FI Morning Grain Comments 01/10/23

PDF attached

 

Good
morning

 

Private
exporters reported sales of 174,181 tons of soybeans for delivery to Mexico during the 2022-23 marketing year.

 

WTI
oil was up about $0.27, natural gas higher, and USD 38 points higher. Commodity fund rebalance will continue through the end of the week. The US soybean complex is lower on follow through selling. News has not changed much. Talk of US export slowing (citing
export inspections) and poor China demand is weighing on soybeans. Traders are also unwinding long positions ahead of the USDA reports. March palm oil futures in Malaysian fell more than 3.5 percent overnight on poor exports for the start of 2023 and lower
than expected December exports. MPOB S&D data did show end of December palm oil stocks smallest since August to 2.19 million tons, but December exports fell more than expected, off 3.5% from November to 1.47 million tons. March palm Futures declined 134 ringgit
to 3,984 and cash down $20.00 at $965.00. Offshore values were leading SBO lower by about 52 points earlier this morning and meal $0.90 short ton higher. CBOT grains are lower in part to uncompetitive US export prices (Black Sea wheat cheapest in Egypt’s import
tender). Paris wheat hit a 10-month low on Tuesday. Egypt, Turkey and Taiwan are in for wheat. Lowest offer for Egypt was $337/ton C&F Russian origin. Japan seeks 89,735 tons of food wheat later this week. Taiwan’s MFIG bought about
65,000 tons of corn from South America for February 10 and March 1 shipment at an estimated $339.79/ton c&f.

 

 

Weather

Californians
are facing another round of flooding and power outages today.

https://origin.wpc.ncep.noaa.gov/discussions/hpcdiscussions.php?disc=pmdspd

 

 

The
morning weather outlook for Argentina was slightly less favorable than that of yesterday while the US Midwest improved. Argentina will see light rain across La Pampa, Cordoba, BA and northern Santa Fe today through Thursday, before drying down Friday. The
far southern areas will see restricted rain while the central areas should improve. Rain will fall across Mato Grosso, Goias, MGDS, Sao Paulo and lesser extent Parana, Santa Catarina, and Rio Grande do Sul. The far western Great Plains will see a wintery mix
mid this week while other areas of the GP will remain dry. Light precipitation will fall across south central and east central of the Midwest Wednesday through Thursday, and southeastern areas later this week. This should be beneficial for winter crops. US
Midwest temperatures will be mild through Thursday. Well above average temperatures will build into the southern Plains. Rain should favor many central and eastern European countries this week.

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 10, 2023

• 00z
  GFS model run suggested greater precipitation in Argentina’s central crop areas next week, but the 06z GFS model run took most of the moisture out – the change toward less moisture was needed
• Argentina’s
  central and south will continue to struggle with dryness, despite a few showers infrequently during the next two weeks
• Northern
  Argentina is still expecting rain of significance later this week that will improve topsoil moisture and benefit cotton and a few minor grain and oilseed production areas
• Most
  of Brazil will get timely rainfall over the next two weeks supporting crops in most areas, although a few pockets of dryness and a few areas of excessive moisture will be of some concern
• Center
  south and some center west Brazil crop areas will experience less intensive rainfall during the middle to latter part of next week favoring better early season soybean maturation and eventual harvest progress
• California’s
  stormy weather will continue for up to one more week and then a break is expected with drier and eventually some warmer weather
• U.S.
  western hard red winter wheat areas are unlikely to get much meaningful precipitation, although a few showers will occur briefly Wednesday and again possibly during mid-week next week – no drought busting precipitation event is expected anytime soon
• U.S.
  eastern Midwest, Delta and southeastern states will get waves of rain over the next two weeks
  
• Europe
  will continue warmer biased with stormy conditions increasing in the coming week to ten days
• Waves
  of rain and strong wind speeds are expected this weekend and especially next week
• Western
  CIS will continue to warm after recent bitter cold and precipitation will slowly resume and increase over the coming week
• Eastern
  China will trend wetter and cooler for a little while later this week and into the weekend
• Australia’s
  rainfall will be greatest in central and northern Queensland crop areas while precipitation elsewhere will be restricted
• South
  Africa, Indonesia and Malaysia will see more limited rainfall for a while, though South Africa may be wetter next week
• India
  precipitation will be limited to the far north for a while
• North
  Africa will have chance for rain next week, but this week will remain dry

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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
inspections versus Reuters trade range

Wheat                 
201,673                 versus   75000-350000                     range

Corn                     
397,585                 versus   325000-900000  range

Soybeans           
1,438,183             versus   1000000-1850000             range

 

Soybean
and Corn Advisory

2022/23
Argentina Soybean Estimate Lowered 2.0 mt to 41.0 Million

2022/23
Brazil Soybean Estimate Unchanged at 151.0 Million Tons

2022/23
Argentina Corn Estimate Lowered 1.0 mt to 45.0 Million

2022/23
Brazil Corn Estimate Unchanged at 125.0 Million Tons

 

Macros

 

Corn

·        
CBOT corn futures
are
lower as US exports are uncompetitive.

·        
Look for positioning ahead of the USDA reports due out January 12.

