FI Morning Grain Comments 08/25/22

PDF attached

 

Good
morning.

 

USDA
export sales data is delayed due to USDA rolling out a new webpage.

 

Pro
Farmer suggests lower yields relative to USDA for IL and western IA. Wheat and soybean prices are lower while corn is higher. The US Midwest will see rain across the central Corn Belt today, northwest Saturday and western areas Sunday. Parts of HRW wheat country
will see rain on and off bias the southwestern areas over the next ten days.

 

Western
Iowa – The Pro Farmer Midwest Crop Tour projected corn yields in Iowa’s crop District 1, in the state’s northwest corner, at 181.12 bushels per acre (bpa), down from 183.96 bpa last year and below the tour’s three-year average of 183.37 bpa. Corn yields in
west-central District 4 were pegged at 180.80 bpa, below the tour’s average yield of 201.10 bpa last year and its three-year average of 188.74, bpa for the district. Corn yields in southwestern District 7 were seen at 173.70 bpa, down from 192.47 bpa a year
ago and the three-year average of 187.83 bpa.

 

Soybean
pod counts per three-by-three-foot area averaged 1,089.74 in District 1, compared with 1089.35 pods last year and the three-year average of 1,066.20. In District 4, pod counts averaged 1,258.94, up from 1,225.24 in 2021 and above the three-year average of
1,159.57.

District
7 soybean pod counts averaged 1,223.85, below last year’s count of 1,367.61 and the three-year average of 1250.92.

 

Illinois
– corn yields were projected at 190.71 bushels per acre (bpa), the Pro Farmer Midwest Crop Tour said on Wednesday evening, below the 2021 crop tour average of 196.30 bpa and above the three-year crop tour average of 185.62 bpa.

 

The
four-day crop tour, which does not project soybean yields, estimated the amount of soybean pods in a 3-by-3-foot square in Illinois, the top soybean producing state, at an average of 1,249.70 pods, down from last year’s average of 1,279.79 pods and up from
the three-year average of 1,174.95 pods.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 25, 2022

• Tropical
  Storm Ma-On moved into western Guangdong overnight producing some heavy rainfall and strong wind speeds, but with a relatively low impact
• Concern
  about lower U.S. Delta crop conditions remain, although the heaviest rainfall is abating
• Soybeans,
  rice and cotton have been negatively impacted by recent excessive rainfall
• U.S.
  Midwest weather is expected to be relatively good for this time of year
• Infrequent
  rainfall and warm weather will continue in Canada’s Prairies and the northern U.S. Plains while the U.S. Pacific Northwest is quite warm and dry
• Texas
  and Oklahoma rainfall will return next week as frequent showers and thunderstorms
• Argentina
  is still dry out ten days, especially in the west where it has been driest
  
• Brazil
  weather will continue moist in the far south and seasonably dry elsewhere
• India’s
  weather has begun to improve with less frequent and less significant rain through early next week
• Increasing
  rain in the south and east parts of the nation are expected later next week
• Russia
  crop areas will continue dry and warm for one more week, although the Russian Southern Region may be dry for ten days to two weeks maintaining concern over winter wheat emergence and establishment
• Europe
  weather will remain best in the eastern countries where timely rain is expected, but that might slow some crop maturation and harvest progress while benefiting late season crops
• Western
  Europe will start getting a little more moisture of significance in the second half of next week, but still not drought busting rain event is expected
• West-central
  Africa rainfall should slowly improve benefiting coffee, cocoa and sugarcane
  
• China’s
  Yangtze River Basin will see a gradual breakdown in its dryness and heat during the weekend and next week, but no drought busing rain is expected in central parts of the basin
• Eastern
  Australia will get rain Sunday into Monday of next week while Western Australia will not see much run until the second weekend

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
GDP Annualized (Q/Q) Q2 S: -0.6% (exp -0.7%; prev -0.9%)

US
Initial Jobless Claims Aug-20: 243K (exp 252K; R prev 2545K)

–         
Continuing Claims Aug-13: 1415K (exp 1441K; R prev 1434K)

US
Personal Consumption Q2 S: 1.5% (exp 1.5%; prev 1.0%)

–         
GDP Price Index Q2 S: 8.9% (exp 8.7%; prev 8.7%)

–         
Core PCE (Q/Q) Q2 S: 4.4% (exp 4.4%; prev 4.4%)

Canadian
Payroll Employment Change Jun: 114.6K (prev -26.1K)

 

 

Corn

·        
Corn is higher after Pro Farmer suggested lower yields relative to USDA for IL and western IA.

·        
The USD is lower this morning and crude oil higher.

·        
Brazil’s Conab released 2022-23 crop estimates yesterday and they see the corn crop at 125.5 million tons, up from 114.69 reported for 2021-22. The total grain crop was seen at 308 million tons. Conab broke out 2022-23 first corn
crop at 28.98 MMT and second at 94.53 MMT. The second corn crop, if realized, would be up 8.2% from 2021-22. Note USDA is at 126 MMT for Brazil’s 2022-23 corn crop.

·        
Heavy rain across the US Delta is seen delaying corn harvest progress and fieldwork activity for the balance of the week.

