FI Morning Grain Comments 04/05/23

PDF attached

 

Good
morning.

 

USDA:
Private exporters reported the following sales activity:

-125,000
metric tons of corn for delivery to unknown destinations during the 2022/2023 marketing year

-276,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

 

News
is light this morning. WTI is down about 28 cents, USD slightly lower and US equities lower. Ongoing profit taking and lower products are sending soybeans lower. China was on holiday. Argentina will release details on their third soybean dollar today. 300
pesos and 45-day window are expected. US wheat futures are trending lower on slow US exports despite unfavorable US weather over the short term. A major blizzard will end early today for the Red River Basin of the US Northern Plains. We look for flooding across
the region when the snowpack melts. Corn is lower for the third consecutive session on technical selling. The US weather outlook for the central and southern US will trend drier and warmer after a round of precipitation exits the Delta and lower ECB later
this workweek. A Bloomberg poll looks for weekly US ethanol production to be down 1,000 thousand barrels to 1002k (990-1020 range) from the previous week and stocks down 159,000 barrels to 25.368 million.

 

Fund
estimates as of April 4

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 5, 2023

• U.S.
  central and southern hard red winter wheat areas experienced strong wind speeds, extremely low humidity and very warm temperatures Tuesday further stressing all crops, especially the unirrigated crop
• Model
  forecast changes for U.S. hard red winter wheat areas are showing up a little more consistently today with both the operational GFS and ECMWF ensemble suggesting a wetter second week for central and eastern parts of hard red winter wheat country
• As
  noted in our long range outlook released last week this potential change has a good chance of verifying, although the high Plains region will not likely be included
• Impressive
  snowfall occurred Tuesday from South Dakota to southeastern Manitoba, Canada and Minnesota with totals of 4 to 11 inches common and local amounts to 14 inches at Pierre, South Dakota
• The
  snow will linger in northern parts of eastern North Dakota and northern Minnesota today as well as in southeastern Manitoba and southwestern Ontario, Canada
• U.S.
  Midwest crop areas outside of the far northwest will experience sufficient warm and dry weather this weekend and especially next week to firm the topsoil and allow some farming activity to begin
• The
  Delta crop areas will also see some improved opportunity for planting
• The
  odds are great that rain will develop in the Plains and western two-thirds of the Midwest late in the second week and into the third weeks of the forecast
• West
  Texas will continue dry biased for another week with “some” showers possible in the second and third week outlooks, but a general soaking is not likely
• California
  will start trending a little wetter again near mid-month
• North
  Africa will be dry biased in the next ten days
• Recent
  rain in northeastern Algeria and northern Tunisia helped east dryness, but more is needed in all of North Africa
• Spain
  will continue to be drier than usual for the next ten days
• India
  weather will be more typically dry in its winter crop region in the next two weeks than seen in recent weeks
• More
  rain fell in China’s lower Yellow River Basin and North China Plain Tuesday finishing out a three day rain event that bolstered soil moisture significantly throughout the key wheat production region and setting the stage for aggressive spring planting
• China’s
  rapeseed area will stay plenty wet for a while
• No
  changes in Australia or South Africa overnight and most of South America weather was unchanged as well

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

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

 

 

 

Macros

US
MBA Mortgage Applications: -4.1% (prev 2.9%)

US
MBA Mortgage Applications 30-Year: 6.40% (prev 6.45%)

US
ADP Employment Change Mar: 145K (exp 210K; prev 242K)

US
Trade Balance (USD) Feb: -70.5B (exp -68.8B; prevR -68.7B)

Canadian
International Merchandise Trade (CAD) Feb: 0.42B (exp 1.70B; prev 1.20B)

 

Corn

·        
Corn is lower for the third consecutive session on talk of large US plantings. The US weather outlook for the central and southern US will trend drier and warmer after a round of precipitation exits the Delta and lower ECB later
this workweek.

·        
USDA reported additional sales this morning which could allow May to firm against back month contracts. Note open interest is starting to decrease for the May position.

·        
Brazil’s second corn planting progress is nearly complete.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 1,000 thousand barrels to 1002k (990-1020 range) from the previous week and stocks down 159,000 barrels to 25.368 million.

