FI Morning Grain Comments 07/26/22

PDF attached

 

Good
morning.

 

The
US morning weather outlook improved for the Midwest and Delta for the short term. The Midwest will see rain favoring the southern areas through Saturday, northwest today, and north central areas Wednesday. The Great Plains will see rain across the northern
Great Plains today, NE and northern KS through Wednesday and far western GP Thursday through Saturday. For the second week of the US weather forecast, ridging is still a strong possibility for the Midwest, and that is supporting futures. Grains and the soybean
complex are trading higher, in part to ridging expected for the US and larger than expected decline in US crop conditions. Yesterday’s evening weather model called for the ridge much further east next week, reducing rains for parts of the US and increasing
rain for the western Canadian Prairies. US energy markets are higher, equities lower and USD sharply higher. The market is pricing in a 75 to 100 interest rate hike.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JULY 26, 2022

• No
  major theme changes were noted overnight
• Western
  and southeastern Europe will continue in a net drying mode for the next ten days, although temperatures will not be as hot as they were in the past
• Russia’s
  Southern Region will continue milder than usual and will experience some periodic rainfall supporting summer crops more favorably after a period of drier biased weather
• It
  is raining this morning in a part of Argentina and showers will continue to impact portions of its wheat production region into Friday resulting in some improvement in topsoil moisture for better germination, emergence and establishment
• Canada’s
  southwestern and south-central Prairies and the northwestern U.S. Plains will be drying out for a while in this coming week to ten days
  
• Crop
  stress will be on the rise until significant moisture falls
• Temperatures
  will be trending warmer over time
• Northern
  U.S. Midwest will experience milder than usual weather in this coming week and a restricted amount of rainfall
• Lower
  U.S. Midwest and central Plains will see waves of rainfall continuing over the next several days
• Returning
  high pressure center in the central United States next week will bring back drier and warmer weather for the Plains and Midwest, but no seriously harsh weather is expected through the first half of August 
• Texas
  rainfall will continue very limited for the next ten days keeping stress on most summer grain, oilseed and cotton crops in the state
• China,
  India and Australia weather will remain mostly good as will be the case for South Africa
• Improving
  rainfall is expected in Sumatra, Indonesia after drier biased eater this month

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Tuesday,
July 26:

• EU
  weekly grain, oilseed import and export data
• Earnings:
  ADM

Wednesday,
July 27:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Earnings:
  Bunge

Thursday,
July 28:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Buenos
  Aires grains exchange weekly crop report
• HOLIDAY:
  Thailand

Friday,
July 29:

• Vietnam
  July coffee, rice and rubber export data
• FranceAgriMer
  weekly update on crop conditions
• ICE
  Futures Europe weekly commitments of traders report
• US
  agricultural prices paid, received, 3pm
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• HOLIDAY:
  Thailand

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
475,426                 versus   200000-550000  range

Corn                     
724,214                 versus   585000-1200000                range

Soybeans           
388,212                 versus   100000-575000  range

 

 

Macros

Philadelphia
Fed Non-Manufacturing Index Jul: 0.1 (prev 4.6)

EU
could see a natural gas shortage as a Russian company said they are slowing flows to Germany.

EU
Energy Commissioner Simson: If Russia Fully Cuts Gas Supply In July, EU Would Face Gas Supply Gap Of 45 BCM In A Cold Winter

EU
Energy Commissioner Simson: Gas Deal Agreed Today Would Yield Enough Gas Savings To Get Through Winter, Even If All Exemptions In The Proposal Are Used

EU
Energy Commissioner Simson: EU Is Exploring Options To Increase Liquefied Natural Gas Imports From Nigeria

 

Corn

·        
CBOT corn
was sharply higher this morning on US weather concerns, decline in US crop conditions, and higher outside related markets. 

·        
China’s end of June pig herd was down 1.9% from a year ago, according to the AgMin, and sow herd down 6.3%.

·        
Due to the June heatwave that swept across the Great Plains, we are hearing thousands of cattle perished in Kansas, with some buried as recycling companies (pet food, fertilizer…) were unable to keep up with demand.

·        
US corn crop conditions for the good-to-excellent categories were 61 percent, 3 points below the previous week and 2 points below expectations. 62% of the US corn crop was pollinated, 25 points above the previous week and compares
to 76 percent year ago and 70 percent average.

·        
Brazil will see cooler temperatures and rain later this week, slowing harvest progress.

·        
Brazil and China are re-negotiating the export protocol and the Brazil AgMin thinks there is a possibility the country will ship corn to China as soon as second half 2022.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
Soybeans, meal and oil are higher from spillover strength in outside markets, larger decline in US soybean conditions than expected, and possible ridging across the US next week. Higher energy markets lend strength to soybean
oil and palm oil futures.

