FI Morning Grain Comments 07/29/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year.

 

CBOT
agriculture markets extended their rally led by soybeans. Fundamentals are unchanged. The US weather outlook appears to be mostly unchanged and the models are starting to converge showing net drying next week and ridging for the Midwest by late next week for
the Midwest. Short term rains will favor the southern areas of the Midwest through Sunday, northwest
areas late in the weekend and central & eastern areas Monday.  The US dollar is higher, WTI sharply higher, and US equities are higher.

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JULY 29, 2022

• The
  second week outlook for North America takes the high pressure ridge back to the west into the Rocky Mountains Aug. 8-12 allowing a potential for cooling and showers in the U.S. eastern and northern Midwest 
  
• Until
  then rising crop stress is expected as heat and dryness evolve in the western Corn Belt in areas that are already trending too dry
• Texas
  showers and thunderstorms that occur Aug. 4-10 will offer some short term relief, but a general soaking does not seem very likely 
• Hot
  weather in the U.S. Pacific Northwest will break down this weekend and into early next week, but it may return near mid-month
• Canada’s
  southern Prairies, the northern U.S. Plains, the U.S. Pacific Northwest and the northwestern half of the U.S. Corn and Soybean Belt will experience net drying and warm to hot temperatures during the coming week to ten days
  
• Crop
  moisture stress will become significant in parts of South Dakota, Minnesota, northwestern Iowa and Nebraska while slowly returning to Kansas and Missouri after this week’s relief
• U.S.
  Delta weather will improve during the coming week with periods of rain and warm weather prevailing
• Argentina’s
  outlook was unchanged overnight with a drier bias in wheat areas during the next ten days
  
• This
  week’s rain was great for Buenos Aires and some La Pampa an Entre Rios locations, but Cordoba and parts of Santa Fe were missed and still need significant moisture
• Today’s
  GFS model run has offered some rain to western Europe late next week, but confidence in this weak weather disturbance is low
• Most
  of western and southeastern Europe are still expected to remain dry biased over the next ten days
  
• Showers
  will occur briefly in southeastern Europe today and Saturday, but resulting rainfall may not have much of a lasting impact on dryness
• Russia’s
  Southern Region is wetter again today after the mid-day model runs Thursday removed some of predicted rainfall
  
• The
  return of showers to the area was a necessary change
• Most
  of the western CIS will continue to experience favorable weather, although there is need for rain in parts of Ukraine 
• No
  changes were noted overnight for India, China or Australia – all of which should see a favorable mix of weather during the next two weeks
  
• some
  areas in India may be a little too wet and local flooding is likely

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
Aug. 1:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for wheat, corn, soybeans and cotton; spring wheat harvest, winter wheat crop progress, 4pm
• USDA
  soybean crush, DDGS production, corn for ethanol, 3pm
• Honduras
  and Costa Rica monthly coffee exports
• International
  Cotton Advisory Committee releases monthly outlook report
• EARNINGS:
  CF, Mosaic
• HOLIDAY:
  Canada

Tuesday,
Aug. 2:

• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• Australia
  commodity index
• US
  Purdue Agriculture Sentiment, 9:30am
• EARNINGS:
  FMC, Green Plains, Andersons

Wednesday,
Aug. 3:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Malaysia’s
  July 1-20 palm oil export data
• New
  Zealand Commodity Price

Thursday,
Aug. 4:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• EARNINGS:
  Corteva

Friday,
Aug. 5:

• FAO
  World Food Price Index
• 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
• Malaysia’s
  Aug. 1-5 palm oil export data

Source:
Bloomberg and FI

 

 

 

 

 

Macros

US
Personal Income (M/M) Jun: 0.6% (est 0.5%; prev R 0.6%)

–
Personal Spending (M/M): 1.1% (est 1.0%; prev R 0.3%)

–
Real Personal Spending (M/M): 0.1% (est 0.0%; prev R -0.3%)

