FI Morning Grain Comments 02/23/22

PDF attached

 

Good
morning. 

 

US
equities are higher, USD lower and WTI crude lower in the spot month.  Corn is mixed and Chicago and KC wheat turned higher. Global vegetable oil prices are leading the soybean complex higher led by uncertainty over Ukraine sunoil supplies, which has around
a 75 percent sunoil global export market share. CBOT soybeans reached their highest level since mid-May, up 5 consecutive sessions. Dry weather for SA is still a big factor behind soybeans.

 

The
USDA Agriculture Forum will be held Thursday and Friday and the trade will get a glimpse of 2022 US supplies on Thursday, followed by full S&D’s Friday morning.
https://www.usda.gov/oce/ag-outlook-forum

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR February 23, 2022

• Rain
  prospects are improving for northwestern Africa during the next ten days.
• The
  moisture is needed to improve the prospects for wheat and barley after a long, drier-than-usual, winter. 
  
• Ivory
  Coast and Ghana, coffee and cocoa areas also have an improving chance for rain during the coming week, although no big soaking is expected.
  
• Moisture
  is needed to induce flowering of the main season crops.
• Europe
  and Asia still have a low potential  crop threatening cold during the next ten days.
  
• Bitter
  cold in the U.S. has been of some interest this week with temperatures this morning slipping into the positive single digits Fahrenheit as far south as the northern Texas Panhandle where temperatures were in the 60s and 70s Fahrenheit just a few days ago.
  
• Subzero-degree
  temperatures this morning were noted as far south as western Kansas and eastern Colorado with extremes in the -20s and negative teens in portions of the northern Plains.
  
• Bitter
  cold will prevail in the central United States through the end of this week, but warming is expected during the weekend and especially next week.
  
• Only
  a small portion of the Great Plains cold will reach the eastern U.S. 
• A
  weather pattern change will occur in contiguous United States next week with a southwest to northeast airflow pattern across the nation. 
  
• That
  change will bring waves of rain across the eastern and southern Plains and into the Midwest and northeastern states maintaining concern over flooding in the lower Midwest, northern Delta and Tennessee River Basin.
  
• Some
  of these wetter areas will receive rain over the next couple of days increasing flood conditions after rain already occurred this week.
  
• Some
  of next week’s rain may impact the eastern hard red winter wheat areas, but the High Plains region, including West Texas, will likely be missed.
  
• In
  South America today, there is not much change from that of Tuesday.
• Most
  of Argentina, Uruguay, far southern Paraguay and far southern Brazil will get rain in this first week of the outlook, but interior southern Brazil will be dry until the second half of next week.
  
• Northern
  Brazil is still expected to move away from the excessive rainfall pattern of late allowing better crop maturation and harvest conditions to evolve.
  
• Worry
  will remain for another week over Safrinha corn in Mato Grosso do Sul, western and northern Parana and interior southern  Paraguay due to some ongoing dryness, but relief is expected next week. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Wednesday,
Feb. 23:

• USDA
  total milk production, 3pm
• EARNINGS:
  IOI Corp.
• HOLIDAY:
  Japan, Russia

Thursday,
Feb. 24:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  corn, cotton, soybean and wheat acreage outlook, 8:30am
• EIA
  weekly U.S. ethanol inventories, production, 11am
• U.S.
  red meat production, 3pm

Friday,
Feb. 25:

• ICE
  Futures Europe weekly commitments of traders report, ~1:30pm
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• USDA
  corn, cotton, soybean and wheat end-stockpile outlook, 8:30am
• FranceAgriMer
  weekly update on crop conditions
• Malaysia’s
  Feb. 1-25 palm oil exports
• U.S.
  cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

USDA
inspections versus Reuters trade range

Wheat
539,366 versus 200000-475000 range

Corn
1,576,666 versus 1000000-1750000 range

Soybeans
975,102 versus 900000-1250000 range

 

Macros

Moscow
Will Give Strong Response To New US Sanctions – RIA Cites Russian Foreign Ministry

 

 

Corn

·        
CBOT corn is lower led by the spot month from light technical selling and improving SA weather.  World Weather noter most of Argentina, Uruguay, far southern Paraguay and far southern Brazil will get rain in this first week of
the outlook. Interior southern Brazil will be dry until the second half of next week. Northern Brazil is still expected to improve with less rain, allowing for soybean harvest followed by corn plantings. 

