FI Morning Grain Comments 01/23/23

PDF attached

 

Good
morning.

 

USDA
under its 24-hour reporting system announced 192,000 tons of soybeans were sold for delivery to unknown destinations.

 

CBOT
agriculture markets are lower this morning after Argentina received good rains over the weekend. With many Asian countries on holiday, news was light. China is on holiday all this week. Malaysia is on holiday, back on the 25^th. Grains are lower
led by KC wheat after the US saw a few storm rolls across the winter wheat region over the past 10 days. There were no major global import tender announcements over the weekend. CBOT February options will expire Friday.

 

 

Weather

The
morning forecast showed improvements for Argentina and the US. Argentina received good rains over the weekend that will benefit crops. Amounts ranged from 0.60 to 1.50 inches, locally up to 2.00 inches. Additional rain will occur across Argentina later this
week and early February. We think the decline in crop conditions should stall. Southern Brazil saw some rain over the weekend, including the southern dry state of RGDS. Rest of Brazil saw beneficial rains but harvesting progress for soybeans likely slowed.
The US Great Plains will see snow favoring KS, OK, and northern Texas Tuesday.

 

Argentina
1-7 and 8-14 day

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

World
Weather Inc.

 

World
Weather Inc.

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 23, 2023

• Argentina
  drought relief continued Friday into Saturday with rainfall of 0.60 to 1.50 inches common and local totals of more than 2.00 inches
• The
  moisture improved topsoil conditions, but much of the nation remains quite dry and in need of additional moisture
• Argentina
  will receive additional rain during the next week to ten days to further the improving trend; however, the precipitation this week will be greatest in the north and west leaving lighter and less frequent rain in the east and far south
• Eventually
  all of Argentina will get additional rain and dryness like that of earlier this month is not very likely again – at least not for a while
• Brazil
  weather will continue favorably moist in many areas, but a part of center south crop country will remain a little too wet while portions of Rio Grande do Sul will be a little too dry
• U.S.
  hard red winter wheat areas received needed snow during the weekend with Kansas and eastern Colorado getting widespread snowfall with moisture totals of 0.10 to 0.70 inch with one location in Colorado getting 0.88 inch
  
• Last
  week’s two snowstorms will lead to improved topsoil moisture as the snow melts later this season
• A
  new snowstorm will impact Oklahoma and the Texas Panhandle tonight and Tuesday with 2 to 8 inches of accumulation expected in wheat production areas
• Snow
  is expected in the northwestern U.S. Plains this week to help protect winter wheat from the coming colder weather
• Precipitation
  will be widespread in the lower and eastern U.S. Midwest, Delta and southeastern states during the next ten days
• India
  will receive some needed moisture late this week and into the weekend to help pre-reproductive winter crops establish better just ahead of reproduction
• Eastern
  Australia will get rain later this week into next week that will benefit dryland summer crops
• Weekend
  rainfall in Queensland and New South Wales, Australia was welcome and widespread enough to bring some short term relief to dryness in unirrigated cotton and sorghum areas
• North
  Africa received rain during the weekend mostly in northern Algeria and more of the same was expected through the next ten days
• Greater
  rain is needed in interior Tunisia and Morocco

Source:
World Weather and FI

 

 

Bloomberg
Ag calendar

Monday,
Jan. 23:

• MARS
  monthly report on EU crop conditions
• Brazil’s
  Unica to release sugar output, cane crush data during the week (tentative)
• HOLIDAY:
  China, Hong Kong, Malaysia, Indonesia, Korea, New Zealand, Singapore, Vietnam

Tuesday,
Jan. 24:

• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  China, Singapore, Hong Kong, Malaysia, Korea, Vietnam

Wednesday,
Jan. 25:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysia’s
  Jan. 1-25 palm oil exports
• US
  cold storage data for pork, beef and poultry, 3pm
• National
  Coffee Association’s webinar on 2023 US coffee outlook
• USDA
  total milk production, 3pm
• US
  poultry slaughter, 3pm
• HOLIDAY:
  China, Hong Kong, Vietnam

Thursday,
Jan. 26:

• Paris
  Grain Conference, day 1
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  to release its outlook for world orange and orange-juice production
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  China, India, Australia, Vietnam

Friday,
Jan. 27:

• Paris
  Grain Conference, day 2
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options
• US
  cattle inventory, 3pm
• HOLIDAY:
  China

Source:
Bloomberg and FI

 

 

 

 

CFTC
Commitment of Traders

 

 

 

 

 

Out
last week

 

Macros

 

Corn

·        
CBOT corn
is
trading lower led by weakness in wheat despite higher US energy prices. The USD was higher by 14 points earlier this morning.

