FI Morning Grain Comments 04/04/23

PDF attached

 

Good
morning.

 

WTI
crude oil is higher by 90 cents, USD slightly higher, and equities higher. CBOT soybeans are lower on light profit taking, SA harvest pressure and sharply lower meal. Details on the Argentina soybean dollar will be released on Wednesday. Soybean oil is mixed,
underpinned by higher US energy prices. Corn is lower on talk of improving US weather but a large snowpack across the upper western Corn Belt is expected to delay seeding progress. US wheat is mostly higher led by higher protein contracts after USDA reported
initial spring wheat conditions worst since 1996 for the combined good and excellent categories. US temperatures will increase this week, but heavy precipitation will fall across the Delta and upper Midwest by the end of the work week.

 

Fund
estimates as of April 3

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 4, 2023

• Snow
  and blowing snow will impact today and Wednesday across the U.S. Northern Plains and a part of the upper Midwest with rain and some snow possible in the remainder of the upper Midwest
• Snowfall
  of 6 to 14 inches and locally more is expected with blizzard or near blizzard conditions
• A
  severe weather outbreak is expected tonight and Wednesday across portions of the U.S. Midwest and Delta
  
• Canada’s
  Prairies will continue drier biased with temperatures likely to be colder than usual today and then much warmer this weekend and especially next week
• Some
  rain and snow will develop in Canada’s Prairies following the big warm up next week
• U.S.
  hard red winter wheat areas and most of West Texas cotton areas will continue dry biased for the next ten days
• U.S.
  Delta and Tennessee River Basin as well as parts of the Carolinas and Georgia will receive heavy rain and experience local flooding possibly later this week followed by drier weather this weekend
• South
  Texas and the Texas Coastal Bend will receive needed rain later this week as well
• California’s
  stormy weather bias has ended for now, but it may return later this month
• Southwestern
  Argentina will be dry biased during the coming week while rain falls in the central and north
• Brazil’s
  drier areas in center south production areas will get rain late this weekend into next week to improve Safrinha crops
• Spain
  and much of North Africa will continue drier biased, although northeastern Algeria and northern Tunisia will get rain – mostly near the coast
• Western
  Russia will receive limited precipitation for a while as Ukraine, Belarus and Russia’s Southern Region are wettest
• Significant
  rain continued to move across China’s Yellow River Basin Monday and it will move farther east today
• Recent
  moisture improvements are setting the stage for aggressive winter crop development and excellent early season spring planting and emergence conditions
• No
  changes in Australia, South Africa or southeast Asia were noted overnight and India is still looking at drier and warm weather

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Tuesday,
April 4:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• Purdue
  Agriculture Sentiment, 9:30am
• HOLIDAY:
  India

Wednesday,
April 5:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysia’s
  April 1-5 palm oil export data
• HOLIDAY:
  China, Hong Kong

Thursday,
April 6:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• New
  Zealand commodity prices
• HOLIDAY:
  Argentina, Thailand

Friday,
April 7:

• FAO
  World Food Price Index, grains report
• 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 condition report
• Good
  Friday holiday in several countries

Source:
Bloomberg and FI

 

 

 

Option
team: Open Interest on the CU 450 put is highlighted. Yesterday’s large volume took open interest up to 20,004 +9,983.

 

 

USDA
inspections versus Reuters trade range                                    

Wheat                 
168,543                 versus   300000-450000

Corn                     
1,097,654             versus   700000-1200000

Soybeans           
499,054                 versus   300000-950000

 

Selected
Brazil commodity exports via Reuters & Brazil AgMin

Commodity                     
March 2023         March 2022

CRUDE
OIL (TNS)                11,310,344            5,335,955

IRON
ORE (TNS)                 27,233,768            28,497,813

SOYBEANS
(TNS)                 13,271,151            12,190,885

CORN
(TNS)                     1,335,257             14,278

GREEN
COFFEE(TNS)              163,444               202,984

SUGAR
(TNS)                    1,827,591             1,440,426

BEEF
(TNS)                     124,435               169,133

POULTRY
(TNS)                  484,177               384,503

PULP
(TNS)                     1,825,641             1,574,743

 

Macros

Canadian
Building Permits (M/M) Feb: 8.6% (est 2.0%; prev -4.0%)

 

 

Corn

·        
Corn is lower from wheat/corn spreading and a weather forecast for the US calling for improving planting progress bias WCB (temperatures warm this week). But wet conditions and the threat of the large snowpack across the upper
northwestern Corn Belt is threatening slow planting progress that could lead to switching from corn to soybeans. Ideas of a higher US soybean are might be pressuring soybeans today.

·        
US corn planting progress was reported by USDA at 2 percent, at trade expectations, same as last year and also the five-year average.

