FI Morning Grain Comments 08/10/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 196,000 metric tons of soybeans for delivery to China during the 2022/2023 marketing year.

 

US
CPI (Y/Y) Jul: 8.5% (est 8.7%; prev 9.1)

US
CPI (M/M) Jul: 0.0% (est 0.2%; prev 1.3)

US
CPI Core (M/M) Jul: 0.5% (est 0.5%; prev 0.7)

US
CPI Core (Y/Y) Jul: 5.9% (est 6.1%; prev 5.9)

 

US
inflation report (CPI) was bullish equities and bearish USD. WTI crude oil rallied. Grains are higher. Soybean and meal spreads are firm from good demand for US interior old crop soybeans by crushers amid strong crush margins. Soybean oil is lower on product
spreading. Palm oil prices snapped a three-day rally. MPOB reported Malaysian July palm oil stocks at 1.773 million tons, 20,000 tons below a Reuters trade guess. China inflation was 2.7% in July from a year ago, a two-year high. Pork prices were up 20.2%
from a year ago. US weather has not changed much. For the Midwest, rains will occur across the southeast today, northwest Thu-Fri, north central areas Saturday, and east Sunday. The southern Great Plains will see rain across northern TX and southern OK today.
MT and ND will see rain during the balance of this week. Brazil’s Conab supply update will be released Thursday, then China’s CASDE & USDA on Friday.

 

 

A
Bloomberg poll looks for weekly US ethanol production to be down 8,000 barrels to 1035 thousand (1020-1052 range) from the previous week and stocks up 118,000 barrels to 23.512 million. 

 

 

 

Weather

 

World
Weather Inc.

 

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

US
CPI (Y/Y) Jul: 8.5% (est 8.7%; prev 9.1)

US
CPI (M/M) Jul: 0.0% (est 0.2%; prev 1.3)

US
CPI Core (M/M) Jul: 0.5% (est 0.5%; prev 0.7)

US
CPI Core (Y/Y) Jul: 5.9% (est 6.1%; prev 5.9)

 

US
Real Avg Weekly Earnings (Y/Y) Jul: -3.6% (prev 1.3)

US
Real Avg Hourly Earnings (Y/Y) Jul: -3.0% (prev 1.3)

 

Fed
Seen Raising Interest Rates By 50Bps In September, Based On Fed Funds Futures Pricing

–    
Versus 75Bps Hike Seen Before CPI Report

 

 

Corn

·        
Corn prices are higher on US corn yield concerns for the north-central and far northwestern Corn Belt. A sharply lower USD is supporting grain prices.

·        
EU corn production concerns are lending support to US futures.

·        
The US CPI report showed inflation rose at a slower pace than expected.

·        
News for the agriculture fundamentals is light.

·        
China inflation was 2.7% in July from a year ago, a two-year high. Pork prices were up 20.2% from a year ago.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 8,000 barrels to 1035 thousand (1020-1052 range) from the previous week and stocks up 118,000 barrels to 23.512 million. 

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
Soybeans and meal are higher on follow through buying. USDA reported sales of 196,000 tons of soybeans for delivery to China during the 2022-23 marketing year. Soybean is lower on product spreading. US weather outlook was mostly
unchanged, but some note it might be not that ideal over the next couple of weeks for the Midwest. News was light outside macro developments. Soybean oil is lower on product spreading.

·        
Soybean and meal spreads are firm. US interior end users (crushers) were bidding up old crop supplies amid good margins. Spot meal demand is very good.

·        
Palm futures snapped a 3-day winning streak.

·        
MPOB reported Malaysian July palm oil stocks at 1.773 million tons, 20,000 tons below a Reuters trade guess. Production of 1.574 million tons were near expectations. Exports of 1.322 million tons came in 102,000 tons above expectations.
Imports were 131,000 tons, more than double than that of June and year ago.

·        
AmSpec reported Malaysian palm oil exports during the August 1-10 period at 339,669 tons, up 10.2 percent from 308,290 tons from the same period month earlier. ITS reported Aug 1-10 exports at 364,910 tons, up 10.5 percent.

·        
Malaysia October palm was down 8MYR to 4111/ton, and cash down $5 at $1,007.50/ton.

·        
China soybean futures were near unchanged, meal 0.7% higher, soybean oil up 0.7%, and palm 0.1% higher.

·        
Rotterdam vegetable oils were 15-23
euros lower earlier, and meal mixed for the positions we follow, from this time yesterday morning.

·        
Offshore values were leading SBO 64 points lower earlier this morning and meal $9.00 short ton lower.

·        
Abiove: 2021-22 Brazil soybean production 126.6MMT from 125.8MMT previous and 138.85MMT last year. Crush 48.6MMT in 2022 from 48.3MMT previous and 47.78 last year.

·        
European Union soybean imports in the 2022-23 season (July 1 start) reached 1.35 million tons by Aug. 5, down from 1.54 million tons same week previous season. EU rapeseed imports had reached 628,542 tons, compared with 418,125
tons a year earlier. Soymeal imports totaled 1.42 million tons against 1.43 million tons prior season.

 

Export
Developments

·        
Private exporters reported sales of 196,000 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.

·        
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

·        
Additional fund buying is seen in US wheat markets. Fundamental news is light.

·        
The net short position for Chicago was estimated at 18,000 contracts as of yesterday.

·        
Paris September wheat was down 1.25 euros at 339 euros as of 8:00 am CT.

·        
French wheat protein content varies across the country. Dry weather tends to boost protein content if the crop is in relatively good shape heading into maturity.

 

Export
Developments.

·        
The Philippines passed on 120,000 tons of wheat and 120,000 tons of barley for several shipment periods between October 2022 through January 2023.

·        
Jordan passed on 120,000 tons of barley for Jan/Feb shipment.

·        
Jordan issued a new wheat import tender, for 120,000 tons set to close August 16 for Jan/Feb shipment.

·        
Results awaited: Iran’s GTC seeks 60,000 tons of wheat on Wednesday for Sep and Oct shipment.

·        
Japan’s AgMin seeks 70,000 tons of feed wheat and 40,000 tons of feed barley on August 19 for arrival by January 26, 2023.

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

 

Rice/Other

·        
(Bloomberg) — World 2022-23 production seen 1.1m bales lower than USDA’s previous estimate, according to the avg in a Bloomberg survey of seven analysts.

Avg est. at 118.97m bales, ranging from 118m to 120m bales

World ending stocks seen down 580,000 bales to 83.68m bales

US production seen 750,000 bales lower, and US ending stocks seen 229,000 bales lower

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