FI Morning Grain Comments 01/26/23

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 106,000 metric tons of soybeans for delivery to China during the 2023/2024 marketing year.

 

USD
was higher, WTI crude oil up $1.61 and US equity futures mostly higher. Export sales were good for soybeans and wheat, while within expectations for corn, soybean meal and soybean oil. Sorghum and pork sales were very good.  Follow through fund buying is seen
this morning for US agriculture markets. US soybeans, meal and soybean oil are higher from strength in outside related markets also with higher grain prices. This comes despite Argentina expected to get more rain this week and Brazil soybean harvesting is
picking up across the northern growing regions. 24-hour sales this week and talk of tight US soybean supplies during the summer period is supportive. Offshore values were leading SBO higher by about 55 points this morning and meal $1.70 short ton lower. CBOT
corn futures are higher from expectations for a short 2023 Ukraine corn output and higher US energy prices. US wheat is mostly higher on follow through buying. Single digit temperatures arrive late this week across the US central and northern Great Plains.
US snow coverage should be sufficient to minimize damage, if any.

 

 

 

Weather

The
US weather outlook still advertises rain to fall across Argentina bias Cordoba, Santa Fe, Entre Rios, north & eastern Buenos Aires, and north La Pampa through Monday. More rain is expected next week. Brazil’s outlook calls for rain across the northeast areas
today-Friday, north central areas Saturday and southern areas Sunday into Monday. The US Great Plains could see rain across the northern areas of Nebraska Friday into Sunday, and eastern TX Saturday into Monday. It will turn very cold for the Great Plains
late this week, but snowfall coverage is good. The Midwest will see precipitation bias ECN over the next few days.

 

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 26, 2023

• Argentina
  rainfall will be mostly well mixed over the next two weeks; west central and northwestern areas will be wettest while southeastern areas may be driest
• Low
  subsoil moisture is still a concern and until greater rain falls with cooler temperatures that situation should be closely monitored
• Brazil’s
  issues with it being a little too wet in center west and center south and drier biased in the far south will continue for a while, but these anomalies will gradually work their out of the forecast in the second week offering greater rain in the south and less
  rain in the north in time
• ECMWF
  model is wetter in the southern Plains today relative to that of earlier this week with waves of precipitation occurring in the middle to latter part of next week
  
• The
  GFS model is also wetter, but mostly in central Oklahoma and areas south into the heart of Texas; including the Blacklands, Coastal Bend and Edwards Plateau
• The
  biggest difference in the models is over West Texas precipitation and World Weather, Inc. believes West Texas is advertised to be too wet by the ECMWF
• U.S.
  Delta, Tennessee River Basin and southeastern states are still advertised to be wet over the next ten days to two weeks
• U.S.
  northwestern Plains will receive snowfall in the next few days that should protect crops from bitter cold expected this weekend and early next week
• Bitter
  cold in the northern Plains Sunday and Monday will push some subzero Fahrenheit temperatures into the central Plains, but early indications still suggest most of the coldest areas will have snow remaining on the ground even though there will be some warming
  over the next few days to melt some of the region’s snow
• The
  situation will be closely monitored
• U.S.
  temperatures will trend warmer again later next week and into the following weekend with the next round of bitter cold expected a little later in February and when it arrives it may be more persistent
• Not
  many changes were noted in the rest of the world overnight

Source:
World Weather and FI

 

 

Bloomberg
Ag calendar

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

 

 

 

USDA
export sales

USDA
Export Sales were very good for soybeans and wheat. Corn, soybean meal and soybean oil were within expectations. China booked 940,000 tons of 2022-23 US soybeans that included 386,000 tons switched from unknown.  303,900 tons of soybean meal sales fell from
362,500 tons previous week and included Central American countries and the Philippines. Only 2,200 tons of soybean oil was booked. All wheat export sales were 500,400 tons, up from 473,100 tons previous week. Corn export sales were 910,400 tons, down from
1.132 million previous week and included China for 71,800 tons (68k switched), Mexico for 407,000 tons and Columbia for 209,700 tons. Sorghum sales were 70,800 tons, all for China. US pork sales were very good at 44,700 tons, including 17,700 ton for Mexico
and 12,500 tons for China.

