FI Morning Grain Comments 09/09/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 104,000 metric tons of soybeans for delivery to Taiwan during the 2022/2023 marketing year.

 

Most
CBOT prices are higher on position day ahead of an unusual USDA NASS US supply (survey) report incorporating additional data that is traditionally not used until l October release, including potential US planted area changes (satellite data, etc.). USD is
sharply lower and energy markets higher.

 

 

 

 

Weather

WEATHER
EVENTS AND FEATURES TO WATCH

• Not
  many changes today
• Central
  U.S. Plains will receive some needed rain today and Saturday easing a long week of hot, dry, conditions
• Rainfall
  of 0.05 to 0.40 inch with a few amounts to 0.75 inch will result, but coverage of more than 0.25 inch of rain will be less than 30% of the region
• Net
  drying will resume late this weekend and last for much of the following week to ten days
• Much
  more rain will be needed
• Cooling
  is expected for a little while, but it will get hot again next week
• Greater
  rain is needed to improve wheat planting prospects
• California’s
  heat wave is abating
• Extreme
  temperatures this week set many records and had a huge impact on water and electrical usage
• Drought
  remains very serious and with La Nina prevailing through the end of this year the odds are not good for much relief prior to the middle and latter parts of winter
• There
  will be some rain and mountain snow this autumn, but it will likely be lighter than usual
• Southern
  U.S. Plains will be mostly dry for the next ten days
• Any
  showers that occur will be too brief and light to have a notable impact on crop or soil conditions
• U.S.
  Delta weather will improve with less frequent and less significant rain after showers this weekend and early next week
• U.S.
  southeastern states will continue rainy into early next week with drier weather during the second half of next week
  
• Recent
  rain has slowed crop maturation and harvest progress and raised some concern over cotton boll rot
• U.S.
  Pacific Northwest will remain drier biased for the next ten days with temperatures near to above normal
• Low
  temperatures this morning slipped to 32 degrees Fahrenheit in southeastern Saskatchewan and 37 in northwestern North Dakota, but no damaging frost occurred
  
• Cooler
  air will continue spread across the north-central U.S. from Canada today and it will linger Saturday before a strong warming trend returns Sunday into next week
  
• No
  damaging frost is expected
• Highest
  temperatures will be confined to the upper 50s and 60s in Canada’s Prairies today and in the 60s and lower 70s in the northern Plains and upper Midwest through Saturday
  
• Next
  colder air mass in Canada’s Prairies will hold off until after September 18
  
• Frost
  and freezes may be more likely in that event
• Tropical
  Storm Muifa in the western Pacific  Ocean will move northwesterly over the next few days moving across or very near to the southwestern Ryukyu Islands of Japan and possibly impacting Taiwan early next week before moving close to the east-central China Coast
  during mid- to late-week next week
• The
  storm could impact eastern China, but will most likely move across North Korea and impact northeastern China a week from now
• Interior
  Eastern China will continue to dry out over the next ten days
• Areas
  from the Yangtze River Basin to the North China Plain will receive very little rain
  
• Drying
  in the northern part of this region will be good for summer crops after a long summer of frequent rain
  
• Drought
  in the central Yangtze River Basin is prevailing and another ten days of drought could further damage rice and a few other crops in the heart of the basin where the worst conditions are prevailing
• Xinjiang,
  China weather is expected to be mild to warm with rain mostly impacting the far northeast periodically
• This
  pattern will be very good for cotton and corn maturation as well as early harvesting in most areas, but there will be some disruption due to the showers in the far northeast
  
• Europe
  will receive some dryness easing rainfall over the coming week, but more will be needed to fully restore soil moisture to normal
• Western
  France, Spain and Portugal may get some significant rain next week from the remnants of Hurricane  Danielle arrive from the west
• Russia
  and Ukraine precipitation is expected to slowly ramp up over the next couple of weeks with Russia’s Southern Region last to get rain in the middle to latter part of next week
• Moisture
  is needed for winter crop emergence and establishment
• Recent
  frost and light freezes in parts of western Russia have had a minimal impact on crops and additional bouts of cool weather will continue to have a low impact.
  
