FI Morning Grain Comments 04/26/22

PDF attached

 

Good
morning.

 

Private
exporters reported the following activity:

-132,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-133,000
metric tons of soybeans for delivery to unknown destinations.  Of the total, 78,000 metric tons is for delivery during the 2021/2022 marketing year and 55,000 metric tons is for delivery during the 2022/2023 marketing year

 

The
USDA crop progress report is lending strength to US agriculture futures. Higher energy prices are adding to the firm undertone. The USD was 18 points higher and US equities lower. US corn planting progress is running behind average and US winter wheat conditions
dropped an unexpected 3 points. Indonesia late yesterday said they are willing to widen their ban on cooking oil exports. Current measures apply to refined palm olein.

 

StatsCan
prospective plantings suggests producers are looking to expand wheat and oats plantings and plant less canola and barley. The corn area was reported above trade expectations.

 

 

Full
table

 

 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 26, 2022

• Frost
  and light freezes occurred this morning in U.S. wheat areas of the central Plains and western portions of the Midwest soft wheat production region; however, none of the cold was potent enough to induce any permanent harm to crops
• U.S.
  Planting progress for corn and other early season crops is off to a poor start in the Midwest, Delta and northern Plains and change is not likely to come readily
  
• mild
  to cool temperatures over the next week to ten days will prevent fast drying
• limited
  rainfall is expected in many areas through the next few days, but wet fields and cool soil temperatures will not bode well for field progress
  
• wetter
  biased weather late this weekend and through all of next week will further delay farming activity in the Midwest and Delta
• A
  storm impacting the northern U.S. Plains Friday into the weekend will generate additional excessive moisture resulting in more flooding in North Dakota, southern Manitoba, Canada and in parts of northern Minnesota while expanding the region of saturated topsoil
  to the south 
• U.S.
  southwestern Plains dryness will continue through the next two weeks, despite some brief showers
  
• this
  impacts West Texas cotton, corn and sorghum crop areas as well as wheat from the Texas Panhandle into southwestern Kansas and southeastern Colorado
• Mato
  Grosso, Brazil Safrinha crops are also going to experience rising amounts of stress during the next ten days as the ground becomes too dry during the second half of reproduction and filling
  
• corn
  yield potentials could be reduced, but much will be determined by rainfall in May and temperatures during the next few weeks
• cotton
  will perform much better in this environment than will corn 
• Neighboring
  areas of Goias and a few areas in Mato Grosso do Sul will also dry down with Crops in Goias to be more impacted by than Mato Grosso do Sul because of better soil moisture in the latter area. 
• Western
  Argentina dryness will be more of an issue in mid- to late-May and June than it will be over the next few weeks because that is when winter wheat crops are usually planted
• Eastern
  Australia will deal with rain delays in its cotton and sorghum harvest over the next few days and there may be a little concern over cotton fiber quality
• Northern
  China is drying down, but the impact of this recent change should be low for a while, but the situation will need to be closely monitored; some rain is expected in a part of the drier area in this coming week
• Weather
  elsewhere in the world may not have nearly the influence on market mentality as the areas noted here. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Tuesday,
April 26:

• Statistics
  Canada publishes report on seeded area for wheat, barley and canola
• MARS
  monthly report on EU crop conditions
• Geneva
  Sugar Conference, day 1
• EU
  weekly grain, oilseed import and export data
• EARNINGS:
  ADM

Wednesday,
April 27:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Geneva
  Sugar Conference, day 2
• EARNINGS:
  Bunge, Pilgrim’s Pride

Thursday,
April 28:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Brazil’s
  Conab releases production numbers for sugar, cane and ethanol (tentative)

Friday,
April 29:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Vietnam’s
  General Statistics Office releases coffee, rice and rubber export data
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  agricultural prices paid, received, 3pm
• HOLIDAY:
  Japan, Indonesia

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
287,997                 versus   300000-475000  range

Corn                     
1,650,844             versus   1000000-1500000             range

Soybeans           
602,178                 versus   600000-1075000                range

 

Macros

US
Philadelphia Fed Non- Manufacturing Regional Business Activity Index Apr: 29.3 (prev 32.4)

US
Durable Goods Orders Mar P: 0.8% (est 1.0%; prev -2.1%; prevR -1.7%)

US
Durables Ex Transportation Mar P: 1.1% (est 0.6%; prev -0.6%; prevR -0.5%)

US
Cap Goods Orders Nondef Ex Air Mar P: 1.0% (est 0.5%; prev -0.2%; prevR -0.3%)

US
Cap Goods Ship Nondef Ex Air Mar P: 0.2% (est 0.5%; prev 0.3%; prevR 0.2%)

 

 

Corn

·        
July corn is back above the psychological $8.00 level on slow US corn planting progress and higher outside energy markets.

·        
StatsCan prospective plantings reported Canada corn plantings at 3.715 million acres, 300,000 above an average trade guess and up 200,000 from a year ago.

·        
After unfavorable weather (hail and thunderstorms) rolled across the safrinha corn areas of western Parana and southern Mato Grosso do Sul over the weekend, Soybean and Corn Advisory warned about 1 million tons of corn could be
lost.

·        
USDA US corn export inspections as of April 21, 2022, were 1,650,844 tons, above a range of trade expectations, above 1,175,398 tons previous week and compares to 1,954,012 tons year ago. Major countries included Japan for 347,558
tons, Mexico for 343,669 tons, and China for 266,247 tons.

