FI Morning Grain Comments 04/27/22

PDF attached

 

Good
morning.

 

Indonesia
reversed their decision again, widening their ban on selected palm oil products. WTI crude oil was lower, USD up 72 points as of 6:53 am CT, and US equities higher. Russia took out a key bridge in Ukraine’s Odesa region that is used for grain transportation
that links exports through Danube ports. Soybeans are higher following soybean oil and meal lower on spreading. Malaysian palm and China vegetable oils traded sharply overnight. July oil share is at a contract high. South Korea bought a combined 119,000 tons
of soybean meal, SA and optional origin for September arrival. On Thursday Egypt and Turkey are in for vegetable oils. CBOT grains are mostly lower from the rally in the USD and slowing global export developments. A Bloomberg poll looks for weekly US ethanol
production to be up 5,000 barrels to 952 thousand (938-965 range) from the previous week and stocks down 78,000 barrels to 24.264 million.

 

USD

 

 

 

 

Weather

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 27, 2022

• Wet
  weather is the theme for U.S. crop areas in today’s outlook 
• At
  least three storms will move from the U.S. central Plains through the Midwest in the next ten days maintaining wet field conditions and delaying farming activity after the next few days
• Southwestern
  U.S. hard red winter wheat areas will get some rain this weekend and there “may” be a follow up system later next week
  
• no
  general soaking of rain is expected, but 0.25 to 0.75 inch and local totals of 1.00 to 2.00 inches will be possible a few counties in the Texas Panhandle and especially across western Oklahoma and far southern Kansas
  
• The
  moisture will be supportive  of reproduction, although follow up rain will be important
• The
  northern U.S. Plains will see a succession of frequent storm systems continue over the next ten days maintaining a wet bias and raising worry over longer lasting field working delays. 
• Southwestern
  parts of Canada’s Prairies are still not advertised to get much moisture for a while and drought in that region still has many producers concerned over the fate of their growing season this year
• Mato
  Grosso and Mato Grosso do Sul, Brazil will receive some showers and thunderstorms early next week that will slow down the region’s drying trend and provide a short-term bout of relief 
  
• Rainfall
  of 0.25 to 0.75 inch and a few greater amounts are expected with some of this moisture reaching Goias while dissipating during midweek next week
• Western
  Argentina is still advertised to be dry over the next ten days which is not much of a concern for summer crops, but future wheat planting and establishment will require moisture – especially in May and June
• Late
  season cotton and sorghum harvest delays are likely in eastern Australia periodically over the next ten days and there may be a little concern over cotton fiber quality, but enough breaks in the precipitation should occur to keep the impact low
• A
  few showers will impact China’s drier areas in the north during the next week to ten days, but the relief is only going to be temporary and more moisture will be needed
• Southwest
  to east-central Europe and a part of western Russia will remain in a wet weather model for the next ten days

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
Wholesale Inventories (M/M) Mar P: 2.3% (est 1.5%; prev 2.5%)

US
Advance Goods Trade Balance Mar: -$125.3Bln (est -$105.0Bln; prev -$106.6Bln; prevR -$106.3Bln)

US
Retail Inventories (M/M) Mar: 2.0% (est 1.4%; prev 1.1%)

 

Corn

·        
July corn is lower after the USD rallied again, up about 68 points around 7:50 am CT. News is light and global corn export developments are slowing. 

·        
Argentina producers sold 880,000 tons of corn for the week ending April 20, bringing 2021-22 sales to 22.6 million tons, near the same about at this time last year.

·        
China plans to buy another 40,000 tons of pork for state reserves on April 29, sixth such purchase this year.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 5,000 barrels to 952 thousand (938-965 range) from the previous week and stocks down 78,000 barrels to 24.264 million.

 

Potential
Disruptions in Nitrogen Fertilizer Trade

Schnitkey,
G., C. Zulauf, K. Swanson, N. Paulson and J. Baltz. “Potential Disruptions in Nitrogen Fertilizer Trade.”
farmdoc
daily
(12):57,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, April 26, 2022.

https://farmdocdaily.illinois.edu/2022/04/potential-disruptions-in-nitrogen-fertilizer-trade.html

 

Export
developments.

·        
None reported

 

 

 

Soybeans

·        
Soybean oil is sharply higher again following strength in global cash and futures markets. Malaysian palm oil hit a 7-week high. July CBOT oil share hit a record contract high. Soybeans are following SBOO higher while product
spreading and lower grains are pressuring meal.  The Indonesia palm oil export ban starts Thursday. 

·        
(Reuters) – Indonesia’s planned export ban on cooking oil’s raw material will cover crude palm oil, refined palm oil and used cooking oil, among other palm oil products, its chief economic minister said on Wednesday. The announcement
was a reversal of the minister’s statement a day earlier, in which he had said the export ban would only cover refined, bleached, and deodorized palm olein. The ban comes into force at midnight (1700 GMT Wednesday).

·        
CBOT soybean meal has been breaking this week, down five consecutive sessions, and two South Korean groups took advantage by buying a combined 119,000 tons at about $20/ton cheaper than what NOFI paid earlier this week.

·        
SA soybean and soybean oil basis was weaker

·        
Argentina producers sold 13.6 million tons so far for the 2021-22 crop-year, compared to 15.5 million tons year earlier. 

·        
Malaysian palm oil ripped higher by 678 ringgit per ton to 7,465, or 10 percent, and cash was up $170/ton at $1,760/ton.

·        
The unusual price increase and volatility in Malaysian palm oil could be related to positioning ahead of next week when they are on holiday May 2-4, returning May 5.

·        
Offshore values are leading SBO 200 points lower and meal $10.00 short ton higher.

·        
China soybean futures were slightly lower, meal slightly higher, SBO 2.3 percent higher and China palm oil up 3.7%.

·        
Rotterdam meal was up 0.50 to 9.00 euros and vegetable oils 5-22 euros higher.

 

Export
Developments

·        
South Korean groups FLC and MFG bought 59,000 tons and 60,000 tons of soybean meal, respectively, at $571.95/ton C&F and $569.30/ton, for September arrival. Earlier this week NOFI paid $591.80.

·        
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
lower on technical selling and a very strong USD.  Algeria bought durum wheat and Taiwan passed on feed wheat.

·        
September EU wheat futures were 1.50 euros higher at 376 euros.

·        
Russia announced they are ready to increase wheat shipments to Africa.

 

Export
Developments.

·        
Algeria bought at least 230,000 tons of durum wheat for second half of May and June shipment at around $570 a ton c&f for shipment in large panama bulk carriers and about $590 a ton for shipment in smaller handysized vessels.

·        
Thailand passed on feed wheat for June-October shipment. Lowest offer was around $380/ton c&f.

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

·        
 Jordan seeks 120,000 tons of feed barley on May 10 for Aug/Sep shipment.

·        
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.

 

Rice/Other

·        
None reported