FI Morning Grain Comments 10/28/22

PDF attached

 

Good
morning.

 

Private
exporters reported the following sales activity:

-126,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

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

 

USD
was up 4 points, WTI crude oil $1.09 lower and US equities mixed. US Feds meet mid next week and may increase rates by 75 points. CBOT futures are mostly lower from positioning ahead of the weekend and mixed news. Offshore values this morning were leading
soybean oil 57 points lower (181 lower for the week to date) earlier this morning and meal $7.30 short ton lower ($0.70 lower for the week).

 

 

 

Weather

The
southern Great Plains have an opportunity for rain today through Saturday before returning Tuesday. Parts of the US Midwest southwestern, central and southern areas will see rain sometime through Sunday. Argentina’s BA, eastern Santa Fe and Entre Rios will
see rain this weekend before turning drier next week. Brazil’s central and northern growing areas will continue to get rain for the balance of this week. Temperatures in Argentina and Brazil will fall early next week bringing potential frosts to some of the
growing areas.

 

 

Past
seven days

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 28, 2022

• Argentina
  is still expected to experience frost and freeze conditions Monday and Tuesday that may damage some winter and early summer crops
• Argentina
  rainfall will be very limited after showers occur in the east this weekend ahead of the big cold surge
• Western
  Australia could see some frosty temperatures in the south Sunday and Monday, but no damaging cold is expected
• Australia’s
  greatest rain will fall in southern parts of the nation during the next couple of weeks with Victoria wettest along with a few southeastern South Australia locations and a few in southern New South Wales
• Some
  net drying is anticipated for early harvest areas in Queensland and northern New South Wales
• Warming
  temperatures in these same areas should lead to eventual better planting conditions for sorghum and cotton
• U.S.
  weather will be relatively tranquil in this first week of the outlook, though rain falling in Oklahoma and northern Texas today will move through the Delta and Tennessee River Basin this weekend
• Some
  of this rain will also reach the lower Ohio River Valley.
• Rainfall
  of 0.30 to 1.50 inches is expected from the Delta to the lower Ohio River Valley with a few greater amounts
• North-central
  Texas and south-central Oklahoma will be wettest with another 0.50 to 1.50 inches falling on top to totals to 1.39 inches so far today
• Most
  of the northern and central Plains and northern and western Midwest will be dry for a week and then a more active weather pattern is expected
• Western
  U.S. hard red winter wheat areas will get a restricted amount of rainfall during the next week with the exception of southern Oklahoma and north-central Texas
• U.S.
  central and eastern U.S. weather will become more active Nov. 3-10 with moisture likely in the northern Plains and upper Midwest early in that period and then from the southeastern Plains into the Ohio River Valley in the latter part of that 7-day period
• No
  serious changes in weather were noted today for Europe, CIS, China or India
• Some
  rain will impact China’s Yangtze River Basin, but it will stay light and much greater amounts will be needed to ease dry
• China’s
  most meaningful rainfall in the Yangtze River Basin will not fall for about ten days leaving concern about rapeseed planting and establishment
• Europe’s
  drying trend is not a huge problem after rain fell earlier this month, but drought remains in the lower Danube River Basin, eastern Spain and southwestern France
• Many
  river levels are still low across the continent, despite recent precipitation

Source:
World Weather INC

 

 

Bloomberg
Ag Calendar

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

Monday,
Oct. 31:

• Malaysia’s
  Oct. 1-31 palm oil export data

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Agricultural
  prices paid, received, 3pm
• US
  crop conditions and harvesting for corn, cotton, soy; winter wheat planting, 4pm
• HOLIDAY:
  Chile

Tuesday,
Nov. 1:

• Australia
  commodity index
• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• Purdue
  Agriculture Sentiment. 9:30am
• USDA
  soybean crush, DDGS production, corn for ethanol, 3pm
• US
  winter wheat condition, 4pm
• Honduras,
  Costa Rica monthly coffee exports
• International
  Cotton Advisory Committee releases monthly outlook
• HOLIDAY:
  France, Chile

Wednesday,
Nov. 2:

• Indonesian
  Palm Oil Conference in Bali, day 1

• EIA
  weekly US ethanol inventories, production, 10:30am
• HOLIDAY:
  Brazil

Thursday,
Nov. 3:

• Indonesian
  Palm Oil Conference in Bali, day 2

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• HOLIDAY:
  Japan

Friday,
Nov. 4:

• Indonesian
  Palm Oil Conference in Bali, day 3

• FAO
  World Food Price Index
• 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

 

 

 

 

 

 

Macros

US
Personal Income Sep: 0.4% (est 0.4%; prev 0.3%)

US
Personal Spending Sep: 0.6% (est 0.4%; prev 0.4%)

