FI Morning Grain Comments 03/21/23

PDF attached include FI estimates for USDA export sales and weekly ethanol production/stocks

 

Good
morning.

 

Private
exporters reported sales of 136,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.

 

US
Fed meetings start today. Consensus is for a 25-point increase.  Broad based reversal in many markets are supporting CBOT ag prices. Soybean oil is seeing some pressure from higher meal. Soybean spreads are again form on talk of China buying.
Corn is higher from technical buying and wheat is higher. The morning US weather outlook slightly improved from that of yesterday bias Midwest and Delta. Rain increases for both regions Thursday into Saturday. Argentina will see rain
later this week for Cordoba, Santa Fe and Entre Rios. Brazil appears to be in good shape other than additional net drying for the northeast.

 

 

 

Weather

 

 

WORLD
WEATHER HIGHLIGHTS FOR MARCH 21, 2023

• Argentina’s
  rain event coming up over the next several days will provide some much needed relief from months of drought, although more moisture will be needed to end the drought
• The
  moisture should end the steady decline in crop conditions
• Brazil’s
  crop areas from southern Mato Grosso do Sul and Parana to Minas Gerais will continue to experience improving weather with an opportunity for more aggressive field progress to take place in late soybean harvesting and Safrinha corn planting
• U.S.
  Southwestern Plains will continue drier than usual over the next ten days; this includes west Texas cotton areas the southwestern hard red winter wheat production regions
• A
  succession of storm systems will continue to produce rain and mountain snow in California and in the Rocky Mountain region to the northern Plains and upper Midwest during the next ten days
• Flood
  potentials remain high for Red River Basin of the North and are increasing for the upper Mississippi River Valley, although the Mississippi River should handle the runoff from the spring snow melt much better than the Red River
• Canada’s
  Prairies will continue missing significant precipitation for a while
• North
  Africa will remain too dry for the next ten days
• Snow
  melt in Russia will be accompanied by rain and snow this weekend into next week complicating the runoff situation
• India’s
  rainfall will be much less frequent and less significant in the coming week than that of the weekend, but it will still be wetter than desired, and some crop conditions will deteriorate
• No
  changes were noted for China, Australia or South Africa in the overnight forecasts

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Tuesday,
March 21:

• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  Japan

Wednesday,
March 22:

• EIA
  weekly US ethanol inventories, production, 10:30am
• EARNINGS:
  Syngenta
• HOLIDAY:
  Indonesia

Thursday,
March 23:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Rabobank
  Farm2Fork Summit, Sydney
• Russian
  Grain Union holds conference in Kazan
• Brazil’s
  Unica may release cane crush and sugar output data (tentative)
• USDA
  red meat production, 3pm
• US
  cold storage data for pork, poultry and beef, 3pm
• HOLIDAY:
  Indonesia

Friday,
March 24:

• Marine
  Insurance London conference
• 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
  poultry slaughter
• HOLIDAY:
  Argentina

Source:
Bloomberg and FI

 

 

 

Macros

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

Canadian
CPI (Y/Y) Feb: 5.2% (est 5.4%; prev 5.9%)

Canadian
CPI Core- Median (Y/Y) Feb: 4.9% (est 4.8%; prev 5.0%)

Canadian
CPI Core- Trim (Y/Y) Feb: 4.8% (est 4.9%; prev 5.1%)

 

Corn

·        
Corn is higher led by the nearby contracts on China demand and higher WTI crude oil.

·        
News was light.

·        
The US is expected to see additional rain over the next week that should help set up favorable early crop development if plantings get in at a timely manner.

 

Export
developments.

• USDA:
  Private exporters reported sales of 136,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.

 

 

 

 

Soybeans

·        
Soybeans are higher from strength in soybean meal amid ongoing talk of a sub 25 million ton Argentina soybean crop and rumors China might be in for US soybeans. The latter is helping out soybean spreads.

·        
Soybean oil is mostly lower on product spreading.

·        
Much of the focus is on outside equity and energy markets. Feds are expected to announce a 25 point interest rate hike later.

 

China
Attaché: Oilseeds and Products Annual

Imports
boosted to 97 million tons (92 year earlier)

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Annual_Beijing_China%20-%20People%27s%20Republic%20of_CH2023-0038

 

·        
Malaysia June palm futures were down 1 ringgit to 3,784 and June cash was down $5 at $915/ton. 

• China
  soybeans were up down 0.7%, meal down 0.7%, SBO up 0.1% and palm oil futures down 0.8%.

·        
Nearby Rotterdam vegetable oils were unchanged to 10 euros higher from this time yesterday morning and meal 2.50-7.50 euros lower.

·        
Offshore values were leading SBO higher by about 15 points this morning and meal $7.40 short ton higher (some of these outside markets are not falling in line with changes in US futures).

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat futures are higher from strength in outside related commodity markets and lower USD.

·        
News was light overnight. USDA reported a general improvement in US wheat conditions, but many states remain at historically low levels for the G/E categories.

·        
Paris May wheat was higher by 0.75 euro earlier at 258.75 per ton.

 

Bloomberg

               Good/Excellent        W/w Change            

Kansas                    19%         +2            

Oklahoma                29%         -1             

Texas                      23%         +6            

Colorado                 36%         -4             

 

Export
Developments.

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

·        
Jordan seeks 120,000 tons of feed barley on March 22.

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

 

Rice/Other

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