·        
StoneX: Brazil total corn crop 131.34 vs. 130.6 previous. 2^nd 100.54 vs. 100.8 previous.

·        
AgRural reported Brazil soybean harvest progress at 76 percent as of last Thursday, up 6 points from the previous week and compares to 81 percent previous year.

·        
USDA NASS reported the February corn for ethanol use at 400 million bushels, nearly 7 million below trade expectations, 41 million below January and 6 million below February 2022. We will not change our US 2022-23 corn for ethanol
use, currently 5.225 billion bushels, 25 below USDA.

·        
USDA US corn export inspections as of March 30, 2023 were 1,097,654 tons, within a range of trade expectations, above 688,379 tons previous week and compares to 1,540,562 tons year ago. Major countries included Mexico for 389,436
tons, Korea Rep for 198,776 tons, and Japan for 180,466 tons.

 

 

 

Export
developments.

• Under
  the USDA 24-hour reporting system, private exporters sold 150,000 tons of new-crop corn to Mexico (2023-24 delivery).
  

 

 

Soybeans

·        
CBOT soybeans are lower on SA harvest pressure, light profit taking and sharply lower soybean meal. Argentina will release details on the new soybean dollar on Wednesday. SA SBM offers were light yesterday and quotes were mixed.

·        
Soybean oil is mixed, underpinned by the strength in US energy markets. WTI earlier was up 90 cents.

·        
StoneX: Brazil soybean crop 157.7 vs. 154.7 previous.

·        
AgRural reported Brazil soybean harvest progress at 76 percent as of last Thursday, up 6 points from the previous week and compares to 81 percent previous year.

·        
Yesterday’s USDA NASS crush report was mostly in line with trade expectations. The February US crush was 176.9 million bushels, 1.5 million above an average trade guess. End of February soybean oil stocks increased 5 million pounds
from end of January to 2.362 million pounds, 11 million above an average. Soybean meal stocks hit a crop-year to date high of 476,000 short tons.

·        
Malaysia June palm futures were up 82 ringgit to 3,966 and June cash was higher by $37.50 at $977.50/ton. 

• China
  May soybean futures were down 0.3%, meal up 2.0%, SBO up 0.8% and palm oil futures up 1.0%.

·        
Nearby Rotterdam vegetable oils were mixed from this time yesterday morning and meal unchanged to as much as 19 euros lower.

·        
Offers out of SA were thin yesterday as traders wait for details on the Argentina soybean dollar. 

·        
Offshore values were leading SBO lower by about 177 points this morning and meal $4.90 short ton lower.

·        
USDA US soybean export inspections as of March 30, 2023 were 499,054 tons, within a range of trade expectations, below 892,086 tons previous week and compares to 742,337 tons year ago. Major countries included China for 297,603
tons, Indonesia for 72,603 tons, and Mexico for 34,421 tons.

 

Export
Developments

• None
  reported

 

 

Wheat

·        
US wheat futures are mostly higher (back month Chicago lower) led by higher protein wheat after USDA reported initial spring winter wheat ratings worst since 1996.

·        
USDA reported combined winter wheat good and excellent conditions at 28 percent, below a trade guess of 31 percent, 6 points below late fall 2022, and compares to 30 year ago and 47 percent average. The combined poor and very
poor was 36 percent, same as what was reported early spring 2022. TX, OK & KS declined from last fall. But also, a drag on conditions were the PNW states of MT, OR, WA, ID.

·        
US spring wheat plantings were not reported and will start next week.

·        
Winter wheat ratings are not expected to improve much, if any, next week. Kansas and surrounding Great Plains states will be mostly dry this week.

·        
The USDA Attaché estimated 2023-24 (April-March) wheat production at a large 108 million tons, based on good weather conditions, up from their own 100 million ton projection for 2022-23. However, recall India’s largest producing
states saw unfavorable weather a week ago that included hail. Producers and local government reported crop damage.
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Annual_New%20Delhi_India_IN2023-0025

·        
India plans to still procure wheat even if yields come in below government standards after hair and heavy rain damaged the crop late March. India looks to buy 34.15 million tons of wheat this season from producers.

·        
Paris May wheat was up 0.50 euro earlier or 0.2% at 256.75 per ton.

·        
USDA US all-wheat export inspections as of March 30, 2023 were 168,543 tons, below a range of trade expectations, below 403,853 tons previous week and compares to 318,304 tons year ago. Major countries included Philippines for
64,884 tons, Ethiopia for 36,220 tons, and Dominicn Rep for 33,720 tons.

 

 

 

Export
Developments.

·        
Jordan passed on 120,000 tons of wheat. They are in for barley on Wednesday.

·        
Japan in its weekly import tender seeks 78,732 tons of food wheat later this week from the US, Canada and Australia.

 

Rice/Other

·        
None reported