US
Real Personal Spending Sep: 0.3% (est 0.2%; prev 0.1%)

US
Employment Cost Index Q3: 1.2% (est 1.2%; prev 1.3%)

US
PCE Deflator (M/M) Aug: 0.3% (est 0.3%; prev 0.3%)

US
PCE Deflator (Y/Y) Aug: 6.2% (est 6.3%; prev 6.2%)

US
Core PCE Deflator (M/M) Aug: 0.5% (est 0.5%; prevR 0.5%)

US
Core PCE Deflator (Y/Y) Aug: 5.1% (est 5.2%; prev 4.9%)

Canadian
GDP (M/M) Aug: 0.1% (est 0.0%; prev 0.1%)

Canadian
GDP (Y/Y) Aug: 4.0% (est 3.7%; prevR 4.4%)

 

Corn

·        
Corn prices are lower on selling in outside markets and lower wheat. SK bought 134,000 tons of corn from either South America or South Africa.

·        
Yesterday a Reuters article said Mexico still plans to ban genetically engineered corn by 2024, potentially halving US imports of yellow corn when the ban goes into effect. Mexico is US’s largest customer.

·        
Temperatures in Argentina and Brazil will fall next week bringing potential frosts to some of the growing areas. Commodity weather group warned Brazil’s Rio Grande do Sul and Santa Catarina states, along with Argentina could see
risks for emerged corn and wheat.

 

 

 

Export
developments.

·        
South Korea’s Major Feedmill Group (MFG) bought an estimated 134,000 tons of corn sourced from South America or South Africa for arrival in South Korea in February 2023. One consignment of 68,000 tons was bought at $329.98 a ton
c&f and another 66,000 tons at $330.99 a ton c&f.

 

Soybeans

·        
CBOT
soybean complex is mostly lower. Meal is hanging in there with good US exports off the PNW and South Korea buying 120,000 tons of meal overnight. SBO is lower from weakness in palm oil and WTI crude oil. We are looking for a pull back for December soybean
oil to the 69-70 cent area if NASS reports a higher than expected end of September ending soybean stocks on Tuesday. We see soybeans in a sideways trading range over the short term.

·        
USDA announced sales to China and Spain.

·        
Brazil elections are this weekend and in general producers would like to see Bolsonaro to win, per recent chat board.
https://www.npr.org/2022/10/28/1131962073/brazil-presidential-election-bolsonaro-lula

·        
Gulf soybean and corn offers are starting to thin out as low water levels along the Mississippi River are hindering barge arrivals.

·        
China plans to auction off 500,000 tons of soybeans from reserves on November 11.

·        
CNGOIC reported China’s soybean crush volume slipped last week to 1.61 million tons. AgriCensus noted its down 650,000 tons from the previous month and unchanged from the previous year. Soybean meal stocks were a low 260,000 tons
and soybean oil stocks were 750,000 tons.

·        
First Notice Day deliveries for November soybeans is seen in a 0-50 range.

·        
Malaysia January palm oil futures fell 158 Ringgit to 3,989 and cash was down $20.00/ton to $925.00/ton.

·        
China November soybeans were up 0.3%, meal down 0.4%, soybean oil 2.6% lower and palm oil 2.2% lower.

·        
Rotterdam vegetable oils were 15-22 euros lower from this time yesterday morning. SA meal was mixed.

·        
Offshore values this morning were leading soybean oil 57 points lower (181 lower for the week to date) earlier this morning and meal $7.30 short ton lower ($0.70 lower for the week).

 

 

We
look for US soybean crush for the month of September to average 5.59 million bushels per day versus 5.65 million during August and 5.47 million September 2021.

 

Export
Developments

• USDA
  announced private exporters reported the following sales activity:

• 126,000
  metric tons of soybeans for delivery to China during the 2022/2023 marketing year
• 198,000
  metric tons of soybeans for delivery to Spain during the 2022/2023 marketing year

• South
  Korea’s MFG bought 120,000 tons of soybean meal at an estimated net $528.49/ton c&f for arrival around March 21.
  

 

Wheat

·        
US wheat futures are easier after recent rain fell across the dry areas of the southern Great Plains.

·        
French soft wheat plantings reached 63% complete as of October 24, above 58 percent year ago.

·        
Paris December wheat was up 0.25 euro earlier at 336.75 euros a ton.

·        
China plans to auction off 40,000 tons of wheat from state reserves on November 2.

·        
Yesterday the EU Crop Monitor increased its estimate for the EU soft wheat production to 127.2 million tons from 127.0 million a month ago. Soft wheat exports for 2022-23 was estimated at 36 million tons, unchanged from previous.

 

Export
Developments.

·        
Results awaited: 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.

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

 

Rice/Other

·        
None reported