FI Morning Grain Comments 03/15/23

PDF attached

 

Good
morning.

 

EIA
ethanol and NOPA crush are due out today. USDA: Private exporters reported sales of 667,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.

 

Negative
financial headlines are sending global equities lower this morning, spilling over into the commodity markets. The soybean complex and grains sold off earlier this morning after trading two-sided overnight. WTI crude oil was down $1.76 earlier and USD screaming
higher by 106 points. No major developments were seen overnight regarding the Black Sea grain deal.
Soybeans are lower on outside commodity selling and higher USD. Meal is gaining on soybean oil.
Palm oil futures ended a 3-day losing streak from an improvement in palm shipments. Malaysia May palm futures were up 35 ringgit to 4,017 and May cash was up $10 at $945.00/ton. Offshore values were leading SBO lower by about 76 points this morning and meal
$2.80 short ton lower. Corn futures turned higher for the nearby contracts on late overnight buying after wheat futures rallied.
CFTC Commitment of Traders as of February 28 showed a huge net long reduction in corn. A Bloomberg poll looks for weekly US ethanol production to be up 10,000 thousand barrels to 1020k (1013-1025 range)
from the previous week and stocks up 58,000 barrels to 25.378 million. China plans to auction off 140,000 tons of wheat from state reserves on March 22.

 

 

Weather

The
US and South American weather forecast were mostly unchanged from that of yesterday. For Argentina, heat and dryness will mainly prevail this week. Light rain does favor Santa Fe, Entre Rios, east Buenos Aires today, and La Pampa, southwest Buenos Aires this
weekend. Brazil will see additional showers for the central and southern areas this week. US temperatures are warming up.

 

 

WORLD
WEATHER HIGHLIGHTS FOR MARCH 15, 2023

• Negative
  PDO remains strong and has been strengthening in the past few weeks which may prove important for U.S. weather this summer
• U.S.
  hard red winter wheat production areas are still not advertised to receive much precipitation of significance during the next two weeks, although some light precipitation is expected infrequently
• South
  Texas, the Texas Coastal Bend and northeastern Mexico have a good chance for rain next week, although frequent follow up precipitation will be needed to ensure the best planting, emergence and establishment conditions for corn, sorghum and cotton
• West
  Texas weather will remain limited on rain for a while, although totally dry weather is not likely
• U.S.
  Delta and southeastern states will get enough precipitation to support spring planting and early season crop development
• Cool
  temperatures will limit snow melt across the northern Plains and upper Midwest leaving concern over increasing snowpack and spring flood potential
  
• A
  snowstorm in the upper Midwest will produce 3 to 9 and local 11 inches of snowfall Thursday from southeastern South Dakota and northeastern Nebraska into much of Minnesota
• Canada’s
  Prairies are unlikely to see substantial new snowfall in the next ten days
• Argentina
  weather will continue drier than usual in the heart of the nation while some showers and thunderstorms occur in the perimeter of crop country
  
• Limited
  rainfall from northern Rio Grande do Sul through Parana and to Minas Gerais will induce better harvest and planting weather, but rain will fall abundantly in center west Brazil
  
• India’s
  shower activity in the next two weeks could raise some worry over crop quality in a few of the wetter areas, but the moisture will be good for late season rice and sugarcane development in the southeast and the lower Ganges River Basin
  
• Snowmelt
  continues in western Russia and neighboring areas with some waves of snow and rain are still expected
  
• China’s
  Yangtze River Basin will still receive the most significant moisture in China over the next two weeks favoring long term rapeseed development
• Limited
  rain will occur in the North China Plain and northern half of the Yellow River Basin – which is normal for this time of year
• Eastern
  Australia’s summer crop areas will be dry biased for the next ten days and perhaps longer
• North
  Africa is still much drier than usual, but a few showers of limited significance will evolve in the coming week to ten days without providing much lasting change in soil moisture
• Europe
  will be wettest in the west and north allowing southeastern areas to dry down
• Eastern
  Spain and the lower Danube River Basin remain notably drier biased

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

 

 

 

CFTC
Commitment of Traders as of February 28

Huge
net long reduction in corn was posted this week. We will monitor the website if there is a correction. Corn saw a large crop in open interest. Funds for soybean meal did not post a new net record long position for futures only and futures & options combined.

 

 

 

 

Macros

Canadian
Housing Starts Feb: 244.0K (exp 220.0K; prev 215.4K)

US
Retail Sales Advance (M/M) Feb: -0.4% (exp -0.4%; prev 3.0%)

Retail
Sales Ex-Auto (M/M) Feb: -0.1% (exp -0.1%; prev 2.3%)

Retail
Sales Ex-Auto And Gas Feb: 0.0% (exp -0.2%; prev 2.6%)

US
PPI Final Demand (M/M) Feb: -0.1% (exp 0.3%; prev 0.7%)

PPI
Ex Food And Energy (M/M) Feb: 0.0% (exp 0.4%; prev 0.5%)

PPI
Final Demand (Y/Y) Feb: 4.6% (exp 5.4%; prev 6.0%)

PPI
Ex Food And Energy (Y/Y) Feb: 4.4% (exp 5.2%; prev 5.4%)

US
Empire Manufacturing Mar: -24.6 (exp -7.9; prev -5.8)

Retail
Sales Ex-Auto (M/M) Feb: -0.1% (exp -0.1%; prevR 2.4%)

Retail
Sales Ex-Auto And Gas Feb: 0.0% (exp -0.2%; prevR 2.8%)

 

Corn

·        
Corn futures ended the electronic session higher in the nearby contracts follow a pop in US wheat futures. News is light and lower energy markets may weigh on corn prices today.

