FI Morning Grain Comments 10/07/22

PDF attached

 

Good
morning.

 

US
Change In Nonfarm Payrolls Sep: 263K (est 255K; prev 315K)

US
Unemployment Rate Sep: 3.5% (est 3.7%; prev 3.7%)

US
Average Hourly Earnings (M/M) Sep: 0.3% (est 0.3%; prev 0.3%)

US
Average Hourly Earnings (Y/Y) Sep: 5.0% (est 5.0%; prev 5.2%)

 

US
equities traded lower (many legs down) after the US jobs report. USD is higher by 33 points and WTI up 78 cents. The soybean complex is lower on technical selling. Planting concerns for the Black Sea region are supporting corn and wheat. Argentina is on holiday
today and Monday. Canada and Malaysia will also be on holiday Monday. We look for China to increase soybean purchases next week after coming back from holiday. The main topic today is the low water levels for the Mississippi River. 25 more deliveries were
posted for soybean meal. Look for a two-sided trade in corn. Wheat may stay above water on war concerns.

 

 

 

 

Weather

Last
seven days

 

 

No
major depressions are seen over the short term for the Gulf.

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 7, 2022

• Tropical
  Depression 13 near the Venezuela coast is still expected to become a tropical storm this weekend and possibly a hurricane prior to reaching Nicaragua Sunday
• Very
  heavy rain and flooding along with some damaging wind is expected in Central America from Nicaragua to Guatemala
• Too
  much rain will continue to fall too frequently in northeastern New South Wales and southern Queensland, Australia through the next week to ten days
• Wheat,
  barley and canola quality will decline later this month and in November if this pattern prevails as it is expected to
• La
  Nina continues strong and its influence on the world remains significant; however, the event is very near its peak of intensity
• Argentina
  will continue drought stricken through the next ten days with little to no rain expected
• Center
  west Brazil needs greater rain, but scattered showers are expected
• Center
  south Brazil will be wettest over the next ten days with waves of rain maintaining concern over wheat quality in the interior south of Brazil
• Planting
  progress in early corn, soybean, rice and cotton areas will be a little slow at times because of the rain, but progress should advance well
• India’s
  rain this weekend and early next week will impact eastern Gujarat, northwestern Madhya Pradesh, southeastern Rajasthan and Uttar Pradesh with some excessive rain in Uttarakhand
• The
  remainder of India will experience waves of rain during the balance of next week and into the following weekend
  
• Only
  northwestern portions of the nation are expected to be dry and that is normal
• China’s
  northern Yangtze River Basin is getting a few showers and thunderstorms offering some relief to drought, but the drought will not end
• Southeastern
  China will remain quite dry for a period of no less than 10 days
• Europe
  and the western CIS weather will be favorably mixed over the next ten days
• U.S.
  precipitation is expected to be restricted enough to maintain concern over river water levels on the navigable rivers
• Some
  rain is expected, but it will not be enough for a serious change in barge restrictions
• Some
  rain will fall in the southwestern U.S. Plains benefiting late season cotton and especially winter wheat and livestock grazing conditions
• Canada’s
  drought will prevail

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
Oct. 10:

• Cane
  crush and sugar production data by Brazil’s Unica (tentative)
• HOLIDAY:
  US, Argentina, Canada, Chile, Japan, Korea, Malaysia

Tuesday,
Oct. 11:

• USDA
  export inspections – corn, soybeans, wheat
• US
  crop conditions and harvesting data for corn, soybeans and cotton; winter wheat planted
• France’s
  agriculture ministry releases monthly grain estimates
• Malaysian
  Palm Oil Board’s data on stockpiles, production and exports
• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  Oct. 1-10 palm oil export data

Wednesday,
Oct. 12:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• Bursa
  Malaysia Derivatives to host East Malaysia palm oil conference, day 1
• FranceAgriMer
  monthly grains outlook
• HOLIDAY:
  Brazil

Thursday,
Oct. 13:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysian
  Cocoa Board releases 3Q grind data
• Bursa
  Malaysia’s East Malaysia palm oil conference, day 2
• New
  Zealand Food Prices
• HOLIDAY:
  Thailand

Friday,
Oct. 14:

• China’s
  first batch of Sept. trade data, including soybean, edible oil, rubber and meat imports
• 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
• HOLIDAY:
  Thailand

Source:
Bloomberg and FI

 

We
are guessing the increase in registrations is related to the low water levels along the Mississippi River.

