FI Morning Grain Comments 09/07/22

PDF attached

 

Good
morning.

 

USDA:
Private exporters reported sales of 257,400 tons of corn for delivery to Mexico.  Of the total, 226,920 tons is for delivery during the 2022/2023 marketing year and 30,480 tons is for delivery during the 2023/2024 marketing year.

 

USD
hit a new 20-year against the euro. WTI crude oil is lower, and US equities mixed. StatsCan released July 31 grain and canola stocks and in general they were slightly supportive for futures.
Moscow is threatening to not renew the Black Sea grain safe passage agreement set to expire in
November. Several news outlets mentioned President Putin is not satisfied over the UN and Turkey brokered grain deal and may look to revise terms as western sanctions have expand against Russia since the agreement was struck in July. CBOT wheat prices are
sharply higher on the above headlines, which is spilling over into corn and soybeans. December Matif wheat is sharply higher. Soybeans are seeing limited gains from an unchanged US crop rating, increase in Argentina producer & crush product selling, and fresh
China covid lockdowns.

 

Look
for light precipitation, if any, to develop across the northern Great Plains and some of the west central areas Thursday through Saturday. Precipitation will fall across parts of the northern Corn Belt Friday, west central and southeast areas Saturday before
moving into the central/southern areas Sunday. The US southeast areas will see rain, slowing harvest progress and drying rates for corn. Europe will see additional rain this week.

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 7, 2022

• Excessive
  heat in California continued Tuesday and another two days of hot weather is expected
• Extreme
  highs reached 117 degrees Fahrenheit in the central valleys Tuesday
• Cool
  air moving through Canada and into the north-central U.S. later this week and into the weekend should not have any big impacts
• Frost
  and a few light freezes will be possible in Canada’s Prairies with soft frost possible in a few far northern U.S. locations, but no damaging cold is expected
• Rainy
  weather will continue in the southeastern United States over this first week of the outlook
  
• Slightly
  greater rainfall has been advertised today for parts of the Plains and western Corn Belt, but some of the increase by the GFS model run was overdone
• Moisture
  from the Gulf of Mexico will continue blocked from reaching the Great Plains for a while which should inhibit rain in those areas, despite model attempts to bolster rainfall
  
• Argentina
  is still looking dry for the next ten days especially in the west
• Brazil’s
  center west is still advertised to begin getting some showers next week and that will be closely monitored
• Southern
  Brazil will continue plenty wet
• Eastern
  Australia will get rain later today into Friday and again a week later impacting New South Wales and some immediate neighboring areas most significantly
  
• Some
  of those crop areas will become too wet over time
• Pakistan
  and northwestern India’s risk for increasing rainfall during the second week of the outlook suggested in Tuesday’s model runs has been reduced today decreasing worry over another round of threatening rain
  
• Eastern
  China is still advertised dry for the next ten days
• Europe
  rainfall is still expected to slowly ramp up over the next ten days bringing some relief to recent drying
• Western
  CIS crop areas will also slowly get some needed moisture this weekend and next week
• Russia’s
  Southern Region will be last to get rain, but some is advertised beginning during mid-week next week which will be good for future establishment of wheat and rye
• Central
  parts of South Africa have been advertised to receive rain next week today – the event seems overdone, but all models are carrying the event and if it occurs it would be a boon for winter wheat development and for improving planting prospects for spring crops,
  although planting is still several weeks away.
  

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Wednesday,
Sept. 7:

• China’s
  first batch of August trade data, including soybean, edible oil, rubber and meat imports
• Canada’s
  StatsCan 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

 

 

 

 

NASS
announced they will review all US acreage information that will include soybeans and corn, that are normally addressed in the October update. NASS “will review all available data, including survey data, satellite-based data, and the latest information
from USDA’s Farm Service Agency and Risk Management Agency for planted and harvested acreage.”  This means we could see changes in corn and soybean plantings.

https://www.nass.usda.gov/Newsroom/Notices/2022/09-06-2022.php

 

USDA
inspections versus Reuters trade range

Wheat                 
477,657                 versus   400000-625000  range

Corn                     
518,373                 versus   500000-825000  range

Soybeans           
495,845                 versus   400000-800000  range

 

StatsCan
released July 31 grain and oilseed stocks.  We see it as supportive wheat and oilseeds.

