FI Morning Grain Comments 10/20//22

PDF attached

 

Good
morning.

 

Private
exporters reported the following sales activity:

-201,000
metric tons of soybeans received in the reporting period for delivery to China during the 2022/2023 marketing year

-132,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

 

UK
PM Liz Truss resigned. USDA export sales were good for soybeans and meal, poor for corn and wheat. Soybean oil sales were status quo. Widespread outside commodity
buying (WTI crude oil up $1.21), lower USD, and crop production decreases to the EU corn crop and Argentina wheat production are sending grain prices higher. Uncertainty over Black Sea shipments is adding to the positive undertone. The US soybean complex is
higher. Oil share is slightly lower from yesterday after a three-day rally to a 4-month high. The 7-day US precipitation outlook shows and improvement in rainfall across the central US.

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 20, 2022

• Argentina’s
  outlook is a little lighter on rainfall today relative to that of Wednesday especially in the central and south
• Most
  crop areas get rain in the coming ten days, but the intensity has been reduced in southern parts of the nation and the latter part of the two week forecast looks dry biased once again
• Australia’s
  rainy weather pattern continues, but there was some reduction in the intensity of rainfall predicted over the next couple of weeks.
  
• This
  change with not very relevant because the bottom line is that rain still falls too frequently to protect crop conditions and quality concerns for early season crops remains high
• Western
  Australia gets some rain for the southern production areas where maturity is still several weeks away which should maintain an excellent outlook for production
• U.S.
  week two weather is a little wetter in Nebraska, northern Kansas, northeastern Colorado and from Illinois and parts of Iowa into the eastern Midwest
  
• This
  increase comes from a late month storm system now on the forecast charts by both the GFS and ECMWF
• Most
  of this occurs Oct. 28-30
• Northern
  U.S. Plains and Manitoba precipitation for Sunday into Tuesday was reduced in the overnight model runs, but a second storm showing up in the early days of November will bring additional moisture to the same region
• Rain
  in the U.S. Midwest and Delta periodically in the next couple of weeks will offer some short term improvement in soil moisture and a limited amount of improved runoff that might raise river water levels over time, but the change should be very slow
  
• Southern
  U.S. Plains weather remains drier biased over the next couple of weeks
• No
  changes noted in Europe, CIS, China South Africa or India
• Tropical
  Cyclone still threatens Bangladesh, northwestern Myanmar and far eastern India early to mid-week next week with flooding rain and windy conditions
• Tropical
  Depression 25W formed east southeast of Taiwan recently and will move across the northern South China Sea this weekend through early next week
  
• Some
  impact might occur to Hainan, China and/or Vietnam, but not until early to mid-week next week
  
• The
  system should become a tropical storm with wind speeds no greater than 60 mph.
  

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Excellent
soybean (2.336MMT) and meal sales (542,300MT), as expected. Soybean oil sales were 9,300 tons but an improvement from previous week. Corn sales were low at 408,300 tons, and well below average for this time of year, in part to US Midwest River logistical concerns
and strong USD. All-wheat was poor at 163,100 tons. Pork sales were good at 40,800 tons.

 

The
soybean export sales of 2.336 million tons for 2022-23 were primarily for China (1,976,200 MT, including 436,000 MT switched from unknown destinations and decreases of213,700 MT). Europe was also active with Netherlands, Spain, UK, and Italy.

 

The
soybean meal sales of 542,300 tons were primarily for the Philippines (190,200 MT, including decreases of 45,000 MT), unknown destinations (88,000MT), Denmark (45,000 MT), Ecuador (40,000 MT), and Canada (39,200 MT).

 

 

 

Macros

UK
PM Liz Truss resigned

US
Initial Jobless Claims Oct 15: 214K (est 232K; prevR 226K)

US
Continuing Claims Oct 8: 1385K (est 1380K; prevR 1364K)

US
Philadelphia Fed Business Outlook Oct: -8.7 (est -5.0; prev -9.9)

 

 

Corn

·        
Corn futures
are higher from outside related markets. WTI crude oil is strong, USD is lower and wheat is lending strength.

·        
Strategie Grains lowered their outlook for the EU corn crop to 50.4 million tons from 52.9 million projected in September and compares to USDA’s official 56.2-million-ton estimate.

·        
IGC lowered their estimate for the world corn crop by 2 million tons to 1.166 billion tons.

·        
The Midwest is expected to see rain later this week
bias western areas Sunday. The 7-day US precipitation outlook shows and improvement in rainfall across the central US. US temperatures will significantly warm up next week bias upper Midwest, ideal for fieldwork progress.

