FI Morning Grain Comments 08/08/22

PDF attached

 

Good
morning.

 

Private
exporters reported the following sales activity:

-132,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-105,000
metric tons of corn for delivery to Italy during the 2022/2023 marketing year

-120,000
metric tons of corn for delivery to unknown destinations during the 2022/2023 marketing year

 

Lower
outside related markets and US weather are in focus. Global export developments over the weekend. Rains over the weekend were about as expected for the northwestern Corn Belt and eastern Midwest. Southern IA, much of IL and Mansouri was mostly dry. The morning
forecast is a little better for the US Midwest. Temperatures will be cooler this week for the Midwest and parts of the Great Plains. Rains favor the north central and southwest areas today, southeast Tuesday through Wednesday, and northwest areas Friday. WTI
crude oil is weaker this morning, USD down 26 pints and US equities leaning towards a higher open. Soybeans and meal are softer but with limited losses on expectations for additional Chinese demand. Soybean oil is catching a bid on talk of Argentina SME sales
to Europe late on Friday and the US Senate bill aimed at reducing inflation that contains the positive measures for alternative fuels. Corn and wheat are lower on Black Sea shipments increasing from Ukraine and easing US weather concerns. Two more ships carrying
corn and soybeans departed from Ukrainian ports on Monday after four on Sunday.
We revised our crop conditions to reflect weekend rains.

 

 

 

Weather

Rains
on Sunday for the NW Corn Belt were near expectations

7-day

 

 

World
Weather Inc.

Yesterday

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 7, 2022

•            
No big changes occurred during the weekend

•            
U.S. rainfall occurred as expected

•            
U.S. outlook is still going to be dry and warm in the Great Plains and a part of the western Corn Belt for a while during the middle to latter part of this week into early next week before the next chance for rain evolves

•            
Western Europe is expecting some rain next week, but his week will be dry and very warm to hot

•            
China will dry out in east-central and southeastern parts of the nation during the next ten days

•            
India will experience flooding rain from a couple of monsoon low pressure systems in the next ten days

•            
Russia’s Southern Region will experience a “Sukhovei” which is a dry, hot, wind that blows across the region at times in the summer

o            
Limited rain, high temperatures in the 90s to over 100 Fahrenheit and low humidity is expected late this week into next week

•            
Australia will continue to get timely rainfall

•            
Argentina’s western wheat areas will get some rain, but no general soaking is expected through Monday; the remainder of this week will be dry

•            
Canada’s Prairies will be drying out during the next ten days

Source:
World Weather INC

 

 

Bloomberg
Ag Calendar

Monday,
Aug. 8:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for wheat, corn, soybeans and cotton; spring wheat harvest, winter wheat progress, 4pm
• Vietnam
  Customs releases July coffee, rice, rubber export data
• HOLIDAY:
  Pakistan

Tuesday,
Aug. 9:

• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  Singapore, India, Bangladesh

Wednesday,
Aug. 10:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• Malaysian
  Palm Oil Board’s data on stockpiles, production and exports
• Malaysia’s
  Aug 1-10 palm oil export data
• Brazil’s
  Unica to release cane crush, sugar production data (tentative)

Thursday,
Aug. 11:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Brazil’s
  Conab to publish output and planting data for soybeans and corn
• HOLIDAY:
  Japan

Friday,
Aug. 12:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• 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
• New
  Zealand food prices
• FranceAgriMer
  weekly update on crop conditions
• EARNINGS:
  Olam, Golden Agri
• HOLIDAY:
  Thailand

Source:
Bloomberg and FI

 

 

 

 

 

Macros

 

Corn

·        
Corn is lower on Black Sea shipments increasing from Ukraine and easing US weather concerns. There is some talk US yields may be increased by private outfits this week. USDA is due to release initial corn and soybean 2022 yields
on Friday. Look for a wide range in trade estimates. Note last year, prices peaked on the USDA August report day for corn.

·        
Some of the outside related markets are softer.

