FI Morning Grain Comments 04/18/23

PDF attached

 

Good
morning. 

 

USD
was down 27 points, WTI lower by 19 cents and US equities higher.

 

Another
day of Black Sea headline trading lifted grain higher overnight before prices eased before the electronic close. Corn is now lower in the nearby position and KC wheat lower. Back month corn, Chicago wheat, and MN wheat remained higher. Outside related vegetable
oil and oilmeal markets are underpinning CBOT soybean products, in turn lifting soybeans higher. China economic data was positive with GDP better than expected at 4.5 percent (4.0% expected). China soybean meal futures rallied 3.3%. China pork production improved
last quarter. Ukraine said grain shipments under the grain deal were delayed for a second day, but news agency RIA overnight reported ship inspections resumed. Then later in the morning a Ukraine official denied inspections have restarted. Egypt seeks vegetable
oils on Wednesday. Japan seeks food wheat this week. Jordan bought 50,000 tons of wheat.

 

 

 

 

 

Fund
estimates as of April 17

 

 

Weather

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 18, 2023

• Snowstorm
  in eastern Canada’s Prairies Tuesday through Thursday of this week will produce 0.50 to 1.50 inches of moisture and local totals to 2.00 inches with 6-15 inches of snow and local totals of 15-20 inches – some weakening of the storm is expected
• Southwestern
  Canada’s Prairies will remain drier biased through the end of this month
• Freezes
  are still expected in hard red winter wheat areas this coming weekend occurring as far south as Oklahoma
• Freezes
  will also occur in the Midwest, northern Delta and as far south as Kentucky with frost in Tennessee late in this coming weekend
• West-central
  and southwestern U.S. Plains may get some showers as colder air arrives late this week and there “may” be some potential for showers again as warmer air returns next week
• This
  will include both hard red winter wheat areas and corn sorghum and cotton
• Moisture
  totals are not advertised to be very great today, but the orientation of the weekend cold and associated high pressure system will dictate the rain potential
• Central
  parts of the Plains should see some beneficial rain when warming returns next week
  
• U.S.
  Red River Basin of the North flooding may not be as bad as feared if precipitation will be limited during the next few weeks
• Cold
  temperatures in the coming ten days will help slow the remaining snow melt
• Canada’s
  Red River Basin and the Assiniboia River Basin flood potentials may worsen with the onset of this week’s significant snowstorm and the snow water equivalency that will run off into the Red River in Manitoba eventually
• No
  change in dryness was suggested for Spain, Portugal or North Africa during the next ten days, despite a few showers expected
  
• Favorable
  crop weather is likely in most areas of the world; including China, India, Australia, South Africa, Europe (away from the southwest) and Ukraine, Belarus and Russia’s Southern Region
• Argentina
  will be drier biased in the coming week favoring summer crop harvesting; some showers will occur in days 7-11
• Brazil’s
  Safrinha corn south of Mato Grosso will get rain through mid-week this week while other areas are drying down
• Most
  of the late week this week and next week will be drier biased throughout Brazil
• Mali
  and Burkina Faso cotton areas will remain dry
• West
  Texas rain prospects are poor during the next ten days
• U.S.
  Delta will get rain as cold air arrives late this week and then will get much more rain next week as warming evolves
  

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Tuesday,
April 18:

• China’s
  2nd batch of March trade data, including agricultural imports
• China’s
  first quarter pork output and inventory levels
• New
  Zealand global dairy trade auction

Wednesday,
April 19:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Brazil’s
  Conab releases cane, sugar and ethanol output data
• USDA
  total milk production, 3pm
• HOLIDAY:
  Indonesia, Bangladesh

Thursday,
April 20:

• China’s
  3rd batch of March trade data, including country breakdowns for commodities
• Malaysia’s
  April 1-20 palm oil export data
• Cocoa
  Association of Asia grinding data for first quarter
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• USDA
  red meat production, 3pm
• HOLIDAY:
  Indonesia

Friday,
April 21:

• 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
• US
  cattle on feed, 3pm
• HOLIDAY:
  Brazil, Indonesia

Source:
Bloomberg and FI

 

 

 

