FI Morning Grain Comments 02/21/23

PDF attached

 

Good
morning.

 

After
a one-day holiday for the US, CBOT soybeans, meal, corn, and high protein wheat futures are all stronger. Weather concerns and ongoing Ukraine/Russia conflict concerns continue to underpin prices. Argentina’s southern and parts of central growing areas saw
frost over the weekend. Chicago wheat was lower at the break on light fund selling and lower Paris wheat. Soybean oil was lower on meal/oil spreading despite a higher trade in WTI April crude oil futures by 47 cents. The USD was up 19 points and US equities
pointing towards a lower open. Russia announced they suspended their participation in the nuclear arms treaty with the US. President Biden started a meeting with Poland’s president and some other NATO officials. Argentina is closed for holiday (Carnival).
Later this week, talks will begin over the extension of the grain corridor export deal, about the same time of the one-year invasion anniversary. USDA will release selected US 2023 initial planting estimates on Thursday. India will soon offer 2 million tons
of wheat from reserves to help cool inflation. Algeria is in corn. SK bought additional corn. Egypt is in for vegetable oils and wheat. Jordan bought wheat. Palm oil futures snapped a three-day rally on Tuesday. Offshore values were leading SBO higher by about
120 points this morning and meal $0.60 short ton higher. 

 

 

 

Estimate
of fund positions

 

Weather

Not
much in the way of changes to the North and South American weather forecasts from that of late last week. Argentina’s outlook did turn slightly unfavorable. Over the weekend, Argentina’s Cordoba, parts of La Pampa, San Luis and northwestern BA saw frosts that
impacted corn and soybeans. It will take some time to figure out the extent of the damage. Light rain will favor Cordoba, Santa Fe, Entre Rios, southeast Buenos Aires Wednesday. Brazil’s Mato Grosso, Goias, south Minas, Sao Paulo, MGDS, Parana, and Santa Catarina
through Saturday. The US will see multiple weather warnings/watches this week coast to coast. The upper US ECB will see a winter storm through Thursday. Snow is expected to fall across north NE, north CO Wed, rain in east KS, east OK, east TX, and then rain
for east OK Friday through Saturday.

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR FEBRUARY 21, 2023

• Frost
  occurred Saturday morning in Argentina’s summer grain and oilseed production areas
• Most
  of the frost was soft and did not have a big impact on crops, but there were exceptions, and an assessment of the damage will come later this week
• Western
  Cordoba and east-central San Luis took the brunt of the coldest conditions and soybeans were likely impacted more than corn with extreme lows slipping near and slightly below freezing in several areas, but mostly along the western fringes of crop country
• In
  the meantime, southern Argentina will continue drier than usual for much of the next week with limited rainfall continuing out ten days
• Northern
  Argentina will get some needed rain
• Brazil
  weather has changed little from that of late last week with waves of rain to disrupt soybean harvesting and Safrinha crop planting
• Mato
  Grosso weather should improve after turning wetter during the Friday through Monday period
• Bitter
  cold is expected in Canada and a part of the far northern U.S. Plains this week
• Temperatures
  will be very warm in the southeastern U.S. and Delta this week
• Heavy
  snow is expected from southwestern Alberta through central Montana and Wyoming through south Dakota and parts of Nebraska to the Great Lakes region this week
• West-central
  and southwestern U.S. Plains will stay dry this week as will much of South Texas and the Texas Coastal Bend
• North
  Africa precipitation may slowly improve over the next ten days along with that in western Europe
• India
  will continue quite dry and warmer biased over the next ten days
• China
  weather will be relatively tranquil for a while
• Eastern
  Australia rain will continue mostly near the coast leaving areas to the west in need of rain
• South
  Africa will be wettest in the northeast

Source:
World Weather and FI

 

Bloomberg
Ag calendar

Tuesday,
Feb. 21:

• Suspended
  until February 24 – CFTC commitments of traders

• National
  Farmers’ Union Conference, Birmingham, UK, day 1
• Grain
  Forum Dubai 2023, day 1
• New
  Zealand global dairy trade auction
• USDA
  export inspections – corn, soybeans, wheat, 11am
• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  Argentina, Bangladesh

Wednesday,
Feb. 22:

• National
  Farmers’ Union Conference, Birmingham, day 2
• Grain
  Forum Dubai 2023, day 2
• USDA
  total milk production, 3pm
• US
  poultry slaughter, 3pm

Thursday,
Feb. 23:

