FI Morning Grain Comments 10/06/22

PDF attached

 

Good
morning.

 

Lower
trade in all CBOT agriculture markets on widespread commodity spreading and higher USD. Conab reported robust Brazil production estimates for the upcoming corn & soybean production and current wheat crop.
We warn La Nina is still a
threat and estimates might be near a seasonal top end of a range of upcoming estimates. The US weather forecast is largely unchanged favoring Midwest harvesting while an ongoing concern for Mississippi water levels. Back month barge rate values are starting
to increase, a sign demand is shifting out on the curve. US Midwest weather conditions will remain drier than normal. The southern Great Plains will remain on the drier side over the next week while the central and northern areas will see scattered showers.

 

Conab
estimates for Brazil were large:

Soybeans
152.4 vs.125.6 last year

Corn
126.9 versus 112.8 last year

Wheat
9.36 MMT, up nearly 22 percent from last season

 

 

 

Weather

Some
relief for Miss River water levels are in sight but much more rain is needed

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 6, 2022

• Not
  many changes overnight
• Rainfall
  in key U.S. Midwestern crop areas is not likely to be very great anytime soon
• Below
  average precipitation is likely to dominate the balance of October and it may continue limited in early November
  
• Completely
  dry weather is not expected, but very few, if any, significant storm systems are likely
• Mississippi
  River water levels will fluctuate in a relatively narrow range keeping water levels very low and barge draft restrictions in place.
  
• Argentina
  received a few showers Wednesday and they will be ending today
• No
  drought busting rain came from the showers and none was expected over the next ten days
•  Erratic
  rainfall is projected for U.S. hard red winter wheat areas during the coming week to ten days
  
• Scattered
  showers and thunderstorms Friday through Tuesday will be worth watching, although the volume of rain may not be great enough to change drought status
  
• Any
  moisture will be good for wheat and the odds are high that crop areas from New Mexico through West Texas and the Texas Panhandle to western and Central Oklahoma will get at least some rain to improve planting and establishment conditions
• U.S.
  Delta, lower eastern Midwest and southeastern states will be drier biased through the weekend and then may experience a few showers next week
  
• The
  latter part of the week would be wettest
• Minimal
  precipitation is expected in Canada’s Prairies except early next week when rain and some wet snow occurs in western and southern Alberta as a cold airmass arrives
• Very
  cool conditions are expected in eastern Canada’s Prairies, the northern U.S. Plains and northern Midwest through the weekend
• Hard
  freezes will occur as far south as northeastern Nebraska and northern Iowa as well as northwestern Illinois Friday and Saturday morning’s
  
• Frost
  will occur southward into southern Nebraska, northern Missouri and the remainder of northern Illinois and Michigan
• Crop
  damage is not likely to be significant
• Brazil’s
  center west and center south crop areas will be plenty moist over the next couple of days supporting long term planting and emergence conditions for soybeans, corn, rice, cotton and other crops
• Sugarcane,
  citrus and coffee will benefit as well
• There
  may be a little too much rain in some areas resulting in some delayed farm progress in Mato Grosso do Sul, Parana and Sao Paulo
• Europe’s
  weather will remain drier biased for a while which should promote fieldwork
  
• Western
  Russia, Belarus and neighboring areas will see less rain over the next ten days helping to reduce flood potentials after recent excessive moisture
• China’s
  greatest rain will be between the Yellow and Yangtze Rivers into the weekend while welcome drying occurs to the north
  
• China’s
  driest region will be in the southeast with drought still prevailing in the southern Yangtze River Basin
  
• Some
  relief from drought is expected in the northern Yangtze Basin where 0.50 to 1.50 inches of rain is expected by Saturday
• Much
  more rain will be needed
• Central
  and northeastern India will need to dry out after rain falls this week
• Northwestern
  India and Pakistan will be seasonably dry
• Frequent
  rain in New South Wales and southwestern Queensland through Saturday will result in some local flooding – especially in New South Wales, but no crop damage is expected
• Additional
  rain will fall in the same areas early next week
• Western
  and South Australia crops should stay in favorable condition

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

US
Initial Jobless Claims Oct 1: 219K (est 204K; prev 193K)

US
Continuing Claims Sep 24: 1361K (est 1350K; prev 1347K)

 

 

Corn

·        
Corn futures are off to a lower start on lack of fresh news, slowing US export commitment due in part to higher prices and US Midwest river logistical problems, and a higher USD. The USDA Broiler Report confirmed no slowdown in
chicken production during the August rail strike threat.

