FI Morning Grain Comments 04/19/23

PDF attached

 

Good
morning. 

 

Negative
UK CPI data and other global economic reports & concerns sent energy and equity markets lower. USD was up 23 points, WTI lower by $1.40 and US equities lower.

 

A
resumption in Black Sea grain export inspections, wetter forecast for Brazil second corn crop, higher USD and widespread commodity selling is weighing on CBOT grains. The soybean complex is also lower led by soybean oil. Malaysia July palm futures were down
54 ringgit to 3,735 and June cash was lower by $7.50 at $902.00/ton. Offshore values were leading SBO lower by about 127 points this morning and meal $4.50 short ton lower.
Egypt’s GASC’s lowest offer for their international vegetable oil import tender for soybean oil was $1,100 per ton c&f (24k) and sunflower oil at $1,038 per ton c&f. South Korea’s NOFI bought 60,000 tons of soybean meal from South America
at an estimated $553.95/ton c&f for shipment between June 8 and July 7. A Bloomberg poll looks for weekly US ethanol production to be up 9,000 thousand barrels to 968k (937-1003 range) from the previous week and stocks down 98,000 barrels to 25.030 million.

 

 

 

Fund
estimates as of April 18

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 19, 2023

• West-central
  and southwestern U.S. hard red winter wheat areas are still not advertised to receive a significant amount of rain over the next two weeks, although some showers are advertised
  
• Central
  and eastern portions of wheat country should see a boost in rainfall that will be good for crops beginning next week
• Cold
  weather in the U.S. northern and central Plains and Midwest this weekend and Monday is not likely to hurt winter wheat in a permanent manner, but concern is rising over some early planted corn and a few fields of soybeans that have emerged
  
• A
  second bout of cold is advertised to impact the U.S. Midwest during the last days of April and that may not go over very well for early planted corn and soybeans, although there is plenty of time for moderation in the temperature outlook
• Snowstorm
  in eastern Canada’s Prairies today through Thursday 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, although some light precipitation is expected briefly
• 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
• Some
  snow and rain will impact the region briefly Thursday and Friday
• Upper
  Mississippi River Basin flooding will be aggravated by rain and snow over the next few days
• Planting
  delays are expected near the Mississippi River due to flooding
• Canada’s
  Red River Basin and the Assiniboine 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 possibly worsening flooding on the Red
  River in May
• Spain,
  Portugal and North Africa will continue drier than usual, despite a few showers over the next ten days
• India’s
  weather may trend cooler and a little wetter in the second week of the outlook which might disrupt its harvest and raise some concern over winter crop quality; first week temperatures will also be cooler than usual, but precipitation will be limited
• Argentina
  will be drier biased into the weekend favoring summer crop harvesting; some showers will occur next week
  
• Mato
  Grosso, Brazil’s Safrinha corn areas are drying down a little early and will need to be closely monitored; however, most of the latest planted Safrinha corn was in Parana, Mato Grosso do Sul and Sao Paulo where the moisture profile is still quite abundant
• Seasonal
  rains have ended in much of Brazil, although rain in the interior south will linger for a little longer
• Mali
  and Burkina Faso cotton areas will remain dry
• Kazakhstan
  and Russia’s spring wheat areas will experience some net drying next week and into the last days of this month, but the environment will be great for planting – rain will be important in May to prevent the region from getting too dry
• West
  Texas rain prospects are poor during the next ten days, although some showers are likely
  
• 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
  
• Western
  Australia will dry down over the next ten days; some planting of wheat, barley and canola has begun

Source:
World Weather, INC.

 

 

Bloomberg
Ag calendar

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

 

 

 

 

Macros

UK
CPI (M/M) Mar: 0.8% (est 0.5%; prev 1.1%)

UK
CPI (Y/Y) Mar: 10.1% (est 9.8%; prev 10.4%)

UK
CPI Core (M/M) Mar: 0.9% (est 0.6%; prev 1.2%)

UK
CPI Core (Y/Y) Mar: 6.2% (est 6.0%; prev 6.2%)

UK
CPIH (Y/Y) Mar: 8.9% (est 8.7%; prev 9.2%)

Eurozone
CPI (Y/Y) Mar F: 6.9% (est 6.9%; prev 6.9%)

Eurozone
CPI (M/M) Mar F: 0.9% (est 0.9%; prev 0.9%)

Eurozone
CPI Core (Y/Y) Mar F: 5.7% (est 5.7%; prev 5.7%)

Eurozone
CPI Core (M/M) Mar F: 1.3% (est 1.2%; prev 1.2%)

 

Redfin
Reports Home Prices Fell 3% In March–Biggest Annual Drop In Over A Decade

Pending
Home Sales Dipped To Lowest Level Since The Start Of Pandemic

 

Canadian
Housing Starts Mar: 213.9K (est 237.5K; prev 244.0K)

Canadian
Industrial Product Price (M/M) Mar: 0.1% (est -0.3%; prev -0.8%)

Canadian
Raw Materials Price Index (M/M) Mar: -1.7% (est -0.8%; prev -0.4%)

 

 

Corn

·        
A resumption in Black Sea grain export inspections, wetter forecast for Brazil second corn crop, higher USD and widespread commodity selling is weighing on CBOT corn.