Soybean
and Corn Advisory

2022/23
Brazil Soybean Estimate Unchanged at 153.0 Million Tons

2022/23
Brazil Corn Estimate Unchanged at 123.0 Million Tons

2022/23
Argentina Soybean Estimate Lowered 2.0 mt to 24.0 Million

2022/23
Argentina Corn Estimate Lowered 1.0 mt to 35.0 Million

 

USDA
inspections versus Reuters trade range

Wheat                 
239,907                 versus   200000-400000  range

Corn                     
1,215,221             versus   700000-1050000                range

Soybeans           
526,376                 versus   300000-725000  range

 

 

Macros

Chinese
GDP (Y/Y) Q1: 4.5% (exp 4.0%; prev 2.9%)

–   
GDP SA (Q/Q) Q1: 2.2% (exp 2.0%; prev 0.0%) –    GDP YTD (Y/Y) Q1: 4.5% (exp 4.0%; prev 3.0%)

Chinese
Industrial Production (Y/Y) Mar: 3.9% (exp 4.4%; prev 2.4%)

–   
Industrial Production YTD (Y/Y) Mar: 3.0% (exp 3.5%; prev 2.4%)

Chinese
Retail Sales (Y/Y) Mar: 10.6% (exp 7.5%; prev 3.5%)

–   
Retail Sales YTD (Y/Y) Mar: 5.8% (exp 3.7%; prev 3.5%)

Chinese
Fixed Assets Ex-Rural YTD (Y/Y) Mar: 5.1% (exp 5.7%; prev 5.5%)

Chinese
Property Sales YTD (Y/Y) Mar: -5.8% (exp -4.7%; prev -5.7%)

–         
Residential Property Sales YTD (Y/Y) Mar: 7.1% (prev 3.5%)

Chinese
Surveyed Jobless Rate Mar: 5.3% (exp 5.5%; prev 5.6%)

 

US
Housing Starts Mar: 1420K (exp 1400K; prev 1450K)

Building
Permits Mar: 1413K (exp 1450K; prevR 1550K)

Housing
Starts (M/M) Mar: -0.8% (exp -3.5%; prev 9.8%)

Building
Permits (M/M) Mar: -8.8% (exp -6.5%; prevR 15.8%)

 

Canadian
CPI (Y/Y) Mar: 4.3% (exp 4.3%; prev 5.2%)

CPI
NSA (M/M) Mar: 0.5% (exp 0.5%; prev 0.4%)

CPI
BoC Core (Y/Y) Mar: 4.3% (exp 4.4%; prev 4.7%)

CPI
Core- Trim (Y/Y) Mar: 4.4% (exp 4.4%; prev 4.8%)

CPI
Core- Median (Y/Y) Mar: 4.6% (exp 4.5%; prev 4.9%)

 

 

Corn

·        
US corn futures are lower in the nearby months and higher in the back months. Positive China economic data, ongoing Black Sea shipping concerns and strength in wheat is supporting prices.  USDA reported US corn planting progress
at 8 percent complete, 2 points below expectations. The WCB is a little further along than the ECB. A Reuters range for US corn plantings as of Sunday showed a 6 to 17 point range, average a large 10 percent.

·        
China’s GDP was better than expected at 4.5 percent (4.0% expected).

·        
China imported 2.19 million tons of corn during the month of March, 6 percent above the same period year ago. YTD corn imports stand at 7.52 million tons, down 9.2% from year earlier.

·        
China’s Q1 pork production increased 1.9% to 15.9 million tons. For Jan-Mar, that’s the highest since at lease 2018. Total meat output including pork, beef, mutton and poultry increased by 2.5% during the first quarter to 24.56
million tons. (Bloomberg)

·        
The US Midwest will see precipitation this week, slowing fieldwork progress.

·        
USDA US corn export inspections as of April 13, 2023, were 1,215,221 tons, above a range of trade expectations, above 839,165 tons previous week and compares to 1,182,821 tons year ago. Major countries included Mexico for 323,441
tons, Japan for 319,494 tons, and Colombia for 116,218 tons.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
CBOT soybeans are up from higher products despite a good start to the US soybean planting season with 4 percent of the crop sowed. Yesterday’s NOPA crush report was seen supportive for soybeans and soybean oil. At 185.8 million
bushels, the March crush was a record for that month. Implied US March SBO use was better than expected.

