022-23 delivery. 

 

 

Wheat

·        
US wheat futures are rebounding on technical buying and higher outside commodity markets. Bottom picking was seen after futures fell 5 percent so far this week. High supply estimates for Russia and Australia are decimating US
export potential. USDA reported a marketing year low in weekly export sales. 

·        
There is talk Australia could produce 40-42 million tons of wheat this season, well above government projections of 36-37 MMT.

·        
China will auction off 140,000 tons of wheat from reserves on January 11. The sale includes 100,000 tons bought in 2015, 2016 and 2017 under its minimum purchase price policy, and another 40,000 tons of 2014 and 2015 wheat from
its temporary reserve. (Reuters)

·        
Paris March wheat was 0.75 euro lower earlier at 301.00 euros a ton.

 

Export
Developments.

·        
Egypt seeks wheat via World Food Bank, on January 10.

·        
Taiwan is in for 45,200 tons of US wheat on January 13 for March shipment. Wheat types sought include dark northern spring, hard red winter and white wheat.

·        
The Philippines passed on 110,000 tons of wheat for Feb-Mar shipment. They also passed on barley.

 

 

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.

 

 

 

USDA
export sales

 

U.S.
EXPORT SALES FOR WEEK ENDING  12/29/2022

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	-13.6	941.8	2,095.3	46.2	3,174.3	4,225.9	30.0	69.3
SRW	-3.5	632.1	689.8	13.0	1,748.2	1,622.2	28.0	41.6
HRS	12.7	1,349.9	1,221.0	20.7	3,173.2	3,019.0	39.0	49.8
WHITE	51.5	1,267.3	807.3	1.5	2,416.8	2,068.8	0.0	0.3
DURUM	0.0	116.7	21.2	0.0	149.5	112.7	0.0	0.0
TOTAL	47.1	4,307.8	4,834.5	81.5	10,662.1	11,048.6	97.0	161.0
BARLEY	0.0	5.2	19.0	0.0	6.5	11.5	0.0	0.0
CORN	319.2	11,743.6	26,344.1	761.8	9,996.9	14,652.8	0.0	1,139.0
SORGHUM	0.0	141.1	3,695.0	1.1	219.8	1,613.1	0.0	0.0
SOYBEANS	721.0	15,644.7	11,088.3	1,478.3	28,184.0	30,613.6	151.0	331.0
SOY MEAL	79.3	3,502.3	2,984.0	219.3	2,697.5	3,142.4	0.0	18.3
SOY OIL	0.4	18.2	248.1	0.5	18.9	192.6	0.0	0.6
RICE
L G RGH	-0.8	122.5	177.0	45.3	191.5	582.3	0.0	0.0
M S RGH	0.0	13.7	10.8	0.0	13.2	2.9	0.0	0.0
L G BRN	0.1	8.3	3.8	0.3	7.5	27.1	0.0	0.0
M&S BR	0.0	7.7	68.3	0.4	7.0	15.4	0.0	0.0
L G MLD	19.1	152.0	57.9	1.6	280.7	392.9	0.0	0.0
M S MLD	5.3	135.9	100.8	2.8	99.5	179.2	0.0	0.0
TOTAL	23.6	440.1	418.7	50.4	599.4	1,199.8	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	39.6	4,918.9	7,556.5	93.6	3,867.5	3,036.8	0.0	1,203.1
PIMA	-0.9	65.1	232.1	3.4	54.8	144.8	0.0	1.1

 

 

Export
Sales Highlights

This
summary is based on reports from exporters for the period December 23-29, 2022.

 

Wheat: 
Net sales of 47,100 metric tons (MT) for 2022/2023 primarily for China (65,000 MT switched from unknown destinations), Thailand (53,000 MT), and Vietnam (43,000 MT switched from the Philippines), were offset by reductions primarily for the Philippines (43,000
MT), unknown destinations (39,000 MT), Nigeria (24,000 MT), and Trinidad and Tobago (10,000 MT). Net sales of 97,000 MT for 2023/2024 were reported for Mexico (33,000 MT), unknown destinations (30,000 MT), Nigeria (24,000 MT), and Trinidad and Tobago (10,000
MT). Exports of 81,500 MT were to Mexico (81,200 MT), Canada (200 MT), and the United Arab Emirates (100 MT).

