FI Morning Grain Comments 10/10/22

PDF attached

 

Good
morning.

 

USD
is higher and WTI down about 67 cents. US government offices and banks are closed today for Columbus Day. US export inspections and crop progress will be released Tuesday. Wheat is up sharply after missile strikes in Ukraine. Black Sea shipping concerns amplified
over the weekend after Russia threatened more strikes after a key bridge linking Crimea was blown up. Bloomberg noted infrastructure facilities in eight Ukraine regions were hit in the missile strikes, including the city of Odessa, a major grain hub. The strength
in wheat is spilling into corn and the soybean complex. Argentina, Canada and Malaysia are on holiday, returning Tuesday.

 

 

 

Mississippi
River water levels are still low, and we are hearing more than 1 million tons of November soybean arrivals at the Gulf could be delayed, but parts of the Miss. River reopened Sunday and expect some of the logjams to clear. Weekend weather for the US was as
expected for the US, with some rain falling across NE, KS, parts of TX and OK, followed by MN and other upper Midwestern areas. Parts of the Midwest will see rain mid this week, bias southwestern areas. Brazil will see widespread rains this week while Argentina
will dry down again after seeing some rain over the weekend. India and eastern Australia saw flooding over the weekend.

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 10, 2022

• Tropical
  Storm Julia brought heavy rain and flooding to parts of Central America during the weekend
• Damage
  occurred in Nicaragua crops and property during the weekend because of the storm
• Honduras,
  El Salvador and Guatemala will be impacted additionally today, but with much less potential for damage
• U.S.
  harvest weather should be mostly favorable in the coming week to ten days with alternating periods of dry and wet weather – none of the rainfall will be exceptionally great
• River
  and stream flow changes are not likely to be dramatic, but fluctuations near current levels are most likely for a while
• European
  forecast model is much too wet for the southern U.S. Plains and Delta for next week
• Ontario
  and Quebec, Canada will likely turn too wet for fieldwork late this week and next week
  
• Argentina
  will continue too dry for the next ten days, despite some timely showers in northwestern and west-central areas Sunday and Monday of next week
• Brazil
  will see a favorable mix of weather, although below normal precipitation will continue from eastern Mato Grosso to Minas Gerais and parts of Sao Paulo over the coming week with improved rainfall in these drier areas possible next week
• Interior
  southern Brazil will be wetter than usual along with southeastern Paraguay
• Europe
  and the western CIS will experience mostly good crop weather during the next two weeks with a mix of rain and sunshine favoring fieldwork and winter crop development
• India
  will become a little too wet in southern, central and northeastern crop areas during the coming week with some drying expected in central and northeastern areas next week
• Excessive
  rain fell in India during the weekend from northwestern Uttar Pradesh into Uttarakhand and a part of southern Haryana raising some crop quality concerns
• Australia
  received abundant rain in parts of southern Queensland and northeastern New South Wales during the weekend
• These
  areas will be drier biased this week
• Western
  Australia will need some rain in the next few weeks to ensure the best possible production
• South
  Africa has been heating up and drying out which has been for winter crop maturation
• Rain
  expected next week will improve summer crop planting conditions

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

*US
ending stocks were revised by Reuters on Friday

 

 

World
ending stocks estimates

 

 

 

Macros

 

Corn

·        
Corn futures are higher on Black Sea shipping uncertainties after Ukraine/Russia war efforts escalated over the weekend.

·        
Midwest river logistical problems may increase this week with little rain in the forecast for the heart of the US, affecting late October and November barge shipments to the Gulf.
Logjams
may ease after some points of the Miss. River were opened up on Sunday but will take time for about 2,000 barges to clear. It will be important to monitor grain inspections over the next 4-6 weeks.
We
heard two Miss R. locations for loading are closed.

·        
China set import quotas for corn at 7.2 MMT for 2023 and wheat at 9.636 MMT. The corn import quota could be at the low end, depending on China production, which is still an unknown. Harvesting progress in China, from what we hear,
is moving along.

·        
US corn harvesting last week is expected to increase about 14 percent points from October 2 to around 34 percent complete, above a 5—year average of 30 percent.

·        
Bird flu was detected in a commercial broilers breeding flock in Madison country, Arkansas.

 

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
CBOT soybean complex is higher from strength in wheat, despite soybeans starting to back up in the Midwest from slowing Midwest river shipments for export. Logjams may ease after some points of the Miss. River were opened up on
Sunday. Higher trade in China is supportive after returning from holiday.

·        
Expect news and trade to be slow with US government offices and banks closed for Columbus Day.

·        
Malaysia, Canada and Argentina are on holiday today. 

·        
ITS reported October 1-10 Malaysian palm oil shipments at 350,767 tons, down 17.3% from 423,912 tons previous period last month.

·        
China is back from holiday. Hog futures traded at a record high (tight supplies), up 5.3%. Soybeans were down 1.2% (harvest), meal 2.3% higher, soybean oil 4.0 percent higher (following CBOT) and palm oil 5.4% higher.

 

 

·        
Rotterdam vegetable oils were 15-32 euros higher from this time Friday morning. SA meal was mixed.

·        
Offshore values were leading soybean oil 11 points lower earlier this morning and meal $2.60 short ton higher.

 

Export
Developments

·        
Tunisia seeks 9,000 tons of soybean oil and/or rapeseed oil on October 11 fir November 21-December 5 shipment.

 

 

Wheat

·        
US wheat prices are sharply higher on Black Sea shipping concerns after several Ukraine cities were attacked over the weekend.

·        
Paris December wheat was up 10.50 euros at 358.50 per ton, near its contract high. It gapped higher from Friday’s close.

·        
Uttar Pradesh, India, saw recorded excess rainfall last week, negatively impacting agriculture production. Keep an eye out for USDA to lower selected crops in its October update.

·        
Australia’s NSW saw heavy rain through early Sunday, resulting in flooding, mainly near the coast, but did impact some grain areas.  Australia’s eastern areas recorded their wettest year since records began in 1858. Why this is
important to monitor? La Nina, for the third straight year, could also impact South America. 

·        
Argentina will dry down this week after seeing light rain over the weekend.

 

Export
Developments.

·        
Algeria seeks at least 50,000 tons of soft milling wheat on October 11 for November shipment, earlier if from SA or Australia. 

·        
Algeria earlier last 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.