 

Macros

US
MBA Mortgage Applications Sep 2: -0.8% (prev -3.2%)

US
MBA 30 Year Mortgage Rate Sep 2: 5.94% (prev 5.80%)

 

 

Corn

·        
CBOT corn is higher on Ukraine shipment concerns and strength in wheat. Lower crude oil and higher is limiting gains.

·        
WTI crude fell below $85 for the first time since January.

·        
USDA S&D trade estimates should be out today, and we look for tight 2022-23 US corn stocks.

 

Export
developments.

·        
USDA: Private exporters reported sales of 257,400 tons of corn for delivery to Mexico.  Of the total, 226,920 tons is for delivery during the 2022/2023 marketing year and 30,480 tons is for delivery during the 2023/2024 marketing
year.

·        
Results awaited: 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 are seeing limited gains from an unchanged US crop rating, increase in Argentina producer & crush product selling, and fresh China covid lockdowns.

·        
The weakness in Argentina product prices on Tuesday, mainly vegetable oil, is lending to some influence in CBOT meal over soybean oil product spreading.

·        
As of yesterday afternoon, Argentina producer soybean sales total upwards to 1.75 million tons since late Sunday. Official data showed producers registered 268,000 tons of soybean sales during the last week of August.

·        
China August soybean imports were 7.17 million tons, lowest for that month since 2014, and down 24.5 percent from a year earlier. Jan-Aug soybean imports were 61.33 million tons, down 8.6 percent from year earlier.

·        
US soybean conditions were unchanged and US production may end up at a record.

·        
Malaysia palm oil futures traded 107 ringgit lower to 3,690 and cash was down $20/ton to $922.50/ton.

·        
China soybean futures were down 0.1 percent, meal up 0.1%, soybean oil down 1.2%, and palm off 0.6%.

·        
Rotterdam vegetable oils were 10 to 25 euros lower from this time yesterday morning, and SA meal near unchanged to 16 euros lower.

·        
Offshore values were leading SBO 201 points higher earlier this morning and meal $7.40 short ton higher.

 

Export
Developments

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

·        
Yesterday Egypt bought 27,000 tons of sunflower oil. They are also in for soybean oil and local vegetable oils but passed. Lowest offer for soybean oil is $1,405/ton for 6k. Traders reported the following:

• 11,000
  tons at $1,300 C&f for arrival Nov 11-30.
• 10,000
  tons at $1,300 C&f for arrival Nov 11-30.
• 6,000
  tons at $1,300 C&f for arrival Nov 11-30.

·        
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.

 

Wheat

·        
CBOT wheat prices are sharply higher on the above Black Sea headlines.

·        
Paris December wheat was up 8.50 euros at 327.25 per ton as of 8:15 am CT.

·        
Moscow is threatening to not renew the Black Sea grain safe passage agreement set to expire in November. Several news outlets mentioned President Putin is not satisfied over the UN and Turkey brokered grain deal and may look to
revise terms as western sanctions have expand against Russia since the agreement was struck in July. Russia noted only two out of 87 ships oof gran shipped from Ukraine made it to “poor” (developing) countries, although what lineup he referred to was not cited.
Russia recently has been struggling to secure wheat shipments from logistical and payment problems. Russia demands payment in rubles instead of dollars, making it harder for banks to back grain and fertilizer deals.

·        
The UN reported 200 vessels were authorized to sail in/out of Ukraine ports since the safe passage agreement. “”As of 6 September, the total tonnage of grain and other foodstuffs exported from the three Ukrainian ports is 2,212,972
metric tons. A total of 204 voyages (108 inbound and 96 outbound) have been enabled so far,” (IFX)

·        
Russia could buy up to 3 million tons of grain for state stockpiles this season, most of it wheat.

 

Export
Developments.

·        
South Korea’s NOFI bought about 55,000 tons of feed wheat from Australia at an estimated $349.30 a ton c&f for shipment between January 10 and February 5.

·        
Japan in a SBS import tender seeks 70,000 tons of feed wheat and 40,000 tons of barley on September 14 for arrival in Japan by February 24.

·        
Jordan seeks 120,000 tons of barley on September 14 after passing September 7 for Feb-Mar shipment. 

·        
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.

·        
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

·        
None reported