FI Morning Grain Comments 10/26/22

PDF attached

 

Good
morning.

 

USD
is 53 points lower, WI crude up $1.34 and equities pointing towards a mostly lower open. CBOT soybeans are up on follow through buying by the investment funds. SA product fob premiums were higher yesterday and that is providing some support to US soybean oil
and meal. Corn prices turned lower despite a sharply lower USD. A Bloomberg poll looks for weekly US ethanol production to be up 1,000 thousand to 1017k (980-1034 range) from the previous week and stocks up 43,000 barrels to 21.887 million. US wheat futures
are near a one-month low, after recent rains fell across parts of the US Great Plains. More precipitation is needed.

 

The
US weather forecast was largely unchanged this morning. After rain falls across the northeastern areas today, the Midwest will dry down Thursday through Saturday. The southern, central, and eastern areas will see rain Sunday. The US Great Plains will see additional
rain today then again Sat-Sun. Brazil will see rain across the northern areas today, then southern and central areas Thursday through Sunday. Argentina will see rain today, then again Saturday (erratic showers). 

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 26, 2022

• A
  few areas of cool weather are being monitored in today’s forecasts
• Temperatures
  will get a little chilly in southwestern Western Australia early Sunday and Monday of next week when a little frost might occur
• Winter
  crops are not expected to be seriously harmed, but if temperatures get colder than advertised it might be a different scenario
• Argentina
  will be vulnerable to frost and freezes in central and southern parts of the nation Sunday and Monday, as well, and central parts of the nation will need to be closely monitored for possible damage to winter and some early season summer crops
  
• Significant
  rain fell in Argentina Tuesday and early today bolstering soil moisture for improved winter crop conditions and to support better planting, emergence and establishment conditions for early corn and sunseed
• Rain
  totals varied from 0.50 to 1.25 inches most often with local totals getting up to 1.92 inches in
  
• Brazil
  weather is still expected to be mixed over the next two weeks, but some of the rain will be lighter than usual in center west and center south as well as the northeast
• Rain
  amounts have decreased in recent model runs for parts of the region
• The
  driest weather recently has been from eastern Mato Grosso do Bahia, Tocantins and Minas Gerais
• These
  areas will get rain, but amounts will be light
• Rain
  from northern Arkansas to western Michigan and southeastern Wisconsin Tuesday and early today was welcome and improved runoff for the middle Mississippi River that may work its way downstream over time.
  
• The
  past two days of rain in Missouri, eastern Iowa and Illinois was very helpful in bringing moisture to the soil and improving runoff
• Rain
  Friday in northern and eastern Texas will move to the Delta this weekend bringing a few rain totals over 1.00 inch to that region and that, too, may help improve river levels briefly
• The
  next U.S. storm system of size would hold off until late next week or early in the following weekend and it will favor the upper and central portions of the Midwest
• Europe’s
  weather looks a little wetter today in the second week of the outlook favoring a return of moisture after this first week’s dry biased conditions
• No
  changes were noted overnight in the CIS, India or China
• Some
  heavy rain fell in southern parts of Luzon Island, Philippines Tuesday
• A
  developing tropical cyclone east of the Philippines may bring significant rain to Samar and Luzon Islands Friday through Sunday
• The
  European model takes the cyclone across those areas while the GFS keeps the storm east of the nation
• Australia’s
  rainfall bias in the next ten days is less frequent and less intensive for eastern parts of the nation, but brief bouts of rain are still likely

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Wednesday,
Oct. 26:

• Asia-Pacific
  Agri-Food Innovation Summit, Singapore, day 1
• EIA
  weekly US ethanol inventories, production, 10:30am
• EARNINGS:
  Bunge, Pilgrim’s Pride
• HOLIDAY:
  India

Thursday,
Oct. 27:

• Asia-Pacific
  Agri-Food Innovation Summit, Singapore, day 2
• Virtual
  New Food Invest Conference, EMEA
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am

Friday,
Oct. 28:

• Asia-Pacific
  Agri-Food Innovation Summit, Singapore, day 3
• FranceAgriMer
  weekly update on crop conditions
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for
• various
  US futures and options, 3:30pm

Source:
Bloomberg and FI

 

Registration
changes

 

 

 

Macros

US
Wholesale Inventories (M/M) Sep P: 0.8% (est 1.0%; prev 1.3%)

US
Retail Inventories (M/M) Sep: 0.4% (est 1.2%; prev 1.4%)

US
Advanced Goods Trade Balance Sep: -$92.2B (est -$87.5B; prev -$87.3B)

 

 

Corn

·        
Corn prices turned lower despite a lower USD. Gains earlier were limited from US river shipment disruptions, slow US exports and harvesting pressure.

