FI Morning Grain Comments 02/09/23

PDF attached

 

Good
morning.

 

The
USD was sharply lower by over 68 points earlier this morning, WTI down about 88 cents and US equities higher.  USDA export sales were good for corn and lower end for the rest of the major commodities. CBOT corn turned lower from a selloff in wheat and lower
WTI crude oil. A sharply lower USD is limiting losses. Soybeans are finding support from ongoing Argentina weather concerns and higher soybean meal. Soybean oil is lower on weakness in palm oil and product spreading. Wheat was mixed on lack of direction. Malaysia
April palm futures were down 24 ringgit to 3973 and cash was down $7.50/ton to $970/ton. Offshore values were leading SBO higher by about 40 points this morning and meal $0.20 short ton lower. South Korea bought US and SA corn overnight.

 

 

 

Weather

The
US CPC sees an 82 percent chance for a neutral ENSO for the March-May period.

 

The
trade will be watching Argentina rains expected to occur though Monday. The bulk of the rain will fall across La Pampa, BA, eastern Cordoba, Santa Fe, Entre Rios. It will remain on the drier side for northern and eastern Argentina.  Brazil will continue to
see rain and the central growing area slowing harvesting progress. The US weather forecast is mostly unchanged. Central and northern Great Plains will not see much precipitation over the next week. The US Midwest will see additional rain bias far southern
areas and northern areas.

 

 

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR FEBRUARY 09, 2023

• No
  serious changes in weather were advertised overnight for most of the world
• Argentina
  rainfall over the next ten days will be greatest in the central and especially the northeast only light rain is currently advertised in the southwest Saturday into Monday with the European model drier than the GFS
  
• Rain
  totals of 0.30 to 1.00 inch and local totals to 1.50 inches will be possible in this region
• Much
  greater rain will fall in northeastern Argentina early next week bringing greater relief to some cotton, citrus and minor grain and oilseed production areas
  
• This
  region has been driest during the past couple of weeks and 1.00 to 3.00 inches of rain and locally more is quite likely
• Brazil
  weather will continue to generate daily rain across much of the nation
• Rio
  Grande do Sul gets some showers today and Friday and more rainfall Tuesday and Wednesday of next week; the moisture should be timely and support of good soybean conditions in the north
• Mato
  Grosso and other Safrinha corn production areas will see alternating periods of sun and rain during the next two weeks keeping the harvest pace a little slow, but progress is likely
  
• U.S.
  southwestern and west-central Plains will receive rain and some snow early next week, but moisture totals will be light maintaining a need for more moisture prior to the start of spring growth
  
• U.S.
  weather will be wettest in the Delta and southeastern states over the next two weeks
  
• Some
  areas in the Midwest from Missouri to Michigan will receive some significant moisture as well with three waves of precipitation likely producing ten-day totals of 1.00 to 3.00 inches
  
• Europe
  will continue drier than usual for the next ten days
• CIS
  precipitation will occur routinely, but lightly
• China’s
  outlook is still wet over the next couple of weeks with rapeseed areas getting abundant rainfall while only light precipitation occurs in winter wheat areas
• Eastern
  Australia summer crop areas are still advertised to receive a restricted rainfall over the next ten days leaving unirrigated summer crop areas too dry and in need of moisture
• South
  Africa will experience waves of rain favoring eastern portions of the nation
• North
  After rainfall will be erratic and light during the next ten days leaving need for greater rain even though some areas in interior Tunisia received their first rain in weeks Wednesday
• Most
  of India is still advertised to be dry

Source:
World Weather and FI

 

Bloomberg
Ag calendar

Thursday,
Feb. 9:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am

• Suspended
  – CFTC commitments of traders weekly report on positions for various US futures and options

• 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

 

 

 