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

·        
US ethanol production was up a large 84,000 barrels to 1.016 million, largest for the week since early August. Traders were looking for a 30,000 barrel increase.  US ethanol stocks decreased 19,000 barrels to 21.844 million. Traders
were looking for an 85,000-barrel increase. 

·        
The weekly USDA Broiler Report showed eggs set in the US up 4 percent and chicks placed up 6 percent. Cumulative placements from the week ending January 8, 2022, through October 15, 2022, for the United States were 7.73 billion.
Cumulative placements were up 1 percent from the same period a year earlier.

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT soybeans are higher following strength in US energy markets, lower USD and higher products. December soybean oil hit its highest level since June 17. Bottom picking in meal is lifting futures higher.

·        
USDA reported soybean sales to China and unknown destinations.

·        
France will send 40,000 tons of rapeseed to the US this week, a rare shipment. We are unsure what prompted the import tender but some sources cite ample EU supplies.

·        
ADM looks for 2022-23 Brazil soybean production at a record 152.4 million tons, a 21 percent increase from the 2021-22 season. USDA is at 152.0 million versus 127.0 for 2021-22.

·        
SGS reported Malaysia October 1-20 palm oil exports at 872,508 tons, a 8.4 percent decrease from the same period month earlier.

·        
Malaysian December palm oil futures decreased 27 Ringgit to 4,055 and cash was down $5.00/ton to $940/ton.

·        
China November soybeans were down 0.9%, meal 1.3% higher, soybean oil 0.1% lower and palm oil 1.6% higher.

·        
Rotterdam vegetable oils were about 10-20 euros higher from this time yesterday morning. SA meal was mixed to lower bias Argentina.

·        
Offshore values this morning were leading soybean oil 114 points lower earlier this morning and meal $2.40 short ton lower.

·        
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.

 

Export
Developments

• USDA
  reported private exporters reported the following sales activity:

-201,000
metric tons of soybeans received in the reporting period for delivery to China during the 2022/2023 marketing year

-132,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

 

Wheat

·        
Wheat is higher in part to technical buying after the front month contracts for the three markets hit multiweek lows earlier this week, a lower USD, and Argentina production concerns.

·        
Uncertainty over Black Sea shipments is adding to the positive undertone.

·        
Argentina’s Rosario grains exchange lowered their Argentina wheat crop to 15 million tons, down from 16 million previous  (23 MMT last year) and compares to USDA’s official is at 17.5 million tons.

·        
Paris December wheat was up 2.50 euros earlier at 338.50 per ton.

·        
Ukraine’s AgMin noted grain exports during the first few weeks of October have returned back to pew-war levels. 2.13 million tons of grain were exported during October 1-17, compared to 2.18 million tons in the same period in
2021.

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

·        
China will auction off 40,200 tons of wheat from state reserves on October 26. They sold 41,359 tons on October 12.

 

Export
Developments.

·        
Saudi Arabia’s SAGO seeks 535,000 tons of wheat for March and April shipment on October 21. It includes 12.5% protein hard milling wheat.

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

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

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

·        
Jordan reopened another import tender for barley set to close October 26.

·        
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 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.

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

 

 

USDA
export sales
highlights

This
summary is based on reports from exporters for the period October 7-13, 2022.

Wheat:
Net sales of 163,100 metric tons (MT) for 2022/2023 primarily for Mexico (93,500 MT, including decreases of 900 MT), Nigeria (36,000 MT), Algeria (31,500 MT), Japan (27,200 MT), and Colombia (18,700 MT, including decreases of 4,300 MT), were offset by reductions
primarily for Italy (60,000 MT), Panama (20,100 MT), and unknown destinations (10,500 MT).  Total net sales of 22,000 MT for 2023/2024 were for Panama.  Exports of 242,600 MT were primarily to Japan (61,600 MT), South Korea (36,300 MT), Ecuador (33,000 MT),
Honduras (27,500 MT), and Panama (27,300 MT). 

Corn: 
Net sales of 408,300 MT for 2022/2023 primarily for Mexico (183,700 MT, including decreases of 32,900 MT), Japan (77,600 MT, including 37,000 MT switched from unknown destinations), Honduras (47,900 MT, including 7,500 MT switched from Guatemala and decreases
of 17,100 MT), Colombia (30,000 MT), and Panama (22,700 MT), were offset by reductions for Guatemala (7,000 MT).  Exports of 407,200 MT were primarily to Mexico (163,300 MT), China (71,400 MT), Honduras (49,000 MT), Japan (37,000 MT), and Saudi Arabia (30,700
MT). 

