FI Morning Grain Comments 09/20/22

PDF attached

 

Good
morning.

 

The
soybean complex is lower on technical selling and an unchanged US weather forecast calling for favorable conditions. EU rapeseed prices hit a one year low earlier. Corn and wheat are higher in a turnaround Thursday trade. US G/E crop conditions fell one point
each for corn and soybeans. Soybean harvest progress, at 3 percent, two points below expectations. Corn harvesting progress was below expectations by 3 points at 10 percent. 94 percent of the US spring wheat crop had been collected while winter wheat seedings
were 21 percent. Jordan passed on wheat. Palm oil futures in Malaysia were higher on good September shipments. Offshore values were leading soybean oil 47 points higher earlier this morning and meal $1.40 short ton lower.

 

US
harvesting weather will be favorable this week. Hot and dry conditions are seen for the southwestern hard red winter wheat growing areas over the next two weeks. Brazil will see widespread rains this week, favoring early development for recently planted corn
and lessor extent soybeans. Argentina is still battling a drought and we could see the local exchanges start to lower their estimates for soybeans and corn planting areas.

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 20, 2022

• Increasing
  market talk is expected today about next week’s possible tropical cyclone in the Gulf of Mexico that will begin to evolve in the Caribbean Sea during the weekend and early next week
• Landfall
  might occur in the middle to latter part of next week, but confidence is still very low since the system has not developed yet
  
• Both
  the GFS and the ECMWF models have suggested a very large and powerful tropical cyclone will be possible, but it is still very early in the forecast of this event leaving plenty of time for change
• U.S.
  Weather until next week is expected to be favorably mixed for late season summer crop filling, maturation and harvest progress
• Rain
  is still advertised for a part of the U.S. Central Plains wheat  country for Wednesday and Thursday
  
• Nebraska,
  northeastern Colorado and northern Kansas are favored for 0.50 to 1.50 inches of rain
• Drought
  will prevail in central and southwestern Canada’s Prairies
• Brazil’s
  center west and center south crop areas are still poised to receive significant rain in the next ten days
• Enough
  rain should fall to support early season soybean planting, continued early season corn planting and development
• The
  moisture will also be good for future rice and cotton planting
• Argentina’s
  rainfall in the coming week to ten days is expected to be erratic and a light with a need for greater moisture
• Europe
  rain will continue improving with rising soil moisture for many areas
• France
  and the U.K. will be last to get rain, but they are expected to eventually benefit
• Russia
  and Ukraine weather will continue to improve for planting, emerging and establishing winter crops
• China’s
  Yangtze River Basin will continue to see very little rainfall through the next ten days
• Central
  and eastern India will receive widespread rain in the next ten days while the northwest and neighboring areas of Pakistan are dry
• Eastern
  Australia is expected to stay wet with rain Wednesday and Thursday of this week and again early to mid-week next week
• Western
  Australia will see restricted rainfall
• Eastern
  South Africa will receive rain in the coming week improving early season spring planting moisture and benefiting a few winter crops

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Tuesday,
Sept. 20:

• China’s
  third batch of August trade data, including soy, corn and pork imports by country
• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• Malaysia’s
  Sept. 1-20 palm oil export data
• World
  Agri-Tech Innovation Summit, London, Sept. 20-21

Wednesday,
Sept. 21:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Globoil,
  international edible oil conference, Agra, India, day 1
• Sugar
  and ethanol conference by Indian Sugar Mills Association and Datagro

Thursday,
Sept. 22:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• US
  cold storage data for beef, pork and poultry, 3pm
• Globoil,
  international edible oil conference, Agra, India, day 2
• International
  Grains Council monthly report
• USDA
  red meat production, 3pm
• Future
  Food Tech Conference, London, Sept. 22-23

Friday,
Sept. 23:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• Globoil,
  international edible oil conference, Agra, India, day 3
• FranceAgriMer
  weekly update on crop conditions
• Brazil’s
  Unica may release cane crush and sugar production data (tentative)
• US
  cattle on feed, poultry slaughter, 3pm
• HOLIDAY:
  Japan

Source:
Bloomberg and FI

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
790,145                 versus   400000-950000  range

Corn                     
549,354                 versus   375000-800000  range

Soybeans           
518,743                 versus   350000-650000  range

 

Macros

US
Housing Starts Aug: 1575K (est 1450K; prev 1446K)

US
Building Permits Aug: 1517K (est 1604K; prevR 1685K)

US
Housing Starts (M/M) Aug: 12.2% (est 0.3%; prev -9.6%)

US
Building Permits (M/M) Aug: -10.0% (est -4.8%; prevR -0.6%)

Canadian
CPI NSA (M/M) Aug: -0.3% (est -0.1%; prev 0.1%)

Canadian
CPI (Y/Y) Aug: 7.0% (est 7.3%; prev 7.6%)

Canadian
CPI Core – Common (Y/Y) Aug: 5.7% (est 5.6%; prev 5.5%)

Canadian
CPI Core – Median (Y/Y) Aug: 4.8% (est 5.1%; prev 5.0%)

Canadian
CPI Core – Trim (Y/Y) Aug: 5.2% (est 5.5%; prev 5.4%)

Sweden
Central Banks hikes its SEK overnight rate by an unprecedented 100 bps to 175bps, and signals that the rate would continue to rise for the next six months.  +100bps was the 1^st time ever for Sweden CB.

