FI Morning Grain Comments 10/04/22

PDF attached

 

Good
morning.

 

USD
was down 78 points and WTI up $1.48 at the time this was written. US equities are pointing towards a higher open. November CBOT soybean futures are higher but gains are limited after USDA reported better than expected US harvesting progress.
There were no changes in US corn and soybean crop conditions and we left our October yield estimates unchanged for corn and soybeans. Nearby meal is higher on bull spreading. Soybean oil is strong following another leg higher in
WTI crude oil. Malaysian palm oil futures were higher for the fourth consecutive day. Offshore values were leading soybean oil 35 points lower earlier this morning and meal $2.40 short ton higher. Corn is higher following soybeans and wheat, and slower than
expected US harvesting pace. KC wheat was leading the US markets higher on slow HRW wheat planting pace. US winter wheat planting progress fell short of expectations by 4 points.
US and SA weather models indicated an improvement this morning. US Midwest weather conditions will remain drier than normal. Look for water levels for the Mississippi to continue to decline well into the workweek. Winter wheat plantings across the southwestern
growing areas will remain a challenge with net drying while parts of the central and northern Great Plains will see some rain. Argentina will see rain this week across the northern, central and southwestern areas, welcome after a slow start to the corn planting
season. Southern and central Brazil will see rain. 

 

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 4, 2022

•  Some
  rain was removed from the U.S. central Plains for next week in today’s forecast model runs
• Europe
  will be drier biased over the coming week to ten days favoring aggressive fieldwork; including both the harvest of late season crops and the planting of winter crops
• Dryness
  remains in a few areas of southeastern and western Europe, but sufficient moisture is present for planting in many areas
• New
  South Wales, Australia is still facing some excessive rainfall later this week into next week
  
• Flooding
  is possible after 2.00 to more than 5.00 inches of rain falls by the end of the ten day period
• South
  Australia received some rain Monday and it will end today while shifting to the east where it will stall for the balance of the next 8 or 9 days
• Western
  Australia weather will be notably drier, but crops will remain in good condition
• Western
  Russia and eastern Belarus have been too wet recently and drier weather is needed to improve farming activity and to protect young winter crops in low lying areas
• Some
  temporary drier weather is expected
• Algeria
  and a part of northern Tunisia will receive periods of rain over the next week moistening the soil for winter crop planting, although fieldwork will not begin for a while
• China’s
  Yellow River Basin received too much rain recently causing some delay to winter crop planting, but the moisture will help support crops later in the establishment season
• China’s
  greatest rain will shift south into the region from northeastern Sichuan and southern Shaanxi to Anhui during the next few days expanding the area of excessive moisture
  
• 2.00
  to 4.00 inches of rain and locally more will result
• Some
  rain will reach the northern drought area of the Yangtze River Basin later this week, but more rain will be needed
• Southern
  areas of the Yangtze River Basin will stay too dry through the next ten days
• Argentina
  will get some beneficial rain showers late today and Wednesday in the drought stricken areas and then experience drying again for the following ten days
• Northeastern
  Argentina will receive more significant rain Wednesday into Thursday bolstering soil moisture for future cotton, grain and oilseed planting
• Brazil
  rain will be widespread in center west, center south and far southern parts of the nation at one time or another in the next ten days
• Portions
  of Parana, Mato Grosso do Sul and Sao Paulo may become a little too wet briefly
• U.S.
  weather will be favorably mixed in many areas, although the Delta, and southeastern states will be driest for the longest period of time in this coming week
  
• Far
  western states will stay dry
• Hard
  red winter wheat areas in the central and southwestern Plains are advertised to get “some” rain over the next ten days, but this should not be the start of a trend change
• Most
  of the precipitation is not likely to have a huge benefit to soil moisture, but there will be pockets of improved planting, emergence and establishment
• Canada’s
  Prairies will see limited rainfall during the coming week
• Some
  precipitation will occur near the mountains of Alberta next week as colder air arrives
  
• Excessive
  weekend heat in Namibia and Botswana shifted into parts of South Africa Monday and the heat will continue for a few days in the northeast half of the nation
• Hurricane
  Orlene moved into west-central Mexico Monday and will dissipate today
• Central
  America may trend much wetter later this week into next week as a tropical disturbance moves into the region after impacting the Windward Islands late Wednesday into early Friday

