FI Morning Grain Comments 02/13/23

PDF attached

 

Good
morning.

 

Last
day of the Goldman Roll. USD was slightly higher, WTI crude oil lower and US equities mixed. The soybean complex is mixed. Soybeans turned mixed. Meal is higher from strong US cash prices. Product spreading is dragging SBO lower. Weekend
rains for Argentina were patchy. The US Attaché lowered Argentina’s corn production estimate to 45 MMT. Grains are lower in part to profit taking.
News
is light. AFS was detected in Hong Kong.

 

 

 

Weather

Weather
forecasts improved from late last week for the US and Brazil. Argentina was about unchanged. Weekend rains are debatable for Argentina. The trade will be monitoring Brazil this week with ongoing planting and harvesting delays from too much rain. However, the
Brazil second corn crop planting progress did advance last week and may weigh on US corn futures. Mato Grosso, MGDS, south Minas, Sao Paulo, Parana, Santa Catarina, and north RGDS will all see rain this week. Argentina rain should favor Cordoba, Santa Fe,
Enter Rios, Buenos Aires through Tuesday. Far western US Great Plains will see snow this week, which includes eastern CO and KS.

 

Source:
World Weather and FI

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR FEBRUARY 13, 2023

• Despite
  good rain coverage in central and southern Argentina overnight the region is not likely to get a huge amount of drought relief.
  
• Rain
  that fell overnight was greatest in southeastern Buenos Aires and in a small part of west-central and southwestern Cordoba while less rain fell in west-central Buenos Aires.
  
• Additional
  rain will fall in western Cordoba later this week and today’s rain may linger a while in east-central Buenos Aires.
  
• Not
  much additional relief is expected in central or southern Argentina this week, despite the rain noted above
  
• Some
  additional rain will fall from Cordoba northward into Salta and that will be welcome, but other areas to the east and south my not see much more moisture for a while and topsoil conditions were depleted of moisture Sunday before the rain began while subsoil
  moisture was still favorable to support some crops in the west and south
• Hot
  and dry conditions during the weekend led to strong drying across Argentina during the weekend raising crop stress in most areas even though subsoil moisture was still favorable in a part of the west and south
  
• Temporary
  relief from these conditions occurred Sunday and overnight
• Brazil’s
  Mato Grosso experienced a little better harvest and planting weather last week and during the weekend, but rainy weather will soon be returning
• Brazil’s
  interior south will be wettest this week delaying fieldwork and crop maturation
  
• Brazil’s
  greatest rain will shift northward after this workweek eventually returning some drier weather to the west and southern parts of the nation
• U.S.
  hard red winter wheat areas will get some needed moisture tonight into Thursday
• No
  drought busting event is expected, but the moisture will be welcome and should improve topsoil moisture
• U.S.
  Midwest, Delta, Tennessee River Basin and southeastern states will all get moisture at one time or another during the next two weeks
  
• Cold
  air will build up in Canada’s Prairies and the north-central, U.S. during the next ten days while warm weather occurs this week in the eastern U.S.
  
• Western
  Europe will continue drier biased for the next ten days, but some moisture will occur in the central and east this weekend into next week
• China’s
  recent rain was great for rapeseed and wheat production areas
• India
  will stay quite dry for the next ten days to two weeks
• Eastern
  Australia will continue to experience below average precipitation through the next ten days leaving dryland sorghum and cotton areas in need of more moisture
• Eastern
  South Africa will continue plenty wet over the next two weeks

Source:
World Weather and FI

 

Bloomberg
Ag calendar

Monday,
Feb. 13:

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

• USDA
  export inspections – corn, soybeans, wheat, 11am

Tuesday,
Feb. 14:

• France
  farm ministry’s report on output in 2022 and winter plantings in 2023
• New
  Zealand food prices
• EU
  weekly grain, oilseed import and export data

Wednesday,
Feb. 15:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysia’s
  Feb. 1-15 palm oil export data
• FranceAgriMer’s
  monthly grains balance sheet report

Thursday,
Feb. 16:

• International
  Grains Council’s monthly report
• USDA
  weekly net- export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Russia
  Grain Conference, Sochi

Friday,
Feb. 17:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• FranceAgriMer’s
  weekly crop conditions reports

Source:
Bloomberg and FI

 

 

 

 

Macros

 

Corn

·        
CBOT corn is
lower following weakness in US wheat prices and advancing Brazil second corn crop planting progress. WTI crude oil was trading 48 cents lower earlier.

·        
Today is the last day of the Goldman Roll.

·        
CBOT corn open interest was up a large 25,381 contracts on Friday. Recall March corn rallied 9.75 cents with March OI down 12,144 and May increased 9.25 cents to 678.25/bu with OI up 26,003 contracts.

