FI Morning Grain Comments 07/21/22

PDF attached

 

Good
morning.

 

CBOT
grains and complex are lower. The US weather forecast improved with additional rain expected for the Midwest next week. The energy markets are lower and are pressuring other commodity markets with fund selling. USDA export sales showed some sales to China,
and overall results were mixed.

 

 

Weather

US
drought monitor showed a widespread change (drier) for the south-central GP and lower WCB.

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JULY 21, 2022

• Concern
  about Europe remains with another ten days of dryness and heat likely from Slovakia into Greece where unirrigated corn, sorghum, sunseed and soybeans will be stressed because it is already too dry in much of that region today
  
• France
  will remain a great concern as well with limited rainfall and continued warm weather for a while keeping unirrigated crops stressed
• Some
  dryness in the southern U.K., Belgium Netherlands, Spain, Portugal and Italy will also be of interest to the marketplace, but Czech Republic into the Baltic States and Belarus (including Poland) will remain in good shape
• Russia’s
  Southern Region will see periods of rain and drizzle over the next five days and cooler than usual temperatures resulting in improved topsoil moisture and some improved summer crop conditions
• U.S.
  Midwest crop areas will continue in mostly good shape, despite dry pockets
  
• Some
  relief to developing dryness from Nebraska to Minnesota is expected over the coming week with some rain Friday and more rain during mid-week next week 
• Relief
  from dryness in the southwestern Corn Belt and northern Delta is not likely in this first week of the outlook, but some rain is expected in the following week
• Texas
  and Oklahoma drought and heat stress will continue for the next seven days
  
• Some
  relief may occur late next week and into the early days of August, but confidence is low on the significance of that relief
  
• World
  Weather, Inc. would not be surprised to find future model runs backing off of some of the moisture advertised in the region in future days
• Northwestern
  U.S. Plains and southwestern Canada’s Prairies may dry down for a little while keep some crop stress in place for a while
• Argentina
  still has a good opportunity for rain next week beginning early in the week 
  
• Two
  waves of rain are expected that should improve soil moisture for better wheat germination, emergence and establishment, but remember the event is still out several days leaving some time for change
  
• Confidence
  is moderately high that at least some rain will impact the nation’s wheat region 
• India
  will experience some flooding rain from Madhya Pradesh into the far northern parts of the nation during the next ten days
  
• Gujarat
  and Rajasthan should be largely missed by the heavier rain, although lighter amounts are expected there to support crop development
• China
  weather remains mostly good, although drying is expected in the interior southeast for a while
• Australia
  weather is still supportive of favorable winter crop establishment

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Thursday,
July 21:

• International
  Grains Council releases monthly report
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  total milk and red meat production, 3pm

Friday,
July 22:

• 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
• FranceAgriMer
  weekly update on crop conditions
• US
  cattle inventory; cold storage data for beef, pork and poultry, 3pm

Source:
Bloomberg and FI

 

 

 

 

USDA
export sales

Old
crop soybeans posted a positive number just above trade expectations. New crop corn was above a trade range and wheat sales were good. Other sales posted were ok to poor. China bought a cargo of new crop corn, 2,100 tons of sorghum, 146,900 tons of current
crop year soybeans (125k switched from unknown), 136,000 new-crop soybeans, some beef & pork.

 

 

 

Macros

ECB
RAISES MAIN REFINANCING RATE BY 50BPS TO 0.5%; EST. 0.250%

US
Initial Jobless Claims Jul 16: 251K (est 240K; 244K)

US
Continuing Claims Jul 9: 1384K (est 1340K; 1331K)

US
Philadelphia Fed Business Outlook Jul: -12.3 (est 0.8; prev-3.3)

Philadelphia
Fed Prices Paid Index July 52.2 Vs June 64.5

New
Orders Index July -24.8 Vs June -12.4

Employment
Index July 19.4 Vs June 28.1

Six-Month
Business Conditions July -18.6 Vs June -6.8

Six-Month
Capital Expenditures Outlook July 4.4 Vs June 11.7

Canadian
New House Price Index Jun: 0.2% (est 0.3%; prev 0.5%)

 

 

Corn

·        
CBOT corn
is lower from a morning weather forecast calling for an improvement for the US Corn Belt.

·        
IGC estimated 2022-23 global corn production at 1.189 billion tons, up 1 million from previous and  below 2021-22 of 1.220 billion tons.

·        
The USDA Broiler Report showed eggs set in the US up 1 percent from a year ago and chicks placed up 2 percent. Cumulative placements from the week ending January 8, 2022, through July 16, 2022, for the United States were 5.25
billion. Cumulative placements were up slightly from the same period a year earlier.