 

Corn: 
Net sales of 319,200 MT for 2022/2023 primarily for Mexico (145,100 MT, including decreases of 500 MT), Honduras (83,200 MT), Japan (49,500 MT, including 69,500 MT switched from unknown destinations and decreases of 20,000 MT), Nicaragua (48,300 MT, including
8,300 MT switched from El Salvador), and Costa Rica (25,100 MT, including decreases of 400 MT), were offset by reductions for unknown destinations (53,400 MT), El Salvador (8,200 MT), and the Philippines (800 MT). Exports of 761,800 MT were primarily to China
(348,400 MT), Mexico (226,800 MT), Japan (69,600 MT), Honduras (53,700 MT), and Panama (25,400 MT).

 

Barley: 
No net sales or exports were reported for the week.

 

Sorghum: 
No net sales were reported for the week. Exports of 1,100 MT were to Mexico.

 

Rice:
 Net
sales of 23,600 MT for 2022/2023 primarily for Haiti (15,000 MT), South Korea (5,000 MT), Canada (3,200 MT), Saudi Arabia (800 MT), and Nicaragua (600 MT), were offset by reductions for Guatemala (900 MT) and El Salvador (600 MT). Exports of 50,400 MT were
primarily to Nicaragua (25,600 MT), Guatemala (11,900 MT), El Salvador (6,500 MT), Canada (2,100 MT), and South Korea (1,600 MT). 

 

Soybeans: 
Net sales of 721,000 MT for 2022/2023 primarily for China (421,800 MT, including 71,400 MT switched from unknown destinations and decreases of 67,000 MT), Turkey (97,900 MT, including 50,800 MT switched from Egypt and 43,600 MT switched from unknown destinations),
Mexico (87,600 MT, including decreases of 900 MT), the United Kingdom (65,300 MT, including 60,000 MT switched from unknown destinations), and Taiwan (62,900 MT, including 50,000 MT switched from unknown destinations and decreases of 200 MT), were offset by
reductions primarily for unknown destinations (129,000 MT). Net sales of 151,000 MT for 2023/2024 were reported for China (66,000 MT), unknown destinations (66,000 MT), and Japan (19,000 MT). Exports of 1,478,300 MT were primarily to China (899,500 MT), Mexico
(155,000 MT), Turkey (97,900 MT), the United Kingdom (65,300 MT), and Taiwan (60,900 MT).

 

Optional
Origin Sales: 
For 2022/2023, the current outstanding balance of 300 MT, all South Korea.

 

Export
for Own Account:  For
2022/2023, the current exports for own account outstanding balance is 1,500 MT, all Canada.

 

Soybean
Cake and Meal: 
Net sales of 79,300 MT for 2022/2023 primarily for the Philippines (26,400 MT, including decreases of 500 MT), the Dominican Republic (18,000 MT), Canada (14,500 MT), Colombia (9,100 MT, including decreases of 18,200 MT), and Nicaragua (8,100 MT, including
3,100 MT switched from El Salvador and decreases of 4,600 MT), were offset by reductions primarily for Morocco (6,000 MT) and El Salvador (3,200 MT). Exports of 219,300 MT were primarily to Colombia (67,400 MT), the Philippines (50,000 MT), Canada (19,000
MT), Panama (18,600 MT), and Guatemala (18,400 MT).  

 

Soybean
Oil: 
Net sales of 400 MT for 2022/2023 were reported for Mexico (300 MT) and Canada (100 MT). Exports of 500 MT were to Canada (300 MT) and Mexico (200 MT). 

 

Cotton: 
Net
sales of 39,600 RB for 2022/2023 primarily for Vietnam (15,500 RB, including 13,000 RB switched from China), Turkey (10,900 RB, including decreases of 2,800 RB), Japan (6,200 RB), Indonesia (5,500 RB, including 900 RB switched from China and 600 RB switched
from Vietnam), and Pakistan (4,300 RB), were offset by reductions for China (7,700 RB) and Peru (2,600 RB). Exports of 93,600 RB were primarily to China (33,600 RB), Pakistan (24,400 RB), Turkey (11,600 RB), Taiwan (4,400 RB), and Malaysia (3,400 RB). Net
sales reductions of Pima totaling 900 RB resulting in increases for Honduras (500 RB) and Colombia (100 RB), were more than offset by reductions for India (1,500 RB). Exports of 3,400 RB were primarily to India (1,300 RB), China (1,200 RB), and Indonesia (500
RB). 

