FI Morning Grain Comments 09/14/22

PDF attached

 

Good
morning.

 

USD
is lower by 36 points and WTI crude up 72 cents. Soybeans are near unchanged while the products are seeing a reversal from yesterday’s trade. Meal gained on soybean oil (back months). Nearby soybean oil spreads are firm in concerns over short term end user
shortages. Corn is weaker and wheat lower. US economic worries may spill over into today’s trade.

 

US
rail strike concerns continue. As of yesterday afternoon, two large unions were still holding out while others were making progress with negotiations. Grain shipments could slow as early as today. We hear some rail movement was suspended in the south, an area
where poultry producers depend on daily shipments. Reuters noted railroads originate 24% of U.S. grain shipments, of which approximately half (691,000 carloads) is corn. Long distance passenger carrier Amtrak said it will cancel trains on seven more long-distance
routes on Wednesday after it began canceling trains on four long-distance routes on Tuesday. Here in the Chicago area, several passenger UP trains could be suspended, forcing tens of thousands of passengers to seek alternative routes to work.

 

Statistics
Canada crop production was released, and largest surprise was canola coming in 800,000 tons below expectations. Durum production fell 5.5% from StatsCan August estimate. Soybeans and corn were reported above expectations.

 

Some
weather models reduced precipitation for the US hard red winter wheat areas and the western Corn Belt for next week. The US lower Midwest, Delta and southeastern states will continue to dry out next ten days. The southern Plains will see restricted precipitation
for a while.

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 14, 2022

• ECMWF
  reduced rain in U.S. hard red winter wheat areas and the western Corn Belt for next week
  
• The
  drier bias is likely to verify
• Brazil
  rain potentials are increasing from center west to center south next week and sufficient rain is expected to support at least some early season soybean planting
• Parana
  wheat in Brazil may experience too much rain in the next ten days delaying harvest progress and raising concern over grain quality
• Buenos
  Aires and La Pampa, Argentina may get some important rainfall during the weekend, but Cordoba precipitation should be limited
• Not
  much change in Europe, Russia, China, India or Australia today relative to that of Tuesday’s forecasts
• Russia
  wheat areas are expecting rain
• Europe
  soil moisture is improving in many areas, but not so much in France
• Pakistan
  and far northwestern India are drying down seasonably
• Gujarat,
  India will stay wet into Friday
• Central
  and eastern India will be wet for the next ten days
• China’s
  drought will continue in the Yangtze River Basin
• Typhoon
  Muifa is impacting the Shanghai region of China today disrupting port activity and causing flooding
  
• Muifa
  will move up the east coast today into Friday producing flooding rain in those provinces while the interior east is left dry
• Plenty
  of rain is occurring in Australia with some concern about too much in parts of New South Wales and Victoria
• U.S.
  lower Midwest, Delta and southeastern states will continue to dry out next ten days
• U.S.
  southern Plains precipitation will be restricted for a while
• U.S.
  hard red winter wheat rainfall will be limited, although not completely absent

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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
PPI (M/M) Aug: -0.1% (est -0.1%; prev -0.5%)

US
Core PPI (M/M) Aug: 0.4% (est 0.3%; prev 0.2%)

US
PPI (Y/Y) Aug: 8.7% (est 8.8%; prev 9.8%)

US
Core PPI (Y/Y) Aug: 7.3% (est 7.0%; prev 7.6%)

Canadian
Manufacturing Sales (M/M) Jul: -0.9% (est -0.9%; prevR -0.1%)

 

Corn

·        
CBOT corn is lower on US economic concerns and technical selling after price hit a mid-June high on Monday.

·        
The Baltic Dry index increased 13.3% to 1,595 points, after increasing 12.1 percent day before.

·        
Agritel sees the Ukraine 2022 corn crop at 30.24 million tons, down nearly 12 million tons from the record set in 2021. Plantings were down to 4.28 million tons from 5.5 million.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 9,000 thousand to 980k from the previous week and stocks down 126,000 barrels to 23.012 million.

 

Export
developments.

·        
Taiwan’s MFIG group bought about 65,000 tons of corn from Brazil at an estimated premium of 177.69 US cents a bushel c&f over the March 2023 contract for shipment between Nov. 1 and Nov. 20.

 

 

Soybeans

·        
Soybeans were
moderately lower at the electronic close. Meal is gaining on soybean oil, at least for the back months. September soybean oil is strong (bull spreading) on concerns over short term supply shortages

·        
StatsCan reported Canada canola production at 19.1 million tons, down 2 percent from an August estimate and 800,000 tons below an average trade guess.

·        
Argentine soybean producer sales reached 57% for the 2021-22 crop (64 % year ago), according to the AgMin, through last week. During the first week of September, farmers sold 2.1 million tons of soybeans compared with just 268,100
tons the previous week. 

·        
Abiove increased its Brazil 2022 soybean production estimate by 0.2% to 126.9 million tons. Domestic crush was projected at 48.9 million tons. Brazil soybean exports were pegged at 77 million tons, 200,000 tons above August.

·        
Malaysia palm oil futures traded 42 ringgit lower to 3,856 and cash was down $5.00/ton to $947.50/ton.

·        
Malaysian third month benchmark contract rolls to the December on Wednesday.

·        
China futures for soybeans were up 0.1%, meal up 0.2%, SBO down 0.1% and palm up 0.5%.

·        
Rotterdam vegetable oils were down 15-35 euros from this time yesterday morning. SA meal mostly off 3-5 euros.

·        
Offshore values were leading soybean oil 179 points lower earlier this morning and meal $9.00 short ton higher.

 

 

Export
Developments

·        
No developments.

 

Wheat

·        
Wheat futures are weaker on lack of fresh news and good US weather. Lower corn and US economic concerns are also pressuring prices.

·        
Recent rain has boosted winter wheat plantings across Europe.

·        
Paris December wheat was down 1.00 euro earlier at 335.25 per ton.

·        
StatsCan reported all-wheat Canadian production increased about 150,000 tons from August and was 203,000 tons above an average trade guess. Durum came in below expectations.

·        
Manitoba, Canada, spring grain harvesting progress reached 31 percent. Spring wheat was 57 percent done.

·        
Ukraine grain exports from Sep 1-13 were 2.5 million tons, down 34 percent from same time year ago.

 

Export
Developments.

·        
Japan in a SBS import tender bought only 220 tons of feed barley and passed on feed wheat. They were in for 40k barley and 70k wheat.

·        
Jordan bought 60,000 tons of barley. 

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

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

·        
Jordan seeks 120,000 tons of barley on September 21.

·        
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