FI Morning Grain Comments 10/18/22

PDF attached

 

Good
morning.

 

US
harvest pressure, softening US river barge freight rates, and optimistic talks between Russian and UN officials over the safe passage agreement are sending US agriculture futures lower. Light talk about slowing US soybean demand is also weighing on prices.
Both US domestic crush and soybean exports declined last month into early October but are expected to rebound last half October. US equities are strong.

 

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 18, 2022

• Argentina’s
  outlook is wetter today relative to that of earlier this week
• A
  more active weather pattern is slated for the nation with showers Wednesday and Thursday, again during the weekend and periodically next week
  
• The
  changes would be a big boon to wheat development and the planting of early corn and sunseed
• Brazil’s
  forecast is still favorably mixed for fieldwork and early season crop development
• Better
  harvest weather has evolved in a part of wheat country
• Wheat
  harvest as of Oct 15 was 30.6% done versus 38.3% done last year with 50% harvested in Parana, 80% in Sao Paulo and 3% in Rio Grande do Sul, according to CONAB
• Corn
  planting was 30.9% complete compared to 32.1% last year, according to CONAB
  
• Soybeans
  as of Oct. 15 were 21.5% planted compared to 23.7% last year with Mato Grosso 41.9% done, according to CONAB
• Rice
  planting was 22.3% done compared to 24.8% last year, according to CONAB
• Upper
  portions of the Yangtze River Basin is advertised to get rain next week; this includes Sichuan, Hubei and northern Hunan
• The
  moisture is needed to improve conditions for winter rapeseed planting
• Lower
  parts of the basin are left with a minimal amount of moisture
• India’s
  rain will be greatest in the south over the next ten days; however, a tropical cyclone is still expected to evolve in the Bay of Bengal this weekend that could make landfall along the upper east coast next week
• Bangladesh
  could be impacted as well
• Eastern
  Australia is still advertised to receive waves of rain over the next ten days resulting in continued excessive soil moisture, delays to spring and summer crop planting and threatening the quality of wheat, barley and canola
• Western
  Australia rainfall will be restricted, but crop conditions should remain favorable
• South
  Africa will see waves of rain over the next ten days to two weeks bolstering soil moisture for summer crop planting which should be getting under way
• Europe
  will see waves of rain impacting the west and northern parts of the continent leaving the southeast dry biased; the lower Danube River Basin remains in drought
• Western
  Russia and parts of Ukraine are wet and a small portion of winter crops might not have been planted in Russia
• Planting,
  emergence and establishment in Russia’s southern region should be advancing normally
  
• Canada’s
  Prairies have potential for rain and snow this weekend and early next week mostly in the central and north
• U.S.
  Pacific Northwest precipitation should increase late this week into next week, but the Yakima Valley and parts of Oregon will only receive brief showers
  
• U.S.
  hard red winter wheat areas will continue dry biased over the next ten days
• Some
  rain in the U.S. Delta next week may help raise river water levels briefly on the lower Mississippi River, but confidence in the event is low
• GFS
  model continues to advertise too much moisture from north-central Texas to Illinois next week
  
• U.S.
  Midwest weather is expected to become more active later next week and into the following weekend

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

Macros

 

Corn

·        
Corn futures
are lower after USDA reported a favorable US harvest progress of 45 percent, a 14 point increase from the previous week. 

·        
The Midwest is expected to see rain later this week, improving river drafts but don’t expect a large amount of corn to reach the Gulf in a hurry. Inspections were good for soybeans yesterday but slow for corn. It may take a few
weeks to sort this out. Some
river points, one in KY, closed this week.

 

Export
developments.

·        
None reported

 

Soybeans

·        
Favorable US weather is advancing the corn and soybean harvest and we see this lasting well into the weekend for the majority of the Midwest.

·        
Soybean oil spreads are active with talk of rising demand for the use of soybean oil for biofuel. EIA is expected to report strong SBO use for biofuel when they close out the old crop reporting season.

·        
Soybean meal is following weakness in soybeans after USDA reported 63 percent of the US soybean crop harvested and nearly all of the soybean crop is dropping leaves. We caution the trade over yields bias ECB and look for a national
decline for the November report. Field reports widely vary. WBC is in better shape.

·        
Safras: Brazil plantings for soybeans 19.1% as of October 14 vs. 9.7% week earlier and 21% year ago.

·        
SGS reported Malaysian palm oil exports for the October 1-15 period at 640,119 tons, a 0.9% decrease from 646,070 tons Sep 1-15.

·        
Malaysian December palm oil futures increased 130 Ringgit to 3,984 and cash was up $35/ton to $927.50/ton.

·        
China November soybeans were down 0.1%, meal 2.5% lower, soybean oil 1.0% lower and palm oil 0.9% higher.

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

·        
Offshore values this morning were leading soybean oil 129 points lower earlier this morning and meal $4.60 short ton lower.

 

Export
Developments

• None
  reported

 

Wheat

·        
US wheat is lower from optimistic views that Russia will extend the safe passage agreement. Outside markets appear to have little influence on US wheat futures. News is light other than routine export business developments.

·        
The USD is lower and WTI crude oil lower.

·        
Paris December wheat was off 4.25 euros at 342.00 per ton.

 

Export
Developments.

·        
Jordan seeks 120,000 tons of wheat on October 25 after buying 60,000 tons this week at $374/ton c&f for FH March shipment. 

·        
Turkey seeks 495,000 tons of wheat on October 21 for November through FH December shipment.

·        
Japan seeks 97,482 tons of food wheat from the US, Canada, and Australia later this week for arrival by Jan 31.

·        
Iraq is in for 50,000 tons of wheat on October 24, valid until October 27.

·        
South Korean millers bought 77,000 tons of wheat at various prices depending on quality for Dec 16-Jan 15, 2023, shipment.

·        
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.