FI Morning Grain Comments 09/06/22

PDF attached

 

Good
morning.

 

CBOT
soybeans, meal and oil are under pressure from an increase in Argentina producer and crush product selling. Malaysian palm oil hit a 6-week low. More and more cities in China are going into lockdown from rising covid cases. Grains are higher on Ukraine/Russia
conflict concerns that could keep grain shipments slow, despite a higher USD by 71 points. Crude oil is higher and US equities are pointing a higher open.

 

December
Matif wheat was 2.00 euros lower at 319.75, in part to a lower euro (near a 20-year low). Over a two day period, offshore values were leading SBO 247 points lower earlier this morning and meal $1.60 short ton lower.

 

The
US Great Plains bias HRW wheat country saw better than expected rains over the weekend.  Western NE parts of western KS and eastern Colorado finally saw some relief. The Central Plains turned a little drier than that of Friday. Look for light precipitation,
if any, to develop across the northern Great Plains and some of the west central areas through Saturday. Either way ,rains across US HRW wheat country is beneficial for the upcoming US winter wheat planting season. US Midwest weekend rainfall was about expected
bias ECB. This week rains are forecast drier in the northwest. SD, NE into KS. IA will see rain. Precipitation will also fall across other parts of the northern Corn Belt. The US southeast areas will see rain, slowing harvest progress and drying rates for
corn. Europe saw good rain over the weekend and will see additional rain this week bias western growing areas, Poland and Romania.

 

 

 

Weather

 

Source:
World Weather INC

 

Source:
World Weather INC

 

Source:
World Weather INC

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 6, 2022

• Continued
  dryness is expected in eastern China this week and early next week 
• India
  may experience some increase in rainfall in the northwest next week 
• Russia
  and Ukraine will experience slowly increasing rainfall, but Russia’s Southern Region will be dry until next week 
• Europe
  will experience increasing rainfall across the continent this week
• U.S.
  Delta and southeastern states will be wettest this week with additional rain in the southeast next week 
• Western
  U.S. Corn and Soybean crop areas will get one chance for rain late this week and then resume a dry pattern
  
• some
  pockets of crop stress will prevail while a few other areas get some welcome moisture
• Weekend
  rain in the U.S. was greatest in the lower eastern Midwest, Delta and southeastern states
  
• Texas
  and the Great Plains dried out 
• Canada’s
  Prairies and the U.S. Plains will continue to see restricted rainfall for a while
• Argentina
  will be dry for the next ten days, especially in the west
• Southern
  Brazil will get waves of rain
• Some
  showers may evolve sporadically and lightly in center west Brazil near mid-month
• Typhoon
  Hinnamnor impacted South Korea overnight and today, but damage assessments have not been received yet

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

Soybean
and Corn Advisor

2022/23
South American Crop Production Estimates

• South
  American soybean production of 211.0 million tons, up 38.3 mt or 21.3%.
• Brazil
  soybean production of 151.0 million tons, up 25 million.
• Argentina
  soybean production of 50 million tons, up 6 million.
• Paraguay
  soybean production of 10.5 million tons, up 6.3 million.
• South
  American corn production of 187.5 million tons, up 11.6 million or 6.5%.
• Brazil
  corn production of 125.5 million tons, up 9.5 million.
• Argentina
  corn production of 55.0 million tons, up 2.0 million.
• Paraguay
  corn production of 5.0 million tons, unchanged.

 

CFTC
Commitment of Traders

 

 

 

 

Macros

 

Corn

·        
CBOT corn is mostly higher on technical buying and higher WTI crude oil.

·        
China corn was up 0.6% on Tuesday. Earlier it hit its highest level since June.

·        
AgRural reported 9 percent of the first Brazil corn crop had been planted, down slightly from 10 percent last season. But on a volume basis, plantings are running slightly above, as AgRural looks for 2022-23 1st corn production
to end up near 28.2 million tons, up from 24.8 million last season.

·        
The US is soon expected to announce 3 years of biofuel blending mandates, instead of just one, providing longer-term certainty for biofuel producers and end users. 2023-2025 are the years they may address. 2023 decision was due
no later than November 16.

·        
(Bloomberg) — North American fertilizer prices are spiking as plant closures in Europe squeeze supplies. An index of weekly North American fertilizer prices by Bloomberg’s analysis organization Green Markets rose by over 11%
Friday, the most since March, as an energy crunch in Europe forces some plants to close or curtail production. Natural gas is the No. 1 input for most nitrogen fertilizer. The common nitrogen fertilizer ammonia in the US Corn Belt saw prices rise nearly 24%.

 

Export
developments.

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

·        
Results are awaited on South Korea’s MFG seeking up to 140,000 tons of animal feed corn sought in two consignment for arrival in South Korea in December, 2022, and January, 2023. Ukrainian and Russian origin is excluded.

 

Soybeans

·        
Soybeans, meal and soybean oil are lower from an increase in Argentina producer/crusher selling. More and more cities in China are going into lockdown from rising covid cases. Malaysian palm oil hit a 6-week low.

