FI Morning Grain Comments 09/27/22

PDF attached

 

Good
morning.

 

The
USD is lower, WTI crude higher and US equities pointing towards a higher open. US harvesting progress was slightly below expectations, and this is supporting the soybean complex and grains. US harvest weather will be favorable this week. US corn and soybean
crop conditions were unchanged in the combined good/excellent categories. Hurricane IDA shifted direction, now predicted to hit central Florida. Heavy rain is expected for the SE and parts of the Delta. The upper Great Plains will see rain during the second
half of the week. The Midwest will see rains for the northeastern areas today, and far northwestern areas Thursday. Mostly dry weather is seen for the Delta and southwestern Great Plains all this week.

 

 

 

 

Weather

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 27, 2022

• Hurricane
  Ian has brought horrific wind and flooding rain to western Cuba overnight
• An
  assessment of the damage will begin this afternoon
• Hurricane
  Ian will make landfall in west-central Florida near Tampa Bay late Wednesday night and early Thursday morning with wind speeds off the coast to 120 mph while speeds in the heart of the city will be 100 mph
• Damage
  to citrus is expected surrounding the Tampa Bay area
• Sugarcane
  in Florida is not likely to be seriously impacted
• Cotton
  in Georgia and South Carolina will experience a quality decline, but no serious production change
• Typhoon
  Noru is still expected to impact central Vietnam over the next two days with damaging wind and flooding rain resulting
  
• Wind
  speeds of 90 to 120 mph will accompany the storm inland and this will impact the ports of Da Nang as well as agricultural from that region westward into Thailand, although the excessive wind will quickly abate
• Damage
  to some sugarcane, rice and a minor amount of coffee is expected, although the Robusta crop in the Central Highlands will not be seriously impacted
• Dry
  weather will dominate the U.S. Plains, much of the Midwest, Delta and Canada’s Prairies during much of the coming week to ten days
• Some
  rain is expected in the northwestern U.S. Plains this weekend, but resulting rain will be light
• Rain
  is still expected in Brazil’s center west and center south crop areas over the next week to ten days improving soil moisture for early season soybean and corn planting and setting the stage for cotton and rice planting
• A
  little too much rain may fall from Mato Grosso do Sul to Parana and Sao Paulo where flooding is possible and damage to unharvested wheat is possible
• Argentina’s
  rain potential remains poor, although a few showers are expected periodically
• Europe,
  western Russia and Ukraine rain will fall frequently in the next ten days bolstering soil moisture for winter crop establishment, but delaying some fieldwork and a few areas might become a little too wet
• China’s
  Yangtze River Basin will remain in a drought for another 8-9 days with no opportunity for rain
• Northern
  areas may get some rain around day 10
• China’s
  Yellow River Basin will get some needed rain this weekend and next week with some of it possibly becoming heavy
• The
  long term benefits of rain will be good for wheat planting and establishment
• No
  serious changes were noted to India or Australia weather overnight

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Tuesday,
Sept. 27:

• EU
  weekly grain, oilseed import and export data
• G20
  Agriculture Ministers Meeting in Bali, day 1

Wednesday,
Sept. 28:

• EIA
  weekly US ethanol inventories, production, 10:30am
• G20
  Agriculture Ministers Meeting in Bali, day 2

Thursday,
Sept. 29:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• G20
  Agriculture Ministers Meeting in Bali, day 3
• Vietnam
  General Statistics Dept. releases Sept. coffee, rice and rubber exports data
• USDA
  hogs & pigs inventory, 3pm

Friday,
Sept. 30:

• USDA’s
  quarterly stockpiles data for wheat, barley, corn, oat, soybeans and sorghum
• US
  wheat production data, noon
• 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
• US
  agricultural prices paid, received, 3pm
• HOLIDAY:
  Canada

Source:
Bloomberg and FI

 

 

 

 

 

 

Link
to the USDA historical track records for soybean production (and other commodities)…page 194 for soybeans 
https://downloads.usda.library.cornell.edu/usda-esmis/files/c534fn92g/g158cn09g/zc77tv62q/croptr22.pdf

 

 

USDA
inspections versus Reuters trade range

Wheat                 
520,464                 versus   200000-800000  range

Corn                     
459,420                 versus   500000-800000  range

Soybeans           
257,547                 versus   385000-800000  range

 

Macros

US
Durable Goods Orders Aug P: -0.2% (est -0.3%; prev -0.1%)

US
Durable Ex Transportation Aug P: 0.2% (est 0.2%; prev 0.2%)

US
Cap Goods Orders Nondef Ex Air Aug P: 1.3% (est 0.2%; prev 0.3%)

US
Durable Goods Ship Nondef Ex Air Aug P: 0.3% (est 0.3%; prev 0.5%)

 

Corn

·        
Corn rallied this morning from the USD taking a break from its recent rally, higher equities and slower than expected US corn harvest progress.