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
Export Inspections

USDA
inspections versus Reuters trade range     

Wheat                 
667,577                 versus   250000-650000  range

Corn                     
661,658                 versus   400000-700000  range

Soybeans           
575,220                 versus   250000-700000  range

 

Selected
Brazil commodity exports

 Commodity                     
September 2022     September 2021

CRUDE
OIL (TNS)                6,087,236             5,274,783

IRON
ORE (TNS)                 36,295,470            33,376,343

SOYBEANS
(TNS)                 4,294,011             4,827,184

CORN
(TNS)                     6,780,334             2,850,171

GREEN
COFFEE(TNS)              168,614               169,588

SUGAR
(TNS)                    3,081,138             2,545,953

BEEF
(TNS)                     203,023               186,998

POULTRY
(TNS)                  364,238               388,534

PULP
(TNS)                     2,049,347             1,112,626

Source:
Brazil AgMin and Reuters

 

Macros

 

Corn

·        
Corn is higher following soybeans and wheat, and slower than expected US harvesting pace. A lower USD and higher WTI is lending support.

·        
Memphis-Cairo Barge Freight (offer) for the October position increased 300 percentage points to 2500 percent on Monday, and November was up 50 percentage points to 950 percent.

·        
Ukraine corn harvest progress is off to a slow start.

·        
Brazil’s 2022-23 first crop corn crop planting pace for the center-south was reported by AgRural at 34 percent complete, compared to 32.6% year ago. Southern Brazil corn planting progress was slow last week.

·        
Government and private estimates look for a bumper 2022-23 Brazil total corn and soybean crop of about 125.5 million and 150 million tons, respectively. StoneX is at 126.3 million tons for the Brazil corn crop and 153.8 million
for the soybean crop. Safras is at 151.5 million tons for the Brazil soybean crop, up 20 percent from 2021-22.

·        
Algeria plans to subsidize fertilizer prices by 50 percent from the current season to reduce price increases for producers.

·        
US harvesting weather looks good over the next seven to ten days. US temperatures will be above average during the 11-15 day period.

·        
US corn harvest progress was reported 2 points below expectations at 20 percent complete, below 27 year ago and 22 percent average. Look for that to jump this week.

·        
US corn crop conditions were unchanged, and we made no changes to our October US corn yield. We also left the US soybean yield for October unchanged

·        
USDA US corn export inspections as of September 29, 2022 were 661,658 tons, within a range of trade expectations, above 549,608 tons previous week and compares to 941,560 tons year ago. Major countries included China for 424,225
tons, Mexico for 198,641 tons, and Trinidad for 7,500 tons.

·        
NASS reported corn for ethanol usage for the month of August near expectations.

 

 

 

Export
developments.

·        
None reported

 

Soybeans

·        
November CBOT soybean futures are higher but gains are limited after USDA reported better than expected US harvesting progress. Nearby meal is higher on bull spreading. Soybean oil is strong following another leg higher in WTI
crude oil. Malaysian palm oil futures were higher for the fourth consecutive day on bargain buying and rebound in Brent & WTI mineral/crude oil.

·        
Egypt received offers for vegetable oils. Lowest was $1,285 per ton c&f for 11,000 tons of sunflower oil and $1,320 per ton c&f for 27,000 tons for soybean oil.

·        
CBOT deliveries were zero for soybean oil and 75 for meal. There were no changes in registrations.

·        
Yesterday US soybean meal basis was down $30 short ton for Chicago, Decatur (IL), Fostoria (OH) and Morristown (IN).  KC, MO, was down $15. December Gulf meal was down $6 to 40 over.

·        
Brazil’s 2022-23 soybean crop planting pace was reported by AgRural at nearly 4 percent complete, same as year ago. Meanwhile Safras was at 4.5 percent through last Friday, above 4 percent year ago and 3.1 percent average.

·        
Argentina September soybean producer sales were about 16.1 million tons.

·        
Ukraine producers completed winter rapeseed plantings on 989,000 hectares.

·        
US soybean conditions were unchanged from the previous week and harvest progress was better than expected by 2 points at 22 percent, below 31 percent year ago and 25 percent average.

