FI Morning Grain Comments 09/01/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 396,000 metric tons of soybeans received in the reporting period for delivery to unknown destinations during the 2022/2023 marketing year.

 

USDA
export sales will be delayed for a couple of weeks. The delay in the data should not be concerning as US corn and soybeans started a new marketing year.

 

US
weather was unchanged for the Great Plains and Midwest but turned slightly unfavorable for the Delta. Rain returns to the southern Delta Friday and southern/eastern areas Sat-Sun. The Midwest will see rain across the far north central/southeast areas Friday,
southeast Sat-Sun, and south central/eastern area Monday. EU will see rain bias the western areas through Monday. China will see rain across parts of the Yangtze Valley through Monday.

 

Macros
are driving the agriculture markets. Soybeans are sharply lower on weakness in grains and outside related commodity markets. Meal is higher on strength in EU oilmeal, and soybean oil lower. Oil share made a large move to the downside,
a reversal from yesterday. NASS is due out later with an updated July US crush number. A Bloomberg survey calls for 180 million bushels and ending stocks for SBO of 2,219 million pounds. Malaysia is back from holiday and futures traded 3.6% lower (down 150
ringgits) and cash was down $25/ton to $991/ton. Offshore values were leading SBO 158 points lower earlier this morning and meal $8.20 short ton higher. Corn is lower for the third consecutive day. Energy prices are weaker. On Friday US unemployment figures
will be released. US wheat is lower on lack of fresh news and higher USD.

 

 

 

Weather

 

 

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 1, 2022

• U.S.
  and European models still divergent for U.S. crop areas
• European
  model favors rain in southern and eastern portions of the nation while GFS model promotes too much rain in the western and central Midwest during week two of the outlook
• Some
  increase in rainfall was suggested for Canada’s Prairies and neighboring areas of the northern U.S. Plains late next week followed by cooler conditions that might bring a chance for frost and or light freezes in a part of the Prairies Sep 9-12
• Southern
  U.S. states will continue to receive more than desired rainfall during the coming ten days further threatening some crops with too much moisture
• Russia/Ukraine
  showers will slowly increase bringing some needed moisture to winter wheat and rye production areas for improved emergence and establishment conditions
• Greater
  volumes of moisture may be needed to ensure the best emergence and establishment
• Europe
  rainfall will gradually increase from west to east during the week next week offering some improved topsoil moisture for winter crop planting, but the moisture comes much too late for summer crops in drought
• Eastern
  Argentina and southern Brazil rainfall today and Friday will maintain good crop and field conditions
• Western
  Argentina will continue too dry
• GFS
  model still trying to bring some early season showers to center west and center south Brazil during weeks 2 and 3 of the forecast; confidence is a little low on the significance of the event
• Tropical
  depression Five has formed in the central Atlantic Ocean and the U.S. National Hurricane Center says the storm could become a small hurricane in the next couple of days, but the system threatens no major landmass
• Super
  Typhoon Hinnamnor continues near the Ryukyu Islands of Japan and will move north northeasterly this weekend and more northeasterly early next week
  
• The
  storm will bring serious damage to southwestern Ryukyu Islands of Japan and may have a low impact on both Taiwan and southeastern coastal areas of China Friday into the weekend
• South
  Korea and the western main islands of Japan will be threatened by the storm early next week
• Torrential
  rain and damaging wind is expected, despite some weakening in the storm intensity
• Australia
  rainfall will continue to be supportive of winter crop future development with improving soil conditions expected in Queensland during the next two weeks and status quo conditions elsewhere
• India
  monsoonal weather will be normal over the next two weeks with northwestern parts of the nation and neighboring areas of Pakistan dry or mostly dry while rain falls elsewhere
• China’s
  Yangtze River Basin and areas north through the North China Plain will be dry for the next 10-12 days with some rain in the week of September 12
  

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

US
area/ supply estimates.

StoneX
will be releasing its survey on corn and soybeans this afternoon. 

