FI Morning Grain Comments 01/17/23

PDF attached

 

Good
morning.

 

Private
exporters reported the following sales activity:

-150,000
metric tons of corn for delivery to Colombia during the 2022/2023 marketing year; and

-119,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year.

 

WTI
crude oil was up about 75 cents, USD slightly lower and US equities lower. Soybeans, corn, and wheat are lower on large Brazil crop prospects and talk of slow Chinese demand. A few import tenders were announced since Friday, including the Philippines in for
wheat & soybean meal. Algeria seeks wheat.

 

 

 

Weather

Argentina’s
weather forecast improved. Argentina will see rain this week with greatest amounts Friday into Saturday, then again early next week. Southern Brazil has an opportunity to see rain this week. Three weather systems will hit the US Great Plains by mid next week.
It starts with precipitation falling across Nebraska into Iowa tonight into Wednesday night.

 

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 17, 2023

• Argentina
  rainfall will be greatest Friday and Saturday of this week, though there will be some showers and thunderstorms earlier than that in the west-central and southwest
• Argentina’s
  next rain event briefly comes this weekend in the west and then during mid- to late-week next week
• Rio
  Grande do Sul, Brazil and Uruguay will not get much more than 0.50 inch of rain except “possibly in northern Rio Grande do Sul where local totals may reach near 1.00 inch
• Routinely
  occurring rain is likely elsewhere in Brazil with sufficient amounts to maintain a good outlook for crop development
• U.S.
  hard red winter wheat production areas will have opportunity for three weather systems; 1) Tonight and Wednesday in the north and east, 2) this weekend in central parts of the region and 3) during mid-week next week 
  
• No
  drought busting moisture is expected, but sufficient amounts to lift topsoil moisture for a little while
• Substantial
  snowfall is expected from the heart of Nebraska into Iowa tonight into Wednesday night
• California’s
  series of storm systems bolstering soil moisture and mountain snowpack will end this week with two lingering weak systems
• U.S.
  Midwest, Delta and southeastern states will experience waves of rain and some snow (in the Midwest) during the next two weeks
• Florida
  citrus and sugarcane areas experienced frost and freeze conditions during the weekend with Sunday coldest, but no serious damage resulted
• West
  Texas and South Texas will not see much rain of significance for a while
• U.S.
  temperatures will be very warm in the east and cool in the west this week and near normal in the east and below normal in the west next week
• North-central
  and eastern India will receive some needed moisture next week just ahead of winter crop reproduction
• Eastern
  Australia will experience a better distribution of rainfall over the next two weeks
• North
  Africa will receive some needed precipitation In the coming ten days

Source:
Bloomberg and FI

 

Bloomberg
Ag calendar

Monday,
Jan. 16:

• Malaysia’s
  Jan. 1-15 palm oil exports
• Malaysia
  CPO export tax for February (tentative)
• HOLIDAY:
  US

Tuesday,
Jan. 17:

• USDA
  export inspections – corn, soybeans, wheat, 11 am (10 am CT)
• NOPA
  12 pm (11 am CT)
• China
  4Q pork output and inventory levels
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data

Wednesday,
Jan. 18:

• Global
  Forum for Food and Agriculture, Berlin, Jan. 18-21
• Asia
  4Q 2022 cocoa grinding data

Thursday,
Jan. 19:

• European
  cocoa grindings
• North
  America cocoa grindings
• EIA
  weekly US ethanol inventories, production
• Port
  of Rouen data on French grain exports
• New
  Zealand Food Prices
• USDA
  red meat production, 3pm

Friday,
Jan. 20:

• Malaysia’s
  Jan. 1-20 palm oil exports
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options
• US
  net- export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• US
  cotton ginnings
• US
  cattle on feed

 

 

 

 

 

Soybean
and Corn Advisory

2022/23
Brazil Soybean Estimate Unchanged at 151.0 Million Tons

2022/23
Brazil Corn Estimate Unchanged at 125.0 Million Tons

2022/23
Argentina Soybean Estimate Lowered 2.0 mt to 39.0 Million

2022/23
Argentina Corn Estimate Lowered 1.0 mt to 44.0 Million

 

Macros

 

Corn

·        
CBOT corn
is
lower from an improvement in the Argentina weather forecast and lower soybeans.

·        
Mexico rolled out a temporary 50% tariff on exports of white corn to help cool domestic prices, including tortillas. The tariff will be in place until June 30.

