FI Morning Grain Comments 09/30/22

PDF attached

 

Good
morning.

 

Most
US agriculture markets are higher on positioning ahead of the USDA reports. Grains are supported by rising tensions between western countries and Russia after the annexation in Ukraine. Soybean oil is lower despite higher palm oil (China and Malaysia). CBOT
First Notice Day deliveries were zero for soybean oil and 50 for meal. Look for positioning today ahead of the USDA stocks report, expected to show little changes in 2021-22 US ending corn and soybean stocks. We look for minor changes to US wheat production
by class when updated by USDA, but some traders are looking for smaller durum and spring wheat production.

 

Weather
improves a touch for the Midwest with mostly dry weather, favoring harvest but bad for river transportation. Some rain will fall across the southeastern areas Saturday and northwestern areas Sunday through Tuesday. Water levels for the Mississippi River are
not expected to improve over the next week. The Delta and southeast will see dry weather after the remnants of the hurricane exit the region. Argentina has a chance for rain Tuesday for La Pampa and southwest Buenos Aires.

 

 

 

 

 

 

Weather

 

Source:
World Weather INC

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 30, 2022

• Hurricane
  Ian will move into South Carolina this afternoon and produce heavy rain throughout the Carolinas and Virginia today and Saturday
• Some
  impact on cotton quality is expected
• Flooding
  in urban and rural areas will be significant, although not as serious as that in Florida
• Greatest
  wind and flood damage will occur between Charleston and Myrtle Beach, South Carolina and from there inland about 75 miles.
  
• Much
  of U.S. Midwest, Delta and southern Plains will be dry biased over the next ten days
• Scattered
  showers will impact the northern U.S. Plains and upper Midwest during the coming week
• Montana
  wheat areas will be the greatest recipients of moisture to benefit future crop establishment
• Canada’s
  Prairies are still expecting restricted rainfall over the next ten days favoring fast harvest progress
• Argentina
  has potential for “some” rain during the middle to latter part of next week, but amounts will be light and the need for much more will continue to rise
• Brazil’s
  center west and center south crop areas along with a few areas in the far south of the nation will get periodic rainfall during the next ten days
• Greatest
  rain will fall in parts of Minas Gerais and Sao Paulo
• Mato
  Grosso rain will continue sporadic with a few areas getting significant amounts while others wait on greater rain
• Europe
  rain frequency and amounts will be easing up for a while next week allowing some improved field working conditions
• Portions
  of western Russia will remain a little too wet into the first half of next week before some drying begins
• Some
  beneficial rain will fall in Russia’s Southern Region in the coming week, although more might be needed
• China’s
  North China Plain and Yellow River Basin will get significant rain this weekend into next week resulting in farming delay and local flooding, but the long-term outlook for the moisture will be good for wheat establishment
• Some
  rain will reach the northern Yangtze River Basin in China late next week and into the following weekend easing drought in that region
• Drought
  will prevail south of the Yangtze River
• Northeastern
  China will see a favorable mix of weather
• Eastern
  and southern India will continue wet in the next week to ten days with too much rain in Uttarakhand and a part of Uttar Pradesh
• Net
  drying will occur from Gujarat to Punjab, India as well as Pakistan favoring crop maturation and harvest progress
• Eastern
  Australia will experience net drying into early next week and then the region may turn much wetter once again
• Western
  Australia will dry out over the next five days with “some” showers later next week
  

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
Oct. 3:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for corn, soybeans and cotton; spring wheat, corn, cotton, soybean harvesting, 4pm
• USDA
  soybean crush, DDGS production, corn for ethanol, 3pm
• HOLIDAY:
  Germany, China, Korea, Australia

Tuesday,
Oct. 4:

• EU
  weekly grain, oilseed import and export data
• Global
  Grain Outlook conference in Baku, Azerbaijan, Oct. 4-7
• US
  Purdue Agriculture Sentiment
• New
  Zealand global dairy trade auction
• Australia
  commodity index
• HOLIDAY:
  China, Hong Kong

Wednesday,
Oct. 5:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysia’s
  Oct. 1-5 palm oil export data
• HOLIDAY:
  China, India, Bangladesh

Thursday,
Oct. 6:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• New
  Zealand commodity price
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans
• HOLIDAY:
  China

Friday,
Oct. 7:

• FAO
  World Food Price Index
• 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
• Vietnam
  customs data on September coffee, rice and rubber exports
• HOLIDAY:
  China, Argentina

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

 

