FI Morning Grain Comments 10/14/22

PDF attached

 

Good
morning.

 

Private
exporters reported the following sales activity:

-392,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-198,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

-230,000
metric tons of soybean cake and meal for delivery to the Philippines during the 2022/2023 marketing year

 

The
USD is higher, up about 16 points. WTI crude oil is lower by $1.65 and US equities higher.
Corn futures are lower from a sharply higher USD, lower WTI crude oil and ongoing global recession concerns. The soybean complex is mixed with soybeans and meal higher and soybean oil lower. Export sales, offshore values and the lower
trade in WTI crude is promoting meal/oil spreading. US wheat futures are lower led by the KC market. Uncertainty over the Black Sea safe passage agreement set to expire November should limit losses.

 

The
US weather group CPC projected a 75% chance of La Nina during the northern hemisphere winter (Dec-Feb) season before a 54% chance of turning neutral during the Feb-Apr period.

 

There
were no major changes to the US weather forecast. Brazil’s outlook is unchanged, and Argentina turned slightly unfavorable. Argentina will see some rain across eastern Cordoba, central Santa Fe, and Entre Rios through Saturday before turning drier through
Tuesday. Brazil will continue to see favorable rains bias western Mato Grosso, southwest MGDS, south Sao Paulo, Parana, Santa Catarina, north RGDS. The US southwestern Great Plains will see additional rain, bias southern OK and TX. The Midwest will be mostly
dry over the next week.

 

 

 

 

Weather

Last
7-days

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 14, 2022

• U.S.
  hard red winter wheat areas are unlikely to get much meaningful rain late this weekend or early next week, although some showers will occur in a minor portion of the production region
  
• Any
  moisture will be welcome, but it will not likely be enough to last very long and more rain will still be needed to induce a well-established wheat crop
• Hard
  freezes in the U.S. Midwest next week will end the growing season, but the impact on crops is not likely to be very great
• Frost
  and light freezes are also possible in the northern Delta
• U.S.
  precipitation biases will continue unchanged for another week keeping the western Midwest, northern Plains and far western states dry while rain and snow impact the Great Lakes region
• Restricted
  rainfall is expected in the Delta and a part of the interior southeastern states for the next week to ten days
• Canada’s
  Prairies will see no relief from drought through the next ten days
• France
  and Germany as well as some neighboring areas will get moisture in the coming week to ten days while other areas in Europe are dry biased
• Much
  of the western CIS soil moisture and crop conditions will remain favorably rated over the next ten days, despite a few areas needing a little moisture while many others would benefit from greater drying
• Eastern
  China’s dry biased weather will continue for the next ten days
• Drought
  in the southeastern part of the nation remains a concern for winter crops
• India’s
  monsoon is withdrawing with central parts of the nation expected to be much drier in the coming week to ten days
• Eastern
  Australia will continue to see waves of rain and cooler than usual weather negatively impacting some crops
• Argentina
  may get some showers infrequently over the next ten days, but there should be a little more rain during this period relative to that of the past ten days
• Little
  change in Brazil weather is expected in this first week of the outlook favoring rain in center south and center west areas, but leaving Goias and eastern Mato Grosso dry
• The
  second week of the outlook should improve rain potentials for some of these drier areas
  
• Tropical
  Storm Karl will bring heavy rain into Tabasco and Chiapas, Mexico this weekend, although the impact on agriculture will be low
• Tropical
  Depression 22W will impact central Vietnam this weekend with some heavy rainfall, but the impact on crops and property should be low

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Thursday,
Oct. 13:

• US
  CPI
• EIA
  weekly US ethanol inventories, production, 11:00am
• 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

Monday,
Oct. 17:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions and harvesting for corn, soybeans and cotton, winter wheat planting, 4pm
• Argus
  Fertilizer Europe conference, Madrid, day 1

Tuesday,
Oct. 18:

• China’s
  second batch of September trade data, including corn, pork and wheat imports
• China’s
  3Q pork output, hog inventory
• Oils
  & Fats International Congress, Kuala Lumpur, day 1
• Argus
  Fertilizer Europe conference, Madrid, day 2
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data

Wednesday,
Oct. 19:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Oils
  & Fats International Congress, Kuala Lumpur, day 2
• Argus
  Fertilizer Europe conference, Madrid, day 3

Thursday,
Oct. 20:

• China’s
  third batch of September trade data, including soybean, corn and pork imports by country
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• International
  Grains Council report
• Malaysia’s
  Oct. 1-20 palm oil export data
• USDA
  total milk, red meat production, 3pm

Friday,
Oct. 21:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• Asia
  3Q 2022 cocoa grind data
• FranceAgriMer
  weekly update on crop conditions
• US
  cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

 

USDA
Export Sales.