·        
Memphis-Cairo Barge Freight offers for the back months are starting to increase as demand/shipping interest is increasing for the Nov and Dec months.

·        
Weekly US ethanol production increased 34,000 barrels per day to 889 thousand, above a Bloomberg trade average of 874. Stocks decreased a large 1.006 million barrels to 21.685 million.

·        
USDA’s weekly Broiler Report showed eggs set in the US up 4 percent and chicks placed up 6 percent from a year ago. Cumulative placements from the week ending January 8, 2022, through October 1, 2022 for the United States were
7.36 billion. Cumulative placements were up 1 percent from the same period a year earlier.

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT soybean complex is lower on widespread commodity selling and higher USD. USDA export sales slowed from the previous week.

·        
Expect USDA export sales next week to come in at low levels for this time of year.   US is getting priced out for beans and corn

·        
Conab reported large corn and soybean production estimates for the 2022-23 season (2023-24 local marketing years), and we think the 125.6 MMT corn and 152.4 MMT corn and soybean figures may end up near the high end of a season
range. The threat of a third consecutive La Nina event still looms.

·        
Malaysian December palm oil futures increased 58 points to 3,3700 and cash was up $15/ton to $870/ton.

·        
China is on holiday this week for Golden Week.

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

·        
Offshore values were leading soybean oil 61 points lower earlier this morning and meal $3.20 short ton higher.

 

Export
Developments

·        
None reported

 

 

Wheat

·        
US wheat prices are lower from a higher USD and poor USDA export sales.

·        
News was again light.

·        
Paris December wheat was off 1.00 euro earlier at 348.75 per ton.

 

Export
Developments.

·        
Japan bought 97,343 tons of food wheat for arrival by January 31.

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

·        
Jordan seeks 120,000 tons of wheat set to close October 11.

·        
Jordan seeks 120,000 tons of barley on October 12 for March and April shipment.

• 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.

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

 

Rice/Other

·        
South Korea seeks 90,100 tons of rice from the US, Vietnam and other origins on October 19 for arrival between Jan 20 and Apr 30.

·        
Mauritius seeks 6,000 tons of rice on October 20, optional origin, for Jan-Mar shipment.

 

USDA Export Sales

Corn and wheat export sales were below and at
the low end of expectations, respectively. China slowed US soybean purchasing to 157,100 tons from 548,700 tons previous week. Meal and soybean oil sales were withing expectations. Overall, a disappointing report, but not surprising with Midwest river logistical
problems. New crop year for meal and oil so updated tables will be released this evening. Attached soybeans, corn and wheat.

 

 

 

Export
Sales Highlights

This
summary is based on reports from exporters for the period September 23-29, 2022.

Wheat:
Net sales of 229,400 metric tons (MT) for 2022/2023 primarily for the Philippines (85,300 MT, including decreases of 700 MT), Taiwan (51,800 MT), Nigeria (51,200 MT, including 47,800 MT switched from unknown destinations), Japan (28,600 MT), and Mexico (28,300
MT), were offset by reductions primarily for unknown destinations (49,000 MT).  Exports of 629,800 MT were primarily to the Philippines (127,300 MT), Indonesia (75,600 MT), Brazil (72,200 MT), China (64,600 MT), and South Korea (55,000 MT). 

Corn: 
Net sales of 227,000 MT for 2022/2023 primarily for Mexico (147,300 MT, including decreases of 1,800 MT), Honduras (28,200 MT), Guatemala (20,800 MT, including 7,500 MT switched from El Salvador and decreases of 1,700 MT), China (14,200 MT), and Costa Rica
(11,100 MT, including decreases of 2,800 MT), were offset by reductions primarily for Japan (8,500 MT), El Salvador (7,500 MT), and Canada (2,300 MT).  Exports of 645,500 MT were primarily to China (422,300 MT), Mexico (182,800 MT), Guatemala (13,300 MT),
Canada (10,000 MT), and Jamaica (7,200 MT). 

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

Sorghum: 
No net sales were reported for the week. Exports of 3,700 MT were to Mexico.

Rice:
 Net
sales of 38,100 MT for 2022/2023 primarily for Japan (13,000 MT), Canada (9,500 MT), Guatemala (5,000 MT, including decreases of 1,000 MT), Nicaragua (4,400 MT), and Jordan (3,900 MT), were offset by reductions for El Salvador (100 MT).  Exports of 9,700 MT
were primarily to Canada (2,800 MT), Mexico (2,300 MT), Saudi Arabia (1,700 MT), South Korea (1,600 MT), and Austria (700 MT).