 

 

 

 

Macros

US
GDP Annualized (Q/Q) Q4 A: 2.9% (est 2.6%; prev 3.2%)

US
Core PCE (Q/Q) Q4 A: 3.9% (est 3.9%; prev 4.7%)

US
GDP Price Index Q4 A: 3.5% (est 3.2%; prev 4.4%)

US
Personal Consumption Q4 A: 2.1% (est 2.9%; prev 2.3%)

US
Initial Jobless Claims Jan 21: 186K (est 205K; prev 190K)

US
Continuing Claims Jan 14: 1675K (est 1658K; prev 1647K)

US
Durable Goods Orders Dec P: 5.6% (est 2.5%; R prev -1.7%)

Durables
Ex-Transportation Dec P: -0.1% (est -0.2%; prev 0.1%)

US
Advance Goods Trade Balance Dec: -$90.3B (est -$88.1B; prevR -$82.9)

US
Wholesale Inventories (M/M) Dec P: 0.1% (est 0.5%; prevR 0.9%)

US
Retail Inventories (M/M) Dec: 0.5% (est 0.2%; prev 0.1%)

US
Chicago Fed Nat Activity Index Dec: -0.49 (prevR -0.51)

Canadian
Payroll Employment Change – SEPH Nov: 7.1K (prev -5.4K)

 

 

Corn

·        
CBOT corn
futures
are
higher from expectations for a short 2023 Ukraine corn output and higher US energy prices. Talk of US corn export business is also supporting futures.

·        
Ukraine’s corn crop is not expected to exceed 18 million tons for 2023, second annual decline in production, according to the Ukraine Grain Association (UGA). This was a “best case” scenario. Meanwhile they see the wheat crop
no higher than 16 million tons.

·        
EIA reported US weekly ethanol production up 4,000 barrels per day and stocks up 1.675 million. For comparison, a Bloomberg poll looked for weekly US ethanol production to be up 6,000 thousand barrels and stocks up 235,000 barrels.

·        
South Africa’s CEC sees the 2023 corn planted areas at 2.544 million hectares, down from 2.623 million in 2022.

 

US
Cold Storage Stocks – USDA

–
U.S. frozen beef stocks 543.955 mln lbs as of Dec 31

–
U.S. frozen pork belly stocks 63.060 mln lbs as of Dec 31

–
U.S. frozen orange juice stocks 0.290 bln lbs as of Dec 31

 

US
Price Inflation – Focus on Farm Prices

Zulauf,
C. and G. Schnitkey. “US Price Inflation – Focus on Farm Prices.” farmdoc daily (13):14, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, January 25, 2023.

https://farmdocdaily.illinois.edu/2023/01/us-price-inflation-focus-on-farm-prices.html

 

Export
developments.

·        
Nothing reported

 

Soybeans

·        
Follow through fund buying is seen this morning. US soybeans, meal and soybean oil are higher from strength in outside related markets also with higher grain prices. This comes despite Argentina expected to get more rain this
week and Brazil soybean harvesting is picking up across the northern growing regions. 24-hour sales this week and talk of tight US soybean supplies during the summer period is supportive. China will remain on holiday through the end of the week.

·        
Nearby soybean meal is gaining on the back months. Several cash oilmeal prices appreciated yesterday across South America and EU.

·        
The US energy department announced they will allocate $118 million in funding for biofuel projects to cut greenhouse gas emissions from transportation and meet climate goals. There are 17 projects on deck (private companies and
universities) to accelerate the production of biofuels, including using food waste, soybean oil and animal fats. In 2021, 16.8 billion gallons of biofuels were consumed in the US. That compares to 134.8 billion gallons of motor gasoline.

·        
Later the Argentina BA Grains Exchange will update the trade with crop conditions. We don’t see much in the way for recovery for the good/excellent condition, but next week do look for an improvement.

·        
Argentina soybean sales were 80.6% of the projected 44-million-ton crop, according to the AgMin, below 82.6% at this time year ago.

·        
Canada canola crushing were 0.83 MMT during December, down 6 percent from November but up 17% from year earlier. Soybean processing during December was 169,000 tons, an 8-month high.

·        
Germany is still looking at phasing out crop-based biofuels by the end of the decade and focus on other methods to increase zero carbon emissions, such as boosting use of used vegetable oils.

·        
Cargo surveyor reported Malaysian palm oil shipments during the January 1-25 period fell 28.4 percent to 876,193 tons from 1.224 million shipped during the December 1-25 period.

·        
Malaysia will leave its February export tax for crude palm oil at 8% and raised its reference price to 3,893.25 ringgit ($917.14) per ton.

·        
After seeing a big decline yesterday, Malaysia April palm futures rose 28 ringgit to 3781 and cash was up $7.50/ton to $940/ton.  

