FI Morning Grain Comments 08/22/22

PDF attached includes CFTC COT and daily estimate of funds

 

Good
morning.

 

Natural
gas futures are sharply higher amid higher EU energy prices and that may be creating concern of a potential downturn in EU oilseed crush. Pro Farmer crop tour kicks off today with two main legs for the US ECB and WCB. Yields may vary for both belts, more so
WCB, in our opinion. Soybeans are higher following strength in soybean meal. Some traders are eyeing US weather as parts of the WCB remain dry. Soybean oil is lower despite higher palm oil. WTI crude oil turned lower and USD higher by 25 points.
US
weather over the weekend was about as expected with rain falling across parts of the Great* Plains and Midwest. Central KS into OK and northwestern TX saw decent precipitation. The Midwest will see rain late Tuesday into Wednesday for the northwestern areas,
and Thursday for the west central growing region. *Corrects
earlier spelling error

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 22, 2022

• A
  favorable mix of rain and sunshine is expected in many U.S. key crop areas this week and next week, although there may be some pockets of net drying
  
• Temperatures
  will be mild enough to reduce evaporation rates 
• Europe
  soil moisture improvements are most likely in the eastern Countries while the west dries out fora while
• Western
  Russia will continue to experience net drying conditions and warmer than usual temperatures for at least one more week
• China’s
  Yangtze River Basin will continue drier than usual and very warm for several more days, but showers and some cooling will occur later this week and into the weekend
• India’s
  latest monsoon low pressure center will move from Madhya Pradesh to southern Pakistan early this week followed by improving weather
• Australia
  will get periods of rain in the southeast while the southwest is mostly dry 
• Western
  Argentina will continue to dry out
• Brazil
  will trend drier than usual in this coming week
• A
  part of Canada’s Southwestern Prairies will get some rain this week which may help ease dryness, but it may delay some harvest progress and raise a little crop quality concern especially in southern Alberta

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
Aug. 22:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• MARS
  monthly EU crop conditions report
• US
  crop conditions for spring wheat, corn, soybeans and cotton; winter wheat harvesting, 4pm
• USDA
  total milk production, 3pm
• EU
  weekly grain, oilseed import and export data
• US
  cold storage data for pork, beef and poultry, 3pm

Tuesday,
Aug. 23:

• Sinofert
  1H results briefing

Wednesday,
Aug. 24:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Brazil’s
  Unica may release cane crush, sugar production data (tentative)
• US
  poultry slaughter

Thursday,
Aug. 25:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Malaysia’s
  Aug. 1-25 palm oil export data
• USDA
  red meat production

Friday,
Aug. 26:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

CFTC
Commitment of Traders

Funds
were more long than expected for the major US agriculture commodities we monitor. No other major surprises were seen for the week ending Aug 16. Wheat has potential upside with funds still net short. Index funds are slowly rebuilding long positions for meal
and soybean oil after selling off during FH 2022.

 

 

 

 

 

 

Reuters
table

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn               
70,723     16,053    372,391        169   -387,210     -9,737

Soybeans           
32,035     -2,975    143,957     -2,838   -138,655     14,280

Soyoil              
6,006      9,923    102,217      3,595   -114,821    -14,160

CBOT
wheat         -55,991      1,916    118,591        -13    -58,222     -2,866

KCBT
wheat         -14,942     -1,322     51,000      1,108    -36,543     -1,428

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
153,840     11,777    241,713     -1,254   -383,520     -9,977

Soybeans           
99,336     -2,173     87,338     -1,691   -137,396     13,783

Soymeal            
86,264      1,882     88,995      3,698   -217,116     -3,178

Soyoil   
          33,235     11,024     85,620      2,750   -129,696    -15,609

CBOT
wheat         -18,107      2,241     69,761        722    -51,850     -3,822

KCBT
wheat           7,520       -503     29,660       -130    -32,647     -1,394

MGEX
wheat            -757        258      1,700        227       -856       -339

Total
wheat        -11,344      1,996    101,121        819    -85,353     -5,555

 

Live
cattle         66,036     16,966     59,112       -841   -135,701    -14,086

