FI Morning Grain Comments 08/03/22

PDF attached

 

Good
morning.

 

Not
much change to the fundamentals. The US weather outlook is largely unchanged over the short term for the Great Plains, slightly better for the Midwest and Canadian Prairies, while unchanged for the Delta. The second week of the US weather forecast for the
Midwest turned drier for the midday yesterday. US
soybeans are higher from strength in soybean oil, higher WTI crude oil, and unfavorable US weather. The USD turned higher. Soybean meal turned lower. There were again no CBOT deliveries. Malaysia October palm was up 23 MYR to 3864 /ton and cash up $7.50 at
$960. China soybean futures were up 0.8%, meal 0.1% lower, soybean oil up 0.4%, and palm 2.3% lower. Offshore values were leading SBO 181 points higher earlier this morning and meal $4.70 short ton lower. Corn is higher primarily on US weather concerns. Wheat
turned higher after reaching a one-week low on strong global import demand. A Bloomberg poll looks for weekly US ethanol production to be down 1,000 barrels to 1021 thousand (1009-1045 range) from the previous week and stocks down 65,000 barrels to 23.263
million.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 3, 2022

• Today’s
  forecast model runs are offering rain in the dry areas of the northwestern U.S. Corn and Soybean Belt this weekend
  
• The
  European model run produces 0.75 to more than 2.50 inches in some of the dry region while the GFS suggests 0.25 to 0.75 inch. 
  
• The
  European model seems to be overdoing the rainfall, but the forecast is all about ridge positioning and the slightest change in the position and intensity of the high-pressure ridge will have much to say about crop production potentials
• The
  northwestern U.S. Corn and Soybean Areas had a relatively good early summer after late planting, but the short to very short soil moisture prevalent today in the region is quite stressful
  
• If
  rain falls as the European model suggests yields will come around better than expected, but without good rainfall and follow up moisture later this month the region’s yield could fall more significantly
  
• That
  puts much pressure on this weekend’s rain event
• World
  Weather, Inc. believes the European model may be too wet
• Good
  crop weather will continue in the central and eastern U.S. production areas
• Texas
  may get some rain in the north and in some western cotton, corn and sorghum areas next week, although the impact from the rain may not be very great because of the serious condition many crops are already in 
• Drying
  will continue in the northwestern U.S. Plains, southwestern Canada’s Prairies and in the U.S. Pacific Northwest inducing a deteriorating trend in dryland crops
• Argentina
  still has a potential for rain in the drier western winter crop areas early next week
• Europe’s
  forecast has not changed much with warmer than usual temperatures expected for the next ten days 
  
• A
  few showers will occur Thursday and Friday from France to Poland, but the amount of relief will be minimal
• GFS
  model suggests better rainfall near and especially after mid-month in parts of Europe, but so much damage to production will have already occurred by then
• France
  and parts of the region from Hungary to the lower Danube River Basin have been driest for the longest period of time
• No
  changes in China, India or Australia were noted overnight
• India
  is expecting a flooding rain event next week as a monsoon low comes across the heart of the nation from the Bay of Bengal to Gujarat 
  
• some
  crop damage might occur from flooding
• Western
  Russia and eastern Ukraine will get rain in the coming week supporting good crop development
• Russia’s
  New Lands will dry down for much of the coming week raising the need for rain later this month

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

US
production estimates

-STONEX
SAYS ESTIMATES U.S. 2022 CORN PRODUCTION AT 14.417 BILLION BUSHELS, YIELD OF 176.0 BU/ACRE

-STONEX
SAYS ESTIMATES U.S. 2022 SOYBEAN PRODUCTION AT 4.490 BILLION BUSHELS, YIELD OF 51.3 BU/ACRE (Reuters)

 

Macros

OPEC+
Meeting Ends, Approves Output Increase Decision Of 100,000 Bpd – RTRS Source

OPEC+
To Hold Next Meeting Sept 5 – RTRS Source

 

 

Corn

·        
Corn futures are higher on follow through buying from net drying across much of the US growing areas.

