FI Morning Grain Comments 09/29/22

PDF attached

 

Good
morning.

 

Light
news day ahead of USDA’s Sep 30 reports. The USD is higher, WTI crude stronger, and US equities lower. Most CBOT ag markets are higher with exception of soybean meal and MN wheat. USDA export sales were good for soybeans, ok for meal and poor for soybean oil.
Corn and wheat came in within expectations.

 

The
Midwest will be mostly dry with exception of the southeastern areas Sat and Sun.MT, western NE and northern CO will see rain through Sunday.  Mostly dry weather is seen for southwestern Great Plains. Argentina will see additional net drying. Brazil looks good
with rain falling across center west and center south.

 

 

 

 

 

 

 

Weather

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 29, 2022

• Frost
  and light freezes occurred this morning in the northern U.S. Great Lakes region without much impact on agriculture
• Hurricane
  Ian brought horrific wind and flooding rain to southwestern and central Florida Wednesday causing catastrophic damage.
  
• The
  storm is now a tropical storm and was moving off the east-central Florida coast this morning
• Tropical
  Storm Ian will make another landfall in South Carolina Friday afternoon until then the storm will produce tropical storm force wind from northeastern Florida to the Carolinas while rain continues in coastal areas in the same region
• Flooding
  rain is expected in the Carolinas Friday through the weekend with 2.00 to 6.00 inches common and a few amounts over 8.00 inches near the coast in South Carolina
• Cotton
  fiber quality declines are expected in the Carolinas and Virginia
• Some
  beneficial rain will fall in the northwestern U.S. Plains Friday into the weekend
• The
  moisture will not fix drought, but it will help improve wheat planting, emergence and establishment conditions in Montana and the western Dakotas
• Canada’s
  Prairies are unlikely to get much significant rain in the coming week to ten days, although a few showers are possible
• Harvesting
  will advance with very little delay
• U.S.
  Midwest, central and southern Plains and Delta crop areas will be dry in the coming week with some areas staying dry for ten days
• Rain
  is still needed in hard red winter wheat areas and a few showers will impact the high Plains region, but much more will be needed
• 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
• The
  first event will occur during mid-week next week
• Europe,
  western Russia and Ukraine rain will fall periodically in the next ten days either maintaining favorable soil moisture of bolstering it
  
• Some
  delay to fieldwork is expected and a few areas might become a little too wet
• Western
  Russia is already quite wet and would benefit from some drying
• Russia’s
  Southern Region still has need for greater rain and it should come in this next ten days
• China’s
  Yangtze River Basin will remain in a drought for another week with no opportunity for rain
• Northern
  areas, however, may get some rain late next week and into the following weekend
  
• China’s
  Yellow River Basin will get some needed rain this weekend and more next week with some of it possibly becoming heavy
• The
  long term benefits of rain will be good for wheat planting and establishment, but some delay in summer crop harvesting and wheat planting will result from the wet weather
• Northern
  India rainfall advertised Wednesday for next week was reduced in Punjab and Haryana removing some worry over cotton conditions
• Rain
  will still fall abundantly in Uttar Pradesh and a part of the Ganges River Basin
  
• Rain
  will also impact interior southern and eastern parts of the nation
• Eastern
  Australia will take a little break from persistent rain in the next five days, but a new bout of significant rain will begin next week that may eventually raise concern over crop conditions
• Typhoon
  Roke formed southeast of the Ryukyu Islands of Japan overnight and it will intensify while paralleling Japan’s main islands in the coming
• The
  storm is unlikely to impact any major landmass
• Tropical
  Depression 11 in the Atlantic Ocean will have no impact on land

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
GDP Annualised (Q/Q) Q2 T: -0.6% (est -0.6%; prev -0.6%)

US
Personal Consumption Q2 T: 2.0% (est 1.5%; prev 1.5%)

US
GDP Price Index Q2 T: 9.0% (est 8.9%; prev 8.9%)

US
Core PCE (Q/Q) Q2 T: 4.7% (est 4.4%; prev 4.4%)

US
Initial Jobless Claims Sep 24: 193K (est 215K; prevR 209K)

US
Continuing Claims Sep 17: 1347K (est 1385K; prevR 1376K)

Canadian
GDP (M/M) Jul: 0.1% (est -0.1%; prev 0.1%)

Canadian
GDP (Y/Y) Jul: 4.3% (est 4.1%; prev 4.7%)

 

 

Corn

·        
Corn futures are higher on ok USDA export sales and higher WTI crude oil. Argentina corn plantings started off at a slow pace but there is time for producers to catch up. La Nina may keep rainfall below average over the next couple
of months.