Macros

Vladimir
Putin Is Hosting A Signing Ceremony For The Annexation Of Four Areas Of Ukraine – Sky News

US
Personal Income Aug: 0.3% (est 0.3%; prev 0.2%)

US
Personal Spending Aug: 0.4% (est 0.2%; prev 0.1%)

US
Real Personal Spending Aug: 0.1% (est 0.1%; prev 0.2%)

US
PCE Deflator (M/M) Aug: 0.3% (est 0.1%; prev -0.1%)

US
PCE Deflator (Y/Y) Aug: 6.2% (est 6.0%; prev 6.3%)

US
PCE Core Deflator (M/M) Aug: 0.6% (est 0.5%; prev 0.1%)

US
PCE Core Deflator (Y/Y) Aug: 4.9% (est 4.7%; prev 4.6%)

 

Corn

·        
Corn is higher from slow Argentina corn planting progress (very dry), strength in wheat and ongoing Black Sea shipping concerns.

·        
News was light.

·        
France collected 51 percent of the corn crop as of September 26, up from 26 percent week earlier and compares to only 2 percent year ago.

·        
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.

 

Export
developments.

·        
South Korea’s KFA bought 60,000 tons of corn at $334.88 a ton c&f from either South America or South Africa with November. Earlier they cancelled a corn import tender with a price of $334.99 a ton c&f. On Thursday they bought
65,000 tons of corn at $334.99/ton for November shipment.

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

 

USDA
reported US quarterly hogs and pigs.

As
expected. All hogs were 99 percent, breeding 99, and marketing 99 percent. Estimates were 99.2 for All hogs, 99.6 for breeding, and 99.1 for market

https://release.nass.usda.gov/reports/hgpg0922.pdf

 

US
ethanol exports are on track this year to end up near a record.

 

 

 

Soybeans

·        
CBOT soybeans and meal are higher while soybean oil mostly lower, despite a higher trade in palm oil futures in Malaysia and China. Malaysian palm oil posted a monthly loss (Bloomberg noted worst quarter in 14 years), down 17.5
percent, and fifth consecutive monthly loss.

·        
Today is the last day of the Argentina soy dollar but don’t expect much in the way of producer selling.

·        
Mississippi River shipping problems from low water levels are disrupting grain flows to the Gulf. This is what got into the meal spreads on Thursday (bear spreading).

·        
CBOT First Notice Day deliveries were zero for soybean oil and 50 for meal. 

·        
A head of a rail company in SA told Reuters that Brazil is more competitive to ship soybeans to China than the US, at least from the perspective for the first half 2022. The rail company, Rumo, plans to build a railroad serving
northern Mato Grosso.

·        
AmSpec reported September Malaysian palm oil exports at 1.320 million tons, up from 1.191 million during August.

·        
Malaysian December palm oil futures increased 74 points to 3,416 and cash was up $5.00/ton to $827.50/ton.

·        
China futures for soybeans were up 0.1%, meal 0.8% higher, SBO 0.6% higher and palm up 1.8%.

·        
Rotterdam vegetable oils were unchanged to 5 euros higher from this time yesterday morning. SA meal was mostly 2-4 euros lower.

·        
Offshore values were leading soybean oil 137 points lower earlier this morning (63 higher for the week to date) and meal $9.00 short ton higher ($14.50 higher for the week).

 

Export
Developments

• None
  reported

 

 

 

 

Wheat

·        
Wheat is higher on increasing tensions between western countries and Russia after the annexation in Ukraine. President Putin held a signing ceremony for  the annexation of the four areas today.

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

·        
Paris December wheat was up 3.00 euros earlier at 355.25 per ton. Over 22,000 options were traded previous session.

·        
EU winter grain plantings improved after rains occurred over the past week, raising the potential for higher rapeseed seedings (up 5% from last year) and planned winter wheat area (unchanged from 2021-22).

·        
The EU is preparing another round of sanctions against Russia after the annex of nearly 15% of Ukraine.

 

Export
Developments.

·        
Algeria’s state grains agency OAIC is in the process of buying wheat for November shipment. Origin was thought to include mostly EU and some from Russia. Initial prices were seen at $369, $370 and $372 a ton c&f.

·        
The Philippines bought around 50,000 tons of feed barley from Australia and rejected offers for up to 50,000 tons of feed wheat, for January, February and March shipment. Prices were unavailable.

·        
Mauritius seeks 25,800 tons of wheat flour, optional origin, on October 28 for January through September 30, 2023, shipment.

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

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

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

 

Rice/Other

·        
None reported