 

Karen
Braun (Reuters) “A poll of Twitter users on Tuesday suggested the 1,720 voters predominantly like a yield around 171 bushels per acre or just below, down notably from the U.S. Department of Agriculture’s August peg of 175.4. Only 7% called for yield above
174 bpa.  About 1,100 voters on Aug. 18 had suggested something closer to 174 with 28% calling for something higher than 174. The quick change in mindset is undoubtedly influenced by last week’s Pro Farmer crop tour and the firm’s corn yield forecast of 168.1
bpa, which would be the worst relative result since 2012.”

 

Allendale
Inc

• US
  2022 corn yield at 172.39 bushels per acre, the company said on Wednesday.
• US
  2022 U.S. soybean yield at 50.86 bushels per acre.
• 2022
  corn production at 14.108 billion bushels and soybean production at 4.435 billion bushels.
• The
  yield survey, conducted from Aug. 15-28, was based on producer-calculated yields in 26 states covering 86% of corn production and 83% of soybean production.
• The
  firm’s production figures were based on the U.S. Department of Agriculture’s estimates of harvested acres.

 

(Reuters)
– A Farm Futures magazine survey of U.S. planting intentions for 2023 indicated that producers expect to expand their plantings of corn and wheat acres in the coming crop year while paring soybean acreage.

• Corn
  plantings for 2023 were forecast at 94.282 million acres, up 5% from the U.S. Department of Agriculture’s 2022 estimate of 89.8 million and the most since 2013
• Soybean
  plantings seen at 87.331 million acres, down 0.8%
• All-wheat
  seedings seen at 48.842 million acres, up 3.9%
• Winter
  wheat seedings seen at 36.553 million acres, up 7.5%
• Spring
  wheat plantings (including durum) seen at 12.289 million acres, down 5.4%
• Farm
  Futures surveyed 692 producers from July 13 to Aug. 1 via an email questionnaire

 

Macros

US
Initial Jobless Claims Aug 27: 232K (est 248K; prev 243K)

US
Continuing Claims Aug 20: 1438K (est 1438K; prev 1415K)

US
Nonfarm Productivity Q2 F: -4.1% (est -4.3%; prev -4.6%)

US
Unit Labor Costs Q2 F: 10.2% (est 10.5%; prev 10.8%)

Canadian
Building Permits (M/M) Jul: -6.6% (est -0.4%; prev -1.5%)

 

 

Corn

·        
CBOT corn is lower for the third consecutive session on global macro-economic concerns / US recession fears.

·        
China locked down Chengdu due to covid. They city has a population of 21 million, and this is the largest city to be locked down since Shanghai, according to Bloomberg.

·        
Ukraine’s AgMin reported 4.5 million tons of grain and oilseed was exported during the month of August. They warned there might be a storage shortage of about 12 million tons by the end of November, but ease as exports increase.

·        
The UN reported 139 voyages (77 inbound and 63 outbound) were cleared for sail at three Ukrainian ports during August.

·        
June EIA US ethanol production was 31.276 million barrels, below our expectations and suggests USDA’s 5.350 billion corn for ethanol use is on the high side.

·        
NASS will release its July corn for ethanol use this afternoon.

·        
Weekly EIA US ethanol production fell by 17,000 barrels, as expected. Stocks dropped 274,000 barrels, opposite from a survey calling for a 70,000-barrel increase.

 

Export
developments.

·        
Taiwan’s MFIG group seek 65,000 tons of corn on September 7 for November and/or early shipment from the US.

 

 

 

EIA:
Record numbers of solar panels were shipped in the United States during 2021

https://www.eia.gov/todayinenergy/detail.php?id=53679&src=email

 

Soybeans

·        
Soybeans are sharply lower on weakness in grains and outside related commodity markets. Meal is higher and soybean oil lower. Oil share made a large move to the downside, a reversal from yesterday.

·        
Argentina is expected to announce a new FX plan today.