·        
Look for positioning today ahead of the USDA stocks report, expected to show little changes in 2021-22 US ending corn and soybean stocks, and minor changes in US wheat production.

·        
Low water levels for the Miss. River have been underpinning spot barge shipping costs.

·        
USDA corn export sales were 512,000 tons, within expectations and up from 182,300 tons previous week.

·        
There were 53,200 tons of sorghum sales for unknown destinations. Pork sales were 34,300 tons of pork sales, most of it for Mexico.

·        
Argentina’s BA Grains Exchange initially estimated the Argentina 2022-23 corn crop at 50 million tons, well below Rosario’s estimate of 56 million. USDA is at 55 million tons versus 53 million for 2021-22.

·        
The USDA weekly Broiler Report showed eggs set in the US up 4 percent and chicks placed up 5 percent. Cumulative placements from the week ending January 8, 2022, through September 24, 2022, for the United States were 7.17 billion.
Cumulative placements were up 1 percent from the same period a year earlier.

·        
US ethanol production was reported at 885,000 barrels per day, well below an average calling for 912,000 barrels, down 46,000 from the previous week and about 6.5% below year ago. Stocks are about 12 percent this time last year. 

 

Export
developments.

·        
South Korea’s KFA bought 69,000 tons of corn at $334.99/ton c&f for arrival around Jan 10.

·        
China plans to release 20,000 tons of frozen pork from reserves on September 30.

 

 

Soybeans

·        
CBOT soybeans are higher on good USDA export sales (1MMT soybeans) and slowdown in Brazil crush. Soybean oil is finding strength after palm oil futures snapped a 5-day losing streak and higher WTI crude oil. Meal is lower on product
spreading. USDA export sales were ok for meal (shipments) and poor for soybean oil.

·        
Brazil’s Abiove may downward revise their 2022 crush estimate after confirming 8-10 crush plants stopped production after crush margins turned negative. Decline in global soybean oil price was noted.

·        
CBOT First Notice Day for October delivery is Friday, and we look for no deliveries.

·        
Malaysian December palm oil futures increased 116 points to 3,342 and cash was up $15.00/ton to $822.50/ton.

·        
China futures for soybeans were up 0.5%, meal 2.0% higher, SBO 1.9% higher and palm off 1.2%.

·        
Rotterdam vegetable oils were unchanged to 37.50 euros higher from this time yesterday morning. SA meal was 3-20 euros lower.

·        
Offshore values were leading soybean oil 183 points higher earlier this morning and meal $1.90 short ton higher.

·        
Argentina’s BA Grains Exchange initially estimated the Argentina 2022-23 soybeans crop at 48 million tons, same as Rosario’s estimate, and above their estimate of 43.3 for 2021-22. USDA is at 51 million tons versus 44 million
for 2021-22.

 

Export
Developments

• We
  heard China book a couple of rapeseed oil cargoes from the EU yesterday.
  

 

Wheat

·        
Wheat is higher for Chicago and KC and lower for MN. A higher USD is limiting gains for Chicago wheat. Some technical selling might be noted after wheat rallied on Wednesday. USDA export sales were ok.

·        
We look for minor changes to US wheat production by class on Friday, when updated by USDA, but some traders are looking for smaller durum and spring wheat production.

·        
Paris December wheat was up 1.25 euros earlier at 355 per ton.

·        
Paris wheat option trading was above average at more than 21,000 contracts.

 

Export
Developments.

·        
Japan bought 61,800 tons of food wheat for Oct 21-Nov 20 loading.

• Taiwan
  Flour Millers’ Association bought an estimated 51,800 tons of US milling wheat for shipment from the PNW between Nov. 10 and Nov. 24.
  
• Results
  awaited: The Philippines seek up to 50,000 tons of feed wheat and up to 50,000 tons of feed barley for Jan-Mar shipment.
  

·        
Results awaited: Algeria seeks 50,000 tons of soft milling wheat on September 29 for November shipment.