·        
There were 22 CBOT soybean registrations were cancelled (Chicago) Tuesday evening (1,017 total). 165 have been cancelled since January 19.

·        
China is on holiday all week.

·        
Nearby Rotterdam vegetable oils were
mixed from early yesterday morning. Rotterdam meal was mostly 1-5 euros higher.

·        
Offshore values were leading SBO higher by about 55 points this morning and meal $1.70 short ton
lower.

 

Export
Developments

·        
USDA under its 24-hour reporting system announced private exporters reported sales of 106,000 tons of soybeans for delivery to China during the 2023-24 marketing year.

·        
South Korea seeks up to 40,000 tons of rapeseed meal from India today for May 21-June 10 shipment.

·        
The CCC seeks 3,770 tons of vegetable oils on February 1 for last half March shipment.

 

Wheat

·        
US wheat is mostly higher on follow through buying. Single digit temperatures arrive late this week across the US central and northern Great Plains. US snow coverage should be sufficient to minimize damage, if any.

·        
Paris March wheat was 1.50 euros higher earlier at 286.00 per ton. 

·        
French Foreign Minister Catherine Colonna is visiting Odesa to see on hand some of the damage caused by the conflict and strengthen their relationship with Ukraine, see what needs they have.

·        
South Africa’s CEC sees the 2022 wheat crop at 2.177 million tons, down from 2.285 million in 2021.

 

Export
Developments.

·        
South Korea bought 11,000 tons of US feed wheat in a private deal out of 20,000 tons sought at $350/ton c&f for shipment out of the PNW between March 10-March 30 arrival. Lowest offer earlier was $351.50/ton for 20,000 tons.

·        
Iraq bought 150,000 tons of milling wheat yesterday, 100,000 tons more than what was announced. No details of the tender was provided.

·        
Japan earlier this week received no offers for 70,000 tons of feed wheat and 40,000 tons of barley for arrival in Japan by March 16.

·        
Jordan seeks 120,000 tons of wheat on Jan 31 for May and June shipment.

·        
Jordan seeks 120,000 tons of feed barley on Feb 1 for May and June shipment.

·        
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.

 

 

U.S. EXPORT SALES FOR WEEK ENDING  1/19/2023 

 

	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	123.0	1,028.3	2,165.8	79.3	3,349.7	4,614.1	1.0	91.3
SRW	84.8	721.7	743.9	6.8	1,787.5	1,831.9	60.0	101.6
HRS	85.9	1,414.1	1,361.7	61.6	3,375.9	3,265.8	0.0	49.8
WHITE	181.7	1,296.6	819.6	116.6	2,747.4	2,234.4	0.0	14.3
DURUM	25.0	144.7	54.6	0.0	168.4	113.1	0.0	1.5
TOTAL	500.4	4,605.4	5,145.6	264.2	11,428.8	12,059.2	61.0	258.5
BARLEY	0.0	4.4	18.0	0.4	7.2	12.5	0.0	0.0
CORN	910.4	12,026.4	25,549.0	912.6	12,012.3	18,399.1	15.5	1,263.9
SORGHUM	70.8	328.1	4,172.0	71.5	292.6	1,962.8	0.0	0.0
SOYBEANS	1,145.7	12,906.8	9,101.5	1,900.3	33,628.7	35,032.4	129.0	526.0
SOY MEAL	303.9	3,272.5	2,938.4	285.8	3,597.1	3,937.0	30.0	48.3
SOY OIL	2.2	19.2	176.1	1.4	21.4	304.5	0.0	0.6
RICE
L G RGH	7.0	83.9	172.2	46.4	244.2	637.8	0.0	0.0
M S RGH	0.0	12.2	10.3	1.2	14.7	3.3	0.0	0.0
L G BRN	0.2	5.3	10.3	2.9	10.8	28.0	0.0	0.0
M&S BR	0.1	35.8	68.4	0.5	8.3	16.9	0.0	0.0
L G MLD	21.7	152.3	92.9	10.7	316.8	418.1	0.0	0.0
M S MLD	13.8	133.4	102.0	5.2	121.8	198.1	0.0	0.0
TOTAL	42.7	422.8	456.0	66.9	716.6	1,302.1	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	213.7	4,905.2	8,057.6	175.8	4,376.9	3,601.0	6.1	1,236.2
PIMA	5.4	61.6	220.8	2.1	69.5	165.8	0.0	1.1

 

Export Sales Highlights   

This
summary is based on reports from exporters for the period January 13-19, 2023.

