FI Morning Grain Comments 10/19/22

PDF attached

 

Good
morning.

 

Wheat
is higher this morning from technical buying after hitting a 4-week low yesterday despite a stronger USD. Russia plans to have a 25.5 million ton grain export quota for February 15-June 30. This is common for Russia to impose a late season quota, and 25.5
million tons if a large quantity. WTI crude oil is higher and equities lower. Soybeans and corn are lower from good US harvesting pressure. Logistical problems along the Mississippi River continue to hamper grain shipments. Argentina has a chance for erratic
rains over the next week which should improve planting progress. Palm oil traded near a 7-week high. Several wheat and barley tender announcements were posted overnight. A Bloomberg poll looks for weekly US ethanol production to be up 30,000 thousand to 962k
(940-986 range) from the previous week and stocks up 85,000 barrels to 21.948 million. Look for a quiet trade.

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 19, 2022

• Australia’s
  wet biased weather will continue over the next ten days to two weeks with frequent weather systems inducing waves of rain
• Flooding
  is already an issue on many rivers and streams in New South Wales and in a few neighboring areas of Queensland and Victoria and this will continue through the end of this month
• Grain
  and oilseed quality declines are expected with some reduced production potential possible if drier weather does not occur soon
• Delays
  to sorghum and cotton planting have occurred and may continue
• Argentina
  is still expecting significant rain to fall next week from two large waves of energy coming through the nation
• Until
  next week a few showers will occur today into Thursday and again Friday into Saturday, although resulting rainfall will be light
• The
  greatest rain will occur next week
• Weather
  systems in the eastern United States will attempt to bring some rain into the Midwest and Delta periodically, but the runoff is not likely to be enough to sustain a raise in river levels, although some minor fluctuations will continue
• U.S.
  hard red winter wheat areas will continue dry – at least in the western half of the region with any showers in the east producing restricted amounts of rain
• A
  late weekend storm in the northeastern U.S. Plains and eastern Canada’s Prairies may bring some moisture to crop areas from North Dakota to Manitoba and a part of Minnesota
• The
  system will be closely monitored for a possible significant snow event in a part of the region late Sunday into Tuesday
  
• Some
  moisture may impact the U.S. Pacific Northwest this weekend and again later next week, but resulting rainfall will be greatest in the mountains leaving the Yakima Valley and central Oregon waiting for greater rain
• U.S.
  Midwest harvest weather will be mostly good with only brief periods of light rain expected
• Frost
  and freezes this morning have reached deeply into the Delta and Alabama ending the growing season for many areas a few weeks earlier than usual
• Some
  crop damage is suspected, but the impact should be mostly a quality one for soybeans and peanuts
• Cotton
  defoliation will help expedite harvesting later this month and in November
• Western
  and northern Europe are still advertised to get needed rain
• Eastern
  China remains dry biased for the next ten days
• India’s
  upper east coast, Bangladesh and northwestern Myanmar will be vulnerable to a tropical cyclone next week, although it looks weaker today
  
• South
  Africa is still expecting some welcome rain over the next ten days supporting planting progress

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

US
MBA Mortgage Applications Oct 14: -4.5% (prev -2.0%)

US
MBA 30-Yr Mortgage Rate Oct 14: 6.94% (prev 6.81%)

US
Housing Starts Sep: 1439K (est 1461K; prev 1575K)

US
Housing Starts (M/M) Sep: -8.1% (est -7.2%; prev 12.2%)

US
Building Permits Sep: 1564K (est 1530K; prevR 1542K)

US
Building Permits (M/M) Sep: 1.4% (est -0.8%; prevR -8.5%)

Canadian
CPI (Y/Y) Sep: 6.9% (est 6.7%; prev 7.0%)

Canadian
CPI NSA (M/M) Sep: 0.1% (est -0.1%; prev -0.3%)

Canadian
CPI Core – Common (Y/Y) Sep: 6.0% (est 5.6%; prevR 6.0%)

Canadian
CPI Core – Median (Y/Y) Sep: 4.7% (est 4.8%; prevR 4.7%)

Canadian
CPI Core – Trim (Y/Y) Sep: 5.2% (est 5.1%; prev 5.2%)

 

 

Corn

·        
Corn futures
are lower from US harvest pressure and improving SA weather. US export developments have been very light over the past week. We look for USDA export sales to be slow when updated Thursday. Our range is 250-550k, versus 200,200 tons for 2022-23 previous week.

·        
The Midwest is expected to see rain later this week
bias western areas Sunday. Some northeastern areas will see a wintery mix today.

·        
China plans to sell 20,000 tons of pork from reserves on October 21.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 30,000 thousand to 962k (940-986 range) from the previous week and stocks up 85,000 barrels to 21.948 million.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
Soybeans are lower from US harvesting pressure. Cold temperatures is speeding up the harvest. Soybean oil is gaining again on meal. December oil share is at around 46.21%, highest since June. Palm oil traded near a 7-week high.

·        
Logistical problems along the Mississippi River continue to hamper grain shipments.

·        
Argentina will see much needed rain, although erratic, over the next week. Plantings are expected to increase but more rain will be needed to end the drought.

·        
Malaysian December palm oil futures increased 98 Ringgit to 4,082 and cash was up $17/ton to $945/ton.

·        
China November soybeans were up 0.6%, meal 2.0% lower, soybean oil 0.6% higher and palm oil 3.0% higher.

·        
Rotterdam vegetable oils were about 5-20 euros higher from this time yesterday morning. SA meal was 7-10 euros lower.

·        
Offshore values this morning were leading soybean oil 134 points lower earlier this morning and meal $2.20 short ton lower.

 

Export
Developments

• None
  reported

 

 

 

Wheat

·        
Wheat is higher this morning from technical buying after hitting a 4-week low yesterday despite a stronger USD.

·        
The US Great Plains will see net drying through Saturday. NE, northern CO and eastern Kansas will see rain Sunday.

·        
Russia plans to have a 25.5 million ton grain export quota for February 15-June 30. This is common for Russia to impose a late season quota, and 25.5 million tons if a large quantity.

·        
Tunisia Jan-Sep 2022 grain imports are up 45.5% to $1.0 billion USD, in large part to higher wheat prices.

·        
Paris December wheat was up 5.00 euros at 339.75 per ton.

 

Export
Developments.

·        
Pakistan seeks 500,000 tons of wheat on October 26.

·        
South Korea’s NOFI group passed on 95,000 tons of feed wheat. Lowest offer was $353.75/ton c&f for April arrival.

·        
South Korea’s NOFI group bought about 30,000 tons of barley at $332.25/ton for arrival around December 20.

·        
Jordan passed on 120,000 tons of barley. They reopened another import tender set to close October 26.

·        
Japan in a SBS import tender saw no offers for feed wheat and barley for arrival by February 24.

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

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

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

·        
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. 

·        
Mauritius seeks 25,800 tons of wheat flour, optional origin, on October 28 for January through September 30, 2023, shipment.

 

Rice/Other

·        
Results awaited: 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.

·        
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.

·        
Mauritius seeks 6,000 tons of rice on October 20, optional origin, for Jan-Mar shipment.