Feeder
cattle        2,215      1,736      3,161        -37      1,803     -1,682

Lean
hogs           71,957      6,804     50,740        165   -112,963     -3,308

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
43,870      5,939    -55,903     -6,486  1,803,247       -187

Soybeans          
-11,939     -1,452    -37,338     -8,466    756,272      6,860

Soymeal            
16,125     -3,008     25,732        607    462,717      7,536

Soyoil              
4,244      1,193      6,598        643    462,872      5,632

CBOT
wheat           4,574       -103     -4,379        963    420,327     -9,203

KCBT
wheat          -5,019        384        486      1,641    174,537     -6,059

MGEX
wheat           2,535         -1     -2,622       -145     60,173     -1,274

Total
wheat          2,090        280     -6,515      2,459    655,037    -16,536

 

Live
cattle         16,415       -270     -5,862     -1,767    325,850     14,808

Feeder
cattle          961        922     -8,140       -940     57,295        981

Lean
hogs            1,859     -2,043    -11,591     -1,619    295,970    -14,396

 

 

 

 

Macros

 

 

Corn

·        
Corn futures are mixed with light bulls spreading in focus. We caution bull traders after Brazil’s increase in corn exports for the month of August. The USD is higher and WTI crude oil lower, so look for some pressure to enter
the corn markets after the open.

·        
The annual Pro Farmer crop tour starts today. The WCB legs will be closely monitored. Past history would suggest that yields will be variable, but the end of week US estimate does give a general idea where the crop will end up
at.

 

Export
developments.

·        
None reported

 

USDA
Cattle on feed as of August 1 was higher than expected, up 1.4 percent from year ago and second highest for August 1 since the series began in 1996. 2020 was the record. Placements were 3.3 percentage points above an average trade guess and marketing were
lower than expected.  We thought the hot spells across the Great Plains during the month of July would have had a larger impact on inventories, as many cattle perished and/or went to market early.

 

 

Soybeans

·        
Soybeans and meal are higher, in part to ongoing addition of longs by the investment funds, as seen mid last week. US natural gas futures are sharply higher amid higher EU energy prices and that may be creating concern of a potential
downturn in EU crush.

·        
Some traders are eyeing US weather as parts of the WCB remain dry.

·        
Soybean oil is lower despite higher palm oil. 50 SBO registrations were cancelled out of Cargill Creve Coeur.

·        
Power troubles for China’s southwest is affecting fertilizer and crush production. The weather does not appear to improve over the short term.

·        
SGS reported Malaysian palm exports for the 1-20 Aug period at 718,291 tons, down 0.8% from same period month earlier.

·        
Malaysia November palm oil was 67MYR higher at 4160 per ton, and cash was up $15.00 at $1022.50/ton.

·        
China soybean futures were up 0.6 percent, meal 0.7% higher, soybean oil up 1.3%, and palm 1.9% higher.

·        
Rotterdam vegetable oils were
mixed, and meal mixed for the positions we follow, from this time Friday morning.

·        
Offshore values were leading SBO 154 points lower earlier this morning and meal $6.40 short ton higher.

 

Export
Developments

·        
Results awaited: Tunisia seeks 6,000 tons of crude degummed vegetable oil for August 27 to September 10 shipment.

 

Wheat

·        
US wheat
futures are traded two-sided this morning, in part to higher soybeans and lack of news that supports a bullish trade.

·        
The USD is higher and bearish for wheat exports. US export developments have been slow since the USD started its rally on August 12.

·        
Paris September wheat was up 0.25 euro at 310.25 per ton as of 8:00 am CT.

·        
Results of Iraq’s import tender might be out this week. Bids ranged from $520 to $560 per ton for US wheat.

 

Export
Developments.

·        
Taiwan Flour Millers’ Association seek 34,025 tons of grade 1 milling wheat from the United States on August 25 for shipment out of the PNW between October 12 and October 26.

·        
Bangladesh seeks 50,000 tons of milling wheat on September 1, optional origin, for shipment within 40 days of contract signing.

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on September 6.