·        
Poland’s AgMin resigned from his post, citing rising anger among farmers over the impact of Ukraine grain imports on prices, according to Reuters. With 2023 Ukraine summer production expected to decline from 2022 and 2021, Poland
is expected to remain an important supplier of grain for parts of Europe.

·        
Options team: Open interest was up 10,299 to 30,303 in the CU 450 put. It traded 4,954x on the screen and blocked 10,000x.

 

 

Export
developments.

• South
  Korea’s NOFI group bought two corn cargoes for September arrival at $297.96/ton, on average, from South America.
  
• Under
  the USDA 24-hour sales reporting system, private exporters sold 125,000 tons of corn for delivery to unknown destinations during the 2022-23 marketing year.
  

 

 

 

Soybeans

·        
Ongoing profit taking and lower products are sending soybeans lower this morning. China was on holiday. News is thin.

·        
Argentina will release details on their third soybean dollar today. A 45-day run time is expected. 300 pesos is also rumored. Argentina’s 1st soybean dollar was set at 200 pesos and Sep 5-30 resulted in 13 MMT sales. The 2^nd
& was 230 pesos (around 165 ex rate late Nov) and Nov 28-Dec 31 resulted in 5.1 MMT sales.

·        
Palm oil futures ended a two-day rally and plunged 2.5 percent overnight on profit taking, despite trade estimates anticipating Malaysian palm oil stocks at the end of March falling to a eight month low. The Malaysian palm oil
S&D’s are due out April 10.

·        
India’s March palm oil imports were up 28% from February to 750,000 tons, according to a Reuters survey. Note February imports of 586,007 tons were at an eighth month low. Traders look for soybean oil imports during March to fall
little more than 25 percent and sunflower oil imports to be down slightly from February.

·        
Malaysia June palm futures were down 98 ringgit to 3,868 and June cash was lower by $27.50 at $950.00/ton. 

·        
Nearby Rotterdam vegetable oils were down 15 euros from this time yesterday morning and meal 4-11.50 euros lower.

·        
Offshore values were leading SBO higher by about 34 points this morning and meal $0.50 short ton lower.

 

Due
out 4/10

 

Export
Developments

• Under
  the USDA 24-hour sales reporting system, private exporters sold 276,000 tons of soybeans for delivery to unknown destinations during the 2022-23 marketing year

 

Wheat

·        
US wheat futures are trending lower on slow US exports despite unfavorable US weather over the short term. Technical selling is also a feature.

·        
Paris May wheat was down 1.50 euros earlier or 0.6% at 253.75 per ton.

·        
A major blizzard will end early today for the Red River Basin of the US Northern Plains. We look for flooding across the region when the snowpack melts.

·        
Kansas and surrounding Great Plains states will be mostly dry over the next week. Note combined TX, OK, KS, CO, and KS winter wheat plantings represent 61 percent of the total US planted area.

·        
Ukraine grain exports as of April 5 reached 38.5 million tons, including 13.2 million tons of wheat, 22.7 million tons of corn and 2.29 million tons of barley. The 38.5MMT compares to 45.1 million tons at this time last year.

·        
Russia’s export duty on wheat declines today for a week by 4.3% to 5,179.4 rubles per ton.

·        
USDA Attaché: Egypt 2023-24 wheat imports seen at 10.8 million tons, a 2.9 percent increase from 2022-23. The current marketing year wheat imports are projected at 10-year low.

 

Export
Developments.

·        
South Korea’s NOFI group passed on feed wheat for late September arrival.

·        
Jordan bought 60,000 tons of barley at $265.50/ton c&f for FH September shipment. 

·        
Japan’s AgMin seeks 60,000 tons of feed wheat and 20,000 tons of feed barley on April 12 for arrival in Japan by September 28.

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

 

Rice/Other

·        
(Reuters) – Indian mills have produced 30 million tons of sugar since the current season began on Oct. 1, down 3.3% year on year, the Indian Sugar Mills Association said on Wednesday. Out of 532 mills that started operations in
the current season, 338 mills have closed operations, it said.