• USDA’s
  acreage outlook for corn, soy, wheat and cotton
• The
  USDA’s Agricultural Outlook Forum, Arlington, day 1
• EIA
  weekly US ethanol inventories, production, 10:30am
• Port
  of Rouen data on French grain exports
• Sugar
  production and cane crush data from Brazil’s Unica (tentative)
• USDA
  red meat production, 3pm
• HOLIDAY:
  Russia

Friday,
Feb. 24:

• USDA’s
  full outlook for corn, soy, wheat and cotton

• The
  USDA’s Agricultural Outlook Forum, Arlington, day 2
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• 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
• US
  cattle on feed, 3pm
• US
  cold storage data for beef, pork and poultry, 3pm

Source:
Bloomberg and FI

 

 

 

 

 

 

Soybean
and Corn Advisory

2022/23
Argentina Soybean Estimate Lowered 2.0 mt to 34.0 Million

2022/23
Brazil Soybean Estimate Unchanged at 151.0 Million Tons

2022/23
Argentina Corn Estimate Unchanged at 43.0 Million Tons

2022/23
Brazil Corn Estimate Unchanged at 123.0 Million Tons

 

Macros

US
Philadelphia Fed Non-Manufacturing Activity Feb: 3.2 (prev -6.5)

Philadelphia
Fed Non-Manufacturing Firm-Level Business Activity Index 15.8 In Feb VS 12.7 In Jan

Philadelphia
Fed Non-Manufacturing New Orders Index 6.2 In Feb VS 10.8 In Jan

Philadelphia
Fed Non-Manufacturing Full-Time Employment Index 15.9 In Feb VS 16.5 In Jan

Philadelphia
Fed Wage And Benefit Cost Index 44.2 In Feb VS 46.1 In Jan

Canadian
CPI NSA (M/M) Dec: 0.5% (est 0.7%; prev -0.6%)

Canadian
CPI (Y/Y) Dec: 5.9% (est 6.1%; prev 6.3%)

Canadian
CPI Core Median (Y/Y) Dec: 5.0% (est 4.9%; prevR 5.2%)

Canadian
CPI Core Trim (Y/Y) Dec: 5.1% (est 5.2%; prevR 5.3%)

Canadian
Retail Sales (M/M) Dec: 0.5% (est 0.5%; prev -0.1%)

Canadian
Retail Sales Ex Auto (M/M) Dec: -0.6% (est -0.1%; prevR -0.5%)

 

Corn

·        
CBOT corn futures
are higher from strength in soybeans and Argentina crop concerns after frosts developed across Cordoba, parts of La Pampa, San Luis and northwestern BA.

·        
Argentina reported additional cases of bird flu over the weekend in the province of Cordoba.

·        
China plans to set aside 660,000 hectares for GMO corn test plots in 2023.

·        
Hedgepoint sees the Brazil total corn crop at 126.2 million tons. Conab is at 123.74 million tons. USDA is currently at 125.0 million tons versus 116 MMT year earlier.

·        
On February 24 USDA NASS will issue 2023-24 US S&D and selected world (exports, etc.) projections. This report may have some impact on new-crop futures prices.
https://www.usda.gov/oce/ag-outlook-forum

·        
Live cattle futures are trading near an 8-year high from smaller supplies.

 

CBOT/CME
selected meats versus feeds, in US cents per pound, weekly since Q3 2020

Source
Reuters and FI

 

Export
developments.

• Algeria’s
  ONAB seeks 30,000-40,000 tons of corn from Argentina on February 22 for shipment by April 10.
  
• South
  Korea’s MFG group bought 60,000 tons of corn, optional origin, at $337.99/ton c&f for arrival around June 6.
  
• South
  Korea’s FLC group bought 65,000 tons of corn, optional origin, at $335.49/ton c&f for arrival around June 3.
  
• Last
  Friday South Korea’s NOFI group bought 68,000 tons of corn out of 138k sought, optional origin, for June shipment at an estimated $336.72/ton c&f.
  

 

Soybeans

·        
CBOT soybeans are
sharply higher led by soybean meal from SA weather concerns. Soybean oil is lower on product spreading and break in SA premiums from Friday despite higher WTI crude oil.

·        
Frosts hit southern and parts of central Argentina over the weekend, threatening crop conditions. It will take some time to see what damage it caused, is any.

·        
Outside vegetable oil prices were higher Monday on talk about China economic recovery. Mineral oil prices were also higher by late Monday morning.