USDA
Export Sales were near the low end of expectations for soybeans, well above expectations for meal, and poor for soybean oil (promotes meal/oil spreading). Corn export sales fell short of expectations and wheat was at the low end. The soybean sales included
China (622,300 MT, including 251,000 MT switched from unknown destinations and decreases of 67,500 MT).

 

 

 

Macros

US
Retail Sales Advance (M/M) Sep: 0.0% (est 0.2%; prev 0.3%)

US
Retail Sales Ex Auto (M/M) Sep: 0.1% (est -0.1%; prev -0.3%)

US
Retail Sales Ex Auto And Gas (M/M) Sep: 0.3% (est 0.2%; prev 0.3%)

US
Retail Sales Control Group (M/M) Sep: 0.4% (est 0.3%; prev 0.0%)

 

US
Manufacturing Sales (M/M) Aug: -2.0% (est -1.8%; prevR -0.6%)

US
Wholesale Trade Sales (M/M) Aug: 1.4% (est 0.8%; prevR -0.6%)

 

US
Import Price Index (M/M) Sep: -1.2% (est -1.1%; prevR -1.1%)

US
Import Price Index Ex Petroleum Sep: -0.5% (est -0.4%; prev -0.2%)

US
Import Price Index (Y/Y) Sep: 6.0% (est 6.2%; prev 7.8%)

US
Export Price Index (M/M) Sep: -0.8% (est -1.0%; prevR -1.7%)

US
Export Price Index (Y/Y) Sep: 9.5% (est 9.3%; prevR 10.7%)

 

JPMorgan
Q3 22 Earnings:

–
EPS $3.12 (est $2.88)

–
Revenue $32.70B (est $32.35B)

Morgan
Stanley Q3 22 Earnings:

–
Adj EPS $1.53 (est $1.51)

–
Revenue $13.0B (est $13.25B)

Wells
Fargo Q3 22 Earnings:

–
EPS 0.85$ (est $1.08)

–
Revenue $19.51B (est $18.81B)

PNC
Financial Q3 22 Earnings:

–
Adj EPS $3.78 (est $3.70)

–
Revenue $5.5B (est $5.41B)

 

Kroger
To Buy Albertsons For Estimated Consideration Of $34.10 A Share

 

 

Corn

·        
Corn futures are lower from a higher USD, lower WTI crude oil and ongoing global recession concerns.

·        
Short term resistance for December corn is seen at $7.2050, then $7.2575.

·        
France collected most of its corn crop. At 83% as of October 10, its u from 67% week earlier and compares to only 14% year ago. The pace is well above average for this time of year.

·        
Weekly US ethanol production increased 43,000 barrels from the previous week to 932 thousand barrels per day (bbl), still low for this time of year, but has improved over the past two weeks. Ethanol stocks increased 178,000 barrels
to 31.863 million.

 

Export
developments.

·        
None reported

 

Soybeans

·        
The soybean complex is
mixed with soybeans and meal higher and soybean oil lower. Offshore values and the lower trade in WTI crude is promoting meal/oil spreading. USDA export sales was ok for soybeans, great for meal and poor for soybean oil. We are hearing China is again in for
US soybeans.

·        
Malaysian palm oil futures increased 4.6 percent in reaction to the Black Sea headline rally in CBOT futures yesterday. For the week its unchanged.

·        
There were 55 deliveries posted for soybeans meal (281 month to date), stopped by JP Morgan, issued by Marex. Registrations were up 55 (Incobrasa – Gilman, IL).

·        
Argentina producers sold 70 percent of their 2021-22 crop (44MMT), according to the AgMin, above 68.4% year earlier (46MMT). September 29-October 5 sales were 375,000 tons, below 1.7 million tons sold week earlier.

·        
Malaysia left their crude palm oil export tax rate unchanged for November at 8%. They lowered the reference price to 3,575.80MYR from 4,033.51MYR previous.

·        
Malaysian December palm oil futures increased 168 Ringgit to 3,833 and cash was up $30/ton to $892/ton.