• A
  few lows in the upper 20s and 30s occurred this morning which may be the coldest morning for the region
• Australia
  is still expected to see periodic bouts of rain over the next two weeks
• Rain
  in Queensland, New South Wales and Victoria Thursday was welcome and beneficial in raising soil moisture – especially in Queensland where the ground had been a little dry
• Australia
  temperatures will be a little cooler than usual in the next ten days which will slow drying rates and raise the need for drier and warmer conditions to improve early season crop development
• India
  will continue plenty wet across the central, southern and eastern parts of the nation during the next ten days
• Local
  flooding will be possible especially in parts of Gujarat and Madhya Pradesh
• Pakistan
  has benefited from drier weather recently and it should remain mostly dry for the next ten days along with neighboring areas of far northwestern India
• Improved
  cotton, rice and sugarcane conditions are expected, but production losses in Sindh because of late August flooding will not be reversible in some areas
• Argentina
  rainfall is expected to be quite restricted over the next ten days raising concern very early summer crop planting prospects later this month and next
• Dryness
  will also be a concern for the nation’s wheat crop – especially in the west
• Brazil
  is expecting waves of rain in the southern part of the nation during the next ten days which should translate into ongoing good wheat development in the far south, but drier weather may soon be needed in wheat areas of Parana
• Showers
  advertised near and beyond mid-month in center west Brazil would be welcome if they verify, although early indications suggest the resulting rainfall will be sporadic and light which is normal for the first rain of the season
• The
  precipitation may offer some sign that seasonal rainfall will begin on time, but World Weather, Inc. urges a little caution because October rainfall is expected to be lighter and more sporadic and usual
• Brazil
  coffee, citrus and sugarcane areas may get some rain after Sep. 18, but confidence is low
• Canada’s
  Prairies will continue drier biased during the next ten days favoring spring and summer crop maturation and harvest progress
• Soil
  moisture in the southeast is still favorable for late season crops
• Showers
  next week should be brief and light
• Greater
  rain may impact the eastern and southern Prairies after Sep. 18.
• Ontario
  and Quebec weather remains mostly good for corn and soybeans with little change likely
• the
  environment will be good for late season crop development,  maturation and early season harvesting
• South
  Africa precipitation is expected to be limited over the next ten days
• winter
  crops are still semi-dormant and unlikely to develop aggressively until later this month leaving time for improved rainfall before the reproductive season arrives
• Winter
  crops are still poised to perform well this spring as long as timely rain evolves late this month and in October.
  
• Central
  America, Colombia and parts of Venezuela are expected to trend wetter than usual in the next few weeks due to the persistent La Nina influence on the region
• Hurricane
  Earl was well south southeast of Bermuda at 0500 EDT today
• Earl
  will continuing moving to the northeast in the next couple of days and will intensify while losing some of its tropical characteristics
  
• The
  system will pass southeast of Bermuda today into Saturday
• Earl
  will lose all of its tropical characteristics next week and become a large mid-latitude storm well to the east of Newfoundland
• North
  Africa showers at this time of year are always welcome, but have a minimal impact and that will be the case over the next ten days
• Mexico’s
  drought in the northeast continues and will not likely end without the help from a tropical cyclone
• With
  that said some significant rain fell last weekend in a few locations bringing some notable relief.
  
• This
  coming week’s weather will be trending drier again
• Southern
  and western Mexico will get some rain periodically. through the next couple of week
  
• Central
  America rainfall has occurred routinely and will continue to do so favoring many crops
• Southeast
  Asia rainfall is expected to be frequent and significant during the next ten days to two weeks
  
• All
  areas are expected to be impacted and sufficient rain is expected to bolster soil moisture for long term crop development need
  
• Local
  flooding is expected
• Central
  Africa showers and thunderstorms have recently increased in some key coffee and cocoa production areas during the next two weeks.
  
• Recent
  rain in Ivory Coast and Ghana has brought relief to seasonal drying and will likely support mid-crop flowering if follow up rain occurs as needed
• Nigeria,
  Cameroon, Benin and other coffee and cocoa production areas should see relatively good crop weather over the next couple of weeks
• East-central
  Africa rainfall will continue to occur most frequent and significantly in Ethiopia, Uganda and southwestern Kenya over the next two weeks
• Good
  coffee, cocoa and other crop development conditions will prevail
• Today’s
  Southern Oscillation Index was +9.71 and it will move higher over the next few days

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 9, 2022

• Some
  rain will fall in the central U.S. Plains today and Saturday followed by a week to ten days of drying
  
• The
  moisture will be welcome in easing recent hot, dry, conditions, but much more rain will be needed 
• Southeastern
  U.S. wet bias will continue into early next week and then take a break for a short period of time
• Northern
  U.S. Plains and northern Midwest precipitation will occur briefly today into Saturday and then some additional showers may occur during mid- to late-week next week, but resulting rainfall is expected to be light
• Western
  U.S. Corn Belt will receive a few showers this weekend bringing a little moisture to filling soybeans
• U.S.
  temperatures will be above normal in the central U.S. and Midwest during week 2 of the outlook
• California
  heat wave is finally breaking down
• Europe
  is still expecting to see periods of rain develop across the continent in the coming week offering relief to ongoing drought, but much more rain will be needed to end the drought
• Western
  CIS weather will favor slowly improving moisture for winter wheat emergence and establishment
• Eastern
  China will continue to dry out for the next ten days
• Drying
  in northeastern China and the North China Plain is welcome and good for most farming activity
• Drying
  in the central Yangtze River Basin remains a problem with low water supply and rice production among a few other crops
• India’s
  weather will continue wet in most areas except near the Pakistan border and in Pakistan where seasonal drying will continue
• Eastern
  Australia received more rain Thursday, and it will end today and then return again in the second half of next week
  
