FI Morning Grain Comments 10/11/22

PDF attached

 

Good
morning.

 

US
agriculture markets are mostly lower following weakness in outside related markets and selected overnight EU and Asian agriculture futures. USD was 14 points lower earlier, WTI $1.39 lower and US equities pointing towards a lower open. Paris wheat was down
$5.50 euros earlier. Wheat is lower after a Russian official said they may remove their grain-export quota. Typically, Russia limits grain exports late in the crop season. US corn futures are lower from weakness in wheat with losses limited from a cut in the
French corn crop.

Soybeans
are lower, meal higher and SBO sharply lower. Palm oil futures were down hard overnight from higher than expected end of Sep. Malaysian palm stocks.

 

 

 

US
weather forecast is unchanged. The Midwest will see light rain across the northern and southwestern areas today, and eastern and central areas Wed. & Thur. eastern KS, eastern NE, and central OK will see rain today. More rain for OK is expected to fall this
weekend. Brazil will see widespread rains this week while Argentina will be dry over the next ten days. Brazil will see rain bias west and interior south.

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 11, 2022

• Tropical
  cyclones may dominate southern Asia in the next two weeks
• Tropical
  cyclone development is expected near the Philippines today and Wednesday before moving to Vietnam’s Central Highlands with landfall possible late Thursday and Friday
  
• Locally
  heavy rain is expected in the Philippines through Wednesday, but the greatest rainfall is expected in Vietnam’s central Highlands and central coast where some flooding is possible
• Coffee
  will be impacted, but production losses are not currently expected
• A
  tropical cyclone forming near the Mariana Islands late this week may move toward Taiwan and/or southeast China with landfall early next week
  
• The
  storm is a bigger threat to Taiwan than China today, but changes are possible
• Rice
  and sugarcane could be impacted along with personal property and infrastructure
  
• Some
  delay to shipping is possible as well
• A
  tropical cyclone “may” evolve in the Bay of Bengal late this weekend or early next week with possible landfall in eastern India late next week
  
• Confidence
  in this storm is low, but the region will be closely monitored
• Tropical
  disturbance over Yucatan Peninsula of Mexico today will enter into the Gulf of Campeche and possibly become a tropical cyclone in the next couple of days before moving into southern Mexico Friday into the weekend producing some heavy rainfall in a few rice,
  coffee and sugarcane production areas.
• The
  storm is projected to be weak
• Eastern
  China is still predicted to be dry next ten days favoring summer crop harvesting and winter crop planting
• Drought
  will continue in the Yangtze River Basin with no sign of change
• Dryness
  could pose a threat to China’s rapeseed production region, although there is plenty of time for rain
• India’s
  monsoon is showing more signs of withdrawing from central parts of the nation over the coming week
• Central
  and eastern Europe will experience net drying over the next week to ten days favoring fieldwork of all kinds
• Far
  western Europe will see waves of rain late this week through next week bolstering soil moisture and slowing fieldwork
• South
  Africa will experience a mix of showers and sunshine in the next ten days, but greater rain will soon be needed to support the best start to summer crop planting and establishment
• No
  changes in the South America outlook today; Argentina will continue dry biased for the coming ten days while rain in Brazil is greatest in the west and interior south
• Favorable
  harvest weather will continue in U.S. summer crop areas over the next ten days with only brief rain delays
• ECMWF
  has reduced rain in the far southern U.S. Plains for late this weekend into Next week, but the GFS is still quite wet for parts of Texas
• The
  ECMWF model is probably on the correct path, although some rain will fall in Texas and a part of Oklahoma benefiting some wheat areas while producing rain in open boll cotton areas of West Texas
• Canada
  Prairies will remain dry biased while Ontario and Quebec will see waves of rain slowing fieldwork
• U.S.
  Midwest weather will be dry west of the Mississippi River while scattered showers occur to the east
  
• Rain
  is needed in the U.S. central Plains

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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:

• US
  CPI
• 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:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am

• 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 lower on weakness in wheat, but losses limited from a shrinking EU corn crop.