Soybeans: 
Net sales of 777,100 MT for 2022/2023 primarily for Mexico (233,400 MT), China (157,100 MT, including decreases of 5,400 MT), the Netherlands (150,100 MT, including 138,000 MT switched from unknown destinations), Taiwan (57,800 MT, including 50,000 MT switched
from unknown destinations and decreases of 800 MT), and Spain (57,200 MT, including 57,000 MT switched from China), were offset by reductions for Japan (5,500 MT) and Colombia (1,300 MT).  Exports of 617,500 MT were primarily to the Netherlands (150,100 MT),
Mexico (69,400 MT), China (65,500 MT), Taiwan (57,300 MT), and Spain (57,200 MT). 

Optional
Origin Sales:
For 2021/2022, the current outstanding balance of 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 reductions of 19,500 MT for 2021/2022 primarily for Canada (15,700 MT), Mexico (7,100 MT), Nicaragua (2,500 MT), Sri Lanka (1,700 MT, including decreases of 400 MT), and Japan (1,600 MT), were more than offset by reductions for Vietnam (48,000 MT),
Venezuela (4,200 MT), and unknown destinations (2,800 MT).  Net sales of 139,900 MT for 2022/2023 primarily for Vietnam (48,000 MT), Canada (35,300 MT), Colombia (26,000 MT), Mexico (25,600 MT), and the Dominican Republic (5,000 MT), were offset by reductions
for Nicaragua (1,400 MT).  Exports of 166,100 MT were primarily to Guatemala (43,800 MT), Colombia (41,200 MT), Mexico (24,900 MT), Canada (21,500 MT), and El Salvador (12,700 MT).

Soybean
Oil: 
Total net sales of 900 MT for 2021/2022 were for Canada.  Total net sales of 100 MT for 2022/2023 were for Canada.  Exports of 1,000 MT were to Canada.

Cotton: 
Net
sales of 121,200 RB for 2022/2023 primarily for Pakistan (69,400 RB, including decreases of 3,500 RB), Turkey (14,000 RB, including decreases of 6,400 RB), Bangladesh (12,100 RB), Taiwan (10,900 RB), and South Korea (7,000 RB), were offset by reduction for
El Salvador (4,500 RB), Indonesia (3,500 RB), and Vietnam (3,200 RB).  Net sales of 48,500 RB for 2023/2024 primarily for Pakistan (22,900 RB), Guatemala (10,100 RB), Honduras (10,000 RB), and Bangladesh (6,600 RB), were offset by reductions for Thailand (4,600
RB).  Exports of 209,600 RB were primarily to China (78,400 RB), Turkey (25,400 RB), Pakistan (21,200 RB), Bangladesh (19,200 RB), and Mexico (17,700 RB).  Net sales of Pima totaling 1,600 RB were reported for Taiwan (900 RB), Italy (600 RB), and Indonesia
(100 RB).  Total net sales of 600 RB for 2023/2024 were for Italy.  Exports of 3,300 RB were to Vietnam (1,800 RB), India (900 RB), Germany (400 RB), Turkey (100 RB), and Honduras (100 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, exports for own account totaling 2,900 RB to China were applied to new or outstanding sales.  The current exports for own account outstanding balance of 74,500 RB is for China (37,600 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 435,400 pieces for 2022 primarily for China (300,000 whole cattle hides, including decreases of 7,400 pieces), Mexico (63,700 whole cattle hides, including decreases of 400 pieces), South Korea (27,700 whole cattle hides, including decreases of
3,700 pieces), Brazil (20,900 whole cattle hides, including decreases of 100 pieces), and Thailand (18,200 whole cattle hides, including decreases of 900 pieces), were offset by reductions primarily for Taiwan (3,800 pieces). 
Total net sales of 2,200 calf skins were for Italy.  In addition, total net sales reductions of 2,200 kip skins were for Italy.  Exports of 465,600 whole cattle hides exports were primarily to China (308,200 pieces), Mexico (63,700
pieces), Thailand (28,900 pieces), South Korea (23,200 pieces), and Japan (8,800 pieces). 

Net
sales of 35,400 wet blues for 2022 were reported for China (13,700 unsplit), Vietnam (12,300 unsplit, including decreases of 100 unsplit), Italy (6,500 grain splits and 1,300 unsplit, including decreases of 3,500 unsplit), Mexico (1,500 unsplit, including
decreases of 1,000 unsplit), and Thailand (100 unsplit, including decreases of 100 unsplit).  Net sales of 4,300 wet blues for 2023 were reported for Italy (3,300 unsplit) and Mexico (1,000 unsplit).  Exports of 144,300 wet blues were primarily to Vietnam
(53,300 unsplit), China (31,700 unsplit), Thailand (29,200 unsplit), Italy (23,700 unsplit), and Taiwan (4,800 unsplit).  Net sales of 87,500 splits reported for China (88,000 pounds) and South Korea (1,600 pounds), were offset by reductions for Vietnam (2,100
pounds).  Exports of 277,900 pounds were primarily to Vietnam (236,600 pounds).