• Temperatures
  will be cooler than usual
• Western
  Australia will not be nearly as wet as the southeast, but crop conditions will be highly rated
• Argentina
  remains drier than usual for at least ten days with the west missing most of the rain
  
• Early
  sunseed planting is under way
• Winter
  wheat conditions vary greatly with some crops struggling from dryness, according to the AG minister last week
• Canada’s
  Prairies is still quite dry in the central and southwest, but harvesting is advancing well
  
• Rain
  is needed for spring 2023, but the dry bias is great for crop maturation and harvest progress

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
Sept. 12:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• Malaysian
  Palm Oil Board’s data on stockpiles, production and exports
• International
  Dairy Federation hosts World Dairy Summit, Sept. 12-15, New Delhi
• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for corn, soybeans and cotton; spring wheat, corn, soybean harvesting, 4pm
• HOLIDAY:
  China, Hong Kong, Korea

Tuesday,
Sept. 13:

• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• EU
  weekly grain, oilseed import and export data
• France’s
  agriculture ministry updates 2022 production estimates
• New
  Zealand Food Prices

Wednesday,
Sept. 14:

• EIA
  weekly US ethanol inventories, production, 10:30am
• France
  AgriMer monthly grains outlook

Thursday,
Sept. 15:

• UkrAgroConsult’s
  Agro&Food Security Forum, Warsaw
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Malaysia’s
  Sept. 1-15 palm oil export data

Friday,
Sept. 16:

• 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
• HOLIDAY:
  Malaysia

Source:
Bloomberg and FI

 

 

 

 

 

 

 

Bloomberg
estimates for USDA

 

 

 

 

Macros

Canadian
Hourly Wage Rate Permanent Employees (Y/Y) Aug: 5.6% (est 5.5%; prev 5.4%)

Canadian
Full Time Employment Change Aug: -77.2K (prev -13.1K)

Canadian
Part Time Employment Change Aug: 37.5K (prev -17.5K)

Canadian
Participation Rate Aug: 64.8% (prev 64.7%)

 

Corn

·        
CBOT corn is higher on position day ahead of an unusual USDA NASS US supply report incorporating additional data that is traditionally not used until l October release, including potential US planted area changes (satellite data,
etc.).

·        
USD is sharply lower and energy markets higher.

·        
French crop ratings for corn dipped 2 points to 43 percent, lowest in recorded history for this time of year, and compares to 89 percent last year. Harvesting of corn in France started with about 10 percent complete as of today.

·        
Look for positioning today ahead of USDA S&D report day (Monday).

·        
The US EIA weekly petroleum status report showed ethanol production increased 19,000 barrels to 989,000 barrels per day from the previous week and stocks fell 395,000 to 23.138 million barrels. 

·        
We are bullish headed into the USDA report and would not discount December to reach above $7.00 next week if US stocks come in 100+ million bushels below the average trade guess of 1.217 billion (Reuters), currently 171 million
below USDA August.  By crop-year end, we look for US corn stocks to end up below 1.0 billion bushels. FI is 193 million bushels below the average trade guess for US corn production of 13.895 billion, and at the low end of 18 houses that were polled by Reuters. 

 

Export
developments.

·        
Taiwan’s MFIG passed on 65,000 tons of US/SA corn.

·        
There were no USDA 24-H sales

 

Soybeans

·        
The soybean complex is mostly higher with SBO rebounding. This is naturally driving meal downward but US domestic demand remans strong, creating some bull spreading in nearby meal contracts.

·        
South America premiums for soybeans and products are lower.

·        
MPOB Malaysian palm oil S&D data will be released September 12 and traders are looking for stocks to increase to just over 2 million tons.

·        
Malaysia palm oil futures traded 53 ringgit higher to 3,594 and cash was up $17.50/ton to $907.50/ton.

·        
China soybean futures were down 1.5 percent, meal off 0.4%, soybean oil down 0.2%, and palm off 0.5%.

·        
Rotterdam vegetable oils were unchanged to 5 euros higher from this time yesterday morning, and SA meal unchanged to 6 euros lower.

·        
Offshore values were leading soybean oil 90 points lower earlier this morning (86 lower for the week) and meal $4.00 short ton higher ($11.50 higher for the week).

 

 

 

USDA
Attaché: Brazil Biofuels Annual

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Biofuels%20Annual_Sao%20Paulo%20ATO_Brazil_BR2022-0047.pdf

 

Export
Developments

·        
Private exporters reported sales of 104,000 metric tons of soybeans for delivery to Taiwan during the 2022/2023 marketing year.

·        
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

·        
Wheat is higher for the US despite slow exports, but the USD is sharply lower and energy markets higher.

·        
India restricting rice exports are supportive, IMO.

·        
Paris December wheat was up 2.75 euros at 328 per ton as of 8.30 am CT.

 

Export
Developments.

·        
Jordan seeks 120,000 tons of wheat on September 13 for March and April shipment.

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

·        
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.

·        
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

·        
Yesterday India announced they imposed a 20 percent duty on rice exports of various types.