·        
Some rain in the US Midwest over the next seven days may help water levels but much more is needed to free up the hundreds of stranded barges.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 1,000 thousand to 1017k (980-1034 range) from the previous week and stocks up 43,000 barrels to 21.887 million.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
CBOT soybeans
are up on follow through buying by the investment funds. We see little fundamental reason for the rally in the complex today other than the US is nearing completion of the US harvest and USD is lower. However, SA product fob premiums were higher yesterday
and that is providing some support to US soybean oil and meal. Argentina 47% soybean meal rose to $507/ton from $494 per ton from Monday. China’s currency was up sharply overnight after banks reportedly sold US dollars. Buying US soybeans could be a good way
to release US dollars, IMO.

·        
Indonesia is testing out B40 with domestic vehicles.

·        
Cargo surveyor SGS reported month to date October 25 Malaysian palm exports at 1,146,113 tons, 6,499 tons below the same period a month ago or down 0.6%, and 59,642 tons below the same period a year ago or down 4.9%.

·        
Malaysia January palm oil futures decreased 6 Ringgit to 4,121 and cash was down $5.00/ton to $937.50/ton.

·        
China November soybeans were down 0.2%, meal 1.0% higher, soybean oil 0.1% higher and palm oil 0.5% higher.

·        
Rotterdam vegetable oils were mixed (SBO 10 higher and RSO 5 lower) from this time yesterday morning. SA meal 2.50-6.00 euros higher.

·        
Offshore values this morning were leading soybean oil 56 points higher earlier this morning and meal $1.70 short ton higher.

·        
EU 2022-23 soybean imports from July 1 through October 23 were 3.50 million tons vs. year-earlier of 3.92 million. Rapeseed imports stood at 2.21 million tons, up from 1.52 million tons year ago and soybean meal imports were 4.94
million tons versus 5.17 million tons year earlier. EU sunflower oil imports were 520,152 tons, up from 474,615 tons year ago. EU 2022-23 palm oil imports were at 1.08 million tons by oct. 23 compared to 1.83 million year ago.

 

Export
Developments

• Results
  are awaited on Egypt seeking vegetable oils for Dec 10-30 arrival, and some local vegetable oils. They are looking for 180-day letters of credit. Lowest offer was $1,425 per ton c&f for 6,000 tons of sunflower oil, and $1,600 per ton c&f for 14,000 tons of
  soybean oil.

 

 

Wheat

·        
US wheat futures are starting to stabilize after trending lower, to over a one-month low, over the last two weeks, but don’t discount additional selling after recent rains fell across parts of the US Great Plains. More precipitation
is needed for wheat establishment before winter dormancy. Last week some producers were planting in the dust. A lower USD may provide some support today.

·        
Oct 24-25 precipitation below…

·        
Paris December wheat was down 0.75 euro earlier at 336.50 euros a ton.

·        
The USDA Attaché sees the Argentina wheat crop at 15.5 million tons, 2 million below USDA official. Exports are seen at 10 million tons.

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Buenos%20Aires_Argentina_AR2022-0019

·        
Seven ships recently left Ukraine for the EU and China, estimated at a combined 220,000 tons. It includes 30,000 tons of rapeseed for the EU and 50,000 tons of corn for the Netherlands.

·        
EU 2022-23 soft wheat exports from July 1 through October 23 were at 11.15 million tons versus 10.96 million tons year ago. Barley exports were 2.37 million tons  vs 4.01 million tons and corn imports were 9.04 million tons compared
to 4.26 million tons year ago.

 

Export
Developments.

·        
Algeria started buying wheat and results should be out later today. Initial volume was 80,000 tons c&f and price at $381/ton. They are in for November 16-December 31 shipment.

·        
Lowest price for Pakistan seeking 500,000 tons of wheat was $373.00/ton c&f for Nov 13-Jan 10 shipment. 

·        
South Korea four millers seek 128,000 tons of wheat from the US, Australia and/or Canada on Thursday, for LH half Jan through Feb shipment.

·        
Jordan saw 4 offers for up to 120,000 tons of barley but ended up passing.

·        
Jordan is back in for 120,000 tons of barley on November 2 for March/April shipment.

·        
Taiwan seeks 38,515 tons of US wheat of various classes on Thursday for Dec 14-Dec 25 shipment out of the PNW.

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

·        
Iraq seeks 50,000 tons of wheat on October 30, nearly one week later than their original close date.

·        
Jordan seeks 120,000 tons of hard milling wheat on November 1 for March/April shipment.

 

Rice/Other

·        
Vietnam Jan-Oct rice exports may reach 6.07 million tons, up 17.2 percent from year earlier.

·        
Results are awaited on Egypt seeking 50,000 tons of sugar, optional origin, on October 29 (not 25) for arrival between Dec 1-31.