FI Morning Grain Comments 08/30/22

PDF attached

 

Good
morning.
Last
trading session before FND deliveries.

 

Under
the 24-H reporting system, private exporters reported sales of 264,000 tons of soybeans for delivery to unknown destinations during the 2022-23 marketing year.

 

USDA
announced the weekly USDA export sales report will be delayed until further notice. Our target was for a Tuesday release. We will be running estimates for last week (8/25) later today, regardless of missing data.

 

US
equities are rebounding, USD down 23 at the time this was written, WTI crude oil down more than $2.30, and gold lower. Most other commodities are lower on renewed recession fears. CBOT ags are lower. US wheat is off 5-13 cents led by spring wheat after USDA
reported an improvement in conditions. Wheat futures were up nearly 5 percent on Monday so some of this is a correction. Corn is lower after rallying to a 2-month high yesterday. Europe’s grain harvest started earlier than normal allowing supplies to soon
hit the domestic and export market. The soybean complex is lower on widespread commodity selling and an unchanged USDA soybean rating. Malaysia is on holiday Wednesday so for the month futures lost 3.6%, fourth monthly consecutive loss. Offshore values were
leading SBO 12 points higher earlier this morning and meal $2.90 short ton lower.

 

 

Pakistan’s
flooding could amount to over 10 billion USD in damages. More than half a million people were displaced. The floods washed out infrastructure including textile mills. The morning weather forecast was largely unchanged for the US. The Midwestern areas will
see rain today, far north central areas Friday and south central areas Sunday. TX will see good rains through Friday before tapering off. NE and CO will remain dry.  The WCB corn belt in general will see net drying over the next week. EU’s weather outlook
improved a touch with additional rain across central and southern France, Italy, Romania and Bulgaria.

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 30, 2022

• European
  model removed rain from the U.S. Delta overnight
• European
  model removed rain from Russia’s Southern Region overnight – this was needed
• Canada’s
  Prairies are dry biased for harvest progress next ten days
• U.S.
  northern Plains, Pacific Northwest, central Plains and western Corn Belt will be dry biased next ten days
• Good
  spring and summer crop maturation and harvest progress to continue
• U.S.
  eastern Midwest drier biased next seven days
• West
  Texas receives more rain overnight with 0.30 to 1.43 inches and local totals to 1.90 inches
• Additional
  rain expected next weekend and early next week
• Two
  tropical cyclones still expected to evolve later this week in the Atlantic Ocean, but neither storm is expected to threaten land
• Typhoon
  Hinnamnor will become a super typhoon today as it moves closer to the Ryukyu Islands of Japan
• The
  storm will move through the East China Sea this weekend and then impact the Korean Peninsula and possibly a part of western Japan early next week with torrential rain and strong wind speeds, although the storm will be weaker by that time
• China’s
  Yangtze River Basin falls back into a dry weather mode over the next ten days to two weeks after “parts” of the region were relieved from drought over the past several days
• Some
  areas have still not seen significant rain
• This
  drought area is still mostly a rice issue and not a significant corn, soybean or groundnut issue
• Good
  drying conditions are expected in the North China Plain while Heilongjiang stays wet
• Western
  Europe is still expecting some showers late this week and through the weekend with a significant amount of moisture possible in parts of France and the U.K. next week
• Northeastern
  Europe into parts of Ukraine and southwestern Russia will be drier than usual for a while
• Showers
  in Russia’s winter crop region are expected to be brief and light in the next two weeks, but “some” rain will fall
• No
  changes in India weather occurred overnight leaving the northwest dry along with Pakistan while rain falls elsewhere in the nation
• Western
  Argentina will stay dry biased
• Eastern
  Argentina and southern Brazil will see periodic rain
• Australia
  weather is expected to remain mostly good for wheat, barley and canola

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Tuesday,
Aug. 30:

• No
  major event scheduled

Wednesday,
Aug. 31:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysia’s
  August palm oil export data
• US
  agricultural prices paid, received, 3pm
• HOLIDAY:
  India, Malaysia