·        
USDA US corn export inspections as of January 05, 2023, were 397,585 tons, within a range of trade expectations, below 683,042 tons previous week and compares to 1,023,656 tons year ago. Major countries included Mexico for 242,437
tons, China for 138,715 tons, and Taiwan for 7,075 tons.

 

Export
developments.

·        
Taiwan’s MFIG bought about 65,000 tons of corn from South America for February 10 and March 1 shipment at an estimated $339.79/ton c&f.

 

 

Soybeans

·        
CBOT soybeans,
meal and soybean oil are lower as longs lift positions ahead of the USDA report. Argentina and southern Brazil are set to see some rain this week.
Rising Covid concerns with outbreaks across China are renewing demand concerns and USDA soybean export inspections yesterday came in below many trade expectations.

·        
March palm oil futures in Malaysian fell more than 3.5 percent overnight on poor exports for the start of 2023 and lower than expected December exports.

·        
MPOB S&D data did show end of December palm oil stocks smallest since August to 2.19 million tons, but December exports fell more than expected, off 3.5% from November to 1.47 million tons.

·        
March palm Futures declined 134 ringgit to 3,984 and cash down $20.00 at $965.00.

·        
ITS reported January 1-10 Malaysian palm oil exports plunged 50 percent from the same period month earlier to 247,711 tons from 492,960 tons, in large part to a decline in crude palm oil exports to India. AmSpec reported January
1-10 palm oil exports at 235,529 tons versus 480,404 tons previous month.

·        
China soybean futures were up 0.7%, meal 0.7% lower, soybean oil off 1.5% and palm down 1.7%.

·        
Rotterdam vegetable oils were
mixed from early yesterday morning. Rotterdam meal was mostly 1.50-11.00 euros lower.

·        
Offshore values were leading SBO lower by about 52 points earlier this morning and meal $0.90 short ton
higher.

·        
USDA US soybean export inspections as of January 05, 2023, were 1,438,183 tons, within a range of trade expectations, below 1,475,344 tons previous week and compares to 985,821 tons year ago. Major countries included China for
1,113,932 tons, Italy for 71,862 tons, and Mexico for 66,112 tons.

 

USDA
Attaché on Brazil soybeans: 153MMT production (1 MMT above USDA) and 51.5MMT crush.

Note:

·        
Only 0.4 percent of the soybean crop had been collected as of late last week, compared to 0.2 percent previous year. 2.3 percent of the center-south crop had been collected, below 3.1% this time year ago.

·        
Some trade estimates are near 151 million tons for production.

 

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Brasilia_Brazil_BR2022-0070

 

Export
Developments

·        
Turkey seeks about 24,000 tons of sunflower oil on January 13 for February 15 to March 20 delivery.

·        
USDA reported private exporters reported sales of 174,181 tons of soybeans for delivery to Mexico during the 2022-23 marketing year.

 

Wheat

·        
US wheat futures lower in part to uncompetitive US export prices. Paris wheat hit a 10-month low on Tuesday, down 5.00 euros to 291.50/ton. Egypt received offers for wheat and Black Sea was cheapest. India may see a record wheat
crop.

·        
The Indian Institute of Wheat and Barley Research told Reuters that the 2023 India wheat production could reach a record 112 million tons versus 106.84 million tons a year ago and 109.59 million for 2021. Higher yield variety
seeds and favorable weather have favored early crop establishment.

·        
Interfax Russia reported five ships left Ukraine over the past three days carrying 158,550 tons of foodstuff as part of the Grain initiative. 17 million tons have been exported since the beginning of August under the initiative.

·        
China gave local companies the green light to pursue trade with Australia as political relationships improved. They already resumed coal import and are looking for Australia to drop complaints at the World Trade Organization on
Chinese tariffs on wine and barley.

·        
Pakistan received a shipment of Russian wheat. It arrived in Karachi city of the southeastern Sindh province. Pakistan aims to import 750,000 tons of Russian wheat by March 30.

·        
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)

·        
USDA US all-wheat export inspections as of January 05, 2023, were 201,673 tons, within a range of trade expectations, above 85,672 tons previous week and compares to 234,356 tons year ago. Major countries included China for 66,000
tons, Mexico for 26,187 tons, and Japan for 26,152 tons.

 

Export
Developments.

·        
Egypt seeks wheat via World Food Bank for February 10-25 shipment. Lowest offer was $337/ton C&F. 6 Russian offers were presented, one Romanian and one French. Russia was lowest offer. Reuters table:

·        
Turkey seeks 565,000 tons of milling, including red, wheat on January 12 for February through March shipment.

·        
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.

·        
Japan seeks 89,735 tons of food wheat later this week.

 

Rice/Other

·        
Russia extended their ban on rice exports through June 30. It applies to exports outside of the Eurasian Economic Union (EAEU). There are no restrictions on exporting these products to other EAEU countries.

·        
Vietnam’s coffee exports in December were up 53.5% from the month before at 197,077 tons. For 2022, Vietnam exported 1.78 million tons of coffee, up 13.8% from a year earlier.

·        
(Bloomberg) — US 2022-23 production seen slightly lower than USDA’s previous estimate, according to the avg in a Bloomberg survey of eight analysts.

-Production
seen down 96,000 bales, while exports seen down 131,000 bales

-Ending
stocks seen mostly unchanged at 3.5m bales

-World
production seen down by 151,000 bales