·        
100 pigs at a Hong Kong farm were culled after African Swine Fever was detected at a farm in Sheung Shui. 32 pigs tested positive. 

·        
Ukraine grain exports fell 28.7% so far for the 2022-23 season to 29.2 million tons, including 16.7 million tons of corn, 10.4 million tons of wheat and 1.9 million tons of barley. Exports at this time last year were 40.9 million
tons, and likely to shrink even further for 2023-24 as producers shift acreage to sunflowers away from grains. Ukraine grain production is expected to drop this summer as the conflict presents challenges to secure fuel, fertilizer and other resources.

·        
AgRural reported 25% of Brazil’s second corn area had been planted in the center-south region as of Thursday, up from 12% a week earlier but below the 42% seen a year ago.

·        
USDA Attaché lowered their estimate for the Argentina corn crop to 45 million tons, down 7 million tons from previous and compares to USDA official of 47 million ton February estimate. For comparison, BA Grains Exchange is at
44.5 million tons. https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Buenos%20Aires_Argentina_AR2023-0001

 

 

Export
developments.

• None
  reported

 

EIA
forecasts U.S. refinery utilization to average more than 90% in 2023 and 2024

https://www.eia.gov/todayinenergy/detail.php?id=55499&src=email

 

Soybeans

·        
CBOT soybeans are
mixed (bear spreading). They were higher earlier from strength in soybean meal. US domestic soybean meal demand remains robust, with ECB cash prices trading at a premium over the March contract. Cash meal prices for the WCB are below ECB levels, but also strong.
Soybean oil is lower from product spreading and lower outside markets.

·        
Argentina is expected to receive beneficial rain this week before net drying sets in again.

·        
AgRural reported Brazil soybean harvest progress as of late last week increased to 17 percent, below 24 percent at this time year ago. They have a 152.9 million ton production estimate.

·        
11 soybean registrations were cancelled Friday evening, leaving 588 left.

·        
CBOT soybean open interest was up 11,762 contracts on Friday. March was down 9,318 and May contract up 15,540 lots.

·        
China looks to boost 2023 soybean production by using a larger amount of high yield varieties. No details were provided. China also looks to reduce soybean meal use for feed. China’s potential for corn and soybean yields to expand
is large, in our opinion, when comparing trend yields for the US and SA.

 

 

·        
ITS reported Malaysian palm oil exports during the Feb 1-10 period at 345,080 tons, a 39 percent increase from the same time month earlier. SGS reported a 23.3 percent increase to 323,280 tons. AmSpec reported February 1-10 Malaysia
palm oil export increased 32.51% to 312,092 tons from 235,529 tons shipped during Jan 1-10.

·        
Palm oil futures fell for the third consecutive session despite Indonesia’s move to restrict palm oil exports. Traders cited weakness in outside markets.

·        
Malaysia April palm futures were down 8 ringgit to 3923 and cash was down $7.50/ton to $952.50/ton. 

·        
China soybeans decreased 0.3%, meal up 1.0%, SBO up 0.1% and palm oil futures down 0.2%.

·        
Nearby Rotterdam vegetable oils were
mostly 5 to 15 euros higher from this time Friday morning
and meal was $3.80 higher.

·        
Offshore values were leading SBO lower by about 117 points this morning and meal $3.80 short ton
higher. 

 

Export
Developments

·        
Last week the USDA bought 2.093 million pounds of vegetable oil in support of Child Nutrition and other domestic food distribution programs, according to TNS.

 

 

 

Wheat

·        
US wheat futures are lower as traders examine the Black Sea conflict situation as the one year anniversary nears (February 24). Fighting remains intense. The IMF may put together a new loan package for Ukraine. Profit taking this
morning in wheat could be in play. The far western Great Plains have an opportunity for precipitation this week, including snow for eastern CO and KS.

·        
China sold 139,150 tons of wheat out of reserves, or 100 percent of what was offered, at an average selling price of 2,888 yuan per ton.

·        
India this week may roll out additional measures to cool inflation which may include tightening exports to control wheat prices.  Last week they said they may extend the wheat export ban. The current ban was scheduled to be reviewed
in April. Reuters noted India wheat stocks at government warehouses dropped 47.9% to 17.2 million tons on Jan. 1, the lowest for the month in six years.

·        
Paris March wheat was down 1.75 euros earlier at 295.25 per ton. 

·        
IKAR reported 12.5% protein Russian wheat prices, FOB, from Black Sea ports, were up $1 from last week to $298 per ton.

 

Export
Developments.

·        
The Philippines bought 110,000 tons of feed wheat from Australia at around $332/ton c&f and $335/ton for June and July 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

·        
The Philippines are in for sugar.