·        
China November soybeans were up 0.1%, meal 0.2% lower, soybean oil 1.2% lower and palm oil 1.2% lower.

·        
Rotterdam vegetable oils were unchanged to 5 euros higher from this time yesterday morning. SA meal was 1.00-4.50 euros lower.

·        
Offshore values were leading soybean oil 32 points lower earlier this morning (17 lower for the week to date) and meal $1.90 short ton higher ($11.90 higher for the week).

 

Export
Developments

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

·        
Under the 24-hour announcement system, USDA reported

-392,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-198,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

-230,000
metric tons of soybean cake and meal for delivery to the Philippines during the 2022/2023 marketing year

 

 

Wheat

·        
US wheat futures are lower led by the KC market. Uncertainty over the Black Sea safe passage agreement set to expire November should limit gains. The UN, Turkey and Russia are in talks to extend the safe passage deal, but details
are lacking.

·        
Paris December wheat was off 3.75 euros at 352.50 per ton.

·        
France planted 21 percent of their soft wheat crop as of last Monday, compared to 3 percent week earlier and 11 percent year ago.

·        
Australia’s southeast saw additional rain resulting in flash floods forcing thousands of people to evacuate parts of the populated areas along the eastern coast.

·        
Results are awaited on China auctioning off 40,000 tons of wheat from reserves from the 2014-2017 crops.

·        
Some traders believe the estimates for the Argentina wheat crop released this week are way too conservative. The BA grains exchange lowered their Argentina 2022-23 wheat crop production from 17.5 million tons to 16.5 million tons
on Thursday. Last year it was record 23 million tons. The Rosario exchange is at 16 million tons and USDA official at 17.5 million tons.

·        
Late on Thursday, Argentina government officials met with wheat millers and exporters to discuss potential shortages for the domestic market.

 

Export
Developments.

·        
South Korea’s MFG bought 65,000 tons of Australian wheat at $354.49/ton for Feb-first half Mar shipment.

·        
Jordan opened another import tender for 120,000 tons of feed barley, set to close October 19.

·        
Japan in a SBS import tender seeks 70,000 tons of feed wheat and 40,000 tons of barley on October 19 for arrival by February 24.

·        
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.

 

 

U.S. EXPORT SALES FOR WEEK ENDING  10/06/2022

 

	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
WHEAT	THOUSAND METRIC TONS
HRW	74.4	724.7	1,546.4	142.5	2,417.2	3,055.3	0.0	1.7
SRW	28.4	519.6	609.3	48.6	1,548.4	1,186.5	0.0	0.0
HRS	32.2	864.1	955.3	173.1	2,357.0	2,320.2	0.0	0.0
WHITE	76.9	610.7	592.5	196.2	1,917.5	1,588.2	0.0	0.3
DURUM	0.0	90.3	60.5	0.0	77.5	61.4	0.0	0.0
TOTAL	211.8	2,809.4	3,764.0	560.5	8,317.6	8,211.5	0.0	2.0
BARLEY	0.0	11.6	24.5	0.0	3.9	5.7	0.0	0.0
CORN	200.2	10,753.5	24,206.3	422.6	2,669.4	3,414.8	60.5	311.0
SORGHUM	5.9	271.2	2,130.5	7.3	27.7	225.8	0.0	0.0
SOYBEANS	724.4	25,512.2	22,760.5	888.0	2,719.8	3,558.5	0.0	0.0
SOY MEAL	491.9	2,977.5	3,753.4	110.9	110.9	301.0	0.0	1.4
SOY OIL	3.3	19.8	104.5	0.2	0.2	0.5	0.0	0.1
RICE
L G RGH	2.0	62.9	220.5	0.9	73.1	235.9	0.0	0.0
M S RGH	1.5	13.5	7.5	1.5	4.6	1.7	0.0	0.0
L G BRN	0.8	6.3	3.8	0.8	3.4	15.0	0.0	0.0
M&S BR	0.0	5.3	54.3	0.5	2.2	14.1	0.0	0.0
L G MLD	7.4	101.1	135.8	47.6	134.7	142.1	0.0	0.0
M S MLD	1.1	36.1	68.1	1.5	69.0	72.6	0.0	0.0
TOTAL	12.8	225.1	490.0	52.8	286.9	481.3	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	144.8	6,081.8	5,881.4	168.1	2,203.6	1,735.8	34.8	1,078.5
PIMA	-2.0	85.2	166.2	0.8	18.2	69.0	0.0	0.9

 

FINAL 2021/22 MARKETING YEAR
COMMODITY	NET SALES	CARRYOVER SALES 1/	09/30/22 EXPORTS	ACCUMULATED EXPORTS
SOY MEAL	-99.9	280.3	32.7	11,701.1
SOY OIL	-10.1	10.2	1.6	678.4

 

 

Export Sales Highlights

This
summary is based on reports from exporters for the period September 30-October 6, 2022.

