FI Morning Grain Comments 08/12/22

PDF attached

 

Good
morning.
USDA
S&D day.

 

USD
is up around 53 points and WTI is lower by nearly $1.70. US weather forecast improved for the US Midwest with a wetter bias for the southwestern areas early next week. GP is unchanged. A high-pressure ridge is still advertised for the western North America
during the second week of the outlook. Look for additional positioning ahead of the USDA report. Tender business was quiet. China in their monthly S&D update lowered 2021-22 soybean imports by 1.98 million tons to 91.02 million. USDA is at 90 million tons
for China 2021-22 imports, down from 99.76 million for 2020-21. Meal is catching a bid on good domestic and export demand. Corn and wheat are lower on positioning and stronger USD, despite FranceAgriMer lowering France corn crop conditions by a large 9 points
to lowest on record of 53 percent G/E.

 

 

 

 

Weather

7-day

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 12, 2022

• East-central
  China will continue quite dry and hot over the next ten days with daily highs in the range of 95-108 degrees Fahrenheit (35-42C)
• Too
  much rain has been occurring in the North China Plain and areas east southeast into the Korean Peninsula and this too will continue for a while longer keeping all of those areas wet
• Russia’s
  Southern Region, eastern most Ukraine, western Kazakhstan and areas north into the middle Volga River Basin and Ural Mountains region will continue very warm to hot into next week, although a few showers may occur briefly during mid-week to induce a short-term
  break from the pattern
• India
  will continue to see waves of significant rain moving through the heart of the nation during the next ten days inducing local flooding, but no widespread serious flooding or crop damage is expected
• Europe
  is still expecting scattered showers during the week next week and into the following weekend offering a little break from the hot, dry, weather
• No
  serious soaking of rain is expected leaving river and water reservoir levels extremely low
  
• Only
  temporary improvement in crop and field conditions are expected and the improvement will vary greatly from one location to another
• No
  changes in Argentina’s outlook was noted overnight; western wheat areas will continue in need of more rain
• Australia
  will continue favorably moist for the next ten days in wheat, barley and canola areas
• U.S.
  weather has not changed greatly
• Showers
  and thunderstorms will accompany a couple of shots of cooler air into the key Midwestern crop areas during the coming week to ten days
• No
  serious decline in crop or field conditions will occur, but there will definitely be pockets of dryness that will need to be closely monitored.
• Temperatures
  will be milder than usual especially from the middle of next week through August 25 in most Midwestern locations
• Texas
  rainfall in the second week of the outlook was reduced in the overnight forecast model runs and that was badly needed and likely to verify
• There
  is still a good chance for some rain briefly late next week and again Aug. 22-24; including West Texas cotton areas
• Hot
  weather is still expected in the U.S. Pacific Northwest next week and into the following weekend
• Limited
  rain will continue along with very warm temperatures from Canada’s southwestern Prairies into the U.S. northwestern Plains and Pacific Northwest during the next ten days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
Aug. 15:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for wheat, corn, soybeans and cotton; wheat harvesting, 4pm
• Malaysia’s
  Aug 1-15 palm oil export data
• HOLIDAY:
  Argentina, France, India, Bangladesh

Tuesday,
Aug. 16:

• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data

Wednesday,
Aug. 17:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• HOLIDAY:
  Indonesia

Thursday,
Aug. 18:

• China’s
  second batch of July trade data, including corn, pork and wheat imports
• International
  Grains Council report
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am

Friday,
Aug. 19:

• 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
• Brazil’s
  Conab releases sugar, cane and ethanol output data
• US
  cattle on feed, 3pm
• EARNINGS:
  Deere

Saturday,
Aug. 20: 

• China’s
  third batch of July trade data, including soy, corn and pork imports by country
• Amspec
  to release Malaysia’s Aug. 1-20 palm oil export data

Source:
Bloomberg and FI

 

 

 

 

 

Macros

US
Import Price Index M/M Jul: -1.4% (est -1%, prevR 0.3%)

Import
Price Index Y/Y Jul: 8.8% (est 9.4%, prev 10.7%)

Export
Price Index M/M Jul: -3.3% (est -1%, prev 0.7%)

Export
Price Index Y/Y Jul: 13.1% (prev 18.2%)

 

Corn

·        
Corn is lower on positioning and stronger USD, despite FranceAgriMer lowering France corn crop conditions by a large 9 points to lowest on record (back to 2011) of 53 percent. Last year at this time France corn conditions were
91% G/E.

·        
Look for USDA to slash EU corn production later today. USDA in their July S&D update lowered EU corn production by 250,000 tons to 68.0 million tons, down from 70.5 million tons for 2021‐22. Yesterday Strategie Grains lowered
their EU corn production estimate by 10 million tons to a 15-year low of 55.4 million.

·        
USD is higher and WTI is lower by nearly $1.00.

·        
Look for additional positioning ahead of the USDA report.

·        
Our bias is to see a lower US soybean yield relative to USDA, and higher corn yield. The trade is about 1.1 bushels below USDA for corn and 0.4 bushel below USDA for soybeans.

·        
A high-pressure ridge is still advertised for the western North America during the second week of the outlook.

·        
South Korea bought 60,000 tons of corn, optional origin, at $346.50/ton c&f for arrival around November 10. Soybeans and soybean oil are lower. China in their monthly S&D update lowered 2021-22 soybean imports by 1.98 million
tons to 91.02 million. USDA is at 90 million tons for China 2021-22 imports, down from 99.76 million for 2020-21. Meal is catching a bid on good domestic and export demand.

 

Export
developments.

·        
None reported

 

Soybeans

·        
Soybeans and meal soybean oil are lower on positioning ahead of the USDA report and bearish outlook for 2021-22 Chinese import demand.

·        
WTI is lower by about $1.60.

·        
US weather forecast improved for the US Midwest with a wetter bias for the southwestern areas early next week. A high-pressure ridge is still advertised for the western North America during the second week of the outlook.

·        
China in their monthly S&D update lowered 2021-22 soybean imports by 1.98 million tons to 91.02 million. USDA is at 90 million tons for China 2021-22 imports, down from 99.76 million for 2020-21.

·        
Meal is catching a bid on good domestic and export demand.

·        
India palm oil imports during July fell 10 percent from June to 530,420 tons.

·        
Malaysia October palm oil was 143 MYR higher to 4407/ton, and cash was up $35 at $1,080.00/ton.

·        
China soybean futures were up 0.1 percent, meal 0.5% higher, soybean oil up 0.9%, and palm 2.2% higher.

·        
Rotterdam vegetable oils were
unchanged to 5 euros higher earlier, and meal unchanged to 2 euros lower for the positions we follow, from this time yesterday morning.

·        
Offshore values were leading SBO 140 points lower earlier this morning (342 lower for the week to date) and meal $5.50 short ton lower ($1.20 lower for the week).

 

 

Export
Developments

·        
China sold nearly 6,400 tons of soybeans out of reserves. About 500,000 tons were offered.

·        
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

·        
US wheat futures were lower earlier on light positioning ahead of the USDA report.

·        
Rain is expected to fall across ND, MN and eastern MT through Saturday. 

·        
USD is up around 53 points.

·        
Tender business was quiet.

·        
Paris September wheat was up 1.50 euros at 339.50 euros as of 7:50 am CT.

 

Export
Developments.

·        
Jordan seeks 120,000 tons of barley on August 17 for LH Dec through LH Feb shipment.

·        
Jordan seeks 120,000 tons set to close August 16 for Jan/Feb 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.

 

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