Wheat:  Net sales of 500,400 metric tons (MT) for 2022/2023 were up 6 percent from the previous week and 84 percent from the prior 4-week
average. Increases primarily for Japan (108,100 MT), Mexico (91,000 MT), unknown destinations (89,000 MT), South Korea (74,300 MT), and Taiwan (45,400 MT), were offset by reductions for Chile (2,300 MT). Total net sales of 61,000 MT for 2023/2024 were for
Mexico. Exports of 264,200 MT were down 15 percent from the previous week, but up 15 percent from the prior 4-week average. The destinations were primarily to South Korea (90,800 MT), Japan (56,000 MT), Chile (47,700 MT), Mexico (35,000 MT), and Colombia (10,700
MT).

Corn:  Net sales of 910,400 MT for 2022/2023 were down 20 percent from the previous
week, but up 46 percent from the prior 4-week average. Increases primarily for Mexico (407,000 MT, including decreases of 800 MT), Colombia (209,700 MT, including decreases of 8,000 MT), unknown destinations (84,300 MT), China (71,800 MT, including 68,000
MT switched from unknown destinations), and Canada (35,400 MT, including decreases of 200 MT), were offset by reductions primarily for Honduras (31,300 MT) and Nicaragua (5,000 MT). Total net sales of 15,500 MT for 2023/2024 were for Japan. Exports of 912,600
MT were up 28 percent from the previous week and 27 percent from the prior 4-week average. The destinations were primarily to Mexico (393,800 MT), Japan (116,600 MT), Guatemala (108,300 MT), Saudi Arabia (73,100 MT), and China (71,500 MT).

Barley:  No net sales were reported for the week. Exports of 400 MT were to Japan.

Sorghum:  Total net sales of 70,800 MT for 2022/2023 were down 63 percent from the previous week, but up 50 percent from the prior 4-week
average. The destination was China. Exports of 71,500 MT were up noticeably from the previous week and from the prior 4-week average. The destinations were to China (70,800 MT) and Mexico (700 MT).

Rice:  Net sales of 42,700 MT for 2022/2023 primarily for Japan (13,000 MT), Haiti (12,000 MT), Mexico (6,500 MT), El Salvador (5,600 MT),
and Saudi Arabia (2,500 MT), were offset by reductions for Panama (100 MT). Exports of 66,900 MT–a marketing-year high–were up noticeably from the previous week and from the prior 4-week average. The destinations were primarily to Panama (27,500 MT), Honduras
(15,600 MT), the United Kingdom (10,600 MT), Mexico (5,600 MT), and Jordan (3,900 MT). 

Soybeans:  Net sales of 1,145,700 MT for 2022/2023 were up 16 percent from the previous
week and 53 percent from the prior 4-week average. Increases primarily for China (940,300 MT, including 386,000 MT switched from unknown destinations and decreases of 75,600 MT), the Netherlands (67,100 MT, including 66,000 MT switched from unknown destinations),
South Korea (58,200 MT, including 55,000 MT switched from unknown destinations and decreases of 200 MT), Bangladesh (57,700 MT, including 55,000 MT switched from unknown destinations),  and Italy (46,600 MT, including 41,000 MT switched from unknown destinations),
were offset by reductions for unknown destinations (213,100 MT). Total net sales of 129,000 MT for 2023/2024 were for China. Exports of 1,900,300 MT were down 8 percent from the previous week, but up 11 percent from the prior 4-week average. The destinations
were primarily to China (1,172,200 MT), Mexico (228,600 MT), Germany (69,300 MT), the Netherlands (67,100 MT), and Taiwan (58,900 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 303,900 MT for 2022/2023 were down 16 percent from the previous week, but up 71 percent from the prior
4-week average. Increases primarily for Colombia (96,900 MT), the Philippines (93,800 MT, including decreases of 600 MT), Venezuela (47,000 MT, including 22,000 MT switched from unknown destinations), the Dominican Republic (43,800 MT), and Guatemala (27,800
MT, including 6,000 MT switched from Honduras, 1,600 MT switched from El Salvador, and decreases of 7,100 MT), were offset by reductions for Ireland (45,000 MT), unknown destinations (22,500 MT), and Morocco (500 MT). Total net sales of 30,000 MT for 2023/2024
were for Ireland. Exports of 285,800 MT were down 4 percent from the previous week, but up 9 percent from the prior 4-week average. The destinations were primarily to the Philippines (50,700 MT), Vietnam (49,600 MT), Mexico (33,100 MT), Ecuador (31,100 MT),
and Guatemala (22,200 MT).