·        
CFTC Commitment of Traders as of February 28 showed a huge net long reduction in corn.

·        
Anec: Brazil corn exports seen reaching up to 845.063 million tons in March vs up to 803,219 tons forecast in previous week.

·        
Bloomberg: US Cattle on Feed Placements Seen Falling 6.6%. February placements onto feedlots seen falling y/y to 1.75m head, according to a Bloomberg survey of ten analysts. That would be the sixth y/y decline in a row. Reuters
estimates below.  Due out Friday after the close.

·        
Tyson Foods plans to shut two US chicken plants down with nearly 1,700 workers.
Locations
include Glen
Allen, Virginia, and Van Buren, Arkansas.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 10,000 thousand barrels to 1020k (1013-1025 range) from the previous week and stocks up 58,000 barrels to 25.378 million.

 

Export
developments.

• Algeria
  seeks 35,000 tons of corn for April 1-15 shipment.
• USDA:
  Private exporters reported sales of 667,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.

 

 

 

 

Soybeans

·        
Soybeans are lower on outside commodity selling and higher USD. Palm oil futures ended a 3-day losing streak from an improvement in palm shipments.

·        
Anec: Brazil soy exports seen reaching 14.893 million tons in March vs 14.662 million tons forecast in previous week.

·        
Anec: Brazil soymeal exports seen reaching 2.091 million tons in March vs 1.905 million tons forecast in previous week.

·        
Germany’s association of farm cooperatives estimated the 2023 winter rapeseed crop will fall 1.1% to 4.23 million tons.

·        
India’s vegetable oil imports fell to 1.11 million tons in February from 1.66 million tons in January (SEA).

• Palm
  oil imports fell to 586,007 tons from 833,667 tons in January
• Soybean
  oil imports fell to 355,840 tons from 366,625 tons in January
• Sunflower
  oil imports fell to 156,628 tons from 461,458 tons in January

·        
Indonesia’s trade minister mentioned palm oil producers in Indonesia sold 360,150 tons of cheap cooking oil to the domestic market in February, less than the government target of 450,000 tons. Exporters must now sell a portion
of their palm oil products at home at a capped price under a domestic market obligation (DMO) scheme, according to Reuters.

·        
Cargo surveyor AmSpec reported Malaysian palm oil exports for FH March at 750,530 tons, a 72 percent increase from the same period month ago. ITS reported a 55 percent increase to 751,814 tons.

·        
Malaysia May palm futures were up 35 ringgit to 4,017 and May cash was up $10 at $945.00/ton. 

• China
  soybeans were up down 0.6%, meal down 0.4%, SBO down 0.1% and palm oil futures up 0.7%.

·        
Nearby Rotterdam vegetable oils were
unchanged to 10 euros higher from this time yesterday morning
and meal mixed.

·        
Offshore values were leading SBO lower by about 76 points this morning and meal $2.80 short ton
lower.

·        
NOPA is due out later. 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

 

 

Export
Developments

·        
Turkey’s TMO bought 18,000 tons of sunflower oil at $1,026.89, $1,025.00, and $1,043 a ton.
Delivery was sought between March 22 and April 28 to the ports of Iskenderun/Mersin or Tekirdag.

 

Wheat

·        
US wheat futures are higher after trading two-sided. Follow through buying was stumped earlier by a selloff in outside related markets and sharply higher USD. Black Sea headlines were quiet. Many countries are disappointed the
extension of the grain export deal will last 60 days rather than 120 days. And this morning several countries are asking Russia to extend it to 120 days.

·        
China plans to auction off 140,000 tons of wheat from state reserves on March 22.

·        
Anec: Brazil wheat exports seen reaching 728.594 million tons in March vs 612,824 tons forecast in previous week.

·        
Germany’s association of farm cooperatives estimated the 2023 wheat crop will fall 2.3% to 22.01 million tons.

·        
Paris May wheat was lower by 0.75 euros earlier at 268.50 per ton.

 

Export
Developments.

·        
The Philippines bought about 40,000 tons of feed wheat from Australia this week at $310/ton c&f for June shipment.

·        
Thailand seeks 21,000 tons of feed barley for July shipment.

·        
Jordan bought 50,000 tons of feed barley at $275.50/ton c&f. Possible shipment combinations are for Aug. 1-15, Aug. 16-31, Sept. 1-15 and Sept. 16-30.

·        
Jordan seeks 120,000 tons of milling wheat on March 21 for Sep-Oct shipment.

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

 

Rice/Other

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

·        
Indonesia may import 500,000 tons of rice, “when needed.”