PDF attached
Soybeans,
meal, soybean oil and grains are lower headed into the weekend on positioning, profit taking, and improving Argentina crop conditions. US equities are lower. The US jobs figures are sending the USD sharply higher. WTI was slightly higher at the time of the
electronic pause. The Buenos Aires Grains Exchange reported Argentina soybean crop conditions increased for the combined good/excellent categories by 5 points from the previous week to 12 percent, and corn increase 10 points to 22 percent. Reuters estimates
for USDA S&D were released and traders are not as bullish on Argentina corn and soybean production when predicting USDA changes. S&D summary tables can be found below. Brazil announced they ended the tax exemption on ethanol imports, effective immediately.
This could impact about 5-6 percent of US ethanol exports in 2023. Due to trade reporting issues (ION), the CFTC COT report will be delayed until further notice. Malaysian markets will be closed on Monday for holiday. Malaysia April palm oil futures appreciated
100 ringgit, or 2.6%, to 3,851, equivalent to $904.84 per ton. Offshore values were leading SBO lower by about 14 points this morning and meal $3.50 short ton lower.
WORLD
WEATHER HIGHLIGHTS FOR FEBRUARY 03, 2023
- Argentina
is advertised to endure up to nine days of little to no rain followed by an opportunity for showers and thunderstorms in a part of the nation to finish out the second week of the outlook. Northern areas are advertised wettest in the second week
- Argentina
temperatures will be very warm to hot, especially in the drier areas of the northeast during the next ten days - Center
west Brazil will trend wetter this weekend into next week after a few days of welcome “drier” weather; the moisture will likely slow crop maturation and field progress once again - Central
and eastern North America temperatures will turn quite warm late this weekend through all of next week - Western
portions of U.S. hard red winter wheat country will not likely see much precipitation for a while; eastern areas will get rain briefly during mid-week next week - U.S.
Delta, Tennessee River Basin and southeastern states will be wettest in the next two weeks maintaining saturated or nearly saturated soil - California
will see rain and mountain snow a couple of times in the next ten days maintaining status quo conditions on soil moisture and mountain snowpack - Europe
and western CIS weather will be relatively quiet with seasonable temperatures for a while - Southeastern
China will receive abundant rainfall over the next week to ten days with heavy rain expected near and south of the Yangtze River - India
will be dry biased in most of its key winter crop areas for a while, although some rain will fall in the far south today into Saturday - Rain
will resume in Queensland and northeastern New South Wales next week and into the following weekend supporting crops - South
Africa will get timely rainfall to support its summer crop development favorably
Source:
World Weather and FI
Bloomberg
Ag calendar
Friday,
Feb. 3:
- FAO
World Food Price Index - FAO
Cereal Supply and Demand Brief - ICE
Futures Europe weekly commitments of traders report - CFTC
commitments of traders weekly report on positions for various US futures and options
Monday,
Feb. 6:
- USDA
export inspections – corn, soybeans, wheat, 11am - HOLIDAY:
Malaysia, New Zealand
Tuesday,
Feb. 7:
- New
Zealand commodity prices - EU
weekly grain, oilseed import and export data - Canada’s
StatCan to release wheat, soybean, canola and barley reserves data, 8:30am - New
Zealand global dairy trade auction
Wednesday,
Feb. 8:
- USDA’s
World Agricultural Supply & Demand Estimates (WASDE), 12pm - China’s
agriculture ministry (CASDE) releases monthly supply and demand report - EIA
weekly US ethanol inventories, production, 10:30am - Brazil’s
Conab issues production, area and yield data for corn and soybeans - RESULTS:
Yara
Thursday,
Feb. 9:
- USDA
weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am - Port
of Rouen data on French grain exports
Friday,
Feb. 10:
- ICE
Futures Europe weekly commitments of traders report - CFTC
commitments of traders weekly report on positions for various US futures and options, 3:30pm - Malaysian
Palm Oil Board’s January data on stockpiles, production and exports - Brazil’s
Unica to release sugar output, cane crush data (tentative) - Malaysia’s
Feb. 1-10 palm oil export data
Source:
Bloomberg and FI
Yesterday’s
Grain Option Volume:
Corn
Option Pit: 63,369
Bean
Option Pit: 30,718
Meal
Option Pit: 11,283
Soyoil
Option Pit: 10,492
Chi
Wheat Option Pit: 17,700
Special
Announcement: Commitments of Traders Market Report
February
2, 2023: An ongoing issue with a third-party service provider is impacting some reporting firms’ ability to provide the CFTC with timely and accurate data. As a result, the Commitments of Traders report for publication date February 3, 2023, will be delayed.
A report will be published upon receipt and validation of data from those firms.