USDA
Export Sales

US
soybean export sales were at the low end of expectations for old crop and near the middle for new crop. There were a lot of sales switched from unknown. Increases  primarily for China (518,900 MT, including 332,000 MT switched from unknown destinations). Soybean
meal sales were again below 200,000 short tons. At 181,700, there were slightly above the previous week, but shipments were very good at 312,800 short tons. The soybean meal sales included 64,900 tons for Columbia. Soybean oil sales again were slow at 2,000
tons and shipments were only 1,900 tons. USDA corn export sales of 1.160 million tons were near the upper end of a range of expectations. The corn sales included  Japan (388,200 MT), unknown destinations (308,200 MT) and Mexico (107,000 MT, including decreases
of 28,900 MT). Sorghum sales were 53,000 tons, all for China. All-wheat export sales of 131,400 tons were poor for the second consecutive week. The wheat sales included Mexico and Columbia. Pork sales were 28,800 tons and included 12,700 tons for Mexico.

 

 

 

Macros

US
Initial Jobless Claims Feb 4: 196K (est 190K; prev 183K)

US
Continuing Claims Jan 28: 1688K (est 1660K; prevR 1650K)

Brazilian
Retail Sales (M/M) Dec: -2.6% (est -0.8%; prev -0.6%)

Brazilian
Retail Sales (Y/Y) Dec: 0.4% (est 2.7%; prev 1.5%)

 

Corn

·        
CBOT corn turned
lower from a selloff in wheat and lower WTI crude oil. A sharply lower USD is limiting losses. ENSO conditions are expected to move into a neutral phase for the Northern Hemisphere by US spring seeding season.

·        
Vietnam might be tendering for corn today.

·        
Today is the third day of the Goldman Roll.

·        
The USDA Broiler Report showed broiler type eggs set up slightly from a year ago and chicks placed up slightly. Cumulative placements were up 1 percent from the same period a year earlier.

·        
US weekly ethanol production fell 28,000 barrels per day to 1.0 million barrels (traders looked for a 11k decline) and stocks fell 25,000 barrels to 24.417 million barrels (trade average was looking for up 572k). US ethanol production
is still up 14,000 barrels for the four-week average.

 

Export
developments.

• South
  Korea’s MFG bought 67,000 tons of South American corn at $343.59/ton c&f and 198.50 cents over the May corn contract for arrival around May 30.
  
• South
  Korea’s FLC bought 65,000 tons of US corn at $337.95/ton c&f for arrival around April 25.
  

 

Soybeans

·        
CBOT soybeans are
higher from strength in soybean meal and ongoing Argentina weather concerns. News was light. Soybean oil is lower from product spreading, lower WTI crude oil and weaker palm oil futures.

·        
Malaysia April palm futures were down 24 ringgit to 3973 and cash was down $7.50/ton to $970/ton.  

·        
China soybeans increased 0.2%, meal down 0.3%, SBO down 0.1% and palm oil futures up 0.1%.

·        
Nearby Rotterdam vegetable oils were
mostly unchanged from this time yesterday morning and meal was 1.50-4.00 euros higher.

·        
Offshore values were leading SBO higher by about 40 points this morning and meal $0.20 short ton
lower.

 

U
of I: Biodiesel and Renewable Diesel: What’s the Difference?

Gerveni,
M., T. Hubbs and S. Irwin. “Biodiesel and Renewable Diesel: What’s the Difference?”
farmdoc daily (13):22, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, February 8, 2023.

https://farmdocdaily.illinois.edu/2023/02/biodiesel-and-renewable-diesel-whats-the-difference.html

 

Export
Developments

·        
None reported

 

Wheat

·        
Chicago wheat is
slightly higher, selling off post UUSDA report on poor sales. KC and MN are lower on profit taking. The premium of KC over Chicago was a little overdone over the past week, IMO.

·        
Paris March wheat was down 3.00 euros earlier at 291.75 per ton. 

 

Export
Developments.

·        
Taiwan bought 48,100 tons of various class wheat from the US for March 29-April 12 shipment.

·        
Algeria ended up buying about 360,000 to 390,000 tons of wheat at $329 to $332/ton c&f for April shipment.

·        
Japan in a SBS import tender seeks 70,000 tons of feed wheat and 40,000 tons oof feed barley on Feb 15 for loading by May 31.