·        
US equities are higher, USD down 10 points and WTI lower in the nearby.   

·        
Argentina will see rain will develop late today and Thursday in much of the central and south growing areas.

·        
Reminder early Friday, USDA releases 2022-23 US S&D’s.  Some acreage numbers will be out Thursday.  March Intentions estimates should be a hot topic from late this week until release. 

·        
USDA US corn export inspections as of February 17, 2022 were 1,576,666 tons, within a range of trade expectations, above 1,455,693 tons previous week and compares to 1,277,332 tons year ago. Major countries included
China for 555,267 tons, Japan for 388,089 tons, and Mexico for 314,291 tons.

 

Export
developments.

• Taiwan’s
  MFIG seeks up to 65,000 tons of corn which from the United States, Brazil, Argentina or South Africa, on Friday, Feb. 25, for shipment between May 1 and early June shipment, depending on origin. 
  

 

 

 

Soybeans

·        
CBOT soybeans reached their highest level since mid-May, up 5 consecutive sessions. Dry weather for SA is still a big factor behind soybeans.  Brazil soybean premiums jumped yesterday.

·        
Global vegetable oil prices are leading the soybean complex higher led by uncertainty over Ukraine supplies, which has around a 75 percent sunoil global export market share.

·        
CBOT soybean oil hit its highest level since June 2021, on a monthly rolling basis. 

·        
Not all vegetable oil markets rallied on Wednesday. 

·        
Meal is following soybeans higher.

·        
Argentine producers sold 39.2 million tons of soybeans from the 2020-21 season, up 368,200 tons from previous week and down from 40.7 million year ago.  

·        
China’s AgMin again announced they intend to expand soybean plantings by utilizing “every patch of land.”  No figures were provided. 

·        
Rotterdam meal was 10-40 euros higher and vegetable oils 1-10 euros higher from this time yesterday.

·        
The Malaysian Palm Oil Association estimated palm production during Feb. 1-20 fell 1.79% from the month before. (Reuters)

·        
Palm oil futures hit a record high overnight.  May Malaysian palm oil was up 142 ringgit, to 5,982 ringgit a ton. 

·        
China soybeans were down 0.3%, meal up 0.6% and vegetable oils mixed with soybean oil 1.0% lower and palm up 2.5%. 

·        
Offshore values are leading SBO 157 points lower and meal $0.80 short ton higher.

·        
USDA US soybean export inspections as of February 17, 2022 were 975,102 tons, within a range of trade expectations, below 1,160,320 tons previous week and compares to 804,038 tons year ago. Major countries included China for 304,170
tons, Egypt for 219,531 tons, and Mexico for 127,280 tons.

 

Export
Developments

• Turkey
  bought 6,000 tons of sunflower oil at an estimated $1,474.90/ton c&f for March 2-25 shipment.
  

 

Wheat

·        
US wheat was mixed with nearby Chicago and KC reversing losses to trade higher early this morning. Uncertainty over Russia/Ukraine situation should continue to create a volatile trade environment. 

·        
US winter wheat conditions, already at low levels for the combined good/excellent categories, declined for selected key states from a month ago (Texas declined from previous week).  See attachment. 

·        
May EU wheat futures that were trading up 3.25 euros at 287.75 euros per ton at the time this was written.

·        
Ukraine’s grain harvest increased 32 percent in 2021 to 85.68 million tons, according to state statistics.

·        
USDA US all-wheat export inspections as of February 17, 2022 were 539,366 tons, above a range of trade expectations, above 459,337 tons previous week and compares to 324,597 tons year ago. Major countries included Japan for 90,633
tons, Mexico for 70,096 tons, and Taiwan for 56,328 tons.

 

Bloomberg
noted the following winter wheat conditions (table attached)

• Kansas
  winter wheat rated good or excellent fell by 4 percentage points from last month
• Oklahoma
  conditions fell by 7 points to 9% good/excellent from last month
• Texas
  conditions fell by 11 points from the previous week

 

Reuters
table for Ukraine below.

 

Export
Developments.

·        
Jordan’s state grain buyer passed on 120,000 tons of milling wheat, optional origins. Shipment as follows: 60,000 ton consignments, for July 16-31, Aug. 1-15, Aug. 16-31 and Sept. 1-15.

·        
Jordan seeks 120,000 tons of feed barley on March 1. 

 

Rice/Other

·        
South Korea seeks 72,200 tons rice from U.S. and Vietnam on Feb. 25.