·        
Today’s forecast model run does offer rain in across the northwestern US Corn and Soybean Belt this weekend. The European model run produces 0.75 to more than 2.50 inches in some of the dry region while the GFS suggests 0.25 to
0.75 inch, according to World Weather Inc.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 1,000 barrels to 1021 thousand (1009-1045 range) from the previous week and stocks down 65,000 barrels to 23.263 million.

 

Export
developments.

·        
Taiwan’s MFIG seeks bought 55,000 tons of South Africa corn for Oct 16 through November 4 shipment, at an estimated 254.82 cents a bushel c&f over the Chicago December 2022 corn contract.

 

BA
Grains Exchange brief on Argentina fertilizer. 

BA
Grains Exchange on Argentina fertilizer suggests policy changes are needed to sustain a large corn planted area for 2022.

file:///C:/Users/treilly/Downloads/situacionmercadofertilizantes-bolsadecereales.pdf

 

 

Soybeans

·        
US soybeans are higher from strength in soybean oil, higher WTI crude oil, and unfavorable US weather.  The USD turned higher.

·        
The second week of the US weather forecast turned drier for the midday yesterday. For this weekend, the European model suggested greater rains for the northwestern Corn Belt. The GFS is not as wet as the European.

·        
There were again no CBOT deliveries.

·        
The India state of Telangana looks to expand the palm oil by a large 2 million acres over the next 4 years, potentially making it a top 5 palm oil producer. The goal is to become less reliant on palm oil imports. India produces
less than 300,000 tons of palm oil a year.

·        
Malaysia October palm was up 23 MYR to 3864 /ton and cash up $7.50 at $960.

·        
China soybean futures were up 0.8%, meal 0.1% lower, soybean oil up 0.4%, and palm 2.3% lower.

·        
Rotterdam vegetable oils were 5-10
euros higher earlier and meal mostly 1-7 euros lower, from this time yesterday morning.

·        
Offshore values were leading SBO 181 points higher earlier this morning and meal $4.70 short ton lower.

·        
EU soybean imports as of July 31 were 1.27 million tons, nearly unchanged from a year earlier. Rapeseed imports are up sharply from the previous year, at 491,443 tons versus 286,826 prior year. Soybean meal imports were 1.28 million
tons, up from 1.14 million year ago. EU sunflower oil imports were 126,033 tons versus 136,733 tons year ago, despite the Ukraine situation.  Much of that likely came by rail if Ukraine origin.

 

Export
Developments

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

 

Wheat

·        
US wheat futures are higher on good global demand.

·        
Paris September wheat was up 3.50 euros at 342.50euros as of 7:30 am CT.

·        
A joint inspection team will meet in Turkey today. The 26,527-ton corn ship left Ukraine on Monday.

·        
Romania’s 2022 wheat harvest is 96% complete and the AgMin said it will be large enough to cover domestic needs and ensure a surplus for exports. No details on the crop size was provided. In 2021 they produced 11.3 million tons
of wheat.

·        
EU soft wheat exports as of July 31 were 1.77 million tons, up from 1.57 MMT year earlier. Barley exports were 585,013 tons versus 1.47 million tons year earlier.

 

Export
Developments.

·        
Tunisia bought 125,000 tons of soft wheat, at $389.86/ton c&f for Aug 25 through October 5 shipment. Tunisia also bought 50,000 tons of barley at $348.88/ton c&f.

·        
Iran’s GTC seeks 60,000 tons of milling wheat for Sep/Oct shipment.

·        
Yesterday Algeria ended up buying an estimated 720,000 tons of wheat, mostly from France, at an estimated $384/ton for Sep and Oct shipment.

·        
Jordan seeks 120,000 tons of wheat on Aug 9 for Jan/Feb shipment.

·        
Jordan saw 5 participants for 120,000 tons of barley.

·        
Japan seeks 122,103 tons of milling wheat later this week for October loading.

·        
South Korea millers seek 100,000 tons of wheat from the US and Australia, 50k each, on Wed. for October (US) and/or LH December (Ausi) shipment.

·        
The Philippines seek 150,000 tons of milling wheat and 150,000 tons of feed barley on Thursday for OND shipment.

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

 

Rice/Other

·        
Mauritius seeks 6,000 tons of rice, optional origin, for October 1 and December 31 delivery.

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