FI Morning Grain Comments 04/12/23

PDF attached

 

Good
morning.

 

US
CPI (M/M) Mar: 0.1% (est 0.2%; prev 0.4%)

US
CPI Ex Food and Energy (M/M) Mar: 0.4% (est 0.4%; prev 0.5%)

US
CPI (Y/Y) Mar: 5.0% (est 5.1%; prev 6.0%)

US
CPI Ex Food and Energy (Y/Y) Mar: 5.6% (est 5.6%; prev 5.5%)

The
CPI report sent the USD down 50 points. WTI crude oil rallied by 50 cents and US equities are higher. Soybeans turned mixed (USD?), soybean oil are lower while meal is catching a bid from product spreading and slow Argentina producer sales under the new FX
program. Malaysian palm oil futures were down sharply overnight, settling at a 12-day low, on concerns over the slowing export pace.
Offshore
values were leading SBO lower by about 70 points this morning and meal $4.50 short ton lower. Corn and wheat are higher led by the nearby positions after Russia made additional negative comments of the grain export deal. Unseasonable warm US temperatures are
expected to melt the snowpack across the upper US, resulting in flooding bias Red River Basin. Today is day 3 of the Goldman Roll. A Bloomberg poll looks for weekly US ethanol production to be down 4,000 thousand barrels to 999k (980-1013 range) from the previous
week and stocks down 38,000 barrels to 25.098 million.

 

 

 

Fund
estimates as of April 11

 

Weather

Many
areas of the US will see near or record high temperatures through Friday, from a large warm corn ridge. This should result in rapid melting of the deep snowpack across the upper Great Plains.

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 12, 2023

• Not
  much change again overnight
• Dryness
  is still a worry in Spain, Portugal, North Africa and U.S. west-central and southwestern Plains and portions of Canada’s Prairies
  
• Some
  snow and rain will fall in the southeastern Canada Prairies, but the heart of the region from southern Alberta to north-central Saskatchewan will be drier biased for an extended period of time
  
• Snow
  and rain in the southeast half of Saskatchewan and southern Manitoba will be sufficient to bolster soil moisture for future planting, although concern remains over the potential for flooding in the Red River Basin
• Aggressive
  snowmelt is continuing in the upper U.S. Midwest and northeastern Plains as well as southeastern Canada’s Prairies where flooding is evolving
• Rain
  and some wet snow will impact these areas Friday into Saturday morning to aggravate the flood situation
• Lighter
  than usual precipitation will continue over the next ten days in the lower U.S. Midwest where aggressive spring planting is expected especially after a few days of warm and drier biased weather
  
• Argentina
  will receive limited precipitation for a while favoring summer crop maturation and harvesting
• Brazil
  rainfall will be sufficient to raise topsoil moisture for long term Safrinha corn and cotton use
• Sugarcane
  and coffee areas in portions of center south Brazil may need some drier weather later this month
• Weather
  in most of Europe (outside of the southwest), the CIS, China, India, Australia and South Africa is mostly favorable right now with little change likely
• Tropical
  Cyclone 18S (Ilsa) will move into northwestern Australia Thursday and a disturbance near the Philippines will bring some rain to Luzon Island and possibly a part of Samar Island

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Wednesday,
April 12:

• EIA
  weekly US ethanol inventories, production, 10:30am
• France
  agriculture ministry’s 2023 planting estimates

Thursday,
April 13:

• China’s
  1st batch of March trade data, including soybean, edible oil, rubber and meat & offal imports
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Brazil’s
  CONAB publishes production, area and yield data for corn and soybeans
• FranceAgriMer
  monthly grains balance sheet
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Thailand

Friday,
April 14:

• 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
• HOLIDAY:
  India, Thailand

Source:
Bloomberg and FI

 

 

 

Due
out Thursday

 

 

Macros

U.S.
Mar Cpi +0.1% , Exfood/Energy +0.4% (est 0.2%; prev 0.4%)

U.S.
Mar Real Earnings All Private Workers -0.1% Vs Feb -0.4% (Prev -0.4%)

U.S.
Mar Cpi Year-Over-Year +5.0%, Exfood/Energy +5.6%

U.S.
Short-Term Interest Rate Futures Price In Less Chance Of 25-Bps Fed Hike In May After Inflation Data

 

US
MBA Mortgage Applications Apr 7: 5.3% (prev -4.1%)

US
30-Yr Mortgage Rate Apr 7: 6.3% (prev 6.4%)

 

Corn

·        
Corn futures are higher led by the nearby position in part to strength in wheat and Black Sea grain export uncertainty.