Thursday,
Sept. 1:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Cocoa
  Association of Asia hosts International Cocoa Conference, day 1
• Australia
  Commodity Index
• USDA
  soybean crush, DDGS production, corn for ethanol
• HOLIDAY:
  Vietnam

Friday,
Sept. 2:

• FAO
  world food price index, grains supply and demand outlook
• 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
• Cocoa
  Association of Asia hosts International Cocoa Conference, day 2

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
520,791                 versus   250000-650000  range

Corn                     
689,052                 versus   500000-850000  range

Soybeans           
436,851                 versus   500000-825000  range

 

Macros

US
FHFA House Price Index (M/M) Jun: 0.1% (est 0.8%; prevR 1.3%)

US
House Price Purchase Index (Q/Q) Q2: 4.0% (prevR 4.7%)

US
CoreLogic CS 20-City (M/M) SA Jun: 0.44% (est 0.90%; prevR 1.22%)

US
CoreLogic CS 20-City (Y/Y) NSA Jun: 18.65% (est 19.20%; prevR 20.51%)

 

 

Corn

·        
CBOT corn is lower after rallying to a 2-month high yesterday.

·        
US equities are rebounding, USD down 24 at the time this was written, WTI crude oil down more than $2.30, and gold lower. Most other commodity markets (softs, metals) are lower on renewed recession fears.

·        
Europe’s grain harvest started earlier than normal allowing supplies to soon hit the domestic and export market.

·        
Additional corn and wheat vessels were recently approved to leave Ukraine ports. About 1.5 million tons of grain/food has sailed from Ukraine since the safe passage agreement.

·        
Agritel called the French corn crop “catastrophic”, estimating production at a 15-year low of 53.8 million tons. The Baltic Dry Index fell 6 percent to 1,017 points.

·        
US corn conditions are down 1 point from the previous week but on our weighted average, the corn rating suggests a September yield of 171.6 bu/ac, 3.8 bu/ac below USDA. USDA’s combined G/E rating of lowest since the drought year
of 2012.

 

 

·        
CBOT corn deliveries are expected to be low, if any, on FND August 31 (tonight). Registrations stand at zero.

·        
USDA US corn export inspections as of August 25, 2022 were 689,052 tons, within a range of trade expectations, below 821,533 tons previous week and compares to 583,498 tons year ago. Major countries included China for 345,199
tons, Mexico for 234,384 tons, and Japan for 72,575 tons.

·        
Brazil’s Datagro looks for Brazil’s total corn crop to end up near 120.5 million tons for 2022-23. USDA is at 126 million tons.

 

Export
developments.

·        
South Korea’s NOFI bought 137,000 tons of corn for December arrival. One cargo was bought of 69,000 tons was bought at 182 cents c&f over the December and another 68,000 tons was bought at an estimated premium of 184.85 cents
c&f over the  December.

 

 

Soybeans

·        
The soybean complex is lower on widespread commodity selling and an unchanged USDA soybean rating. Many outside related oilseed product markets were lower overnight.

·        
Russia plans to extend its export tax on soybeans until Aug. 31, 2024, and a partial ban on rapeseed exports (from the Zabaikalsk region) until Feb. 1, 2022. The current export tax on soybeans is 20% but not less than $100 per
ton.

·        
There were no changes to CBOT registrations. We look for no FND deliveries for soybeans and meal. Soybean oil deliveries are expected to be zero to 100.

·        
US soybean conditions were unchanged for the combined good and excellent categories. On a weighted basis, our soybean yield was lowered only a tenth of a percent to 51.3 compared to USDA’s 51.9 bu/ac.

 

 

·        
Malaysia is on holiday Wednesday so for the month futures lost 3.6%, fourth monthly consecutive loss.

·        
Malaysia November palm oil was 30 ringgit lower at 4144 per ton, and cash was down $5.50 at $1021.50/ton.