·        
Weekly US ethanol production increased 4,000 barrels to 987 million (trade was looking for up 7k) and stocks increased 361,000 barrels to 23.807 million (trade estimated a 177,000-barrel decline). 

·        
The USDA Broiler Report showed eggs set in the US up 3 percent and chicks placed up 3 percent. Cumulative placements from the week ending January 8, 2022, through August 20, 2022, for the United States were 6.20 billion. Cumulative
placements were up 1 percent from the same period a year earlier.

 

IA
implied as eastern areas will be toured today

 

United
States and Canadian Cattle Inventory Down 2 Percent

• All
  cattle and calves in the United States and Canada combined totaled 111 million head on July 1, 2022, down 2 percent from the 113 million head on July 1, 2021. All cows and heifers that have calved, at 44.5 million head, were down 2 percent from a year ago.
• All
  cattle and calves in the United States as of July 1, 2022, totaled 98.8 million head, down 2 percent from July 1, 2021. All cows and heifers that have calved, at 39.8 million head, were down 2 percent from a year ago.
• All
  cattle and calves in Canada as of July 1, 2022, totaled 12.3 million head, down 3 percent from the 12.6 million head on July 1, 2021. All cows and heifers that have calved, at 4.69 million head, were down 1 percent from a year ago

 

Export
developments.

·        
South Korea’s KOCOPIA group bought two non-GMO corn cargoes from the Black Sea at $378 and $379.40/ton c&f for FH November arrival.

 

 

Soybeans

·        
The soybean complex is lower led by meal and soybeans.

·        
Pod development has a chance to improve across the US. The US Midwest will see rain across the central Corn Belt today, northwest Saturday and western areas Sunday.

·        
Argentina extended their 12.5% biodiesel blend rate to help limit fuel imports. They raised it from 5 percent back in June to “save foreign exchange” (reserves), according to Reuters.

·        
(Reuters) – Russia has set its export tax for sunflower oil at 8,621.3 roubles ($143.4) per ton for September, down from 15,987.1 roubles in August. The September tax is based on an indicative price of $1,583.0 a ton.

·        
Palm oil ended a 4-day winning streak.

·        
From the same period month ago, cargo surveyor ITS and AmSpec estimated exports of Malaysian palm oil products for Aug. 1-25 were up between 4.9% (966,655 tons) and 10% (906,470 tons), respectively, while cargo surveyor SGS reported
exports fell 0.1% to 969,341 tons.

·        
Malaysia November palm oil was 50 ringgit lower at 4258 per ton, and cash was down $5 at $1043.50/ton.

·        
China soybean futures were down 1.5 percent, meal 1.2% higher, soybean oil up 1.3%, and palm 1.3% higher.

·        
Rotterdam vegetable oils were
2-30 euros lower, and meal lower (Argentina unquoted) for the positions we follow, from this time yesterday morning.

·        
Offshore values were leading SBO 85 points higher earlier this morning and meal $3.90 short ton
lower.

·        
Brazil’s Conab estimated 2022-23 soybean production at a record 150.36 million tons, well up from 124.05 million for 2021-22. USDA is at 149 MMT for Brazil’s new-crop.

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat
futures are lower for Chicago and KC. MN is mostly higher on slight delays for US spring wheat harvesting and Taiwan picking up US milling wheat.

·        
India will ban wheat flour exports to cool local prices. They banned wheat exports mid-May. India flour exports were up 200% during April-July 2022 from a year ago. Local wheat prices hit a record earlier this week (over $305
per ton).

·        
Parts of HRW wheat country will see needed rain on and off bias the southwestern areas over the next ten days.

·        
Paris December wheat was down 2.00 euros at 320 per ton as of 7:30 am CT.

·        
Reuters reported Egypt was believed to have passed on 240,000 tons of wheat on Wednesday and opening talks with direct suppliers for Russian wheat. Monday’s price was thought to be around $368 per ton.

·        
Russia is experiencing warm and dry weather, good for harvest, but rain will be needed prior to winter grain plantings.

·        
(Bloomberg) — Russian Ports Load Wheat for Iran, Egypt, Israel, Turkey. Russian ports also loaded barley for Iran, according to shipping lineups from Logistic OS for the week to Aug. 24.

 

Export
Developments.

·        
Taiwan bought 34,025 tons of US million wheat for shipment from the PNW between Oct. 12 and Oct. 26. 

-9,675
tons of U.S. dark northern spring wheat, 14.5% protein content bought at $417.91 a ton FOB

-8,925
tons of hard red winter wheat, 12.5% protein content bought at $411.62 a ton

-5,425
tons of soft white wheat, 9.0% protein bought at $372.79 a ton.

·        
Reuters reported Egypt was believed to have passed on 240,000 tons of wheat on Wednesday and opening talks with direct suppliers for Russian wheat. Monday’s price was thought to be around $368 per ton.

·        
Japan bought 118,881 tons of food wheat from the United States, Canada and Australia, for Oct, Jan, and Feb loading.

·        
Jordan seeks 120,000 tons of barley on August 31 for Dec-Feb shipment. 

·        
Jordan seeks 120,000 tons of wheat on August 30.

·        
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.