 

Rice/Other

·        
Results awaited: Egypt seeks at least 25,000 ton of rice from optional origin April-May shipment.

 

 

USDA Export Sales

Export Sales Highlights  

This summary is based on reports from exporters for the period January 27 – February 2, 2023.

Wheat: 
Net sales of 131,400 metric tons (MT) for 2022/2023 were down 4 percent from the previous week and 56 percent from the prior 4-week average. Increases primarily for Mexico (76,000 MT, including decreases of 300 MT), Colombia (43,600 MT, including 31,600 MT
switched from unknown destinations and decreases of 800 MT), unknown destinations (39,000 MT), Ecuador (28,800 MT, including 19,400 MT switched from unknown destinations), and Japan (26,000 MT), were offset by reductions primarily for South Korea (60,000 MT)
and Iraq (47,900 MT). Net sales of 19,500 MT for 2023/2024 were reported for Colombia (12,500 MT), Mexico (6,500 MT), and Panama (500 MT). Exports of 538,100 MT were up 9 percent from the previous week and 70 percent from the prior 4-week average. The destinations
were primarily to the Philippines (121,100 MT), Mexico (81,300 MT), South Korea (55,200 MT), Iraq (52,100 MT), and Ecuador (45,800 MT).

Corn:  Net sales of 1,160,300 MT for 2022/2023 were
down 27 percent from the previous week, but up 19 percent from the prior 4-week average. Increases were primarily for Japan (388,200 MT), unknown destinations (308,200 MT), Mexico (107,000 MT, including decreases of 28,900 MT), Guatemala (70,800 MT), and Panama
(67,000 MT). Total net sales of 10,000 MT for 2023/2024 were for Japan. Exports of 394,900 MT were down 34 percent from the previous week and 40 percent from the prior 4-week average. The destinations were primarily to Mexico (283,900 MT), Costa Rica (33,200
MT), Canada (26,300 MT), Hong Kong (15,300 MT), and Nicaragua (12,200 MT).

Optional Origin Sales: 
For 2022/2023, new optional sales 100,000 MT were for South Korea. The current outstanding balance of 100,000 MT, all South Korea.

Barley:  No net sales or exports were reported for
the week.

Sorghum: 
Total net sales of 53,000 MT for 2022/2023 were down 52 percent from the previous week and 43 percent from the prior 4-week average. The destination was for China. Exports of 200 MT were down 73 percent from the previous week and 99 percent from the prior
4-week average. The destination was to Mexico.

Rice:  Net sales of 112,800 MT for 2022/2023–a marketing-year
high–were up noticeably from the previous week and from the prior 4-week average. Increases were primarily for Colombia (61,200 MT), Nicaragua (25,000 MT), Japan (13,000 MT), Saudi Arabia (8,500 MT), and Mexico (1,500 MT). Exports of 33,800 MT were up 20
percent from the previous week, but down 7 percent from the prior 4-week average. The destinations were primarily to Japan (13,000 MT), Saudi Arabia (8,900 MT), Jordan (4,700 MT), Mexico (4,200 MT), and Canada (2,200 MT).