Wheat:
Net sales of 211,800 metric tons (MT) for 2022/2023 primarily for Japan (65,200 MT), Thailand (55,000 MT), Mexico (38,500 MT, including decreases of 300 MT), the Philippines (35,100 MT), and Venezuela (29,000 MT, including 30,000 MT switched from unknown destinations
and decreases of 1,000 MT), were offset by reductions for Nigeria (24,300 MT) and unknown destinations (5,000 MT).  Exports of 560,500 MT were primarily to China (135,600 MT), Iraq (105,000 MT), the Philippines (63,600 MT), South Korea (55,000 MT), and Taiwan
(39,100 MT). 

Corn: 
Net sales of 200,200 MT for 2022/2023 primarily for Japan (142,300 MT, including 85,400 MT switched from unknown destinations), Guatemala (22,800 MT, including decreases of 5,100 MT), Colombia (22,500 MT, including decreases of 1,000 MT), Mexico (19,100 MT,
including decreases of 181,000 MT), and Panama (17,500 MT), were offset by reductions for unknown destinations (45,000 MT) and Hong Kong (100 MT).  Total net sales of 60,500 MT for 2023/2024 were for Mexico.  Exports of 422,600 MT were primarily to Mexico
(189,700 MT), Japan (137,000 MT), China (76,700 MT), Colombia (9,000 MT), and Canada (3,700 MT). 

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

Sorghum: 
Net sales of 5,900 MT for 2022/2023 reported for Mexico (6,300 MT), were offset by reductions for Haiti (300 MT).  Exports of 7,300 MT were to Mexico.

Rice:
 Net
sales of 12,800 MT for 2022/2023 were primarily for Iraq (4,000 MT), Mexico (3,700 MT), Canada (3,300 MT), Saudi Arabia (1,300 MT), and Japan (200 MT).  Exports of 52,800 MT were primarily to Iraq (44,000 MT), Mexico (3,700 MT), Canada (3,700 MT), Taiwan (700
MT), and Saudi Arbia (400 MT).

Soybeans: 
Net sales of 724,400 MT for 2022/2023 primarily for China (622,300 MT, including 251,000 MT switched from unknown destinations and decreases of 67,500 MT), South Korea (51,600 MT, including 53,000 MT switched from unknown destinations and decreases of 1,600
MT), Portugal (28,200 MT, including 21,500 MT switched from unknown destinations and decreases of 800 MT), Japan (14,900 MT, including 9,600 MT switched from unknown destinations and decreases of 100 MT), and Thailand (12,300 MT), were offset by reductions
for unknown destinations (63,400 MT) and Colombia (2,500 MT).  Exports of 888,000 MT were primarily to China (607,100 MT), Mexico (92,400 MT), Egypt (60,500 MT), South Korea (51,400 MT), and Portugal (20,700 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 for the 2022/2023 marketing year, which began October 1, totaled 491,900 MT primarily for the Philippines (100,000 MT), Ecuador (91,000 MT), Japan (53,800 MT), Canada (48,700 MT), and Vietnam (45,000 MT), were offset by reductions for Morocco (1,100
MT).  Net sales of 280,300 MT was carried over from the 2021/2022 marketing year, which ended September 30.  Exports for the period ending September 30 were primarily to Mexico (28,500 MT), Sri Lanka (1,200 MT), Canada (900 MT), Burma (700 MT), and Taiwan
(500 MT).  Exports for the period ending October 1 of 110,900 MT brought accumulated exports to 11,701,100 MT, up 38 percent from the prior year’s total of 301,000 MT.  The primary destinations were to the Philippines (52,500 MT), Mexico (27,200 MT), Canada
(15,900 MT), and Morocco (14,900 MT).

