FI Morning Grain Comments 04/26/23

PDF attached

 

Good
morning. 

 

USD
was down 51 points, WTI crude off 67 cents and US equities higher (tech leading). The weaker USD and Ukraine/Russia conflict is supporting wheat along with technical buying after nearby Chicago recently hit a 21-month low. Corn is higher with a rebound in
nearby spreads. The same is true for soybeans. Traders will be watching US planting progress and Brazil export competition (soybeans). The US weather forecast was mostly unchanged this morning. Malaysia palm futures fell 65 ringgit to 3570, a one month low,
and cash fell $17.50 to $857.00. Offshore values were leading SBO higher by about 21 points this morning and meal $1.40 short ton lower. Poland plans to ban imports of Ukraine grain for domestic consumption through the end of 2023. Tunisia, Iraq and Algeria
are in for wheat. A Bloomberg poll looks for weekly US ethanol production to be down 18,000 thousand barrels to 1006k (970-1034 range) from the previous week and stocks up 18,000 barrels to 25.311 million.

 

StatsCan
plantings

https://www150.statcan.gc.ca/n1/en/daily-quotidien/230426/dq230426a-eng.pdf?st=Opf1NtX-

 

 

 

 

Fund
estimates as of April 25

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 26, 2023

• U.S.
  hard red winter wheat areas began receiving rain overnight and will continue to see waves of it through Friday
  
• Sufficient
  amounts will occur to induce great improvements in crop and field conditions
• U.S.
  Midwest, Great Plains, Delta and southeastern states will be cooler than usual through the first few days in May and a more normal temperature regime is expected
• Eastern
  Canada’s Prairies will also be cooler than usual into next week before warming begins
• Western
  Canada’s Prairies will experience warmer temperatures and some fieldwork will begin
  
• West
  Texas cotton areas will only get a limited amount of rain during the next ten days, although a few showers and thunderstorms will be possible at times
• The
  Rolling Plains of Texas, southwestern Oklahoma and the Texas Panhandle will all receive needed rain
  
• A
  favorable mix of weather is expected in the Delta and southeastern states over the next ten days with a wetter and cooler bias expected in the first half of that period
• California
  is poised for greater precipitation once again and that along with melting snow will lead to some rising flood potentials
• Southwestern
  Europe and northwestern Africa will continue drier and warmer than usual for another ten days
• Northern
  Kazakhstan and southern parts of Russia’s eastern New Lands will be drier and warmer than usual for the next ten days
• India
  will experience some scattered showers and thunderstorms – some of which may be locally heavy in the interior southeast
• China
  will continue to experience mostly good weather, although rain is needed in a part of the northeast and drier weather is needed south of the Yangtze River
  

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Wednesday,
April 26:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Euro
  Grain Hub Exchange & Forum, Bucharest, Romania, day 1
• Argus
  Biofuels & Feedstocks Asia Conference, Singapore, day 2
• Commodity
  Trading Week conference, London, day 2
• Canada’s
  StatsCan to release seeded area data for wheat, barley, canola and soybeans
• Brazil’s
  Conab to publish cane, sugar and ethanol production data

Thursday,
April 27:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Euro
  Grain Hub Exchange & Forum, Bucharest, day 2
• Port
  of Rouen data on French grain exports
• Argus
  Biofuels & Feedstocks Asia Conference, Singapore, day 3

Friday,
April 28:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• Euro
  Grain Hub Exchange & Forum, Bucharest, day 3
• FranceAgriMer’s
  weekly crop condition report
• US
  agricultural prices paid, received, 3pm

Saturday,
April 29:

• Vietnam’s
  coffee, rice and rubber export data

Source:
Bloomberg and FI

 

 

 

Macros

Brent
Crude Erases All Price Gains Since Surprise OPEC+ Cut

US
MBA Mortgage Applications Apr 21: 3.7% (prev -8.8%)

US
30-Yr MBA Mortgage Rate Apr 21: 6.55% (prev 6.43%)

US
Durable Goods Orders Mar P: 3.2% (est 0.7%; prev -0.1%)

US
Durables Ex Transportation Mar P: 0.3% (est -0.2%; prev -0.1%)

US
Cap Goods Orders Nondef Ex Air Mar P: -0.4% (est -0.1%; prev -0.1%)

US
Cap Goods Ship Nondef Ex Air Mar P: -0.4% (est 0.1%; prev -0.1%)

US
Wholesale Inventories (M/M) Mar P: 0.1% (est 0.1%; prev 0.1%)

US
Advance Goods Trade Balance Mar: -$84.6B (est -$90.0B; prev -$91.6B)

 

Corn

·        
Corn futures are higher in the nearby contracts and lower in the back months as traders reevaluate domestic spot demand and US planting progress. Higher soybeans and Chicago wheat are lending support. The USD is down sharply this
morning.

·        
Brazil’s AgMin sees 2023-24 ethanol production at 33.17 billion liters, up 5.9% from the previous season.