·        
The morning weather forecast improved for the US Midwest with rain across much of the growing areas through the end of the week, bias ECB, although it will slow fieldwork progress.

·        
Ukraine is looking to end import bans by three countries and reaching an agreement with Poland. Bulgaria is the latest country to join that list.

·        
Bloomberg noted about 1.5 million tons of Ukraine corn left for China during the month of March, and through mid-April about 3 million tons total may have been shipped. September through December corn shipments to China were 1.7
million tons from Ukraine.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 9,000 thousand barrels to 968k (937-1003 range) from the previous week and stocks down 98,000 barrels to 25.030 million.

 

EIA:
(US) Forecast retail gasoline prices for summer 2023 will be lower than last summer

https://www.eia.gov/todayinenergy/detail.php?id=56220&src=email#

 

Export
developments.

·        
None reported

 

 

 

Due
out Friday after the close

 

Soybeans

·        
CBOT soybean complex is lower led by soybean oil, in large part to weakness in WTI crude oil and other commodity markets. Offshore values are leading the products lower. Global demand destruction, seen in oilmeal earlier this
week, is starting to spread into palm oil.

·        
Indian buyers cancelled 75,000 tons of palm oil import contracts, first big washout in several years, and switch to other oils, such as cheaper sunflower oil and some soybean oil, according to Reuters. “Crude palm oil (CPO) imports
are currently being offered at about $1,050 a ton, including cost, insurance and freight (CIF), in India for May delivery, while palm oil imported in the past few months is now priced between $1,000 to $1,010.”

·        
Oil World showed Malaysian RBD palm oil fob last $1,025/ton, Black Sea sunflower oil fob at $885/ton, and Brazil soybean oil fob $982/ton. Argentina soybean oil fob was quoted at $976/ton. US soybean oil is over $1250/ton.  India
imported an estimated 132,000 tons of soybean oil from Brazil during the month of March, above 118,000 tons from Argentina, according to Oil World.

·        
Not all counties are reducing palm oil buying. China and EU have picked up in purchases over the past few days.

·        
Germany’s association of farm cooperatives estimated the 2023 winter rapeseed crop at 4.25 million tons, down 0.6% from 2022.

·        
Cargo surveyor SGS reported month to date April 15  Malaysian palm exports at 566,995 tons, 148,235 tons below the same period a month ago or down 20.7%, and 71,899 tons above the same period a year ago or up 14.5%.

·        
Malaysia July palm futures were down 54 ringgit to 3,735 and June cash was lower by $7.50 at
$902.00/ton.

·        
China May soybean futures were down 0.4%, meal down 1.8%, SBO up 0.7% and palm oil futures up 1.5%.

·        
Nearby Rotterdam vegetable oils were mixed from this time yesterday morning and meal 3.25-12.50 euros lower.

·        
Offshore values were leading SBO lower by about 127 points this morning and meal $4.50 short ton lower.

 

Export
Developments

• Egypt’s
  GASC’s lowest offer for their international vegetable oil import tender for soybean oil was $1,100 per ton c&f (24k) and sunflower oil at $1,038 per ton c&f. They are looking for delivery between May 20 and June 15.
  
• South
  Korea’s NOFI bought 60,000 tons of soybean meal from South America at an estimated $553.95/ton c&f for shipment between June 8 and July 7.
  

 

Wheat

·        
US wheat futures are lower on Black Sea headlines, higher USD, and a US weather forecast calling for an improvement in precipitation for the eastern areas of NE, KS, OK and TX through Friday. 

·        
Ukraine’s grain exports so far this season were 40 million tons against 45.5 million tons around this time last year. That includes 13.7 million tons of wheat, 23.6 million tons of corn and 2.4 million tons of barley.

·        
Germany’s association of farm cooperatives estimated the 2023 wheat crop at 22.15 million tons, down 1.6% from 2022.

·        
Yesterday SovEcon upward revised their estimate of the Russian wheat crop for 2023 to 86.8 million tons from 85.3 million tons. The AgMin has an 80-85 million ton range. SovEcon lifted their Russian 2022-23 wheat export forecast
by 0.4 million tons to 44.5 million tons.

 

Export
Developments.

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

·        
Jordan seeks 120,000 tons of optional origin wheat on May 2.

·        
China plans to sell 40,000 tons of wheat from state reserves on April 26.

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

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

 

Rice/Other

·        
Sugar futures hit a multi-decade high on India concerns and El Nino.

·        
China plans to sell 900,000 tons of rice from state reserves on April 25.

·        
(Reuters) – Thailand’s rice exports in the first two months of 2023 were up 38% on the year to 1.4 million tons, a government spokesperson said on Wednesday. The exported rice was worth 25.4 billion baht ($740.09 million), said
Anucha Burapchaisri.

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