 

 

Corn

·        
CBOT corn is higher from a one point drop in US corn conditions and technical rebound from yesterday’s selling.

·        
The USD is higher and energies higher.

·        
US corn harvesting progress was below expectations by 3 points at 10 percent.

·        
The Baltic Dry Index increased 11.3% to 1,729 points.

·        
USDA US corn export inspections as of September 15, 2022 were 549,354 tons, within a range of trade expectations, above 474,388 tons previous week and compares to 403,422 tons year ago. Major countries included Mexico for 217,839
tons, Japan for 161,834 tons, and China for 142,833 tons.

·        
FOMC meetings begin today, and the US rate decision is Wednesday, and many are looking for a 75 to 100 point basis increase. Several other countries will revise interest rates this week.

 

Export
developments.

·        
None reported

 

 

 

Soybeans

·        
Soybeans are lower in part to technical selling (was higher Monday), favorable US weather, higher USD, and lower products. EU rapeseed prices hit a one year low earlier. October meal is still trading near its contract highs. Soybean
oil is seeing limited losses from higher WTI crude oil and higher corn. November soybeans may remain in a short term $14.40 and $14.80 trading range.  Strong support is seen around the $13.93-$13.98 area.

·        
Brazil’s weather forecast improves this week with scattered rainfall expected across most of the growing areas.

·        
US G/E crop conditions fell one point each for corn and soybeans. Soybean harvest progress, at 3 percent, two points below expectations.

·        
Out of the 7.17 million tons of China soybean imports during the month of August, 6.25 million was Brazil origin. China imported 286,762 tons from the US, 350,342 tons from Uruguay, and 197,770 tons from Argentina.

·        
Palm oil futures in Malaysia were higher on good September shipments. ITS reported Sep 1-20 palm oil exports from Malaysia at 950,827 tons, a 31 percent rise from 728,165 tons during the Aug 1-20 period. AmSpec reported a 39 percent
increase to 866,984 tons.

·        
Malaysian December palm oil futures increased 37 points to 3737 and cash was up $2.50/ton to $836.

·        
China futures for soybeans were up 0.1%, meal up 1.1%, SBO 1.2% lower and palm down 2.6%.

·        
Rotterdam vegetable oils were down 5-20 euros from this time yesterday morning. SA meal was higher by 4-11 euros.

·        
Offshore values were leading soybean oil 47 points higher earlier this morning and meal $1.40 short ton lower.

·        
USDA US soybean export inspections as of September 15, 2022 were 518,743 tons, within a range of trade expectations, above 341,713 tons previous week and compares to 279,572 tons year ago. Major countries included China for 149,393
tons, Mexico for 140,694 tons, and Japan for 97,435 tons.

 

Export
Developments

·        
None reported

 

Wheat

·        
Wheat futures are higher, rebounding after a big decline on Monday.  US winter wheat planting progress of 21 percent, 4 points above average, is expected to be robust this week, despite persistent dryness across the southwestern
Great Plains. Producers, in our opinion, will plant wheat in dry fields as crop insurance favors it.

·        
Russia’s currency strengthened for the second day against the USD. Exporters started selling the currency for upcoming tax payments.

·        
Paris December wheat was up 2.00 euros earlier at 327.75 per ton, remaining in a sideways trading range.

·        
94 percent of the US spring wheat crop had been collected while winter wheat seedings were 21 percent.

·        
Ukraine started winter grain planting progress with 9 percent complete on 364,000 hectares. About 3.8 million hectares of winter grains are expected to be sowed this season, down from 4.6 million last season.

·        
A UN vessel arrived at a Ukraine port and will load 30,000 tons of wheat destined for Afghanistan. This is the fourth UN vessel since the safe passage agreement.

·        
Kazakhstan producers harvested 17.9 million tons or 86%, of grain and pulses so far this season.

·        
USDA US all-wheat export inspections as of September 15, 2022 were 790,145 tons, within a range of trade expectations, above 757,804 tons previous week and compares to 567,522 tons year ago. Major countries included China for
136,464 tons, Japan for 90,926 tons, and Mexico for 80,853 tons.

 

 

Export
Developments.

·        
Jordan passed on 120,000 tons of wheat.

·        
Jordan opened a new import tender for 120,000 tons of wheat set to close Sep 27 for March and April shipment. 

·        
Iraq may soon float an import tender for 300,000 tons of wheat from various origins.

·        
Bangladesh cancelled their import tender for 50,000 tons of wheat. They recently bought wheat from Ukraine and Bulgaria.

·        
Pakistan seeks 300,000 tons of wheat on September 26 for October shipment.

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

 

Rice/Other

·        
Several ships (20) are stranded at India ports that were to load 600,000 tons of rice, after the government restricted exports on September 8.