 

 

 

 

 

 

Macros

US
Change In Nonfarm Payrolls Sep: 263K (est 255K; prev 315K)

US
Unemployment Rate Sep: 3.5% (est 3.7%; prev 3.7%)

US
Average Hourly Earnings (M/M) Sep: 0.3% (est 0.3%; prev 0.3%)

US
Average Hourly Earnings (Y/Y) Sep: 5.0% (est 5.0%; prev 5.2%)

 

Canadian
Net Change In Employment Sep: 21.1K (est 20.0K; prev -39.7K)

Canadian
Unemployment Rate Sep: 5.2% (est 5.4%; prev 5.4%)

Canadian
Participation Rate Sep: 64.7% (est 64.8%; prev 64.8%)

Canadian
Hourly Wage Rate Permanent Employees (Y/Y) Sep: 5.2% (est 5.6%; prev 5.6%)

Canadian
Full Time Employment Change Sep: 5.7K (prev -77.2K)

Canadian
Part Time Employment Change Sep: 15.4K (prev 37.5K)

 

 

Corn

·        
A higher start for the last trading session of the week from broad based commodity buying and lower USD. Gains in corn futures were trimmed from a downturn in US equities and soybeans before the electronic close amid US jobs report.

·        
France collected 67 percent of their corn crop as of October 3, up from 51 percent week earlier, 28 points above year ago and 18 points above average.

·        
Ukraine wrapped up barley and wheat harvesting for the 2022 crop, but corn collection is running behind normal. Storage issues is a problem. 

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT soybean complex turned lower before the electronic close after US stocks sold off post US employment report. Earlier soybeans did find technical support after prices hit a two-month low on Thursday. Soybean oil and meal are
lower for the non-expiring months.

·        
CBOT meal registrations were up 25 contracts (Owensboro).
We
are guessing the increase in registrations is related to the low water levels along the Mississippi River.

·        
Mississippi barge rates were steady late Thursday for the front two months and eased a touch for the December position.

·        
We heard two Miss R. locations for loading are closed. Meanwhile, dry expected for Midwest and no major tropical depressions are seen over the short term for the Gulf that would impact the US.

·        
The weather outlook calls for light rain later next week for the Midwest but much more is needed to increase

·        
Malaysia, Canada and Argentina are on holiday Monday.

·        
(Bloomberg) — Heavy rains and thunderstorms are expected in most parts of Sumatra and Kalimantan on Friday, according to Indonesia’s Meteorological, Climatological and Geophysical Agency. “Flood warnings issued for Riau, Jambi,
Bengkulu, South Sumatra and Lampung provinces in Sumatra island, as well as Central Kalimantan, East Kalimantan and South Kalimantan provinces. Floods in North Aceh province in Sumatra have affected more than 5,000 families, with people moving to higher grounds,
according to the national disaster mitigation management agency.”

·        
Malaysian December palm oil futures increased 137 points to 3,837 and cash was up $30/ton to $900/ton.

·        
China is back from holiday Sunday evening, and they could step up soybean purchasing early next week.  CBOT soybean futures are near a 2-month low.

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

·        
Offshore values were leading soybean oil 30 points lower earlier this morning (101 higher for the week to date) and meal $2.70 short ton higher ($12.00 higher for the week).

 

Export
Developments

·        
South Korea’s KFA and FLC jointly bought 60,000 tons of soybean meal, optional origin (Reuters noted SA), at $524.80/ton c&f for arrival around March 10.

·        
South Korea’s NOFI group bought 60,000 tons of soybean meal at $531.92/ton c&f for arrival around February 20.

 

 

Wheat

·        
US wheat prices are higher on Black Sea shipping concerns. Government leader comments/headlines over the war in Ukraine have stirred up tensions.

·        
Planting concerns for the Black Sea region are supporting wheat.

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

·        
FOA food price index fell for the sixth consecutive month to 136.3 points from a revised 137.9 points for August. The record was 159.7 posted for March 2022. A drop in vegetable oils contributed to the decline for the September
index.

 

Export
Developments.

·        
Algeria earlier this week bought 200,000 to 250,000 tons of durum wheat at $496.3 to $512.6 a ton c&f, for LH October through November shipment. Origin was thought to be Canadian.

·        
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 plans to buy 450,000 tons of rice for reserves this year October 20 through December to stabilize domestic prices. This would be up from 350,000 tons last year.

·        
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.