·        
Today is day 3 of the Goldman Roll.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 4,000 thousand barrels to 999k (980-1013 range) from the previous week and stocks down 38,000 barrels to 25.098 million.

·        
US corn plantings are expected to rapidly advance this week with warmer and drier conditions for the Corn Belt.

 

 

Export
developments.

• Taiwan’s
  MFIG bought about 65,000 tons of corn, optional origin, for May 26-June 14 shipment, later if sourced from the US PNW and/or South Africa. The corn was purchased at an estimated premium of 179.50 cents a bushel c&f over the July contract.
  

 

 

Soybeans

·        
Soybeans turned mixed, soybean oil is lower while meal is catching a bid from product spreading and slow Argentina producer sales under the new FX program. Malaysian palm oil futures were down sharply overnight, settling at a
12-day low, on concerns over the slowing export pace.

·        
US ECB soybean basis has firmed from the previous week for selected locations, pressuring cash crush margins.

·        
France’s AgMin estimated the 2022-23 rapeseed area at 1.34 million hectares, up 9.3% versus 2022, and 11.1% above a 5-year average.

·        
(Bloomberg) — Indonesia, the world’s biggest palm oil supplier, is reviewing its export policy as it seeks to regulate domestic supplies after the peak demand season of Ramadan, according to a senior government official. 

·        
Malaysia June palm futures were down 113 ringgit to 3,775 and June cash was lower by $17.50 at
$915.00/ton.

·        
China May soybean futures were down 0.5%, meal up 0.5%, SBO up 0.6% and palm oil futures up 0.7%.

·        
Nearby Rotterdam vegetable oils were 5 to 30 euros lower this time yesterday morning and meal mostly higher.

·        
Offshore values were leading SBO lower by about 70 points this morning and meal $4.50 short ton higher.

 

Export
Developments

• None
  reported

 

Wheat

·        
US wheat futures
are higher after Russia made additional negative comments of the grain export deal. They mentioned the deal is ‘not so great.’ Algeria is in for wheat.

·        
Unseasonable warm temperatures is expected to melt the snowpack across the upper US, resulting in flooding bias Red River Basin.

 

 

·        
The eastern US wheat areas will see some rain. CO will see some rain later this week (day 3-4). Other western areas will be mostly dry.

·        
France’s AgMin estimated the 2022-23 soft wheat area and spring wheat at 4.77 million hectares, up 1.7% versus 2022 but down from a previous estimate of 4.75 million.

·        
Romanian producers are seeking a ban on Ukraine grain imports due to the influx of arrivals.

·        
The UN mentioned grain inspections were at a standstill Tuesday but will resume today after having discussions with multiple parties.

·        
(Reuters) – Egypt’s cabinet has raised the local wheat procurement price for the 2023 season to 1,500 pounds ($48.59) per ardeb (150 kilograms), it said in a statement on Wednesday. The new price is a 50% increase of the initial
price the cabinet had set in August of 1,000 Egyptian pounds.

 

Export
Developments.

·        
Algeria seeks at least 50,000 tons of durum wheat today, for May-June shipment.

·        
South Korea millers bought 45,000 tons of US wheat for June shipment at $270-$350/ton, depending on variety.

-soft
white wheat 10% to 11% protein content high $270s a ton

-soft
white wheat of 8.5% protein bought in the low $280s a ton

-hard
red winter wheat of 11.5% protein bought in the mid $360s per ton

-northern
spring/dark northern spring wheat of 14% protein bought in the mid $350s a ton (Reuters)

·        
South Korea’s NOFI group bought around 60,000 tons of feed wheat, optional origin, at $305.86/ton c&f for arrival in SK around September 24. Russia, Argentina, Pakistan, Denmark and China were excluded.

·        
Japan’s AgMin passed on feed wheat and bought 380 tons of feed barley for arrival in Japan by September 28.

·        
Jordan passed 120,000 tons of feed barley for October through November 15 shipment.

·        
Taiwan Flour Millers Association seeks 52,850 tons of million wheat from the US on April 13 for May 31-June 14 shipment via PNW.

·        
Japan seeks 78,548 tons of food wheat from the US and Canada later this week for June shipment.

·        
Jordan seeks 120,000 tons of wheat on April 18 for Oct-FH Nov shipment.

 

Rice/Other

·        
(Bloomberg) — Sugar climbed again in New York, hitting the highest in a decade on persistent worries about tight global supplies. Meanwhile, corn extended declines toward a one-month low as Brazilian production is set to rise,
heating up the competition with US supplies.