FI Morning Grain Comments 03/14/23

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 612,000 tons of corn for delivery to China during the 2022-23 marketing year. The soybean complex is mixed with meal leading soybeans lower and soybean oil higher from a reversal in oil share despite lower WTI crude oil. The market
continues to focus on improving weather for South American harvest progress and poor US winter wheat conditions. Grains are mostly lower after a Black Sea grain deal was reached, at least for 60 days.
Wheat has traded two-sided several times since the day session opened. Malaysia
May palm futures were down 61 ringgit (3-week low) to 3,982 and May cash was down $15 at $935.00/ton. Offshore values were leading SBO higher by about 56 points this morning and meal $1.60 short ton higher.

 

Weather

 

WORLD
WEATHER HIGHLIGHTS FOR MARCH 14, 2023

• No
  major changes occurred overnight
• China
  will see frequent rain in the Yangtze River Basin supporting aggressive rapeseed development and some early rice planting
• India
  will experience unsettled shower active from late this week into early next week possibly benefiting a few late season crops, but no serious improvement in yield potential is expected and most of the precipitation should not harm wheat quality
• Eastern
  Australia rainfall is ending and a drier forecast will resume for Queensland and New South Wales over the next ten days
• North
  Africa will see mostly dry weather for another week and then scattered showers will resume and the moisture may be helpful in raising soil moisture for reproduction
• Europe
  weather will continue active in the northwest over the coming week and then wetter for most of the west and northeast
• Southeastern
  Europe is not likely to see much precipitation of significance for a while
• Melting
  snow continues in parts of western Russia and precipitation will be light enough to help reduce flood potentials, but areas of standing water and localized flooding are likely
• Argentina’s
  weather will continue a little too dry for a while longer; some showers are expected, but drought busting rain will be hard to come by for a while
• Brazil
  weather will be less wet for parts of Parana, Sao Paulo and southern Minas Gerais over the next ten days, although rain is still expected periodically
• Center
  west Brazil as well as Tocantins, Maranhao, Piaui, Goias and western Bahia are expected to get some periodic rainfall through the next two weeks maintaining wet field conditions
• U.S.
  hard red winter wheat production areas are not expecting much precipitation for a while, but some shower activity of limited significance is likely

Source:
World Weather, INC.

 

 

Bloomberg
Ag calendar

Tuesday,
March 14:

• EU
  weekly grain, oilseed import and export data

Wednesday,
March 15:

• EIA
  weekly US ethanol inventories, production, 10:30am
• FranceAgriMer
  monthly grains balance sheet
• Malaysia’s
  March 1-15 palm oil export data
• Eurasian
  agri-commodities conference, Kazakhstan, day 1
• Grain
  Export Conference, Paris

Thursday,
March 16:

• IGC
  grains market report
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Eurasian
  agri- commodities conference, Kazakhstan, day 2
• Port
  of Rouen data on French grain exports

Friday,
March 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
• USDA
  cattle on feed

Source:
Bloomberg and FI

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
249,017                 versus   250000-500000  range

Corn                     
999,388                 versus   500000-1225000                range

Soybeans           
618,803                 versus   300000-950000  range

 

Macros

US
CPI Core (Y/Y) Feb: 5.5% (est 5.5%; prev 5.6%)

US
CPI Core (M/M) Feb: 0.5% (est 0.4%; prev 0.4%)

US
CPI (Y/Y) Feb: 6.0% (est 6.0%; prev 6.4%)

US
CPI (M/M) Feb: 0.4% (est 0.4%; prev 0.5%)

US
Real Avg Hourly Earning (Y/Y) Feb: -1.3% (prevR -1.9%)

US
Real Avg Weekly Earnings (Y/Y) Feb: -1.9% (prevR -1.9%)

Canadian
Manufacturing Sales (M/M) Jan: 4.1% (est 3.9%; prev -1.5%)

 

Corn

·        
Corn futures
are lower following weakness in wheat and lack of fresh bullish news outside of USDA confirming China bought a good amount of corn, per USDA 24-hour sales.

·        
Some think the China sales were concluded a week or two ago. 

·        
A selloff in WTI crude oil may add pressure to corn prices.

 

Export
developments.

• USDA
  reported private exporters sold 612,000 tons of corn for delivery to China during the 2022-23 marketing year.
• Algeria
  seeks 35,000 tons of corn for April 1-15 shipment.
• South
  Korea’s MFG group bought 135,000 tons of corn for mid to late Aug shipment. 244.87 US cents over the Sep contract and $309.85/ton c&f was paid. Origin is unknown.
  

 

 

 

Soybeans

·        
Soybeans are lower following weakness in soybean meal. Soybean oil is higher on product spreading (rebound in oil share). Palm oil futures hit a three week low and that may trim gains for soybean oil today.

·        
Malaysia May palm futures were down 61 ringgit to 3,982 and May cash was down $15 at $935.00/ton. 

• China
  soybeans were up down 0.5%, meal down 0.4%, SBO down 1.6% and palm oil futures down 1.7%.

·        
Nearby Rotterdam vegetable oils were
2-20 euros lower from this time yesterday morning and meal 7-9 euros lower.

·        
Offshore values were leading SBO higher by about 56 points this morning and meal $1.60 short ton
higher.

·        
NOPA is due out on Wednesday for February US soybean crush and trade estimate have a wide range for US soybean oil stocks at the end of February. There is a 1,775-2,025 million pounds range for SBO, with an average of 1,886 million,
up 3 percent from 1,829 million at the end of January and compares to 2,059 million a year earlier. Crush is seen at 166.06 million bushels, down from 179.0 million during January and compares to 165.1 million during February 2022. Estimates for the February
2023 crush ranged from 162.000 million to 173.015 million bushels, another wide range.  Look for price reaction post release.  We are under the impression crush could end up slightly below expectations and soybean oil stocks to weigh in if there is a 100+
million pound discrepancy from the 1,886 million pound estimate.

 

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat futures are mixed to after a Black Sea grain deal (good faith) was reached. However, more talks are needed as Russia extended it for only 60 days. Ukraine agreed to continue shipping grain under current guidelines. It’s
uncertain if major importers will risk buying Black Sea grain over the 60 day period.

·        
Vessels are still loading Ukraine grains although inspections are still behind.

·        
US winter wheat conditions fell for OK and Texas from the previous week. Rain is need for the lower US. Central and northern areas are in good shape.

·        
Paris May wheat was lower by 2.50 euros earlier at 264.50 per ton.

 

Export
Developments.

·        
Algeria bought at least 540,000 tons of wheat for May shipment. Most of it was bought at $312/ton c&f.

·        
Japan seeks 73,518 tons of food wheat later this week from US, Canada, and Australia.

·        
Results awaited: Tunisia saw offers for 234,000 tons of soft milling wheat for March 20-May 30 shipment. $292 per ton was believed to be the lowest price.

·        
Jordan bought 60,000 tons of milling wheat (120k sought), optional origin, for shipment during Aug 1-15, at an estimated $309.75 a ton c&f.

·        
Jordan seeks up to 120,000 tons of feed barley on March 15. Possible shipment combinations are for Aug. 1-15, Aug. 16-31, Sept. 1-15 and Sept. 16-30.

 

Rice/Other

·        
South Korea seeks 121,800 tons of rice, most of it from China, on March 21.