·        
June EIA US soybean oil for biofuel use came in well below our expectations at 810 million pounds (886 estimated by FI), down from 856 million pounds used during May but up from 663 million pounds for June 2021.  Implied food
use was better than expected for the US during June. We lowered out US soybean oil for biofuel use by 150 million pounds and raised food use by 50. 

·        
NASS is due out later with an updated July US crush number. A Bloomberg survey calls for 180 million bushels and ending stocks for SBO of 2,219 million pounds.

·        
Cargo surveyor SGS reported August Malaysian palm exports at 1,309,801 tons, 3,408 tons above the same period a month ago or up 0.3%, and 118,748 tons above the same period a year ago or up 10.0%. Cargo surveyor AmSpec reported
Malaysian August palm exports at 1,190,848 tons, compared to 1,227,118 tons month earlier. Cargo surveyor ITS reported Malaysian palm exports at 1,299,116 tons, 1.6 percent above 1,278,579 tons from month earlier.

·        
Malaysia is back from holiday and futures traded 3.6% lower (down 150 ringgits) and cash was down $25/ton to $991/ton.

·        
China soybean futures were down 0.7 percent, meal 0.8% higher, soybean oil down 0.8%, and palm 1.1% lower.

·        
Rotterdam vegetable oils were
mixed with SBO higher and rapeseed oil sharply lower, and meal 2-6 lower for the positions we follow, from this time yesterday morning.

·        
Offshore values were leading SBO 158 points lower earlier this morning and meal $8.20 short ton
higher.

 

Export
Developments

·        
Private exporters reported sales of 396,000 metric tons of soybeans received in the reporting period for delivery to unknown destinations during the 2022/2023 marketing year.

·        
South Korean groups bought 120,000 tons of soybean meal from SA and/or the US & China. 60,000 tons of South American meal was bought jointly by FLC and Feed Buyers Group at an estimated $525.35 a ton c&f for shipment between Sept.
27 and Oct. 26. Another 60,000 tons was purchased by the MFG at an estimated $526.90 a ton c&f and was expected to be sourced from either the United States or China for shipment between Oct. 1 and Oct. 31.

·        
China seeks to sell 500,000 tons of soybeans from auction on Friday.

·        
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 is lower on lack of fresh news and higher USD.

·        
Oman’s Salalah Mills Company received 61,780 tons of Australian wheat. They increased strategic reserves to cover 6 months of domestic consumption.

·        
Paris December wheat was down 2.75 euros at 321.75 per ton as of 6:45 am CT.

·        
Kazakhstan lifted restrictions on wheat and flour exports from September 10 after realizing a good 2022 crop. Limits on wheat exports were imposed back in May. They may introduce quotas on livestock exports.

·        
The Ukrainian Agrarian Council estimated Ukraine’s 2023 wheat plantings could fall 30% to 40% due to lack of funds and warned production may not exceed 15 million tons. Ukraine collected 19 million tons in 2022 and 32.2 million
tons in 2021.

·        
Russia ports are loading wheat destined for Iran, Egypt, Syria, Turkey, and Algeria. They are also going to soon ship barley to Lebanon, Israel, Saudi Arabia, and Libya.

 

Export
Developments.

·        
South Korea’s MFG group bought 63,000 tons of feed wheat from Australia at an estimated $357.50/ton c&f for Jan 5-Feb 5 shipment.  They bought 135,000 tons of corn yesterday from SA or SAf.

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

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

·        
Jordan seeks 120,000 tons of barley on September 7 for Feb-Mar shipment. 

·        
Bangladesh seeks 50,000 tons of milling wheat on September 18.  It’s for optional origin with shipment within 40 days of contract signing.

 

Rice/Other

·        
South Korea’s AgMin announced they will purchase, on the domestic market, 450,000 tons of rice for reserves, including 350,000 tons of packaged rice and 100,000 tons of pre-dried rice, all by the end of November. This is up sharply
from 350,000 bought last year.

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