• Iraq
  seeks 50,000 tons of wheat on October 10.

·        
Pakistan seeks 2 million tons of wheat to meet consumption shortages.

·        
Results awaited: The UN seeks 100,000 tons of wheat for late October and/or November delivery. Destinations included east Africa, Asia and the Middle East.

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

• Jordan
  retendered for barley set to close October 5 for 120,000 tons.
• Iraq
  seeks 50,000 tons of milling wheat on October 10, optional origin.

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

 

Rice/Other

·        
Vietnam saw flooding and blackouts after the typhoon landfalls. Coffee production could be impacted.

 

 

USDA Export Sales

USDA export sales were mixed in trade sentiment for the soybean complex and (soybeans good 1 million tons and meal shipments and new crop sales were within expectations), ok for corn and
within expectations for wheat.  Crop year corn sales are running nearly 50 percent below this time year ago. Soybean crop year commitments are about 10 percent above last year’s level. There were 53,200 tons of sorghum sales for unknown destinations. Pork
sales were 34,300 tons of pork sales, most of it for Mexico.

 

 

 

Export Sales Highlights

This
summary is based on reports from exporters for the period September 16-22, 2022.  

Wheat:
Net sales of 279,800 metric tons (MT) for 2022/2023 primarily for Guatemala (115,400 MT, including 51,500 MT switched from unknown destinations), Thailand (47,500 MT), Mexico (45,500 MT, including decreases of 13,000 MT), Italy (31,800 MT), and Brazil (30,000
MT), were offset by reductions for unknown destinations (66,300 MT), Malaysia (700 MT), and Costa Rica (400 MT).  Net sales reductions of 29,700 MT for 2023/2024 resulting in increases for South Korea (300 MT), were more than offset by reductions for Brazil
(30,000 MT).  Exports of 620,700 MT were primarily to China (137,400 MT), Chile (71,100 MT), Nigeria (69,700 MT), Mexico (50,000 MT), and Japan (48,200 MT). 

Corn: 
Net sales of 512,000 MT for 2022/2023 primarily for Mexico (321,700 MT, including decreases of 1,800 MT), unknown destinations (57,000 MT), Honduras (51,900 MT), Japan (51,100 MT, including 50,600 MT switched from unknown destinations and decreases of 300
MT), and Panama (44,200 MT), were offset by reductions for Egypt (65,000 MT), Guatemala (7,500 MT), and Costa Rica (3,200 MT). 
Total net sales of 160,000 MT for 2023/2024 were for Mexico. 
Exports of 574,700 MT were primarily to Mexico (239,200 MT), China (141,200 MT), Japan (135,000 MT), El Salvador (19,400 MT), and Venezuela (15,300 MT).  

Barley: 
No net sales or exports were reported for the week. 

Sorghum: 
Net sales of 53,200 MT for 2022/2023 were for unknown destinations (53,000 MT) and Japan (200 MT).  Exports of 4,300 MT were to Mexico (4,100 MT), Japan (100 MT), and China (100 MT). 

Rice:
 Net
sales of 7,900 MT for 2022/2023 were primarily for Guatemala (4,000 MT), Canada (2,200 MT), Honduras (1,000 MT), Mexico (300 MT), and the Dominican Republic (100 MT).  Exports of 47,900 MT were primarily to Honduras (16,500 MT), Japan (12,400 MT), Guatemala
(10,700 MT), Canada (2,000 MT), and El Salvador (2,000 MT).

Soybeans: 
Net sales of 1,003,000 MT for 2022/2023 primarily for China (548,700 MT, including 132,000 MT switched from unknown destinations and decreases of 32,000 MT), Mexico (217,000 MT, including 47,500 MT switched from unknown destinations and decreases of 34,700
MT), Japan (81,600 MT, including 50,400 MT switched from unknown destinations and decreases of 1,900 MT), Egypt (78,000 MT, including decreases of 30,000 MT), and Tunisia (30,000 MT), were offset by reductions for unknown destinations (23,700 MT) and Cuba
(4,000 MT).  Total net sales reductions of 30,000 MT for 2023/2024 were for Tunisia. 
Exports of 269,200 MT were primarily to Japan (85,800 MT), China (78,700 MT), Mexico (61,100 MT), Taiwan (20,600 MT), and Costa Rica (7,900 MT). 