Beef: 
Net sales of 16,400 MT for 2022 primarily for South Korea (6,000 MT, including decreases of 700 MT), Japan (2,200 MT, including decreases of 700 MT), Mexico (2,200 MT), China (2,100 MT, including decreases of 100 MT), and Taiwan (900 MT,
including decreases of 100 MT), were offset by reductions for Kuwait (100 MT).  Total net sales of 100 MT for 2023 were for Japan.  Exports of 18,400 MT were primarily to South Korea (4,700 MT), Japan (4,400 MT), China (3,100 MT), Mexico (1,500 MT), and
Taiwan (1,100 MT). 

Pork: 
Net sales of 34,300 MT for 2022 primarily for Mexico (16,800 MT, including decreases of 200 MT), China (10,100 MT, including decreases of 200 MT), Canada (1,900 MT, including decreases of 400 MT), South Korea (1,600 MT, including decreases of 200 MT), and
the Dominican Republic (1,200 MT), were offset by reductions for Australia (100 MT). 
Exports of 29,700 MT were primarily to Mexico (13,500 MT), China (5,000 MT), Japan (3,400 MT), Canada (1,700 MT), and South Korea (1,700 MT).

Late
Reporting:
For 2021/2022, net sales of 800 MT of pork were reported late. The destinations were Marshall Islands (200 MT), Western Samoa (100 MT), Federated States of Micronesia (100 MT), Palau (100 MT), other Pacific Islands (100 MT), American Samoa (100 MT), and Northern
Mariana Islands (100 MT).  Exports of 700 MT were reported late.  The destinations were to Marshall Islands (200 MT), Western Samoa (100 MT), Federated States of Micronesia (100 MT), Palau (100 MT), other Pacific Islands (100 MT), and
Northern Mariana Islands (100 MT).

October
6, 2022                                               1                FOREIGN AGRICULTURAL SERVICE/USDA

 

U.S.
EXPORT SALES FOR WEEK ENDING  09/29/2022

 

 

	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	57.6	792.8	1,517.9	134.0	2,274.7	2,839.1	0.0	1.7
SRW	5.0	539.8	672.1	56.6	1,499.8	1,093.3	0.0	0.0
HRS	99.0	1,005.0	851.9	190.3	2,183.9	2,232.7	0.0	0.0
WHITE	67.6	730.1	552.8	245.3	1,721.3	1,526.1	0.0	0.3
DURUM	0.1	90.3	60.5	3.5	77.5	61.4	0.0	0.0
TOTAL	229.4	3,158.1	3,655.3	629.8	7,757.1	7,752.6	0.0	2.0
BARLEY	0.0	11.6	24.5	0.0	3.9	5.7	0.0	0.0
CORN	227.0	10,975.9	24,084.6	645.5	2,246.8	2,496.6	0.0	250.5
SORGHUM	0.0	272.6	2,190.2	3.7	20.4	163.5	0.0	0.0
SOYBEANS	777.1	25,675.7	23,326.5	617.5	1,831.8	1,844.7	0.0	0.0
SOY MEAL	-19.5	412.9	791.3	166.1	11,668.4	11,534.7	139.9	2,316.2
SOY OIL	0.9	21.9	16.7	1.0	676.9	675.6	0.1	6.5
RICE
L G RGH	9.3	61.8	199.0	0.0	72.2	227.8	0.0	0.0
M S RGH	0.0	13.5	7.7	1.4	3.0	1.5	0.0	0.0
L G BRN	3.9	6.3	3.7	0.3	2.6	14.5	0.0	0.0
M&S BR	0.0	5.7	54.3	0.0	1.7	14.0	0.0	0.0
L G MLD	7.8	141.3	137.7	3.7	87.1	138.7	0.0	0.0
M S MLD	17.1	36.5	69.6	4.4	67.5	69.0	0.0	0.0
TOTAL	38.1	265.1	471.9	9.7	234.2	465.5	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	121.2	6,105.1	5,829.9	209.6	2,035.5	1,640.6	48.5	1,043.7
PIMA	1.6	88.0	170.4	3.3	17.4	58.4	0.6	0.9