FI Morning Grain Comments 09/13/22

PDF attached

 

Good
morning.

 

Key
US inflation data was released, and several markets sold off and/or gave up some gains. Soybeans are seeing follow through buying from the bullish USDA report, but gains are limited from a rally in the USD. Corn and wheat are mostly lower. Next month the trade
could see additional downward revisions to the US harvested area and yield for corn and soybeans if crop conditions continue to deteriorate. US weather is unchanged for the Great Plains and Midwest.  Rain returns to the central Plains Wednesday, stating with
the Dakotas before moving into MN, NE and western KS Thursday. The Midwest will see rain across the northwestern areas Thursday through Saturday. 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 13, 2022

• U.S.
  Southeast and Delta will be dry next week to ten days
• Lower
  eastern Midwest will be dry next week to ten days
• Center
  west Brazil and center south Brazil rainfall will increase next week bringing some of the first planting moisture for soybeans and also bringing moisture to citrus, sugarcane and some of the more important coffee areas of Brazil by the end of next week
• Argentina
  rainfall is still advertised to be limited during the next ten days
• Portions
  of hard red winter wheat areas are advertised wetter in today’s forecast model runs for next week
• Eastern
  Canada’s Prairies will experience a boost in rainfall next week ahead of colder temperatures
• Killing
  frost and freezes may follow the rain event in at least a portion of the Prairies next week
• Eastern
  Australia is still advertised to experience frequent bouts of rain over the next couple of weeks
• India’s
  Gujarat will remain wet through Friday of this week and then begin to dry down
• Other
  areas in central and eastern India will remain wet for the next ten days
• Interior
  eastern China will remain in a net drying mode for the next ten days
• Russia’s
  winter crop region will get rain that will bolster soil moisture for better winter crop establishment
• Portions
  of Europe will get relief from dryness, but more rain will be needed to end drought
  
• Typhoon
  Muifa is expected to shut down ports near Shanghai China over the next two days
  
• Some
  property and crop damage is possible from flooding and strong wind as the storm moves inland over northeastern Zhejiang and Jiangsu, China

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

Macros

US
CPI (M/M) Aug: 0.1% (est -0.1%; prev 0.0%)

US
CPI Core (M/M) Aug: 0.6% (est 0.3%; prev 0.3%)

US
CPI (Y/Y) Aug: 8.3% (est 8.1%; prev 8.5%)

US
CPI Core (Y/Y) Aug: 6.3% (est 6.1%; prev 5.9%)

US
Real Avg Hourly Earning (Y/Y) Aug: -2.8% (prev -3.0%)

US
Real Avg Weekly Earning (Y/Y) Aug: -3.4% (prev -3.6%)

Fed
Funds Futures Now Pricing 19% Chance Of 100 Bp Fed Rate Hike And 81% Chance Of 75 Bp Hike At Sept Meeting – RTRS

 

 

Corn

·        
CBOT corn turned lower this morning in part to a sharply higher USD and disappointing US inflation data. 

·        
The threat of US railroad strikes still loom and Amtrack, a major US long distance train carrier, started suspending services in the event passengers could get stranded in selected cities.

·        
China in its monthly CASDE report made no changes to its 2022-23 corn, soybean and cotton outlooks.

·        
France lowered their corn estimate to 11.33 million tons from 12.36 million, lowest level since 1990. They put 2022 rapeseed production at 4.50 million vs. 4.35 million previous. 

·        
The EPA is working with USDA and DOE over biofuel blending requirements that would extend beyond 2022, a benefit for biofuel companies that need to plan ahead/hedge.

·        
The Baltic Dry index increased 12.1% to 1,408 points.

·        
USDA may resume the weekly export sales report September 15.

·        
The US weather forecast is calling for warm temperatures through the third week of September, welcome for producers that had to plant late.

·        
(Bloomberg) — Drought will likely continue in parts of China, especially regions south of the Yangtze River, which will be unfavorable for crops, according to the National Meteorological Center. 

·        
The UN and Russia have continued talks on increasing Russian exports of fertilizer and this morning the UN announced a deal for ammonia to move through Ukraine. No amounts or details were provided at the time this was written. 

 

Export
developments.

·        
Taiwan’s MFIG seeks 65,000 tons of corn on September 14 for Nov 1-20 shipment, later if PNW and/or South Africa origin.

 

 

 

Soybeans

·        
Soybeans and soybean oil are higher on follow through bullish sentiment from the USDA report.  Meal is lower following weakness in corn and a higher USD. Palm oil surged nearly 6 percent overnight.

·        
Soybean prices are expected to test the $15 level again later this week unless widespread selling in commodities sets in. 

·        
Abiove reported Brazil’s total oilseed processing capacity grew 4.1% in the 2020-22 period (2 years), fastest pace since 2016. Capacity stands at 66.7 million tons a year. The average rate of increase is 2.5% in the last decade.
The increase over the past two years in capacity is in response to higher biodiesel production, although the mandate still stands at 10 percent.

·        
We are hearing rumors that Argentina may extend the soy dollar until the end of the year, but at this time can not confirm that.

·        
India’s palm purchases in August jumped considerably to close to 1.0MM tons and September’s imports are expected to be large. August was highest in 11 months. Palm oil is trading significantly lower than soybean oil.

·        
Malaysia palm oil futures traded 215 ringgit higher to 3,898 and cash was up $42.50/ton to $952/ton.

·        
China is back from holiday and soybeans were up 2.7%, meal up 4.8%, SBO up 2.2% and palm up 2.5%.

·        
Rotterdam vegetable oils were sharply higher from this time yesterday morning. SA meal was up 20-23 euros.

·        
Offshore values were leading soybean oil 21 points lower earlier this morning and meal $4.10 short ton lower.

 

Export
Developments

·        
No developments.

 

Wheat

·        
Wheat is mostly lower from a big reversal in the USD to the upside and a good US winter wheat planting progress pace of 10 percent as of Sunday, 3 points above average. Spring wheat harvesting pressure should also be noted (85
percent versus 89 average).

·        
Canada’s Prairies will be warmer than usual over the next week with below average precipitation.

·        
Paris December wheat was up 0.75 euros earlier at 336.25 per ton.

·        
Ukraine started winter wheat plantings with 3.5 percent complete. The area may fall to 3.8 million hectares from 4.6 million year earlier. Ukraine’s winter barley sowing area for the 2023 harvest could also fall by 20% from last
year while the winter rapeseed area would remain unchanged.

·        
UN reported 7 ships left Ukraine for Spain, Turkey and Israel.

·        
Statistics Canada will have its next crop estimate on Wednesday, September 14.

 

Export
Developments.

·        
Japan seeks 97,373 tons of food wheat later this week for arrival by December 31.

·        
Jordan passed on 120,000 tons of wheat for March and April shipment.

·        
Jordan is back in September 20 for 120,000 tons of wheat.

·        
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

·        
None reported