Soybeans: 
Net sales of 459,400 MT for 2022/2023 were down 38 percent from the previous week and 49 percent from the prior 4-week average. Increases primarily for China (518,900 MT, including 332,000 MT switched from unknown destinations, 52,000 MT switched from Pakistan,
and decreases of 67,200 MT), Spain (139,600 MT, including 132,000 MT switched from unknown destinations), the Netherlands (85,600 MT, including 77,000 MT switched from unknown destinations), Indonesia (73,800 MT, including 55,000 MT switched from unknown destinations,
300 MT switched from Taiwan, and decreases of 200 MT), and Colombia (26,700 MT, including 12,000 MT switched from unknown destinations and decreases of 1,200 MT), were offset by reductions primarily for unknown destinations (387,000 MT). Net sales of 185,000
MT for 2023/2024 were reported for unknown destinations (132,000 MT) and China (53,000 MT). Exports of 1,828,600 MT were down 7 percent from the previous week and 3 percent from the prior 4-week average. The destinations were primarily to China (1,181,900
MT), Mexico (248,800 MT), Spain (139,600 MT), the Netherlands (85,600 MT), and Indonesia (78,800 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 181,700 MT for 2022/2023 were up 10 percent from the previous week, but down 13 percent from the prior 4-week average. Increases primarily for Colombia (64,900 MT, including decreases of 1,100 MT), South Korea (50,000 MT switched from unknown
destinations), Mexico (34,400 MT, including decreases of 12,700 MT), Canada (25,700 MT), and Honduras (20,800 MT, including decreases of 11,800 MT), were offset by reductions primarily for unknown destinations (42,000 MT), El Salvador (3,000 MT), and Ecuador
(1,500 MT). Total net sales of 900 MT for 2023/2024 were for Canada. Exports of 312,800 MT were up 9 percent from the previous week and 5 percent from the prior 4-week average. The destinations were primarily to Ecuador (53,100 MT), the Philippines (51,500
MT), Chile (49,500 MT), Colombia (33,600 MT), and Denmark (32,700 MT).

Soybean Oil: 
Net sales of 1,900 MT for 2022/2023 were up noticeably from the previous week and up 79 percent from the prior 4-week average. Increases were primarily for the Dominican Republic (1,200 MT). Exports of 2,300 MT were up 51 percent from the previous week and
up noticeably from the prior 4-week average. The destinations were to the Dominican Republic (1,200 MT), Mexico (800 MT), and Canada (300 MT).

Cotton: 
Net sales of 262,800 RB for 2022/2023–a marketing-year high–were up 54 percent from the previous week and 58 percent from the prior 4-week average. Increases primarily for China (87,700 RB, including 200 RB switched from Vietnam), Turkey (72,600 RB, including
decreases of 300 RB), Vietnam (45,300 RB, including 800 RB switched from South Korea), Indonesia (16,600 RB), and Pakistan (14,000 RB, including decreases of 4,200 RB), were offset by reductions for El Salvador (400 RB) and Mexico (300 RB). Net sales of 4,800
RB for 2023/2024 were primarily for Thailand (3,300 RB). Exports of 210,100 RB were down 1 percent from the previous week, but up 17 percent from the prior 4-week average. The destinations were primarily to Pakistan (45,200 RB), Vietnam (42,800 RB), China
(40,300 RB), Turkey (18,900 RB), and Mexico (13,000 RB). Net sales of Pima totaling 1,300 RB for 2022/2023 were down noticeably from the previous week and down 50 percent from the prior 4-week average. Increases were primarily for Vietnam (700 RB) and Bangladesh
(300 RB). Exports of 5,800 RB were down 25 percent from the previous week, but up 4 percent from the prior 4-week average. The destinations were primarily to Vietnam (2,200 RB), India (1,300 RB), China (1,100 RB), South Korea (400 RB), and Turkey (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 15,400 RB were to China (8,300 RB), Turkey (3,800 RB), and
Vietnam (3,300 RB). Exports for own account totaling 12,500 RB to China were applied to new or outstanding sales. The current exports for own account outstanding balance of 117,600 RB are for China (83,900 RB), Vietnam (19,400 RB), Turkey (5,400 RB), Pakistan
(5,000 RB), South Korea (2,400 RB), and India (1,500 RB).

Hides and Skins: 
Net sales of 395,300 pieces for 2023 primarily for China (226,400 whole cattle hides, including decreases of 32,600 pieces), South Korea (109,100 whole cattle hides, including decreases of 3,800 pieces), Mexico (38,500 whole cattle hides, including decreases
of 1,000 pieces), Taiwan (12,400 whole cattle hides, including decreases of 100 pieces), and Turkey (6,100 whole cattle hides), were offset by reductions primarily for Brazil (1,400 pieces) and Vietnam (1,200 pieces). In addition, net sales of 2,200 kip skins
primarily for Belgium (1,400 kip skins), were offset by reductions for China (700 kip skins). Exports of 494,000 whole cattle hides exports were primarily to China (349,200 pieces), Mexico (57,600 pieces), South Korea (34,300 pieces), Thailand (16,300 pieces),
and Brazil (11,300 pieces). In addition, exports of 5,100 kip skins were to China.