·        
Slow Argentina producer selling since the launch of the new soybean dollar a little more than week ago is aiding the higher trade in soybeans. AgriCensus noted export licenses nearly reached 500,000 tons for soybeans during the
first week.

·        
CBOT July crush increased 3.75 cents to $1.38. CBOT soybean meal and soybean oil are higher in part to rising outside related product prices. China soybean meal futures rallied 3.3%. July Malaysian palm oil surged little more
than 4 percent, largest one day gain since December, over Indonesia supply concerns and Black Sea shipping concerns. Indonesia palm stocks at the end of February fell 15 percent from January, reported by GAPKI last week.

·        
Egypt seeks vegetable oils on Wednesday.

·        
Malaysia July palm futures were up 151 ringgit to 3,789 and June cash was higher by $30.00 at
$910.00/ton.

·        
China May soybean futures were down 0.4%, meal up 3.3%, SBO up 0.9% and palm oil futures up 1.4%.

·        
Nearby Rotterdam vegetable oils were unchanged to 10 euros higher (rapeseed oil was unquoted) from this time yesterday morning and meal 8.00-11.50 euros higher.

·        
Offshore values were leading SBO lower by about 23 points this morning and meal $5.60 short ton higher.

·        
USDA US soybean export inspections as of April 13, 2023, were 526,376 tons, within a range of trade expectations, below 678,038 tons previous week and compares to 1,008,326 tons year ago. Major countries included China for 280,217
tons, Germany for 128,297 tons, and Mexico for 64,208 tons.

 

Export
Developments

• Egypt’s
  GASC seeks an unspecified amount of international vegetable oils and small amount of domestic supplies of soybean oil and sunflower oil on April 19 for delivery between May 20 and June 15.
  

 

July
Malaysian palm oil

 

 

Wheat

·        
Uncertainty over an extension of the Black Sea grain deal set to expire mid next month and an unchanged, yet low, US winter wheat condition (good and excellent categories), are supporting Chicago wheat futures. By class US HRW
improved and SRW and White declined. KC turned lower before the electronic close and MN remained higher.

·        
A cold US weather forecast, and lower USD is also helping wheat.

·        
We see a volatile trade today on headline trading. President Putin visited command posts in Ukraine (annex) as Russia increased assaults on Bakhmut.

·        
Ukraine said grain shipments under the grain deal were delayed for a second day, but news agency RIA overnight reported ship inspections resumed. Then later in the morning a Ukraine official denied inspections have restarted.

·        
Poland, Hungary and Slovakia recently banned imports of Ukrainian grain. Poland and Ukraine are in talks. Romania’s Social Democrat party supports a ban on Ukraine grain imports.

·        
The US weather forecast is wetter next week for the US wheat areas. Wet and cold conditions should slow spring wheat planting progress. Light snow will fall across the northern growing areas this week. Eastern KS and eastern NE
will see precipitation one time or another Wednesday through Friday.

·        
China imported 1.33 million tons of wheat during the month of March, 43 percent above the same period year ago. YTD wheat imports stand at 4.35 million tons, up 53.6% from year earlier.

·        
China sold 18,552 tons of wheat or 47 percent of what was offered back on April 12, at an average price of 2,578 yuan per ton.

·        
USDA US all-wheat export inspections as of April 13, 2023, were 239,907 tons, within a range of trade expectations, below 389,345 tons previous week and compares to 446,225 tons year ago. Major countries included Mexico for 88,332
tons, Thailand for 56,037 tons, and Nigeria for 26,418 tons.

 

 

Export
Developments.

·        
Jordan bought 50,000 tons of wheat for LH Oct shipment at $303/ton c&f.

·        
Japan seeks 66,377 tons of food wheat later this week.

·        
Jordan seeks 120,000 tons of feed barley on April 19 for October through November 15 shipment.

·        
China will auction off 40,000 tons of wheat on April 19.

 

Rice/Other

·        
South Korea seeks 43,500 tons of rice on April 25 for July 1 and September 30 arrival.