·        
Weekly US ethanol production increased 29,000 barrels from the previous week to 1034 thousand barrels per day (bbl). This was the first increase in five weeks and largest weekly increase since the week ending May 27, 2022. Ethanol
stocks decreased 53,000 barrels to 22.553 million. 

·        
Reuters estimates for COT below.

 

 

Export
developments.

·        
South Korea’s MFG bought an estimated 66,000 tons of feed corn from South America or South Africa for arrival around November 21, at an estimated $317.99/ton C&F and 227 cents over the Dec corn contract.

·        
South Korea’s NOFI bought an estimated 138,000 tons of feed corn from South America or South Africa for arrival during November, at an estimated $319.45/ton C&F.

 

Soybeans

·        
The soybean complex is lower led by soybean oil. US energies are lower and the US weather outlook improved per morning forecast with additional rains for the Midwest for next week.

·        
Global energy prices are down after Russia announced they plan to increase natural gas shipments to Europe after a maintenance schedule. This weighted on global vegetable oil prices.

·        
Yesterday US soybean meal cash prices declined in selected US locations and was down big for the US Gulf. IL Dec fell $2 to +50/NA Q and Gulf was down $12/$15 to +33/45 Q.

·        
Indonesia continues to approve palm oil for export to clear out large inventories and keep production from slowing down.

·        
Malaysia October palm was down 215MYR to 3935 ton and cash down $65.00 to $955. Profit taking was noted.

·        
China soybean futures were slightly higher, meal 0.1% lower, soybean oil down 0.6% and palm down 1.3%.

·        
Rotterdam vegetable oils were 25-50
euros lower and meal 1-9 euros higher, from this time yesterday morning.

·        
Offshore values were leading SBO up by about 40 points earlier this morning and meal $2.40 short ton higher.

 

Export
Developments

·        
China looks to sell a half a million tons of soybeans out of reserves on July 22.

 

Wheat

·        
US wheat futures are lower but losses are limited from a hot spell for the southern Great Plains and US drought monitor showing deteriorating conditions across many areas of the wheat belt.  Russian wheat prospects are high.

·        
Egypt bought French and Russian wheat, passed on US. The total amount when broken down for the three shipping periods is routine.

·        
SovEcon increased their estimate for the Russia 2022 wheat crop to 90.9 million tons from 89.2 million tons. They may downward adjust exports based on the start of the new-crop shipment pace from the current 42.6 million tons. 

·        
Turkey said the Black Sea grain shipping talks are going well. Look for an announcement soon.

·        
IGC on estimated world wheat production at 770 million tons for 2022-23, up 1 million from previous.

·        
Paris wheat was up 1.75 euros at 341.75 euros as of 7:40 am CT.

 

Export
Developments.

·        
Pakistan bought 300,000 tons of wheat at $404.86/ton C&F for Aug. 1-25 shipment.

·        
Egypt’s GASC bought 640,000 tons of French and Russian wheat (no US) at $403 and $405 a ton C&F (US offer of $443 C&F presented Wednesday). They also bought local wheat. Reuters breakdown:

• 60,000
  French first half October $405
• 60,000
  French second half October $403
• 60,000
  Russian second half September $403
• 60,000
  French first half November $403
• 60,000
  French first half November $403
• 60,000
  French first half November $403
• 60,000
  Russian unclear $403
• 60,000
  French second half October $403
• 40,000
  Russian second half September $403
• Egyptian
  – African 30,000 German ex warehouse $403
• Egyptian
  – African 30,000 Lithuanian ex warehouse $403
• Grain
  (?) – 60,000 Russian second half September $403

·        
Jordan seeks 120,000 tons of wheat on July 26 for November and/or December shipment.

·        
Jordan seeks 120,000 tons of feed barley on July 27 for Dec/Jan shipment.

 

Rice/Other

·        
None reported

 

 

USDA Export Sales

U.S. EXPORT SALES FOR WEEK ENDING  7/14/2022

 