·        
US corn planting progress increased by a less than expected figure, currently 7 percent and compares to 16 percent last year and 15 percent average. Traders were looking for 9 percent complete.

 

Trends
in General Inflation and Farm Input Prices

Langemeier,
M. “Trends in General Inflation and Farm Input Prices.” farmdoc daily (12):56, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, April 25, 2022.

https://farmdocdaily.illinois.edu/2022/04/trends-in-general-inflation-and-farm-input-prices.html

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
The soybean complex is higher led by beans and soybean oil as uncertainty over the impact of Indonesia banning RBD palm exports will have on the market.  WTI crude is also lending support. We may see some support from the Canada
canola area estimate for soybeans.

·        
StatsCan prospective plantings reported Canada soybean plantings at 5.358 million acres, 200,000 below expectations and near unchanged from 2021. Canola plantings are expected to decline 7 percent from year ago to 20.897 million
acres, 1.2 million below expectations.

·        
ICE canola is over 10.00 after the report.

·        
CBOT soybean registrations were down 99 contracts (Morris, IL) to now zero.

·        
US soybean planting progress was reported by USDA at 3 percent complete, same as an average trade guess and compares to 7 last year and 5 percent average.

·        
Indonesia late yesterday said they are willing to widen their ban on cooking oil exports. Current measures apply to refined palm olein. Domestic shortages of selected refined palm olein have sent prices higher. RBD accounts for
40 percent of Indonesia’s total shipments of palm oil products, according to Reuters. China, India, the Philippines and South Korea, source between 46% and 58% of their total palm oil imports from Indonesia. The ban might be short lived, IMO.

·        
There has already been a large backlash at the export ban. Bangladesh will lower its import taxes on canola, sunflower oil and olive oil to 10% from 32% following the global supply shortages of vegetable oils. The Malaysian Palm
Oil Board (MPOB) recommended Malaysia should slow biodiesel production to ensure supply for use in food.

·        
India May palm oil imports are still on track to exceed 600,000 tons despite the Indonesia ban but look for June imports to drop below that amount.

·        
Cargo surveyor SGS reported month to date April 25 Malaysian palm exports at 897,683 tons, 133,260 tons below the same period a month ago or down 12.9%, and 219,236 tons below the same period a year ago or down 19.6%.

·        
Malaysian palm oil finished 178 points higher (2.7%), and cash was unchanged at $1,590/ton.

·        
Offshore values are leading SBO 76 points lower and meal $3.60 short ton higher.

·        
China’s Dalian Exchange plans to raise margin requirements for palm oil and LPG on April 28.

·        
China soybeans, meal, SBO and palm finished lower led by soybean oil.

·        
Rotterdam meal was unchanged to down 2 euros and vegetable oils mixed.

·        
USDA US soybean export inspections as of April 21, 2022, were 602,178 tons, within a range of trade expectations, below 1,004,103 tons previous week and compares to 284,564 tons year ago. Major countries included China for 270,653
tons, Mexico for 94,117 tons, and Bangladesh for 56,090 tons.

 

Export
Developments

·        
Egypt’s GASC seeks vegetable oils for June and/or July arrival on Thursday, April 28. A minimum of 30,000 tons of soybean oil and 10,000 tons of sunflower oil, in the international market, is for arrival between June 10 and 30.
Locally they seek 3,000 tons of soybean oil and 2,000 tons of sunflower oil with delivery from June 10 to 30.

·        
Turkey seeks 18,000 tons of sunflower oil on April 28 for shipment between May 16 and June 16.

·        
China looks to auction off another 500,000 tons of soybeans April 29.

 

Wheat

·        
US wheat is
higher after USDA surprised the trade with a 3 point decline in US winter wheat ratings.

·        
StatsCan prospective plantings reported Canada all-wheat acres at 25.031 million acres, 900,000 above an average trade guess and 7.2% above the previous year.  The durum crop was expected to expand 12.5% from 2021. Spring wheat
was projected to expand 7 percent.

·        
September EU wheat futures were 8.00 euros higher at 375.00 euros.

·        
US winter wheat crop conditions dropped an unexpected 3 points to only 27 percent for the combined good and excellent categories, lowest for this week since 1989. The trade was looking for unchanged (30 percent). We were surprised
SRW wheat ratings declined while HRW improved.

·        
US spring wheat planting progress was reported at 13 complete, compared to 12 percent trade average, 27 year ago and 15 for the 5-year average. 

·        
Ukraine has sent via rail about 80,000 tons of grain to Romania’s Black Sea port of Constanta since the start of the Ukraine/Russia situation.

·        
USDA US all-wheat export inspections as of April 21, 2022, were 287,997 tons, below a range of trade expectations, below 446,225 tons previous week and compares to 581,087 tons year ago. Major countries included Mexico for 55,354
tons, Italy for 54,590 tons, and Philippines for 44,641 tons.

 

Export
Developments.

·        
Turkey seeks 210,000 tons of international red milling wheat on Friday and another 210,000 tons of wheat already in warehouses for delivery between May 17 and August 10.

·        
Today Algeria is in for 50,000 tons of wheat for second half of May and June shipment.

·        
Jordan passed on 120,000 tons of feed barley for Aug and/or Sep shipment.

·        
Jordan seeks 120,000 tons of wheat. on April 27 for Jun and/or Aug shipment.

 

Rice/Other

·        
None reported