·        
Mississippi River barge rates are starting to ease after two locations reopened on Sunday.

·        
France lowered their corn crop to 11.15 million tons from 11.33 projected last month, 27% below last season. Yield was estimated at 8.18 tons per hectare versus 8.44 last month.

·        
Yesterday US railroad union workers voted to reject a tentative labor agreement, raising the threat of an upcoming strike, but note progress in talks have improved.

·        
USDA will release inspections and crop progress today, followed by S&D’s on Wednesday. US CPI report due out on Thursday.

·        
USDA US S&D expectations are of a 171.8 corn yield with ending stocks next year at 1.124BB bushels and a 50.6 bean yield with ending stocks of 248MM bushels. Wheat stocks are expected to be a very low 554MM bushels.

 

Export
developments.

·        
Taiwan’s MFIG seeks up to 65,000 tons of corn on October 12, optional origin, for December and/or early January shipment.

 

Soybeans

·        
The soybean complex is mixed with lower soybeans and a sharply lower trade in soybean oil. Spreading is supporting soybean meal. Malaysian palm oil futures snapped a 7 day winning streak, ending over 3 percent lower.

·        
China plans to auction off 500,000 tons of soybeans from reserves on October 14, consisting of the 2019, 2020, and 2021 crop years.

·        
Malaysian palm oil stocks at the end of September were reported near their highest in three years and above expectations. Stocks were also up little more than 10 percent from end of August. Palm production was better than expected,
offset by higher predicted exports. Imports were very good.

 

 

·        
After a one day holiday, Malaysian December palm oil futures decreased 145 points to 3,692 and cash was down $25/ton to $875/ton.

·        
AmSpec reported October 1-10 palm oil exports at 373,030 tons, a 0.5% increase from Aug 1-10.

·        
GAPKI reported Indonesia palm oil exports during August at 4.33 million tons, up from 2.71 million tons during July, and up 1.4% from year ago. Production during August was 4.31 million tons versus 3.8 million in July.

·        
China November soybeans were down 0.5%, meal 0.2% lower, soybean oil 2.0 percent higher and palm oil 1.2% higher.

·        
Rotterdam vegetable oils were 15-22 euros lower from this time yesterday morning. SA meal was mixed.

·        
Offshore values were leading soybean oil 18 points lower earlier this morning and meal $ 0.40 short ton lower.

 

Export
Developments

·        
Results are awaited from Tunisia seeking 9,000 tons of soybean oil and/or rapeseed oil for November 21-December 5 shipment.

 

 

Wheat

·        
US wheat futures are lower following weaker EU wheat and a Russian official stating they may drop their grain export quota program for this crop year after a bumper crop was realized. Russia tends to limit grain exports late in
the crop season to ensure domestic supplies.

·        
Paris December wheat was off 5.50 euros at 358.75 per ton.

·        
The UN is asking shipping parties to speed up grain inspections conducted in Istanbul. Currently it takes about 10 days to complete inspections per ship.

·        
Argentina will dry down this week.

·        
Australia’s heavy rains over the past week may have impacted wheat quality for the far eastern areas, according to a Reuters article interviewing traders and analysts.

·        
Kazakhstan increased their grain harvest to 19 million tons, up from 16.3 million year ago.

 

Export
Developments.

·        
Japan seeks 94,140 tons of food wheat from the US, Canada and Australia later this week for arrival by January 31.

·        
Turkey started buying (495,000 tons sought) feed barley. Lowest offer was believed to be $321.90, highest $327.40/ton. About 320,000 tons was thought to have been bought so far.

·        
Jordan passed on 120,000 tons of wheat. 

·        
Results are awaited for Algeria seeking at least 50,000 tons of soft milling wheat for November shipment, earlier if from SA or Australia. 

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

·        
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.