·        
A surge in Argentina producer soybean sales over the coming days could be negative for CBOT soybean futures, but we will have to see how producers react to the “soybean dollar” in coming days. Already this morning we heard Argentina’s
soy dollar increased sale registrations on its first day. New source La Nacion reported 1 million tons was sold Sunday while a private source reported 500,000 tons.

·        
End of August Argentina producer sales for soybeans were 10% lower than the same period year ago.

·        
Look for Argentina soybean product sales to increase as well.

·        
Argentina’s central bank plans to increase its interest rate early this week, according to a Reuters article. This comes after the government announced a new exchange rate for soybean producers. The “soy dollar” allows soybean
producers to convert their earnings to local currency at 200 pesos per dollar, above the official rate of 140 pesos, and may require the government to come up with more pesos to purchase dollars if liquidity immediately increases. Interest rates are at 69.5%
with inflation running around 70% on an annual basis. They may increase the interest rate to 75%.

·        
ITS reported Sep 1-5 Malaysian palm shipments at 249,102 tons, up 17.8% from month earlier.

·        
Reuters survey for Malaysian palm oil S&D

·        
Over a two day period, Malaysia traded 118 ringgit lower to 3,797 and cash was down $30/ton to $942.50/ton. On Monday futures were up 1 ringgit and cash down $5.00.

Monday
through Tuesday changes

Monday
changes

·        
Over a two day period, China soybean futures were down 0.9 percent, meal up 2.8%, soybean oil up 2.4%, and palm near unchanged.

Monday
through Tuesday changes

Monday
changes

·        
Over a two day period, Rotterdam vegetable oils
were
mixed with SBO higher and rapeseed oil lower, and SA meal mixed.

·        
Over a two day period, offshore values were leading SBO 247 points lower earlier this morning and meal $1.60 short ton
lower.

 

Export
Developments

·        
Egypt is in for vegetable oils. Lowest offer for soybean oil is $1,405/ton for  6k, and sunflower oil is $1,333 per ton for 10. Earlier Egypt’s GASC announced they seek vegetable oils on Tuesday for Oct. 20-Nov. 10 and/or Nov.
11-30 arrival. They are also in for local vegetable oils for Oct. 5-30 and/or Nov. 1-25 delivery.

·        
Results awaited. 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 was higher on Ukraine/Russia conflict concerns despite a higher USD. Some fear the nuclear plant in Ukraine will eventually leak radiation.

·        
Paris December wheat was down 2.25 euros at 319.50 per ton as of 7:15 am CT. On Monday December Matif wheat finished 2.25 euros higher.

·        
Egypt reported wheat reserves were sufficient for 6.7 months.

·        
The Russian export duty on wheat was set at 3,368.9 rubles ($66.58) per ton from September 7 to 13, 2022, based on an indicative price of $329.3 per ton.

·        
Russia’s wheat harvest reached 75 percent for 82.2 million tons expected, according to the AgMin, compared with 66.4 million tons last year. 

·        
Australia producers are expected to see record earnings this season from large production (wheat) and high global prices. ABARES has forecast wheat production of 32.2 million tons and 6.6 million tons for canola, just shy of their
records hit last year. 

 

US
Wheat Associates 9/2/22

“This
week, basis was mixed in the Gulf and Pacific Northwest (PNW). In the Gulf, HRS and SRW basis was up while HRW basis was unchanged. In the PNW, HRS basis was down slightly while HRW and soft white were marginally up. Durum prices declined significantly in
August as good growing conditions and higher yields have lifted analysts’ production expectations. Dry conditions in the HRW growing areas of the High Plains have encouraged farmers to hold on to wheat with the expectation that prices may rally. The ocean
freight market has softened recently, but a strong U.S. dollar is reducing U.S. wheat competitiveness. The Surface Transportation Board held its annual Grain Car Council meeting this week. Railroad executives said they are optimistic they can hire enough workers
to move trains on time. The major class I railroads have faced extensive logistical challenges over the last year.”

 

Export
Developments.

·        
South Korea’s Major MFG bought about 65,000 tons of feed wheat from Australia at an estimated $351.75 a ton c&f for shipment between Dec. 19 and Jan. 20.

·        
Taiwan Flour Millers’ Association seeks 55,375 tons of US grade 1 milling wheat on Sept. 8 for shipment Nov. 2 and Nov. 16. Types sought include dark northern spring, hard red winter and white wheat.

·        
Iraq bought 100,000 tons of US hard red wheat at $494.00 per ton C&F. 

·        
Jordan bought 60,000 tons of wheat at $347/ton for LH February shipment.

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

·        
Jordan seeks 120,000 tons of wheat on September 13 for March and April 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 will buy 200,000 tons of rice from Myanmar in a government to government deal at $645.50/ton CIF for delivery within 2 months.

·        
Lowest price offer for Bangladesh seeking 50,000 tons of rice was $439.11 a ton CIF.