FI Morning Grain Comments 08/09/22

PDF attached

 

Good
morning.

 

USDA
24-Hour: Private exporters reported sales of 133,000 metric tons of corn for delivery to China during the 2022/2023 marketing year.

 

US
energy market are strong this morning and equities leading towards a lower open. The USD is lower. US weather forecast is largely unchanged. US corn silking is nearly complete so US weather is not a big factor for that market. US soybeans are made during August.
Russia increased shelling along Donbas front in eastern Ukraine. Reuters reported two more grain ships left Ukraine on Tuesday, bringing the total to 12 since the safe passage deal. We heard China bought soybeans Monday and again today. Soybeans and gains
are generally higher on US yield concerns after USDA reported a decline in ratings for soybeans, corn and spring wheat Monday afternoon. Monthly S&D reports kick off late tonight with Malaysia updating their July S&D estimates, followed by Brazil’s Conab supply
update Thursday, then China’s CASDE & USDA on Friday.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 9, 2022

• U.S.
  High pressure ridge will shift to the far western U.S. next week reducing heat for the Plains and allowing showers to return to many areas in the Midwest, including the western Corn Belt
• West
  Texas rain potentials will improve as U.S. high pressure ridge shifts to the west next week
  
• Showers
  will occur this week through Thursday and again late next week if the ridge shifts as far to the west as advertised today
• Limited
  rainfall is still advertised for the southwestern U.S. Corn Belt during the coming ten days, but temperatures will not be nearly as hot
  
• If
  the high pressure ridge moves as far to the west as the models are suggesting today rain may eventually reach into some of the western Corn Belt crop areas, but some caution is advised because the ridge may be moving too far to the west.
  
• Poor
  rainfall is still expected to prevail in Canada’s central and southern Prairies over the next ten days
• Western
  Europe weather is advertised wetter for next week with scattered showers and thunderstorms in many areas
• Russia’s
  Southern Region, western Kazakhstan , eastern most Ukraine and areas north into the middle Volga River Basin and Ural Mountains region will experience very warm to hot temperatures and restricted rain late this week into much of next week stressing crops and
  livestock eventually
• East-central
  and interior southeastern China will continue hot and dry for the next ten days
  
• Waves
  of rain will continue in southern Australia through the next ten days
• Waves
  of heavy rain will impact central India over the next couple of weeks inducing some local flooding from Odisha through Chhattisgarh and parts of Madhya Pradesh and northeastern Maharashtra to Gujarat and Rajasthan
• Argentina
  will continue to experience limited rainfall over the next ten days leaving some wheat areas still needing more rain, despite some rain in the past two days

Source:
World Weather INC

 

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
603,549                 versus   250000-550000  range

Corn                     
555,620                 versus   700000-1150000                range

Soybeans           
867,504                 versus   300000-750000  range

 

Macros

US
Nonfarm Productivity Q2 P: -4.6% (est -4.7%; prevR -7.4%)

US
Unit Labour Costs Q2 P: 10.8% (est 9.5%; prevR 12.7%)

 

Corn

·        
Corn is higher after USDA reported a larger than expected drop in the US corn rating, strength in soybeans, higher outside commodity markets (energy) and lower USD. We are already hearing private groups lowering their US corn
yield from the previous week. One outfit suggested sub 170. Based on our August yield relationship, that would suggest 175.8 bushels per acre.

·        
Follow through bull spreading is seen. CBOT corn open interest dropped 26,795 contracts on Monday. September position was down 34,792 lots.

·        
Reuters reported two more grain ships left Ukraine on Tuesday, bringing the total to 12 since the safe passage  deal.

·        
US corn silking is nearly complete. US corn crop conditions dropped 3 points for the combined good and excellent categories to 58 percent, 2 points below trade expectations. Our theoretical yield would come out to 175.8 bushels
per acre, below our previous working estimate of 177.6 bushels per acre.

·        
USDA US corn export inspections as of August 04, 2022, were 555,620 tons, below a range of trade expectations, below 905,293 tons previous week and compares to 816,337 tons year ago. Major countries included
China for 208,601 tons, Mexico for 192,337 tons, and Japan for 79,729 tons.

·        
The far US western Corn Belt will continue to see stress, but some rain in the forecast later this week, exception for NE and lower SD.

 

“The
2022 DTN Digital Yield Tour, powered by Gro Intelligence, estimates the national average corn yield at 167.2 bpa, while soybeans are anticipated to average 48.9 bpa.” – DTN

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
The soybean complex is higher on good China spot demand, US yield concerns after USDA reported a G/E rating decline in soybeans, corn and spring wheat Monday afternoon. The USD is lower and outside related energy markets higher.

·        
We heard China was looking around for soybeans again today. Yesterday it was rumored they bought 6-8 charges: 2-3 from the PNW and rest from Brazil.

·        
US soybean conditions for the combined good and excellent categories were 59 points, down one point from the previous week and at trade expectations. We left our August yield unchanged at 49.9. A Bloomberg trade guess for Friday
is at 51.0 bushels per acre.

·        
There were no CBOT deliveries posted, but meal registrations were down 17 and stand at zero.

·        
USDA US soybean export inspections as of August 04, 2022, were 867,504 tons, above a range of trade expectations, above 594,958 tons previous week and compares to 114,865 tons year ago. Major countries included
China for 249,869 tons, Japan for 95,097 tons, and Netherlands for 65,897 tons.

·        
Indonesia again lowered their palm oil export tax, to $52/ton, based on a reference price of $872.220/ton.

·        
Malaysia October palm was up 48MYR to 4119/ton, a 11-day high, and cash up $10 at $1,012.50/ton.

·        
China soybean futures were up 0.6%, meal 0.1% lower, soybean oil up 1.9%, and palm 2.1% higher.

·        
Rotterdam vegetable oils were unchanged
to 20 euros higher earlier and meal mostly higher for the positions we follow, from this time yesterday morning.

·        
Offshore values were leading SBO 45 points higher earlier this morning and meal $6.40 short ton higher.

·        
MPOB is due out Wednesday.

 

Export
Developments

·        
USDA 24-Hour: Private exporters reported sales of 133,000 metric tons of corn 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.

·        
The CCC seeks 4350 tons of vegetable oil for use in export programs on Aug 16 for Sep 9-oct 15 shipment, October for plants at ports.

 

Wheat

·        
A sizable drop in US spring wheat ratings reported by USDA Monday lifted US wheat futures higher overnight.

·        
US spring wheat conditions fell 6 points for the combined good and excellent categories, 6 points below expectations. That potentially shaves off 2 bushels from the spring wheat yield.

·        
Paris September wheat was up 1.25 euros at 342.25 euros as of 7:30 am CT, off its session high of 344.25.

·        
USDA US all-wheat export inspections as of August 04, 2022, were 603,549 tons, above a range of trade expectations, above 308,333 tons previous week and compares to 653,969 tons year ago. Major countries included
Mexico for 145,597 tons, Japan for 82,512 tons, and Ecuador for 73,172 tons.

 

Export
Developments.

·        
Jordan passed on 120,000 tons of wheat for Jan/Feb shipment. Three trading houses participated.

·        
The Philippines seek 120,000 tons of wheat and 120,000 tons of barley on Wednesday for several shipments between October 2022 through January 2023.

·        
Japan seeks 82,955 tons of food wheat later this week from the US and Canada.

·        
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.