 

Optional
Origin Sales:  For
2022/2023, the current outstanding balance of 9,300 RB, all Malaysia.

 

Export
for Own Account:  For
2022/2023, new exports for own account totaling 1,000 RB were to China. Exports for own account totaling 1,100 RB primarily to Pakistan (1,000 RB) were applied to new or outstanding sales. The current exports for own account outstanding balance of 119,300
RB are for China (88,200 RB), Vietnam (22,700 RB), Pakistan (6,500 RB), India (1,500 RB), and Indonesia (400 RB).

 

Hides
and Skins: 
Net sales of 104,100 pieces for 2022 primarily for China (66,100 whole cattle hides, including decreases of 43,400 pieces), Brazil (25,200 whole cattle hides, including decreases of 100 pieces), South Korea (15,500 whole cattle hides, including decreases of
4,200 pieces), and Mexico (5,700 whole cattle hides, including decreases of 2,900 pieces), were offset by reductions for Thailand (9,100 pieces). Net sales of 320,900 pieces for 2023 primarily for China (206,200 whole cattle hides), Brazil (38,300 whole cattle
hides), South Korea (25,800 whole cattle hides), Mexico (20,400 whole cattle hides), and Italy (15,000 whole cattle hides), were offset by reductions for Japan (1,100 pieces). Exports of 317,700 whole cattle hides exports were primarily to China (229,000 pieces),
South Korea (38,800 pieces), Brazil (13,600 pieces), Mexico (13,000 pieces), and Indonesia (11,200 pieces).

 

Net
sales of 109,800 wet blues for 2022 reported for China (58,000 unsplit), Vietnam (29,700 unsplit), Italy (23,200 unsplit, including decreases of 1,600 unsplit), and Thailand (2,000 unsplit), were offset by reductions for the Dominican Republic (2,400 unsplit)
and India (700 unsplit). Net sales of 20,400 wet blues for 2023 primarily for Taiwan (8,500 unsplit), China (5,300 unsplit), the Dominican Republic (4,800 unsplit), and Italy (3,200 unsplit), were offset by reductions for Thailand (2,000
unsplit). Exports of 108,900 wet blues were primarily to Italy (64,700 unsplit), China (17,600 unsplit), Vietnam (11,900 unsplit), Thailand (11,200 unsplit), and Brazil (2,200 grain splits). Total net sales of 25,300 splits, including decreases of 51,900
splits were for Vietnam. Net sales of 583,000 splits for 2023 for Taiwan (615,000 pounds) and Hong Kong (3,400 pounds), were offset by reductions for Vietnam (35,400 pounds). Exports of 354,100 splits were to Vietnam. 

 

Beef: 
Net sales reductions of 6,900 MT for 2022 were primarily for Japan (2,200 MT), South Korea (1,900 MT), China (1,000 MT), Taiwan (900 MT), and Hong Kong (500 MT).
Net sales of 12,500 MT for 2023 were primarily for Japan (4,400 MT), South Korea (2,100 MT), Taiwan (2,100 MT), China (1,500 MT), and Hong Kong (900 MT).
Exports of 11,700 MT were primarily to Japan (4,500 MT), South Korea (3,100 MT), China (1,100 MT), Mexico (900 MT), and Canada (800 MT). 

 

Pork: 
Net sales reduction of 51,900 MT for 2022 were primarily for Mexico (21,800 MT), Japan (9,200 MT), South Korea (5,800 MT), Canada (4,400 MT), and Australia (4,200 MT).
Net sales of 73,600 MT for 2023 were primarily for Mexico (31,000 MT), Japan (15,700 MT), South Korea (7,000 MT), Canada (5,400 MT), and Australia (5,300 MT).
Exports of 19,400 MT were primarily to Mexico (8,700 MT), China (3,000 MT), Japan (2,600 MT), South Korea (1,300 MT), and Colombia (1,000 MT).