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

Sorghum: 
Net sales of 11,900 MT for 2022/2023 reported for unknown destinations (10,700 MT) and Mexico (1,600 MT), were offset by reductions for China (400 MT).  Exports of 5,700 MT were to Mexico.

Rice:
 Net
sales of 11,200 MT for 2022/2023 were primarily for Colombia (10,400 MT), Canada (400 MT, including decreases of 200 MT), Mexico (200 MT), the Netherlands (100 MT), and Micronesia (100 MT).  Exports of 7,100 MT were primarily to Canada (2,400 MT), Mexico (1,900
MT), Jordan (1,000 MT), the United Kingdom (900 MT), and Saudi Arabia (500 MT).

Soybeans: 
Net sales of 2,335,600 MT for 2022/2023 primarily for China (1,976,200 MT, including 436,000 MT switched from unknown destinations and decreases of 213,700 MT), the Netherlands (82,800 MT, including 77,000 MT switched from unknown destinations and decreases
of 200 MT), Spain (58,800 MT switched from the United Kingdom), Italy (57,200 MT, including 57,000 MT switched from unknown destinations), and Algeria (43,400 MT, including decreases of 1,600 MT), were offset by reductions primarily for the United Kingdom
(60,000 MT).  Exports of 1,896,800 MT were primarily to China (1,400,700 MT), Mexico (97,800 MT), the Netherlands (82,800 MT), Spain (58,800 MT), and Italy (57,200 MT). 

Optional
Origin Sales:
For 2022/2023, 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.

Export
Adjustment:
Accumulated exports of soybeans to unknown destinations were adjusted down 43,417 MT for week ending September 29^th.  The correct destination for this shipment is Algeria.

Soybean
Cake and Meal: 
Net sales of 542,300 MT for 2022/2023 primarily for the Philippines (190,200 MT, including decreases of 45,000 MT), unknown destinations (88,000 MT), Denmark (45,000 MT), Ecuador (40,000 MT), and Canada (39,200 MT, including decreases of 400 MT), were offset
by reductions for Belgium (1,400 MT) and Japan (100 MT).  Exports of 161,000 MT were primarily to the Philippines (47,500 MT), Ireland (22,300 MT), Mexico (17,900 MT), Panama (17,500 MT), and Canada (15,600 MT).

Soybean
Oil: 
Net sales of 9,300 MT for 2022/2023 were for Canada, including decreases of 600 MT.  Total net sales of 400 MT for 2023/2024 were for Canada.  Exports of 2,300 MT were primarily to Canada (1,700 MT) and Mexico (400 MT).

Cotton: 
Net
sales of 84,500 RB for 2022/2023 primarily for Pakistan (27,600 RB), Egypt (22,000 RB), China (10,100 RB), Mexico (6,900 RB), and El Salvador (5,300 RB), were offset by reductions for Indonesia (2,500 RB) and Costa Rica (300 RB).  Net sales of 4,400 RB for
2023/2024 were reported for Portugal (2,200 RB) and Pakistan (2,200 RB).  Exports of 165,700 RB were primarily to China (71,700 RB), Pakistan (24,800 RB), Turkey (19,200 RB), Mexico (14,600 RB), and Vietnam (9,000 RB).  Net sales of Pima totaling 100 RB resulted
in increases for China (100 RB) and Japan (100 RB), were offset by reductions for the United Kingdom (100 RB).  Exports of 400 RB were to Turkey.

Optional
Origin Sales:
For 2022/2023, the current outstanding balance of 9,300 RB is for Malaysia.

Export
for Own Account:
For 2022/2023, 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 920,400 pieces for 2022 primarily for China (395,200 whole cattle hides, including decreases of 33,200 pieces), Mexico (362,100 whole cattle hides, including decreases of 5,200 pieces and 297,400 whole cattle hides – late), South Korea (51,200
whole cattle hides, including decreases of 7,600 pieces), Thailand (27,500 whole cattle hides, including decreases of 2,100 pieces), and Turkey (23,600 whole cattle hides, including decreases of 100 pieces), were offset by reductions for Italy (100 pieces)
and Germany (100 pieces).  Total net sales of 3,300 calf skins were for Italy, including decreases of 1,400 calf skins.  In addition, net sales of 3,500 kip skins reported for Belgium (2,900 kip skins) and Canada (1,300 kip skins, including decreases of 1,600
kip skins), were offset by reductions for Italy (400 kip skins) and China (300 kip skins).  Exports of 472,900 whole cattle hides exports were primarily to China (288,400 pieces), Mexico (44,700 pieces), South Korea (36,500 pieces), Thailand (32,100 pieces),
and Brazil (25,100 pieces).  Exports of 1,800 calf skins were to Italy.  In addition, exports of 3,100 kip skins were to China (1,800 kip skins) and Canada (1,300 kip skins).