·        
Brazil’s Rio Grande do Sul will see scattered showers through Wednesday and Thursday (bias northern areas).

·        
AgRural reported 25 percent of the soybean crop had been harvested as of February 16, up 8 points from the previous week and compares to 33 percent year earlier. They are using a 150.9 million ton harvest.

·        
Hedgepoint sees the Brazil soybeans crop at 150.9 million tons. Conab is at 152.89 million. USDA is currently at 153.0 million tons versus 129.5 MMT year earlier.

·        
Cargo surveyor SGS reported Malaysia February 1-20 palm oil shipments at 712,740 tons, up 8.8 percent from the Jan 1-20 period of 654,888 tons. ITS reported Malaysian palm oil exports for the February 1-20 period at 784,105 tons,
up 33.1% from the same period last month. AmSpec reported 723,482 tons from 566,561 tons previous period last month, up 27.7 percent.

·        
Palm oil futures snapped a three day rally on Tuesday. Over a two-day period,
Malaysia
May palm futures were up 10 ringgit to 4,141 and May cash was up $2.50/ton to $975/ton.  4,196 is seen as a good resistance level.

Monday
changes

Two
day changes

 

·        
Over a two-day period, China
soybeans decreased 0.1%, meal up 0.9%, SBO up 0.8% and palm oil futures up 1.2%.

Monday
changes

Two
day changes

 

·        
Over a two-day period, Nearby
Rotterdam vegetable oils were
higher by about 7.50-25.00 euros from this time Friday morning
and meal lower by 4-6 euros for Argentina and 1.50-2.00 lower for Brazil.

·        
Offshore values were leading SBO higher by about 120 points this morning and meal $0.60 short ton
higher. 

 

Export
Developments

·        
Egypt’s GASC) seeks vegetable oils ion February 23 for arrival April 1-20, for payment via 180-day letters of credit and at sight. They are also in for at least 3,000 tons of local soybean oil and 1,000 tons of local sunflower
oil for delivery April 5-25.

·        
Last Friday South Korea’s NOFI group bought 60,000 tons of soybean meal at an estimated $576.80/ton from the US or SA for June arrival.

 

Wheat

·        
Chicago wheat futures were
lower at the break while higher protein wheat remained higher. Black Sea shipping concerns are underpinning KC and MN type wheat. Results are awaited for Egypt in for wheat.

·        
India will soon offer 2 million tons of wheat from reserves to help cool inflation.

·        
Paris wheat traded two-sided on Monday, ending unchanged. Today it was 2.75 euros lower basis the May position at 289.25 euros per ton. Traders were shoring up positions ahead of the Black Sea negotiations to extend the grain
deal that will start later this week between Turkey, Ukraine, and Russia, among other officials.

·        
The US Great Plains and southern EU are still in need of rain.

·        
Ukraine grain exports for the week ending February 19 fell to 760,189 tons versus 1.14 million tons previous week.

·        
Ukraine grain exports crop year to date were 30.3 million tons, down 29 percent from the same period previous season. Wheat of 10.8 MMT are down 39%, corn at 17.4 million tons or 7 percent below year earlier and barley down 64
percent to 1.9 MMT.

·        
Russian 12.5% protein wheat prices FOB Black Sea were up $1.00 last week to $299/ton, according to IKAR. Exports increased to 730,000 tons from 540,000 tons previous week.

·        
Russia’s president said total 2022-23 grain exports could reach into the 55-60 million tons range.

·        
China sold 100 percent of the 141,771 tons of wheat offered from reserves on February 15 at an average price of 2,848 yuan per ton.

·        
India raised its old crop wheat production estimate from 106 million tons to 107.7 million tons, without providing a reason.

·        
Over a two-day period, Paris May wheat was down 2.75 euros earlier at 288.75 per ton.

 

Export
Developments.

·        
Jordan’s state grain buyer bought about 60,000 tons of optional origin milling wheat at $333/ton c&f for shipment between July 1-15. 

·        
Egypt’s GASC seeks wheat funded by the World Bank on February 22 for April 1-15 shipment. They are in for cargoes of 30,000, 40,000 or 50,000, 55,000, or 60,000 tons plus or minus 5% from the last crop for supply C&F. 

·        
Japan seeks 94,387 tons of food wheat later this week.

·        
Jordan’s state grain buyer seeks up to 120,000 tons of optional origin feed barley on Feb. 22 for shipment between June 1-15, June 16-30, July 1-15 and July 16-31.

 

Rice/Other

·        
None reported