·        
US harvest weather will favorable this week. US corn and soybean crop conditions were unchanged in the combined good/excellent categories.

·        
Traders will be looking out for comments made by agriculture ministers at a G-20 meeting in Bali.

·        
China will release another round of pork from reserves today before going on holiday next week.

·        
China will see heavy rains across the northern growing areas over the next 7-10 days, delaying corn harvest progress.

·        
Ukraine will see delays for their corn harvest from wet weather this workweek.

·        
US gasoline demand remains below pre pandemic levels and with the rail disruption a couple weeks ago, we look for ethanol production to end up near unchanged to down 15,000 barrels from the multi month low posted previous week
(901k for week ending Sep 16).

 

FI
yield estimate for US corn: 170.1 versus 170.4 last week.  USDA at 172.5

 

Export
developments.

·        
South Korea’s MFG bought 137,000 tons of corn from SA or South Africa at $333.38 (arrival around Dec 10) and $332.88/ton c&f (arrival around Jan 17).

·        
South Korea’s FLC bought 68,000 tons of corn at $330.95/ton c&f form South America for October 25-November 25 shipment.

 

 

Soybeans

·        
CBOT soybeans, meal and soybean oil are higher on outside macro influences, with a lower USD and higher WTI crude oil. US harvest weather is favorable this week. Soybean oil is gaining on meal.

·        
Cargo surveyor SGS reported month to date September 25 Malaysian palm exports at 1,152,612 tons, 183,271 tons above the same period a month ago or up 18.9%, and 257,106 tons below the same period a year ago or down 18.2%. Yesterday
AmSpec reported Sep 1-25 Malaysian palm oil exports at 1.075 million tons, up 18.6 percent and ITS at 1.169 MMT, up 20.9% from 966,655 tons Aug 1-25.

·        
Malaysian December palm oil futures decreased 18 points to 3523 and cash was down $2.50/ton to $865/ton.

·        
China futures for soybeans were up 0.1%, meal 0.3% higher, SBO 0.9% lower and palm off 2.5%.

·        
Rotterdam vegetable oils were unchanged to 20 euros higher from this time yesterday morning. SA meal was unchanged to 7 euros lower.

·        
Offshore values were leading soybean oil 108 points higher earlier this morning and meal $3.30 short ton higher.

 

US
soybean yield estimate versus last week: 39.8 versus 39.9 last week.  USDA at 50.5

 

Export
Developments

·        
None reported

 

Wheat

·        
Wheat is higher from a lower USD and higher outside related commodity markets.

·        
Ukraine ports shipped around 5.3 MMT of food under the grain deal, according to the infrastructure ministry. Another four vessels left Monday for Turkey, Netherlands and Spain.

·        
President Putin looks for a 150 million ton Russian wheat crop, and all grains at 150 million tons. Russia is seeing excessive rainfall threatening some winter grain sowings.

·        
China plans to sell 40,000 tons of wheat from reserves on October 12, from the 2014-2017 crops.

·        
Paris December wheat was up 3.00 euros earlier at 347.50 per ton.

 

Export
Developments.

·        
Japan seeks 61,800 tons of food wheat later this week for Oct 21-Nov 20 loading.

·        
Jordan seeks 120,000 tons of wheat on October 4. They passed on wheat today
for
March and April shipment.

·        
The UN seeks 100,000 tons of wheat on September 28 on September 30 for late October and/or November delivery. Destinations included east Africa, Asia and the Middle East.

·        
Taiwan seeks 51,800 tons of US wheat on September 29 for mid to LH November shipment.  Various classes are sought.

·        
Jordan is back in for barley on September 28.

 

Rice/Other

·        
None reported