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	140.6	1,561.5	1,631.1	109.7	615.5	858.9	0.0	0.0
SRW	92.2	1,227.4	967.4	5.4	271.7	332.6	0.0	30.0
HRS	185.7	1,571.1	1,533.0	2.4	624.3	742.3	0.0	0.0
WHITE	92.6	1,241.7	1,065.1	24.3	329.3	408.2	0.0	0.0
DURUM	0.0	124.4	8.4	0.0	18.0	41.7	0.0	0.0
TOTAL	511.1	5,726.1	5,205.1	141.8	1,858.7	2,383.7	0.0	30.0
BARLEY	0.0	12.8	23.5	0.0	2.7	1.6	0.0	0.0
CORN	33.9	5,926.6	9,019.4	1,109.1	54,523.6	60,751.2	570.2	7,406.5
SORGHUM	5.9	350.0	710.9	108.2	6,611.7	6,467.4	0.0	0.0
SOYBEANS	203.5	6,624.2	3,132.2	499.9	52,973.4	58,855.8	254.7	14,106.3
SOY MEAL	109.3	1,874.6	2,069.7	150.0	9,508.1	9,519.9	27.6	749.8
SOY OIL	0.6	66.2	16.9	0.3	621.0	660.3	0.0	0.1
RICE
L G RGH	0.0	57.7	189.8	0.6	1,280.8	1,611.3	5.0	18.1
M S RGH	0.0	10.5	8.0	3.4	17.6	25.9	0.0	0.0
L G BRN	0.5	3.2	11.5	0.2	52.1	40.0	0.0	0.0
M&S BR	0.1	8.5	0.7	0.4	79.1	156.2	0.0	0.0
L G MLD	20.3	74.0	46.8	26.9	790.3	645.5	40.1	40.1
M S MLD	1.1	105.6	113.0	1.5	431.9	579.8	0.0	0.0
TOTAL	22.0	259.4	369.7	33.0	2,651.8	3,058.6	45.1	58.3
COTTON		THOUSAND RUNNING BALES
UPLAND	54.1	3,172.4	1,825.3	330.8	12,532.2	14,365.2	113.2	4,701.0
PIMA	-2.6	37.5	103.3	5.3	442.0	733.8	0.4	59.5

 

 

Export Sales Highlights

This
summary is based on reports from exporters for the period July 8-14, 2022.

Wheat:
Net sales of 511,100 metric tons (MT) for 2022/2023 were down 50 percent from the previous week and 10 percent from the prior 4-week average.  Increases primarily for the Philippines (110,100 MT, including decreases of 1,400 MT), unknown destination (107,000
MT), Nigeria (89,800 MT, including decreases of 2,200 MT), Mexico (50,700 MT, including decreases of 100 MT), and Taiwan (44,700 MT), were offset by reductions for Egypt (32,000 MT), South Korea (19,200 MT), and Honduras (700 MT).  Exports of 141,800 MT were
down 48 percent from the previous week and 50 percent from the prior 4-week average.  The destinations were primarily to Nigeria (27,800 MT), Brazil (26,000 MT), the Philippines (22,600 MT), Venezuela (21,300 MT), and Honduras (18,300 MT).

Corn: 
Net sales of 33,900 MT for 2021/2022 were down 43 percent from the previous week and 82 percent from the prior 4-week average.  Increases primarily for Japan (87,300 MT, including 87,700 MT switched from unknown destinations and decreases of 2,600 MT), Mexico
(38,800 MT, including decreases of 1,900 MT), Venezuela (10,200 MT switched from unknown destinations), El Salvador (2,000 MT), and South Korea (1,400 MT, including decreases of 1,000 MT), were offset by reductions primarily for unknown destinations (94,600
MT).  Net sales of 570,200 MT for 2022/2023 primarily for unknown destinations (162,700 MT), Mexico (158,700 MT), Japan (85,100 MT), China (66,500 MT), and Honduras (49,900 MT), were offset by reductions for Canada (2,500 MT).  Exports of 1,109,100 MT were
up 21 percent from the previous week and 2 percent from the prior 4-week average.  The destinations were primarily to China (455,700 MT), Mexico (307,100 MT), Japan (228,200 MT), Canada (44,800 MT), and Costa Rica (30,600 MT).

Optional
Origin Sales: 
For 2021/2022, the current outstanding balance of 108,300 MT is for unknown destinations (65,000 MT), Italy (34,300 MT), and Saudi Arabia (9,000 MT).  For 2022/2023, the current outstanding balance of 35,400 MT is for Italy.

Barley: 
No net sales or exports were reported for the week. 

Sorghum: 
Net sales of 5,900 MT for 2021/2022 were down noticeably from the previous week and down 84 percent from the prior 4-week average.  Increases were reported for Eritrea (2,400 MT), China (2,100 MT), and Mexico (1,400 MT, including decreases of 300 MT).  Exports
of 108,200 MT were down 42 percent from the previous week and 10 percent from the prior 4-week average.  The destinations were to China (72,400 MT), Eritrea (32,400 MT), and Mexico (3,400 MT).