Soybean Oil:  Net sales of 2,200 MT for 2022/2023 were up noticeably from the previous week and up 27 percent from the prior 4-week average.
Increases were primarily for Mexico (1,700 MT). Exports of 1,400 MT were up noticeably from the previous week, but down 24 percent from the prior 4-week average. The destination was primarily to Canada (700 MT).

Cotton:  Net sales of 213,700 RB for 2022/2023 were up 2 percent from the previous week and up noticeably from the prior 4-week average.
Increases primarily for China (59,200 RB), Turkey (55,200 RB), Vietnam (42,400 RB, including 3,500 RB switched from China and 200 RB switched from Japan), Pakistan (22,000 RB, including decreases of 700 RB), and Egypt (8,800 RB), were offset by reductions
primarily for Honduras (6,100 RB). Total net sales of 6,100 RB for 2023/2024 were for Honduras. Exports of 175,800 RB were down 4 percent from the previous week, but up 24 percent from the prior 4-week average. The destinations were primarily to China (56,700
RB), Pakistan (40,600 RB), Mexico (14,000 RB), Vietnam (13,200 RB), and Turkey (10,300 RB). Net sales of Pima totaling 5,400 RB for 2022/2023 were up noticeably from the previous week and from the prior 4-week average. Increases were primarily for China (3,100
RB), Pakistan (1,300 RB), and Thailand (900 RB). Exports of 2,100 RB were down 66 percent from the previous week and 58 percent from the prior 4-week average. The destinations were to Peru (900 RB), Taiwan (400 RB), Turkey (400 RB), and Bangladesh (300 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 800 RB were to China. Exports for own account totaling 17,800
RB to China were applied to new or outstanding sales. The current exports for own account outstanding balance of 105,300 RB are for China (75,000 RB), Vietnam (21,900 RB), Pakistan (6,500 RB), India (1,500 RB), and Indonesia (400 RB).

Hides and Skins:  Net sales of 409,500 pieces for 2023 were primarily for China (251,600 whole cattle hides, including decreases of 16,000
pieces), Mexico (48,400 whole cattle hides, including decreases of 1,200 pieces), South Korea (37,400 whole cattle hides, including decreases of 600 pieces), Thailand (35,700 whole cattle hides, including decreases of 5,600 pieces), and Italy (23,800 whole
cattle hides). In addition, total net sales of 200 kip skins were for Canada. Exports of 405,000 whole cattle hides exports were primarily to China (266,700 pieces), South Korea (51,000 pieces), Mexico (48,500 pieces), Thailand (19,800 pieces), and Turkey
(9,100 pieces).  

 

Net sales of 206,600 wet blues for 2023 primarily for Italy (69,900 unsplit, including decreases of 300 unsplit), China (48,300 unsplit),
Vietnam (43,800 unsplit), Thailand (17,200 unsplit), and Mexico (10,100 unsplit and 5,400 grain splits), were offset by reductions for Hong Kong (200 unsplit). Exports of 131,400 wet blues were primarily to Italy (57,200 unsplit and 3,500 grain splits), China
(25,500 unsplit), Vietnam (17,600 unsplit), Thailand (10,500 unsplit and 800 grain splits), and Hong Kong (5,800 unsplit). Net sales of 3,000 splits for 2023 were reported for Vietnam (1,600 pounds) and China (1,400 pounds). Exports of 85,000 splits were to
Vietnam (42,600 pounds) and China (42,400 pounds).

 

Beef:  Net sales of 25,100 MT for 2023 were primarily for South Korea (10,000 MT, including decreases of 400 MT), Japan (4,400 MT, including
decreases of 700 MT), China (4,200 MT, including decreases of 100 MT), Taiwan (1,900 MT, including decreases of 100 MT), and Hong Kong (1,500 MT, including decreases of 100 MT). Exports of 15,600 MT were primarily to South Korea (4,500 MT), Japan (4,200 MT),
China (2,200 MT), Mexico (1,700 MT), and Taiwan (900 MT). 

Pork:  Net sales of 44,700 MT for 2023 were primarily for Mexico (17,700 MT, including decreases of 200 MT), China (12,500 MT, including
decreases of 200 MT), Japan (3,700 MT, including decreases of 200 MT), Canada (2,800 MT, including decreases of 300 MT), and Colombia (2,200 MT, including decreases of 100 MT). Exports of 30,400 MT were primarily to Mexico (15,600 MT), China (4,500 MT), Japan
(2,700 MT), Canada (2,600 MT), and South Korea (1,500 MT).