FI Morning Grain Comments 09/02/22

PDF attached

 

Good
morning.

 

No
USDA 24-H sales despite talk of China in for US soybeans yesterday.

 

US
Nonfarm Payrolls Aug: 315K (est 298K; prev 528K)

Unemployment
Rate (M/M) Aug: 3.7% (est 3.5%; prev 3.5%)

Average
Hourly Earnings (M/M) Aug: 0.3% (est 0.4%; prev 0.5%)

Average
Hourly Earnings (Y/Y) Aug: 5.2% (est 5.3%; prev 5.2%)

 

General
rebound for most commodity and equity markets this morning, ahead of the long US holiday weekend. USD is lower and WTI crude higher. Private yield reports are trickling out before general September wire estimates due out early next week and they are hinting
a much lower yield estimate for US corn. Malaysian palm traded 79 ringgit lower and cash was off $18.50. China futures traded higher for soybeans and meal and lower for the vegetable oils. Offshore values were leading SBO 230 points higher earlier this morning
(16 lower for the week to date) and meal $1.80 short ton lower ($6.00 lower for the week).

 

Rain
returns to the southern Delta today 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.

 

 

 

Weather

 

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 2, 2022

• Not
  many changes overnight
• Typhoon
  Hinnamnor will move through the East China Sea this weekend and will produce some very damaging wind, rain and flooding in a few of the southern Ryukyu Islands of Japan and have a minor impact on Taiwan today and Saturday before reaching South Korea Monday
  into Tuesday
• portions
  of Kyushu and western Honshu, Japan will also be impacted with high wind speeds, torrential rain and flooding, but the greatest Damage may be in South Korea
• The
  storm will eventually brush the northeast corner of China and southeastern Russia producing some high wind and heavy rain in those areas as well, but crop damage should be minimal
• China’s
  Yangtze River Basin and areas northeast to the North China Plain will experience dry weather for the next ten days
  
• Drought
  will be perpetuated in the central Yangtze River Basin further harming rice and other crops in the region
• Drying
  in the North China Plain is not expected to be a problem and may prove to be beneficial for a few areas that had been too wet
• India’s
  northwest will continue drying out along with Pakistan during the next ten days – this is a seasonable event and one that should be great for crops that survived excessive rain and flooding earlier this season
• Russia
  will be cooling down and experience brief periods of light rainfall to help slowly improve topsoil moisture for winter crop establishment, although greater rain will still be needed in parts of Russia’s Southern Region
• Europe
  weather is still expected to see improvement next week especially from the U.K. and France into southeastern parts of the continent where relief from dryness is expected
• U.S.
  weather changes today include less rain for the southern Plains and a part of the Western Corn Belt as the GFS backed way off of bringing a tropical cyclone from western Mexico into those areas
• Today’s
  solution is much more likely to verify
• Southern
  U.S. will remain wetter biased through the coming week to ten days while the heart of the Midwest and especially in the northwestern Corn and Soybean Belt will experience net drying conditions – at least through the coming week
  
• Cooler
  air coming into Canada’s Prairies late next week will induce rain in a part of that region and will likely generate a brief bout of rain in the northern U.S. Plains and western Corn Belt a week from now
• Frost
  and a few light freezes may impact parts of Canada’s Prairies in the Sep. 9-13 period with no seriously negative impact on the majority of crops
• Tropical
  Storm Danielle will continue over north-central Atlantic Ocean and poses no threat to land through next week
• Tropical
  Disturbance several hundred miles east of the Lesser Antilles still has some potential for evolution into a tropical depression this weekend and early next week, but it is expected to pass northeast of the northern Leeward Islands and stay on a path that is
  not threatening to the Greater Antilles, Bahamas or North America

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
Sept. 5:

• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  Sept. 1-5 palm oil export data
• New
  Zealand Commodity Price
• HOLIDAY:
  US, Canada

Tuesday,
Sept. 6:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for corn, soybeans and cotton; spring wheat harvesting, 4pm
• New
  Zealand global dairy trade auction
• US
  Purdue Agriculture Sentiment
• Abares
  releases quarterly reports on Australian crops and agricultural commodities

Wednesday,
Sept. 7:

• China’s
  first batch of August trade data, including soybean, edible oil, rubber and meat imports
• Canada’s
  StatCan releases wheat, durum, canola and barley stockpile data, 8:30am
• HOLIDAY:
  Brazil

Thursday,
Sept. 8:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Black
  Sea Grain and Oilseeds conference, Rostov-on-Don, Russia
• EIA
  weekly US ethanol inventories, production, 11am
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans

Friday,
Sept. 9:

• 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
• Vietnam’s
  customs department releases August coffee, rice and rubber exports
• Brazil’s
  Unica to release cane crush and sugar output data (tentative)
• HOLIDAY:
  Korea

Source:
Bloomberg and FI

 

 

 

 

 

US
area/ supply estimates.

StoneX:

US
soybean yield 51.3 vs. 51.8 previous

US
soybean production 4.515 billion vs. 4.490 previous

US
corn yield 173.2 vs. 176.0 previous

US
corn production 14.168 vs. 14.417 previous

 

 

Macros

US
Nonfarm Payrolls Aug: 315K (est 298K; prev 528K)

Unemployment
Rate (M/M) Aug: 3.7% (est 3.5%; prev 3.5%)

Average
Hourly Earnings (M/M) Aug: 0.3% (est 0.4%; prev 0.5%)

Average
Hourly Earnings (Y/Y) Aug: 5.2% (est 5.3%; prev 5.2%)

 

Corn

·        
Broader markets are driving CBOT agriculture prices.

·        
CBOT corn is higher on private estimates for USDA to potentially lower the September US corn yield by up to 3 bushels per acre. US payroll data is lending support to US equities.

·        
A lower USD and higher WTI crude oil market is lending support. 

·        
Baltic Dry Index rose 8.4 percent to 1,086 points.

·        
French corn ratings again declined, by 2 points for the week ending August 29, to 45 percent, lowest on record and compare to 91 percent year earlier. Look for USDA to take EU corn production down 1-2 million tons September 12.

·        
NASS reported July corn for ethanol use at 446 million bushels, at our expectations and 2 million above a Bloomberg trade guess. This compares to 444 million during June and 450 million July 2021. We will not make any changes
to our corn for ethanol use.

 

Export
developments.

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

 

Soybeans

·        
Soybeans, meal and oil are higher on higher outside commodity markets and positioning ahead of the long holiday weekend. 

·        
Ukraine started sunflower and soybean harvest but its too early to gather data for quality of the crops.

·        
NASS reported the July US crush higher than expected at 181.3 million bushels. End of July stocks for soybean oil were 2.228 billion, 9 million above average and compares to 2.316 billion at the end of June and 2.070 billion at
the end of July 2021. A Bloomberg survey called for 180 million bushels and ending stocks for SBO of 2,219 million pounds. Note Reuters trade guess for crush was 180.5. End of July soybean meal stocks were 524,000 short tons, above 357,000 short tons previous
month. 

·        
Malaysia traded 79 ringgit lower to 3915 and cash was down $18.50/ton to $972.50/ton.

·        
China soybean futures were up 0.2 percent, meal 0.5% higher, soybean oil down 3.5%, and palm 4.2% lower.

·        
Rotterdam vegetable oils were
mixed with SBO lower and rapeseed oil higher, and meal unchanged to 4 euros lower for the positions we follow, from this time yesterday morning.

·        
Offshore values were leading SBO 230 points higher earlier this morning (16 lower for the week to date) and meal $1.80 short ton
lower
($6.00 lower for the week).

 

Export
Developments

·        
Results are awaited on China selling 500,000 tons of soybeans out of reserves.

·        
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 higher following outside commodity markets and lower USD.

·        
News is very light.

·        
The FAO world food price index fell for the fifth consecutive month to 138 points from a revised 140.7 for July. The record was set in March at 159.7.

·        
Paris December wheat was down 1.25 euros at 320.00 per ton as of 7:50 am CT.

·        
Ukraine wheat prices are cheap enough to undercut Russia supplies, from what we read in  DTN story overnight.

 

Export
Developments.

·        
Egypt in a direct purchase bought 120,000 tons of Russian wheat at $340/ton for November  10-30 shipment.

·        
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

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