US
PCE Deflator (M/M) Jun: 1.0% (est 0.9%; prev 0.6%)

–
PCE Deflator (Y/Y): 6.8% (est 6.8%; prev 6.3%)

–
PCE Core Deflator (M/M): 0.6% (est 0.5%; prev 0.3%)

–
PCE Core Deflator (Y/Y): 4.8% (est 4.7%; prev 4.7%)

US
Employment Cost Index Q2: 1.3% (est 1.2%; prev 1.4%)

Canadian
GDP (M/M) May: 0.0% (est -0.2%; prev 0.3%)

–
GDP (Y/Y): 5.6% (est 5.4%; prev R 5.1%)

 

Corn

·        
CBOT corn
futures
are sharply higher led by the nearby months from ongoing US weather concerns, steep drop in French corn conditions, and WTI crude oil rallying $3.50 at the time this was written.

·        
The high-pressure ridge is expected to move through the Plains and into the Midwest late next week and into the following weekend before retreating to the Plains Aug. 8-11.

·        
France’s corn crop conditions fell to 68% from 75% previous week, as of July 25, for the good and excellent conditions, compared to 90 percent year ago.

·        
We look for US corn conditions to decline by three points when updated this Monday. That could trim our US yield estimate by 2.0 bushels to 176.6 bushels per acre from 178.6 estimated last Monday. Attached is our updated US balance
sheet reflecting this change in yield. Note we lowered our US corn for ethanol use to 5.372 billion bushels, 3 million below USDA, due to a slowdown in corn grind. Previous we were about 25 million above USDA. We lowered new-crop US corn exports by 25 million
bushels to 2.375 billion (USDA @ 2.350) based on a reduction in 2022 supplies and potential increase in Brazil corn exports during FH 2023.

 

Export
developments.

·        
None reported

 

 

 

Soybeans

·        
The soybean complex is higher on follow through bullish momentum over US weather and expectations for strong US domestic demand for soybean oil. USD is higher and that might curb gains. Don’t discount profit taking during the
day session. 

·        
There were no deliveries posted for First Notice Day. Look for bull spreading to continue.

·        
Malaysia October palm was up 332 MYR to 4289 /ton and cash up $70 at $1045.

·        
China soybean futures were up 1.2%, meal 0.2% lower, soybean oil up 3.2%, and palm 4.4% higher.

·        
Rotterdam vegetable oils were 35-50
euros higher earlier and meal mixed, from this time yesterday morning.

·        
Offshore values were leading SBO 161 points lower earlier this morning and meal $3.10 short ton higher.

 

Export
Developments

·        
We heard the Philippines bought soybean meal this week.

·        
China looks to sell a half a million tons of soybeans out of reserves on August 5.

·        
Private exporters reported sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year.

 

 

 

 

Wheat

·        
The first Ukraine grain vessel may set to sail today.

·        
US wheat futures are higher on follow through buying, with Chicago and KC gaining over MN after the US spring wheat crop tour reported a strong ND spring wheat yield.

·        
The US spring wheat crop tour pegged the ND yield at 49.1 bushels per acre, about expected, above a 5-year average of 39.4 bu/ac and just below the 15 year high of 49.9 set in 2015.

·        
Paris December wheat was up 7.75 euros at 336 euros as of 8.00 am CT.

·        
Egypt is expected to float another import tender soon. Reserves are sufficient for seven months.

 

Export
Developments.

·        
The Philippines passed on 100,000 tons of feed wheat and 100,000 tons of feed barley.

·        
South Korean flour mills bought around 40,000 tons of milling wheat from Canada at a low $380s a ton, FOB, for shipment between Oct. 16 and Nov. 15.

·        
Jordan seeks 120,000 tons of wheat on August 2.

·        
Taiwan seeks 50,910 tons of US wheat on August 4 for shipment from the PNW between September 21 and October 5.

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

 

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.