·        
Two more Ukraine ships carrying corn and soybeans departed from Ukrainian ports on Monday.
Four
sailed on Sunday.

·        
The far US western Corn Belt will continue to see stress, but some rain in the forecast later this week, exception large part of NE and lower SD. NE conditions may decline this week (and last week).

·        
The USD is lower this morning and WTI lower.

·        
Paris corn prices were said to be trading at a premium to milling wheat, a rare occurrence. Bloomberg noted November corn futures in Paris traded at 323 euros ($329.44) per ton. “That puts them ahead of December milling-wheat
futures, with the ratio reaching the highest since 2017.  By comparison, December corn futures in Chicago are trading at $6.0325 a bushel, almost $2 below wheat for the same month.”

·        
A fourth heat wave started Sunday across France. Reuters noted the “National weather agency Meteo France said it was the worst drought since records began in 1958 and that the drought was expected to worsen until at least the
middle of the month. On average, less than 1cm of rain fell across France in July.”

 

Export
developments.

·        
Private exporters reported the following sales activity:

-105,000
metric tons of corn for delivery to Italy during the 2022/2023 marketing year

-120,000
metric tons of corn for delivery to unknown destinations during the 2022/2023 marketing year

 

Soybeans

·        
Soybeans and meal are softer but with limited losses on expectations for additional Chinese demand. Soybean oil is catching a bid on talk of Argentina SME sales to Europe late on Friday, and the passage of the Senate bill aimed
at reducing inflation that contains the positive measures for alternative fuels. The bill would extend rebates for biodiesel and encourage more production of bio jet fuel especially.

·        
USDA reported soybean sales to China (2 cargoes)

·        
There were no CBOT deliveries posted, but meal registrations were down 18.

·        
China’s soybean imports in July fell 9.1% from a year earlier to 7.88 million tons versus 8.67 million tons a year earlier, and down 4.5% from a month ago. COVID lockdowns curbed consumption. From January to July 2022, China brought
in 54.17 million tons of soybeans, down 5.9% from the same period a year ago.

·        
MPOB is due out Wednesday.

·        
Malaysia October palm was up 193 MYR to 4071/ton and cash up $37.50 at $1002.50/ton.

 

·        
China soybean futures were down 0.5%, meal 0.1% lower, soybean oil up 1.3%, and palm 3.5% higher.

·        
Rotterdam vegetable oils were 25-44
euros higher earlier and meal 14-17 euros lower for the positions we follow, from this time Friday morning.

·        
Offshore values were leading SBO 124 points lower earlier this morning and meal $6.30 short ton higher.

 

Export
Developments

·        
Private exporters reported the following sales activity:

-132,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

·        
China looks to sell a half a million tons of soybeans out of reserves on August 12.

 

Wheat

·        
US wheat futures are lower this morning on improving US weather and Black Sea shipping talk.

·        
Global export developments over the weekend were quiet for wheat but there are reports of additional Ukraine grain boats set to sail soon out of Black Sea ports. Ukraine wheat shipments are expected to increase in September.

·        
Paris September wheat was down 6.00 euros at 336.50 euros as of 7:35 am CT.

·        
Russia’s IKAR raised its forecast for Russia’s 2022 wheat crop to 95 million tons from a previous 90.5 million tons, mainly due to higher yields in the Central and Volga regions. The Russian barley crop was raised to 21.5 million
tons from 20 million tons.

 

Export
Developments.

·        
South Korea’s Feed Leaders Committee (FLC) and Major Feedmill Group (MFG) bought 120,000 tons of feed wheat on Friday from Australia. FLC purchased 55,000 tons at an estimated $367.65 a ton c&f for shipment between Oct. 15 and
Nov. 10. MFG purchased  65,000 tons at an estimated $367.66 a ton c&f for shipment between Nov. 17 and Dec. 12.

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

·        
Jordan seeks 120,000 tons on Aug. 10 for Dec through Feb shipment.

 

Rice/Other

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