Soybean
Oil: 
Net sales for the 2022/2023 marketing year, which began October 1, totaled 3,300 MT for Canada (3,700 MT), were offset by reduction for Mexico (400 MT).  Total net sales of 10,200 MT was carried over from the 2020/2021 marketing year, which ended September
30.  Exports for the period ending September 30 were to Canada (1,600 MT). Exports for the period ending October 1 of 200 MT brought accumulated exports to 678,400 MT, up noticeably from the prior year’s total of 500 MT, with Canada being the destination.

Cotton: 
Net
sales of 144,800 RB for 2022/2023 were primarily for Pakistan (55,300 RB, including decreases of 900 RB), Bangladesh (31,700 RB), China (14,400 RB), Vietnam (13,700 RB, including 200 RB switched from Japan), and Turkey (6,400 RB, including decreases of 500
RB).  Total net sales of 34,800 RB for 2023/2024 were reported for Mexico (21,000 RB), Pakistan (6,600 RB), Guatemala (6,300 RB), and Turkey (900 RB).  Exports of 168,100 RB were primarily to China (39,700 RB), Vietnam (26,700 RB), Pakistan (25,500 RB), Mexico
(20,300 RB), and Bangladesh (19,000 RB).  Net sales reductions of Pima totaling 2,000 RB resulted in increases for Italy (1,000 RB), were more than offset by reductions for India (3,000 RB).  Exports of 800 RB were to China (700 RB) and Italy (100 RB). 

Optional
Origin Sales:
For 2022/2023, options were exercised to export 1,000 RB to Pakistan from the United States.  The current outstanding balance of 9,300 RB is for Malaysia.

Export
for Own Account:
For 2022/2023, exports for own account totaling 10,600 RB to Turkey were applied to new or outstanding sales.  The current exports for own account outstanding balance of 63,900 RB is for China (37,600 RB), Vietnam (23,900 RB), India (1,500 RB), Pakistan (500
RB), and Indonesia (400 RB). 

Hides
and Skins: 
Net sales of 362,100 pieces for 2022 primarily for China (275,700 whole cattle hides, including decreases of 69,700 pieces), Mexico (44,100 whole cattle hides, including decreases of 500 pieces), South Korea (25,700 whole cattle hides, including decreases
of 9,700 pieces), Indonesia (5,100 whole cattle hides), and Brazil (4,500 whole cattle hides), were offset by reductions primarily for Canada (600 pieces).  Exports of 321,100 whole cattle hides exports were primarily to China (210,500 pieces), Mexico (37,500
pieces), South Korea (33,700 pieces), Thailand (12,700 pieces), and Brazil (12,400 pieces). 

Net
sales of 88,900 wet blues for 2022 were primarily for Italy (49,400 unsplit, including decreases of 200 unsplit and 200 grain splits), Vietnam (29,500 unsplit), and China (9,900 unsplit, including decreases of 200 unsplit).  Total net sales reductions of 2,000
wet blues for 2023 were for China.  Exports of 166,800 wet blues were primarily to China (54,200 unsplit), Vietnam (45,900 unsplit), Thailand (34,900 unsplit), Italy (23,600 unsplit), and Mexico (2,600 unsplit).  No net sales of splits were reported for the
week.  Exports of 76,600 pounds were to Vietnam (40,000 pounds) and China (36,600 pounds).

Beef: 
Net sales of 13,200 MT for 2022 primarily for Japan (5,300 MT, including decreases of 300 MT), South Korea (2,900 MT, including decreases of 700 MT), Mexico (2,300 MT), Canada (800 MT), and Taiwan (800 MT, including decreases of 100
MT), were offset by reductions for China (300 MT), the Netherlands (100 MT), and Vietnam (100 MT).  Net sales of 1,600 MT for 2023 were primarily for Indonesia (700 MT) and Japan (700 MT).  Exports of 16,500 MT were primarily to Japan (5,400 MT), South
Korea (3,700 MT), China (2,300 MT), Mexico (1,200 MT), and Canada (1,000 MT). 

Pork: 
Net sales of 29,900 MT for 2022 were primarily for Mexico (8,100 MT, including decreases of 200 MT), China (5,900 MT, including decreases of 100 MT), Japan (5,300 MT), South Korea (4,000 MT, including decreases of 200 MT), and the Dominican Republic (1,500
MT).  Exports of 28,500 MT were primarily to Mexico (12,100 MT), China (5,800 MT), Japan (3,500 MT), South Korea (1,800 MT), and Canada (1,500 MT).