Optional
Origin:
For 2022/2023, the current optional origin outstanding balance is 300 MT, all South Korea.

Export
for Own Account:
For 2022/2023, the current exports for own account outstanding balance is 6,300 MT, all Canada.

Soybean
Cake and Meal: 
Net sales of 86,300 MT for 2021/2022 primarily for Vietnam (48,300 MT), Ireland (30,000 MT), Colombia (6,900 MT, including decreases of 13,400 MT), Kuwait (6,000 MT), and Canada (6,000 MT, including decreases of 200 MT), were offset by reductions primarily
for Costa Rica (7,200 MT), unknown destinations (7,100 MT), Guatemala (2,600 MT), Belgium (1,900 MT), and Japan (600 MT).  Net sales of 150,200 MT for 2022/2023 primarily for the Philippines (90,000 MT), Mexico (26,300 MT), Panama (26,300 MT), Honduras (23,400
MT), and Canada (12,700 MT), were offset by reductions for Ireland (30,000 MT) and Colombia (4,100 MT).  Exports of 249,700 MT were primarily to Colombia (73,300 MT), Vietnam (42,600 MT), Honduras (27,500 MT), Canada (23,000 MT), and the Philippines (21,900
MT).

Soybean
Oil: 
Net sales of reductions of 5,000 MT for 2021/2022 resulting in increases for Canada (1,400 MT), were more than offset by reductions for unknown destinations (6,500 MT).  Total net sales of 700 MT for 2022/2023 were for Canada.  Exports of 2,000 MT were to
Canada (1,900 MT) and Mexico (100 MT).

Cotton: 
Net
sales of 30,200 RB for 2022/2023 primarily for Pakistan (32,400 RB), Nicaragua (8,800 RB), Taiwan (5,300 RB), Vietnam (1,600 RB), and Peru (1,300 RB), were offset by reductions primarily for Turkey (12,600 RB), El Salvador (5,000 RB), and Indonesia (2,500
RB).  Net sales of 41,500 RB for 2023/2024 reported for Pakistan (20,000 RB), Thailand (16,100 RB), Turkey (8,800 RB), Mexico (1,600 RB), and Japan (500 RB), were offset by reductions for Bangladesh (5,500 RB).  Exports of 187,900 RB were primarily to China
(46,800 RB), Vietnam (29,600 RB), Turkey (27,300 RB), Pakistan (21,000 RB), and Bangladesh (17,000 RB).  Net sales of Pima totaling 1,200 RB were primarily for Taiwan (400 RB) and Japan (400 RB). 
Total net sales of 300 RB for 2023/2024 were for Italy.  Exports of 1,000 RB were primarily to Vietnam (700 RB) and South Korea (200 RB). 

Optional
Origin Sales:
For 2022/2023, the current outstanding balance of 10,300 RB is for Malaysia (9,300 RB) and Pakistan (1,000 RB).

Export
for Own Account:
For 2022/2023, current exports for own account outstanding balance of 77,400 RB is for China (40,500 RB), Vietnam (23,900 RB), Turkey (10,600 RB), India (1,500 RB), Pakistan (500 RB), and Indonesia (400 RB).

Hides
and Skins: 
Net sales of 337,400 pieces for 2022 primarily for China (250,800 whole cattle hides, including decreases of 20,500 pieces), South Korea (30,800 whole cattle hides, including decreases of 2,000 pieces), Thailand (24,100 whole cattle hides, including decreases
of 1,900 pieces), Mexico (11,600 whole cattle hides, including decreases of 600 pieces), and Indonesia (4,200 whole cattle hides, including decreases of 600 pieces), were offset by reductions primarily for Canada (5,900 pieces). 
Total net sales reductions of 1,200 calf skins were for Italy, including decreases of 2,200 calf skins.  In addition, net sales of 11,700 kip skins were primarily for Canada (5,600 kip skins, including decreases of 300 kip skins)
and China (4,000 kip skins).  Exports of 442,200 whole cattle hides exports were primarily to China (288,100 pieces), South Korea (41,300 pieces), Mexico (31,400 pieces), Thailand (26,600 pieces), and Brazil (15,000 pieces).  In addition, exports of 4,500
kip skins were primarily to Canada (2,700 kip skins).