·        
Cargo surveyor SGS reported September Malaysian palm exports at 1,400,145 tons, 90,344 tons above August or up 6.9%, and 305,568 tons below September a year ago or down 17.9%.

·        
Heavy rain will fall this week across parts of Indonesia’s palm production areas.

·        
Indonesia may extend its palm oil export levy waiver through the end of the year. They will continue to collect taxes.

·        
India September palm imports were 1.2 million tons, up 21 percent from August and highest in a year. Sunflower oil imports were 165,000 tons, up from 135,308 tons in August. Soybean oil imports were 370,000 tons versus 244,697
tons in August.

·        
Malaysian December palm oil futures increased 188 points to 3,614 and cash was up $35.00/ton to $857.50/ton.

·        
China is on holiday this week for Golden Week
黄金周

·        
Rotterdam vegetable oils were mixed from this time yesterday morning. SA meal was 2.00-6.50 euros higher.

·        
Offshore values were leading soybean oil 35 points lower earlier this morning and meal $2.40 short ton higher.

·        
USDA US soybean export inspections as of September 29, 2022 were 575,220 tons, within a range of trade expectations, above 291,413 tons previous week and compares to 849,556 tons year ago. Major countries included Algeria for
88,577 tons, Mexico for 84,214 tons, and Italy for 57,234 tons.

 

 

Export
Developments

·        
Egypt received offers for vegetable oils. Lowest was $1,285 per ton c&f for 11,000 tons of sunflower oil and $1,320 per ton c&f for 27,000 tons for soybean oil. Egypt’s GASC seeks vegetable oils for arrival Nov. 25-Dec. 10 for
payment through 180-day letters of credit. GASC also seeks local vegetable oils, for at least 3,000 tons of soyoil and 1,000 tons of sunflower oil for delivery Dec 1-15.

 

 

Wheat

·        
KC wheat was leading the US markets higher on slow HRW wheat planting pace.

·        
US winter wheat planting progress fell short of expectations by 4 points in large part to a big slowdown in Texas and Oklahoma seedings due to very dry conditions. At 40 percent, it compares to 45 percent year ago and 44 percent
average.

·        
Ukraine winter wheat plantings are off to a slow start with just only 1.1 million hectares planted compared to 1.3 million year ago. The 1.1 million represents 27% of the expected area. Rains and war are two key reasons for smaller
plantings. the area could fall to 3.8 million hectares from 4.6 million a year earlier because of Russia’s invasion, according to the AgMin. Some other analysts are near 3.4-3.5 million hectares.

·        
Paris December wheat was up 1.00 euro earlier at 352.00 per ton.

·        
USDA US all-wheat export inspections as of September 29, 2022 were 667,577 tons, above a range of trade expectations, above 589,207 tons previous week and compares to 616,311 tons year ago. Major countries included Philippines
for 121,240 tons, China for 113,674 tons, and Indonesia for 76,584 tons.

 

Export
Developments.

·        
South Korea’s Major Feedmill Group (MFG) bought 65,000 tons of feed wheat sourced from Australia at an estimated $349.90 a ton c&f for shipment between February 5 and March 5.

·        
Iraq seeks 50,000 tons of wheat, optional origin, on October 5. Russia is excluded from the import tender.

·        
Tunisia’s state grains agency seeks 150,000 tons of soft wheat, 100,000 tons of durum wheat and 100,000 tons of feed barley on October 5, all in 25,000-ton consignments. The wheat is sought for shipment between Nov. 1 and Dec.
15 depending on origin, durum between Nov. 1 and Dec. 15 and barley between Nov. 1 and Dec. 5.

·        
Jordan passed on wheat. Four trading companies participated.

·        
Jordan opened an import tender for 120,000 tons of wheat set to close October 11.

·        
Japan seeks 97,343 tons of food wheat later this week for arrival by January 31.

• Jordan
  seeks 120,000 tons of barley set to close October 5.

·        
Turkey seeks 495,000 tons of barley on October 11.

• 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.

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

·        
Results are awaited on Algeria’s state grains agency OAIC 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.

 

Rice/Other

·        
Yesterday US cotton futures hit a three-month low on demand concerns. Today its higher.

·        
Colombia Sept. Coffee Output Falls 31% Y/y to 834,000 (Bloomberg)