Net
sales of 174,200 wet blues for 2022 were primarily for Italy (102,800 unsplit and 100 grain splits, including decreases of 2,100 unsplit), Thailand (35,600 unsplit), Vietnam (9,500 unsplit), China (7,900 unsplit), and the Dominican Republic (7,200 unsplit,
including decreases of 800 unsplit).  Net sales reductions of 500 wet blues for 2023 primarily for the Dominican Republic (800 unsplit), were more than offset by reductions for Mexico (2,000 unsplit).  Exports of 116,200 wet blues were primarily to Italy (23,600
unsplit and 4,400 grain splits), Thailand (25,000 unsplit), China (23,600 unsplit), Vietnam (16,000 unsplit), and Taiwan (11,000 unsplit).  Net sales of 396,700 splits were reported for Vietnam (352,700 pounds) and China (44,000 pounds).  Exports of 42,300
pounds were to Vietnam.

Late
Reporting:
For 2022, net sales totaling 297,400 pieces of whole cattle hides were reported late for Mexico.

Beef: 
Net sales of 16,600 MT for 2022 primarily for South Korea (7,100 MT, including decreases of 600 MT), Japan (3,600 MT, including decreases of 300 MT), China (2,000 MT, including decreases of 100 MT), Mexico (1,600 MT, including decreases of 100 MT), and Canada
(800 MT, including decreases of 100 MT), were offset by reductions for Colombia (100 MT).  Net sales of 2,800 MT for 2023 were primarily for Japan (1,600 MT).  Exports of 17,600 MT were primarily to South Korea (4,400 MT), Japan
(4,000 MT), China (3,900 MT), Mexico (1,400 MT), and Canada (1,000 MT). 

Pork: 
Net sales of 40,800 MT for 2022 were primarily for Mexico (14,800 MT, including decreases of 300 MT), Japan (11,000 MT, including decreases of 200 MT), Australia (3,500 MT), Canada (3,100 MT, including decreases of 400 MT), and China (3,000 MT, including decreases
of 100 MT).  Exports of 28,400 MT were primarily to Mexico (13,700 MT), China (4,100 MT), Canada (2,100 MT), Japan (2,100 MT), and South Korea (2,000 MT).

 

U.S.
EXPORT SALES FOR WEEK ENDING  10/13/2022

 

	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
	THOUSAND METRIC TONS
WHEAT
HRW	58.0	703.7	1,640.9	79.0	2,496.2	3,167.2	4.6	6.3
SRW	13.6	454.1	639.2	79.2	1,627.6	1,207.4	6.6	6.6
HRS	105.7	908.7	1,000.9	61.0	2,418.0	2,336.8	10.8	10.8
WHITE	14.3	601.7	642.8	23.4	1,940.9	1,598.8	0.0	0.3
DURUM	-28.5	61.8	42.4	0.0	77.5	61.4	0.0	0.0
TOTAL	163.1	2,730.0	3,966.2	242.6	8,560.2	8,371.7	22.0	24.0
BARLEY	0.0	11.6	23.7	0.0	3.9	6.4	0.0	0.0
CORN	408.3	10,754.6	24,437.8	407.2	3,076.6	4,456.4	0.0	311.0
SORGHUM	11.9	277.3	2,355.2	5.7	33.4	263.6	0.0	0.0
SOYBEANS	2,335.6	25,950.9	23,431.6	1,896.8	4,573.1	5,638.5	0.0	0.0
SOY MEAL	542.3	3,358.8	3,777.0	161.0	271.9	517.8	0.0	1.4
SOY OIL	9.3	26.8	99.5	2.3	2.5	8.5	0.4	0.6
RICE
L G RGH	10.4	73.0	285.7	0.2	73.3	238.1	0.0	0.0
M S RGH	0.0	12.2	7.3	1.3	5.9	1.9	0.0	0.0
L G BRN	0.0	5.9	9.1	0.3	3.7	15.5	0.0	0.0
M&S BR	0.0	5.3	54.3	0.0	2.2	14.2	0.0	0.0
L G MLD	0.0	97.5	77.4	3.6	138.3	204.3	0.0	0.0
M S MLD	0.8	35.3	69.6	1.6	70.6	75.4	0.0	0.0
TOTAL	11.2	229.2	503.3	7.1	294.1	549.4	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	84.5	6,000.6	6,155.7	165.7	2,369.3	1,853.2	4.4	1,082.9
PIMA	0.1	84.9	184.7	0.4	18.6	74.4	0.0	0.9