CFTC
Statement on ION and the Impact to the Derivatives Markets
https://www.cftc.gov/PressRoom/SpeechesTestimony/cftcstatement020223
Macros
US
Change In Nonfarm Payrolls Jan: 517K (est 189K; prevR 260K)
US
Unemployment Rate Jan: 3.4% (est 3.6%; prev 3.5%)
US
Average Hourly Earnings (M/M) Jan: 0.3% (est 0.3%; prevR 0.4%)
US
Average Hourly Earnings (Y/Y) Jan: 4.4% (est 4.3%; prev 4.6%)
US
Labor Force Participation Rate Jan: 62.4% (est 62.3%; prev 62.3%)
US
Underemployment Rate Jan: 6.6% (prev 6.5%)
US
Change In Private Payrolls Jan: 443K (est 190K; prevR 269K)
US
Change In Manufact. Payrolls Jan: 19K (est 7K; prevR 12K)
Livesquawk:
China Says Balloon Enters US By Mistake Due To Force Majeure
·
CBOT corn is lower on positioning and improving Argentina crop conditions. US equities are lower. The US jobs figures are sending the USD sharply higher. WTI was slightly higher at the time of the electronic pause.
·
Brazil announced they ended the tax exemption on ethanol imports, effective immediately. Brazil ethanol importers will now have to pay a 16% tax until the end of the year before it rises to 18% for 2024. This will impact about
5-6% of the US export program. Brazil used to be a big market share of US ethanol exports, consisting of 23-31 percent during the 2016-2019 calendar years. But since 2020, market share dropped sharply. Since 2016, Brazil was the US largest importer from 2017
through 2019 while Canada claimed that spot in 2016 and 2019 through 2021.
·
The Buenos Aires Grains Exchange reported Argentina corn crop conditions increased for the combined good/excellent categories by 10 points from the previous week to 22 percent. See yesterday’s evening comment for more information.
Export
developments.
·
South Korea’s KFA bought an estimated 126,000 tons of corn for Arrival around April 20. 60,000 tons was sourced from South America at $337.80/ton c&f and 66,000 optional origin at $336.60/ton c&f.
·
Soybean complex is lower from improving Argentina soybean crop conditions, sharply higher USD, and positioning. Offshore values are leading products lower. Some noted upside momentum for soybean meal and soybeans could soon stall
from Brazil harvesting pressure.
·
Earlier this morning we heard China might be auctioning off old crop vegetable oils to make way for new-crop, typical rotation.
·
Malaysian markets will be closed on Monday for holiday.
·
Malaysia April palm oil futures appreciated 100 ringgit, or 2.6%, to 3,851, equivalent to $904.84 per ton. Cash palm oil was up $17.50/ton at $957.50/ton.
·
For the week palm oil futures were down 1.4%.
·
China soybeans increased 1.0%, meal down 0.1%, SBO down 2.8% and palm oil futures off 1.5%.
·
Nearby Rotterdam vegetable oils were
unchanged to 5 euros early yesterday morning and meal was 2-10 euros higher.
·
Offshore values were leading SBO lower by about 14 points this morning and meal $3.50 short ton
lower.
·
Yesterday Abiove estimated the 2023 Brazil soybean crop at 152.6 million tons, crush at 52.5 million, and exports at 92 million tons, all unchanged from their January 12 estimate. The 2022 soybean crop production was raised to
128.6 million tons from 128.5 million previous.
·
Chicago wheat is lower on fund selling and a sharply higher USD.
·
FOA food price index averaged 131.2 points January versus a revised (lower) 132.2 for December, and lowest Since September 2021. It’s down 10 consecutive months.
·
Paris March wheat was 0.75 euro lower earlier at 282.25 per ton.
·
IKAR lowered their estimate of the Russian 2023 wheat crop to 84 million tons from 87 million due to poor weather. The AgMin is at 80-85 MMT versus a large 104.4 million tons for 2022. Note USDA thinks Russia is overstating their
2022 crop production forecast.
Export
Developments.
·
Egypt imported 535,000 tons of wheat from Russia for late February through March 20 shipment at $322.80-$325.80/ton c&f. The tender is under the Food Security and Resilience Support Program funded by the World Bank with at sight
financing.
·
Taiwan seeks 48,100 tons of milling wheat from the US on February 9 for March 29 and April 12 shipment.
·
Jordan seeks 120,000 tons of optional origin milling wheat on February 7 for May-June shipment.
Rice/Other
·
South Korea seeks 79,439 tons of rice on February 8 for May 1-Dec 31 arrival.
Terry Reilly
Senior Commodity Analyst – Grain and Oilseeds
Futures International
One Lincoln Center
18W140 Butterfield Rd.
Suite 1450
Oakbrook Terrace, Il. 60181
Work: 312.604.1366
ICE IM: treilly1
Skype IM: fi.treilly
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AMcom020323.pdf