Net
sales of 130,400 wet blues for 2022 primarily for Thailand (39,100 unsplit), Vietnam (35,600 unsplit, including decreases of 100 unsplit), China (33,800 unsplit, including decreases of 100 unsplit), Taiwan (8,200 unsplit), and Switzerland (8,000 unsplit),
were offset by reductions for Italy (100 grain splits) and Hong Kong (100 unsplit).  Total net sales of 1,300 unsplit for 2023 were for Italy.  Exports of 177,700 wet blues were primarily to Vietnam (50,600 unsplit), Italy (34,800 unsplit and 8,800 grain),
China (37,900 unsplit), Thailand (21,200 unsplit), and Taiwan (9,700 unsplit). Net sales of 18,800 splits reported for China (10,500 pounds) and Vietnam (10,100 pounds, including decreases of 900 pounds), were offset by reductions for South Korea (1,800 pounds). 
Exports of 395,800 pounds were to Vietnam (221,300 pounds) and China (174,500 pounds).

Beef: 
Net sales of 21,500 MT for 2022 were primarily for South Korea (7,300 MT, including decreases of 400 MT), China (6,000 MT, including decreases of 100 MT), Japan (3,500 MT, including decreases of 900 MT), Canada (1,200 MT, including
decreases of 100 MT), and Mexico (1,100 MT).  Net sales of 600 MT for 2023 were primarily for Japan (500 MT).  Exports of 18,300 MT were primarily to Japan (5,100 MT), China (4,200 MT), South Korea (4,000 MT), Mexico (1,400 MT), and Canada (800 MT). 

Pork: 
Net sales of 34,300 MT for 2022 were primarily for Mexico (23,700 MT, including decreases of 200 MT), South Korea (2,900 MT, including decreases of 800 MT), China (2,000 MT, including decreases of 200 MT), Japan (1,800 MT, including decreases of 200 MT), and
Canada (1,400 MT, including decreases of 400 MT).  Total net sales
of 100 MT for 2023 were for Mexico.  Exports of 27,200 MT were primarily to Mexico (13,000 MT), China (4,400 MT), Japan (2,800 MT), South Korea (2,000 MT), and Canada (1,600

U.S. EXPORT SALES FOR WEEK ENDING  09/22/2022

 

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	18.1	869.2	1,567.8	205.3	2,140.7	2,691.4	0.0	1.7
SRW	176.8	591.4	666.7	76.1	1,443.2	1,048.5	-30.0	0.0
HRS	40.1	1,096.3	988.5	171.3	1,993.6	1,988.9	0.0	0.0
WHITE	26.3	907.8	582.0	128.3	1,476.0	1,419.0	0.3	0.3
DURUM	18.5	93.7	60.5	39.8	73.9	61.4	0.0	0.0
TOTAL	279.8	3,558.5	3,865.5	620.7	7,127.3	7,209.2	-29.7	2.0
BARLEY	0.0	11.6	25.5	0.0	3.9	4.7	0.0	0.0
CORN	512.0	11,394.3	23,794.1	574.7	1,601.3	1,522.0	160.0	250.5
SORGHUM	53.2	276.3	2,235.7	4.3	16.6	115.6	0.0	0.0
SOYBEANS	1,003.0	25,516.1	23,224.8	269.2	1,214.3	975.1	-30.0	0.0
SOY MEAL	86.3	598.5	1,001.3	249.7	11,502.3	11,346.5	150.2	2,176.3
SOY OIL	-5.0	21.9	22.4	2.0	675.9	675.2	0.7	6.5
RICE
L G RGH	5.0	52.5	185.5	29.2	72.2	175.1	0.0	0.0
M S RGH	0.0	15.0	8.0	0.1	1.6	1.2	0.0	0.0
L G BRN	0.1	2.7	4.4	0.3	2.3	13.4	0.0	0.0
M&S BR	0.0	5.7	54.3	0.6	1.7	13.9	0.0	0.0
L G MLD	0.5	137.1	139.7	2.7	83.5	133.5	0.0	0.0
M S MLD	2.3	23.8	68.4	15.0	63.1	66.6	0.0	0.0
TOTAL	7.9	236.7	460.3	47.9	224.5	403.7	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	30.2	6,193.5	5,708.3	187.9	1,825.9	1,515.5	41.5	995.2
PIMA	1.2	89.7	160.4	1.0	14.2	54.6	0.3	0.3