Rice: 
Net sales of 22,000 MT for 2021/2022 were down 20 percent from the previous week and 8 percent from the prior 4-week average.  Increases were primarily for the Dominican Republic (10,000 MT), Haiti (7,100 MT, including decreases of 100 MT), Canada (2,400 MT,
including decreases of 100 MT), Saudi Arabia (1,800 MT), and Mexico (400 MT).  Net sales of 45,100 MT for 2022/2023 were reported for Iraq (40,000 MT), Honduras (5,000 MT), and the Leeward and Windward Islands (100 MT).  Exports of 33,000 MT were down 30 percent
from the previous week and 26 percent from the prior 4-week average.  The destinations were primarily to Haiti (15,200 MT), the Dominican Republic (10,000 MT), Mexico (4,500 MT), Canada (1,900 MT), and Taiwan (400 MT).

Soybeans: 
Net sales of 203,500 MT for 2021/2022 were primarily for China (146,900 MT, including 125,000 MT switched from unknow destinations), Indonesia (72,200 MT, including 68,000 MT switched from unknown destinations and decreases of 100 MT), Germany (68,800 MT),
Japan (55,100 MT, including 50,200 MT switched from unknown destinations and decreases of 2,900 MT), and Mexico (13,200 MT, including decreases of 300 MT), were offset by reductions for unknown destinations (172,900 MT).  Net sales of 254,700 MT for 2022/2023
were primarily for China (136,000 MT), Egypt (52,000 MT), Mexico (27,000 MT), unknown destinations (19,000 MT), and Japan (13,500 MT).  Exports of 499,900 MT were up 13 percent from the previous week and 10 percent from the prior 4-week average.  The destinations
were primarily to China (140,000 MT), Japan (117,800 MT), Indonesia (80,900 MT), Germany (68,800 MT), and Mexico (56,800 MT). 

Export
for Own Account:
For 2021/2022, the current exports for own account outstanding balance is 6,300 MT, all Canada.

Export
Adjustment:
Accumulated exports of soybeans to the Netherlands were adjusted down 68,786 MT for week ending June 30^th.  The correct destination for this shipment is Germany.

Soybean
Cake and Meal: 
Net sales of 109,300 MT for 2021/2022 were up noticeably from the previous week and from the prior 4-week average.  Increases primarily for the Philippines (96,500 MT), Panama (11,800 MT, including 10,800 MT switched from Colombia), Canada (11,200 MT, including
decreases of 200 MT), Costa Rica (6,000 MT), and Mexico (5,000 MT), were offset by reductions primarily for the Dominican Republic (22,300 MT), unknown destinations (1,400 MT), and Belgium (1,200 MT).  Net sales of 27,600 MT for 2022/2023 were primarily for
Honduras (16,800 MT) and the Dominican Republic (6,200 MT).  Exports of 150,000 MT were unchanged from the previous week, but down 33 percent from the prior 4-week average.  The destinations were primarily to the Philippines (49,900 MT), Mexico (24,400 MT),
Colombia (22,200 MT), Canada (21,400 MT), and Panama (10,800 MT).

Soybean
Oil: 
Net sales of 600 MT for 2021/2022 were down 38 percent from the previous week and 29 percent from the prior 4-week average.  Increases were reported for Canada (300 MT) and Guatemala (300 MT).  Exports of 300 MT were down 98 percent from the previous week
and 95 percent from the prior 4-week average.  The destination was to Canada.

Cotton: 
Net sales of 54,100 RB for 2021/2022 were up noticeably from the previous week and up 93 percent from the prior 4-week average.  Increases primarily for Vietnam (64,200 RB, including decreases of 100 RB), China (3,100 RB, including decreases of 9,000 RB),
Indonesia (2,100 RB, including 700 RB switched from Pakistan, 400 RB switched from Japan, and decreases of 100 RB), Honduras (800 RB), and Thailand (700 RB, including 300 RB switched from Japan), were offset by reductions primarily for Pakistan (13,500 RB),
South Korea (2,200 RB), and Japan (1,100 RB).  Net sales of 113,200 RB for 2022/2023 primarily for Vietnam (37,400 RB), Turkey (29,000 RB), Malaysia (9,200 RB), Ecuador (7,600 RB), and Honduras (6,600 RB), were offset by reductions for El Salvador (100 RB). 
Exports of 330,800 RB were up 6 percent from the previous week, but down 7 percent from the prior 4-week average.  The destinations were primarily to China (116,500 RB), Vietnam (53,900 RB), Turkey (42,800 RB), Pakistan (22,200 RB), and Mexico (21,900 RB). 
Net sales reductions of 2,600 RB of Pima–a marketing-year low–were down noticeably from the previous week and from the prior 4-week average.  Increases reported for Thailand (900 RB), were more than offset by reductions for India (3,500 MT).  Total net sales
of 400 RB for 2022/2023 were reported for India.  Exports of 5,300 RB were up 23 percent from the previous week, but down 21 percent from the prior 4-week average.  The destinations were to China (2,300 RB), India (1,200 RB), Egypt (600 RB), Vietnam (400 RB),
and Taiwan (400 RB). 