·        
Anec: Brazil April corn exports are projected at 166,552 tons, down from 186,552 previous estimate.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 18,000 thousand barrels to 1006k (970-1034 range) from the previous week and stocks up 18,000 barrels to 25.311 million.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
CBOT soybeans are mostly higher on technical buying despite slowing US export demand. Products are slightly lower led by bear spreading. K/N meal spread was hit hard yesterday, in part to positioning ahead of deliveries. A boost
in US corn plantings after rain exits the Midwest next week could be supporting back month soybean futures.

·        
StatsCan Canadian canola plantings of 21.597 million acres were 200,000 acres below expectations but up 3.3 percent from 2022.

·        
Palm oil futures hit a one-month low.

·        
Indonesia will set its CPO reference price at $955.53 per ton for May 1 to May 15, up from $932.69 LH April. The CPO export tax will be unchanged at $124 per ton and export levy at $100 per ton.

·        
Malaysia palm futures fell 65 ringgit to 3570, and cash fell $17.50 to $857.00.

·        
China May soybean futures were down 0.3%, meal off 0.2%, SBO up 0.1% and palm oil futures down 0.1%.

·        
Nearby Rotterdam vegetable oils were mixed from this time yesterday morning and meal 1.00-8.00 euros higher.

·        
Offshore values were leading SBO higher by about 21 points this morning and meal $1.40 short ton lower.

·        
Argentina apparently introduced a special sunflower and barley FX rate yesterday at the same rate of soybeans. Producer selling for both commodities picked up after the announcement.

·        
Argentina’s peso hit a record low in the black market of near 490 pesos per USD (460 on Monday), compared to about 400 from a week ago.  The official rate was around 220 pesos. The IMF is working with Argentina to strengthen the
economy.

·        
Anec: Brazil April soybean exports are projected at 14.71 million tons, down from 15.15 million previous estimate. Soybean meal was estimated at 1.9 million tons, down from 2.04 million previously.

 

USDA
Attaché: Brazil oilseed complex update

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Annual_Brasilia_Brazil_BR2023-0007

 

Export
Developments

• No
  fresh export developments. Some traders are eyeing Brazil’s lineups to see if additional US purchases were conducted.
  
• USDA
  seeks 860 tons of vegetable oil in 4 liter cans for use in export programs. Shipment was scheduled for Jun 1-30 (June 16 to July 15 for plants located at ports). All offers are due by early May 2.
  

 

Wheat

·        
Chicago wheat futures are higher in part to general concerns over the Russia/Ukraine conflict. KC and MN are lower, but losses are limited with a pickup in global import tender business.

·        
StatsCan Canadian acreage estimates were above trade expectations for all-wheat, durum and spring wheat. All-wheat of 27.0 million acres are up 7.9% from 2022. Table on page one.

·        
Nearby Chicago wheat is still near a 2021 low.

·        
A Bloomberg article cited Russia is stepping up tactical-nuclear threats with Belarus training.

·        
A Russian source told Reuters the US granted JPMorgan permission to process (selected) payments for the Russian Agricultural Bank for grain exports, but Russia again said they want full access to the SWIFT payment system, not
a case by case basis. The
grain deal is set to expire May 18.

·        
Poland plans to ban imports of Ukraine grain for domestic consumption through the end of 2023. Earlier this week
Hungary
was looking for a Ukraine export ban until the end of the year.

·        
Russia will lower the weekly export duty for wheat by 1.4% to ,678.9 rubles per ton starting April 26 from 5,759.5 rubles per ton. Indicative price was $283/ton. 

·        
Ukraine’s AgMin said grain exports so far for the 2022-23 season were 41.1 million tons as of April 26, down from 45.7 million tons about a year ago. That included about 14.2 million tons of wheat, 24.2 million tons of corn and
about 2.5 million tons of barley.

·        
September Paris wheat futures were higher by 0.75 euro to 243.50 euros.

·        
The strike this week in Canada among major grain handlers may start to support global wheat  prices. Wheat Growers Association wants foreign workers to be allowed to weigh and inspect grain on the west coast to keep grain flowing
during the strike.

 

USDA
Attaché: Argentina grain update

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Annual_Buenos%20Aires_Argentina_AR2023-0005

 

Export
Developments.

·        
Tunisia is getting offers for 75,000 tons of soft milling wheat for June 5 and July 5 shipment, optional origin. Lowest offer was $304.80/ton c&f.

·        
Iraq seeks 50,000 tons of milling wheat today from only the United States, Australia and Canada.

·        
Results awaited: South Korean flour millers seek 95,000 tons of wheat from the US and/or Australia, on Wednesday, for shipment from the United States for shipment between July 1-July 31 and 50,000 tons from Australia for shipment
between Aug. 1-Aug. 31.

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

·        
Algeria’s OAIC seeks at least 50,000 tons of wheat on Thursday, valid until Friday, for May 16 through July 31 shipment.

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

·        
Jordan seeks 120,000 tons of feed barley May 3 for October through FH November shipment.

 

Rice/Other

·        
Bloomberg: Sugar Hits Fresh 11-Year High as India Cuts Output Estimates