·        
China soybean futures were down 0.2 percent, meal 0.6% lower, soybean oil down 0.2%, and palm 0.2% lower.

·        
Rotterdam vegetable oils were
7-20 euros lower, and meal 4-7 lower for the positions we follow, from this time yesterday morning.

·        
Offshore values were leading SBO 12 points higher earlier this morning and meal $2.90 short ton
lower.

·        
USDA US soybean export inspections as of August 25, 2022 were 436,851 tons, below a range of trade expectations, below 686,827 tons previous week and compares to 387,206 tons year ago. Major countries included Mexico for 89,925
tons, Indonesia for 80,354 tons, and China for 71,592 tons.

·        
Yesterday Brazil’s Datagro see the 2022-22 soybean crop for Brazil at 151.8 million tons.
Abiove
estimated 2022-23 Brazil soybean production at 151 million tons. USDA is at 149 million, up from 126 million tons for 2021-22. Abiove looks for the soybean crop area to end up near 42 million hectares. Crush was pegged at 49.2 million. They went onto say they
don’t anticipate China to buy large quantities of soybean meal from Brazil, but purchases will be important.

 

Export
Developments

·        
Under the 24-H reporting system, private exporters reported sales of 264,000 tons of soybeans for delivery to unknown destinations during the 2022-23 marketing year.

·        
For China’s 14^th weekly soybean auction set for September 2, they look for sell 500,000 tons.

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 30,000 tons of GMO-free soybeans on September 6 for arrival in SK between November 12 and Dec 12, and another arrival period of October 30 and November 30.

·        
USDA’s AMS CCC seeks to sell 3,150 tons of vegetable oil on September 7 for shipment for Oct 1-31 (Oct 16 to Nov 15 for plants at ports).

 

 

Wheat

·        
US wheat futures are off 6-16 cents led by spring wheat after USDA reported an improvement in high protein conditions. Wheat futures were up nearly 5 percent on Monday so some of this is a correction.

·        
Agritel increased their estimate of the French soft wheat crop at 33.63 million tons, up from 33.44 million projected a month ago, but below the average.

·        
The Baltic Dry Index fell 6 percent to 1,017 points.

·        
Paris December wheat was down 3.75 euros at 326 per ton as of 8:00 am CT.

·        
Parts of HRW wheat country will see rain on and off bias the southwestern areas over the next 5 days. Rain will be heavier today through Friday then start to taper off this weekend. Not all areas will see rain. NE, CO, and surrounding
areas may see little or no precipitation.

·        
US spring wheat conditions increased 4 points. We increased spring wheat production to 515 million bushels from 508 million previous and compares to 512 USDA August. Durum was increased to 76 million from 73 million and compares
to 73.6 million USDA.

·        
USDA US all-wheat export inspections as of August 25, 2022 were 520,791 tons, within a range of trade expectations, below 594,273 tons previous week and compares to 435,399 tons year ago. Major countries included Mexico for 104,552
tons, China for 71,811 tons, and Vietnam for 70,045 tons.

 

Export
Developments.

·        
Results are awaited on Algeria seeking at least 50,000 tons of wheat for LH Sep through Oct 31 shipment.

·        
The Philippines passed on 100,000 tons of feed wheat Oct-Dec shipment.

·        
Jordan bought 60,000 tons of wheat at $376.50/ton c&f for shipment in the second half of January 2023.

·        
Jordan seeks 120,000 tons of wheat on September 6.

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

·        
Japan seeks 95,497 tons of food wheat form the US and Canada later this week for arrival by December 31.

·        
Bangladesh delayed their 50,000 ton import tender of milling wheat set to close on September 1, to September 18.  It’s for optional origin with shipment within 40 days of contract signing.

 

Rice/Other

·        
(Reuters) – Vietnam’s rice exports are expected to rise to 6.3 million-6.5 million tonnes this year from 6.24 million tons last year on strong demand, the chairman of the country’s food association said on Tuesday.

·        
Taiwan and Vietnam plant to raise their export price of rice but no details have been set.

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