·        
China committed to import 1 million tons of Indonesian palm oil.

·        
Cargo surveyor SGS reported month to date July 25 Malaysian palm exports at 970,243 tons, 21,381 tons below the same period a month ago or down 2.2%, and 180,209 tons below the same period a year ago or down 15.7%.

·        
Malaysia October palm was up 141 MYR to 3787 /ton and cash up $30 to $965.

·        
China soybean futures were up 2.0%, meal 1.5% higher, soybean oil up 2.1%, and palm 2.8% higher.

·        
Rotterdam vegetable oils were up
10 euros higher earlier and meal 15-20 euros higher, from this time yesterday morning.

·        
Offshore values were leading SBO 93 points higher earlier this morning and meal $4.00 short ton lower.

·        
USDA soybean crop conditions for the combined good and excellent categories fell 2 points to 59 percent, one point below an average trade guess and compares to 58 percent year ago and 53 average. 26 percent of the crop is setting
pods, below 39 percent year ago and 34 percent average.

 

Export
Developments

·        
China looks to sell a half a million tons of soybeans out of reserves on July 29. Last week they sold just 7,500 tons.

 

Wheat

·        
US wheat is higher from a dip in spring wheat ratings and Black Sea shipping concerns despite a sharply higher USD. We heard Russian missiles were launched at another port city in Ukraine, not the port itself but the city.

·        
Paris wheat was up 9.25 euros at 341 euros as of 7.30 am CT.

·        
As a part to resume grain exports out of Ukraine, the Joint Coordination Centre (JCC) was established and today the major countries (and UN) started work in Istanbul.

·        
Kazakhstan estimated their 2022 wheat crop at 13.0 to 13.50 million tons, up 15 percent from a year ago, and domestic consumption at 6.0 million tons.

·        
The US spring wheat crop tour started. Note the combined North Dakota and Montana spring wheat harvest area represents about 75 percent of the US crop. Much of the tour will be focused on North Dakota (around 50% of the US harvested
area). USDA estimated the ND spring wheat yield at 51 bushels per acre )production 267.750 million) in their July crop production update, up from 33.5 bushels for 2021 (174.535 million). The US yield was pegged at 47 versus 32.6 last year.

·        
USDA crop conditions for spring wheat were down 3 points from last week to 68 percent, well up from 9 points year ago and 63 percent average. The US harvest of winter wheat was 77% complete, up from 70% week ago, down from 82
year ago and 80 percent average.

·        
Montana, which represents 25 percent of USDA’s harvest out of the six major producing states reported in weekly crop progress, fell 7 points in the combined good and excellent categories to 43 percent. North Dakota was rated 78
percent, down 2 points from the previous week.

 

USDA
Attaché: Argentina Grain and Feed update

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Buenos%20Aires_Argentina_AR2022-0012

Wheat
exports for marketing year (MY) 2022-2023 are forecast at 12.35 million tons, l.15 million tons lower than USDA’s official number as a result of lower production. The wheat and barley crops are suffering very dry weather. Barley exports in MY 2022-2023 are
forecast at 3.7 million tons, the same as in MY 2021-2022. Corn exports in MY 2022-2023 are forecast at 38.8 million tons, 2.2 million tons lower than USDA as Post forecasts a lower production at 53 million tons. Sorghum exports for MY 2022-2023 are forecast
at 1.65 million tons, 850,000 tons lower than USDA as China’s demand has recently cooled down. Rice exports in MY 2022-2023 are forecast at 350,000 tons, 30,000 tons higher than USDA.

 

Export
Developments.

·        
Pakistan bought up to 7 cargos of French wheat last week. $404.86 c&f for Aug 1-25 shipment was noted.

·        
Jordan bought an estimated net 60,000 tons of wheat at $405.75/ton for LH December shipment.

·        
The World Food Program seeks 30,000 tons of Ukrainian milling wheat for August delivery. (AgriCensus)

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

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade seeks 92,100 tons of rice on Aug 3 for arrival in SK between Feb & Apr.

 

US RICE – 75 PCT CONDITION GOOD/EXCELLENT VS 72 PCT WK AGO (73 PCT YR AGO) -USDA

US RICE – 39 PCT HEADED VS 28 PCT WK AGO (44 PCT 5-YR AVG) -USDA

 

US COTTON – 34 PCT CONDITION GOOD/EXCELLENT VS 38 PCT WK AGO (61 PCT YR AGO) -USDA

US COTTON – 48 PCT SETTING BOLLS VS 31 PCT WK AGO (38 PCT 5-YR AVG) -USDA

US COTTON – 80 PCT SQUARING VS 74 PCT WK AGO (80 PCT 5-YR AVG) -USDA