 

Net sales of 91,700 wet blues for 2023 were primarily for Thailand (44,200 unsplit), Vietnam (17,400 unsplit), Mexico
(8,800 unsplit), Italy (7,900 unsplit, including decreases of 100 unsplit), and Hong Kong (6,800 unsplit, including decreases of 200 unsplit). Exports of 124,800 wet blues were primarily to Italy (37,400 unsplit and 1,900 grain splits), Vietnam (22,800 unsplit),
Thailand (17,100 unsplit), China (16,500 unsplit), and Hong Kong (13,000 unsplit). No net sales or exports of splits were reported for the week.

 

Beef:  Net sales of 16,400 MT for 2023 were primarily
for South Korea (4,400 MT, including decreases of 400 MT), Japan (3,500 MT, including decreases of 400 MT), Mexico (2,700 MT), Canada (1,400 MT, including decreases of 100 MT), and China (1,400 MT, including decreases of 200 MT). Exports of 15,600 MT were
primarily to Japan (4,800 MT), South Korea (4,400 MT), China (1,900 MT), Mexico (1,200 MT), and Taiwan (900 MT). 

Pork: 
Net sales of 28,800 MT for 2023 were primarily for Mexico (12,700 MT, including decreases of 200 MT), South Korea (4,700 MT, including decreases of 1,200 MT), China (3,400 MT, including decreases of 200 MT), Colombia (1,600 MT, including decreases of 100 MT),
and Australia (1,500 MT). Exports of 30,400 MT were primarily to Mexico (14,000 MT), China (4,600 MT), Japan (3,000 MT), Canada (2,100 MT), and South Korea (2,100 MT).

 

U.S. EXPORT SALES FOR WEEK ENDING  2/2/2023 

 

	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	93.9	894.5	1,936.6	104.6	3,592.2	4,957.6	10.0	101.3
SRW	18.0	634.4	652.4	100.7	1,916.9	1,907.7	9.5	134.1
HRS	47.5	1,167.7	1,182.3	127.6	3,708.2	3,466.2	0.0	49.8
WHITE	-28.9	1,058.9	697.5	174.4	3,017.0	2,379.1	0.0	23.4
DURUM	0.8	83.2	54.6	30.8	228.8	113.1	0.0	1.9
TOTAL	131.4	3,838.8	4,523.4	538.1	12,463.2	12,823.7	19.5	310.5
BARLEY	0.0	4.4	13.8	0.0	7.2	14.7	0.0	0.0
CORN	1,160.3	13,786.7	24,997.3	394.9	13,005.5	20,715.1	10.0	1,437.1
SORGHUM	53.0	490.5	4,112.6	0.2	293.7	2,244.1	0.0	0.0
SOYBEANS	459.4	10,314.0	9,162.9	1,828.6	37,416.9	37,596.8	185.0	903.0
SOY MEAL	181.7	3,018.6	3,226.6	312.8	4,198.1	4,495.4	0.9	53.4
SOY OIL	1.9	18.2	169.4	2.3	25.1	318.2	0.0	0.6
RICE
L G RGH	87.3	172.4	306.7	3.9	249.6	708.4	0.0	0.0
M S RGH	-0.5	10.3	9.6	0.3	16.0	4.1	0.0	0.0
L G BRN	0.0	4.6	19.9	0.2	11.6	28.6	0.0	0.0
M&S BR	0.0	35.7	67.4	0.0	8.4	18.0	0.0	0.0
L G MLD	9.4	143.8	83.8	10.5	350.7	465.4	0.0	0.0
M S MLD	16.5	131.1	180.1	19.0	142.3	216.2	0.0	0.0
TOTAL	112.8	498.0	667.5	33.8	778.6	1,440.8	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	262.8	4,916.8	7,973.2	210.1	4,799.2	4,202.8	4.8	1,261.2
PIMA	1.3	48.6	199.1	5.8	83.1	200.7	0.0	3.5