·        
The US Cattle on Feed report showed a slightly less than expected contraction for the January 1 cattle on feed at 97.1%. Marketings were a touch below trade expectations at 1.741 million head, 93.9 percent of a year ago. Placements
were 1.804 million, 1 percent above expectations at 92.0%.

 

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT’s soybean complex is trading lower led by soybean meal after Argentina received good rains over the weekend. We think the decline in crop conditions should stall. With many Asian countries on holiday, news was light. Higher
energy markets may be limiting losses in soybean oil. March soybeans traded majority of the overnight session below its 20-day MA. Support for March soybeans is now seen at $14.75. There were 46 CBOT soybean registrations were cancelled Friday evening. Note
the managed money position for soybean meal was a fresh record as of last Tuesday. Long liquidation might be in play.

·        
There were 46 CBOT soybean registrations were cancelled Friday evening.

·        
CBOT crush basis March was down 4.25 cents earlier to $1.91, after trading an intraday peak of $2.37 on Thursday.

·        
After meeting with exporters last week, Argentina’s Economy Minister Sergio Massa will meet with farmers this next week to discuss some type of relief over the ongoing drought, which has halved the wheat crop and prompted some
analysts to chop soybean production estimates to low as 34 million tons. USDA is at 45.5 million tons for the Argentina soybean crop, likely to come down in its February update. Large prospects for Brazil’s should keep South American production for 2022-23
above what was produced in 2021-22, even if the USDA also lowers the Uruguay and Paraguay’s output. 

·        
Brazil and Argentina at a summit in Buenos Aires this week will announce they are looking to create a common currency, called the “sur” (south), looking to boost “regional” trade (southern Brazil and Argentina) and reduce reliance
on the US dollar. Without details on the plan, one speculation for this move is to stabilize or create a fair-trade environment, for local (southern Brazil and Argentine) merchants that want to avoid the volatile currency fluctuations currently tied with the
US dollar.

·        
Safras estimated Brazil 2023 soybean exports at a large 93 million tons, up from 78.9 million for 2022. This is a big increase despite the trade looking for anywhere from a one to four-million-ton increase in 2023 China soybean
imports. Brazil’s crush was seen at 52 million tons versus 50 during 2022.

·        
AgRural sees Brazil’s soybean crop at 152.9 million tons, down 700,000 tons form their previous estimate. Only 1.8 percent of the Brazil soybean crop was harvested, below 4.7 percent year ago. The Brazil corn crop was estimated
at 123.9 million tons, down from 124.3 million previous.

·        
Brazil’s Mato Grosso was 5.9 percent complete as of late last week for soybean harvesting, up nearly 4 points from the previous week, according to IMEA, and about 7 points below year earlier.

·        
Malaysia is on holiday though the 24^th, back Wednesday.

·        
China is on holiday all week.

·        
Nearby Rotterdam vegetable oils were
unchanged to 10 euros lower from early Friday morning. Rotterdam meal was 4-16 euros lower.

·        
Offshore values were leading SBO higher by about 123 points this morning and meal $2.30 short ton
lower.

 

Export
Developments

·        
USDA under its 24-hour reporting system announced 192,000 tons of soybeans were sold for delivery to unknown destinations.

 

Wheat

·        
US wheat futures are lower led by KC wheat after the US saw a few storm rolls across the winter wheat region over the past 10 days. The latest snow event aided Kansas and Colorado. The US Great Plains will see snow favoring KS,
OK, and northern Texas Tuesday.

·        
There were no major global import tender announcements over the weekend. Traders are shrugging off possible geopolitical tensions.

·        
Russian wheat export prices for 12.5 percent protein were up $1.00 last week to $306.00 per ton, according to IKAR. About 800,000 tons of wheat was export last week out of Russia, according to SovEcon.

·        
Western countries made progress with talks to supply Ukraine with tanks and other weapons. Russia warned of “West destruction” for arming Ukraine.  “If Washington and NATO supply weapons that would be used for striking peaceful
cities and making attempts to seize our territory as they threaten to do, it would trigger a retaliation with more powerful weapons” (Reuters provided the quote). 

·        
Grain ships were briefly stopped at Turkey’s Bosphorus strait on Sunday due to rudder failure but resumed shortly.

·        
Paris March wheat was 3.75 euros lower earlier at 281.00 per ton, lowest since March 2022. 

 

Export
Developments.

·        
Japan seeks 70,000 tons of feed wheat and 40,000 tons of barley on January 25 for arrival in Japan by March 16.

·        
China plans to auction off 140,000 tons of wheat on February 1, that includes stocks from the 2014-2017 crop years.

 

Rice/Other

·        
None reported