·        
China grain exports fell 11 percent in 2022 to 146.9 million tons from 164.5 million tons in 2021.

·        
China boosted pork production in 2022 by 4.6%, highest since 2014, to 55.41 million tons from 52.96 million during 2021. 2014 production was 56.71 million.

·        
Germany’s environment minister Steffi Lemke she would soon send proposals to the cabinet for the country to withdraw from the use of crop-based biofuels to achieve reductions in greenhouse gases. The minister wants to focus on
use of garbage, wastes and used edible oil.

 

Export
developments.

·        
Egypt seeks corn on January 19 for Feb 10-25 shipment. Egypt tends to buy South American corn followed by Ukraine origin.

 

Soybeans

·        
CBOT soybeans
are lower on light long liquidation and improving Argentina rain prospects. Argentina did see light rain over the weekend. Best change for rain this week will occur Friday into Saturday. Concerns over a slow rebound for China’s economy are also weighing on
soybean prices. 2022 GDP grew only 3 percent for China. Soybean meal is leading the products lower. Losses in soybean oil are limited from spreading and higher WTI crude oil.

·        
Brazil soybean harvest remains slow with less than one percent of the crop collected as of last week, six points below year ago. Mato Grosso was 2.4% complete, 1.8 points below year earlier.

·        
A Reuters poll calls for the Brazil soybean crop to end up near a record 153 million tons, up 2 million from the previous months poll. The highest estimate was 154.1 million tons and lowest 150.1 million.

·        
NOPA is due out later today and the average trade guess is 182.9 million bushels, below 186.4 million year earlier. Some have noted the crush could end up well below that level after the cold spell hit the US around Christmas
time.

·        
AmSpec reported 1-15 Malaysia January palm oil exports at 401,749 tons, down 36.4 percent from the same period in December. ITS reported 409,731 tons, down 36.9 percent.

·        
From Friday, April palm futures were down 50 ringgit to 3795 cash down $15.00 at $925.00.

·        
China soybean futures were up 1.5%, meal 0.4% lower, soybean oil down 0.1%, and palm down 0.2%.

·        
Nearby Rotterdam vegetable oils were
down 15-50 euros from early Friday morning. Rotterdam meal was 6-21 euros lower.  

·        
Offshore values were leading SBO higher by about 78 points lower this morning and meal $8.90 short ton
lower.

 

 

Export
Developments

·        
The Philippines seek up to 45,000 tons of soybean meal on January 19. The soybean meal was sought for April 18 and May 25 shipment.

·        
Last week Turkey bought 24,000 tons of sunflower oil for February 15 to March 20 delivery at $1,218.80 to $1,228.80/ton.

 

Wheat

·        
US wheat futures are lower in part to fresh lows in March EU wheat futures, improving US weather and slow US export demand.

·        
Paris March wheat was down 3.75 euros earlier at 283.75 per ton, lowest since early 2022.

·        
Russian wheat prices for the Black Sea region eased from the previous week by $1.00/ton to $305 per ton. 

·        
SovEcon reported Russian weekly exports dropped to 760,000 tons of grain from 970,000 a week earlier. Of that wheat exports were 670,000 tons.

·        
IKAR increased their estimate for 2022-23 Russian wheat exports at 45.5 million tons from previous 44 million tons. All grains exports are estimated at 55.5 million tons from 53.5 million.

·        
Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin had a call on Monday to talk about the grain corridor. They also talked about sending Russian wheat to Turkey in order for millers to boost flour output
and send it to African countries. Russia also seeks to boost fertilizer exports.

·        
Ifax reported that Rosstat estimated the 2022 grain crop at 153.8 million tons, including 104.43 million tons of wheat.

·        
Wheat reserves stand at 4.5 months for Egypt, and sugar at 2.3 months.

 

Export
Developments.

·        
The Philippines seek up to 165,000 tons of feed wheat and up to 45,000 tons of soybean meal on January 19. The wheat was sought for April 16 and June 25 shipment.

·        
Algeria seeks at least 50,000 tons of 11.5% protein milling wheat today for March shipment.

·        
Japan seeks 77,763 tons of food wheat later this week for Feb 21-Mar 20 shipment.

·        
Egypt’s GASC also sold about 300,000 tons of wheat via the new Egyptian Mercantile Exchange since its November launch.

 

Rice/Other

·        
Egypt’s rice reserves are sufficient for 6.3 months.