Optional
Origin Sales: 
For 2021/2022, options were exercised to export 3,700 RB to Vietnam from the United States.  The current outstanding balance of 9,000 RB is for Vietnam (6,500 RB) and Pakistan (2,500 RB). 

Export
for Own Account:
For 2021/2022, new exports for own account totaling 300 RB were to Pakistan.  Exports for own account totaling 8,100 RB to China (5,200 RB) and Vietnam (3,000 RB) were applied to new or outstanding sales.  The current exports for own account outstanding balance
of 58,200 RB is for China (32,500 RB), Vietnam (20,600 RB), Indonesia (4,800 RB), and Pakistan (300 RB).

Hides
and Skins: 
Net sales of 499,000 pieces for 2022 were up 78 percent from the previous week and 42 percent from the prior 4-week average.  Increases primarily for China (344,500 whole cattle hides, including decreases of 7,600 pieces), Mexico (63,800 whole cattle hides,
including decreases of 1,500 pieces), Thailand (32,300 whole cattle hides, including decreases of 1,000 pieces), Indonesia (17,800 whole cattle hides, including decreases of 200 pieces), and South Korea (12,700 whole cattle hides, including decreases of 3,000
pieces), were offset by reductions for Vietnam (200 pieces).  In addition, total net sales reductions of 7,200 calf skins were for Italy.   Exports of 451,900 pieces were up 62 percent from the previous week and 28 percent from the prior 4-week average.  Whole
cattle hides exports were primarily to China (258,100 pieces), South Korea (67,000 pieces), Mexico (54,900 pieces), Thailand (31,000 pieces), and Indonesia (10,800 pieces).

Net
sales of 76,800 wet blues for 2022 were down 46 percent from the previous week and 57 percent from the prior 4-week average.  Increases primarily for Thailand (21,800 unsplit, including decreases of 1,000 unsplit), China (21,400 unsplit), Taiwan (12,400 unsplit),
Vietnam (9,200 unsplit), and India (6,800 grain splits and 1,300 unsplit), were offset by reductions for Portugal (200 grain splits) and Italy (100 unsplit).  Exports of 174,200 wet blues were up noticeably from the previous week and up 66 percent from the
prior 4-week average.  The destinations were primarily to China (51,300 unsplit), Italy (48,100 unsplit and 1,500 grain splits), Thailand (30,500 unsplit), Vietnam (26,500 unsplit), and Taiwan (4,600 unsplit and 1,700 grain splits).  Net sales of 682,000 splits
were up noticeably from the previous week and from the prior 4-week average.  Increases reported for Vietnam (621,500 pounds) and Taiwan (80,000 pounds), were offset by reductions for South Korea (19,500 pounds).  Exports of 243,500 pounds were down 24 percent
from the previous week and 44 percent from the prior 4-week average. The destinations were to Vietnam (200,000 pounds) and China (43,500 pounds).

Beef: 
Net sales of 23,800 MT for 2022 were up noticeably from the previous week and up 97 percent from the prior 4-week average.  Increases primarily for South Korea (7,700 MT, including decreases of 500 MT), Japan (5,800 MT, including decreases of 500 MT), China
(3,100 MT, including decreases of 100 MT), Mexico (1,900 MT, including decreases of 100 MT), and Hong Kong (1,600 MT, including decreases of 100 MT), were offset by reductions for the United Arab Emirates (200 MT) and Chile (100 MT).  Exports of 19,600 MT
were up 14 percent from the previous week and 3 percent from the prior 4-week average.  The destinations were primarily to Japan (5,800 MT), South Korea (5,500 MT), China (3,300 MT), Mexico (1,200 MT), and Taiwan (1,100 MT). 

Pork: 
Net sales of 20,600 MT for 2022 were up 13 percent from the previous week, but down 23 percent from the prior 4-week average.  Increases were primarily for Mexico (10,500 MT, including decreases of 400 MT), Japan (2,600 MT, including decreases of 200 MT),
China (2,500 MT, including decreases of 300 MT), Canada (1,600 MT, including decreases of 400 MT), and Colombia (1,600 MT, including decreases of 100 MT).  Exports of 26,700 MT were up 16 percent from the previous week, but down 5 percent from the prior 4-week
average.  The destinations were primarily to Mexico (11,300 MT), China (4,400 MT), Japan (4,200 MT), South Korea (2,000 MT), and Canada (1,300 MT).