FI Morning Grain Comments 10/31/22

PDF attached

 

Good
morning.

 

USD
is 63 points higher, WTI crude oil $1.35 lower and US equities pointing towards a lower open. US wheat futures are sharply higher, lending strength to soybeans and corn. US Fed meets November 1-2 and most expect a 75 point hike in interest rates.

 

Russia
said they will not extend the Ukraine grain safe passage agreement and that is sending CBOT agriculture commodities higher. We are hearing many firms and major importers were prepared for this announcement.  Ships may still load Ukraine grain through the third
week of November, but officials are noting up to 218 vessels are “blocked” after the decision. Traders should monitor grain movement over the next few weeks. Twelve vessels embarked from Ukrainian ports early Monday. First Notice Day deliveries for November
soybeans were a large 440 contracts with no major commercial stoppers.

 

 

 

 

Weather

US
rainfall over the weekend was as expected, favoring southern OK and northern and central TX, southeastern MO, southern IL, southern IN, and southern IN and KY. Western NE will see rain Thursday. NE, KS, western OK, and western TX will see rain Friday. The
Midwest will see light rain today and again Thursday through Friday bias northwestern areas. Northeastern areas of Brazil will see rain this week. Argentina will see net drying over the next 5-7 days.

 

 

Past
seven days

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 31, 2022

• A
  tropical cyclone is forming in the Caribbean Sea south of Jamaica today that will bring heavy rain and flooding to Belize, northern Guatemala and southern Chiapas, Mexico Thursday and Friday
• Tropical
  Cyclone Nalgae brought torrential rain and flooding to southern Luzon Island, Philippines with 5.00 to more than 15.00 inches or rain resulting 
• Areas
  in the Manila region were wettest
• Nalgae
  will move toward Hainan China later this week, but will diminish after reaching typhoon intensity briefly Tuesday and early Wednesday
• West-central
  Argentina crop areas experienced some frost and light freezes conditions overnight and similar conditions are expected in the southeast part of the nation Tuesday morning
• Frost
  occurred overnight mostly in La Pampa, western Buenos Aires, San Luis and southern Cordoba with extreme lows to 28 Fahrenheit (-2C) in San Luis.
  
• Most
  crop areas were not seriously impacted by the cold
• U.S.
  rain from eastern Texas to the Delta during the weekend induced some runoff, but changes in the lower Mississippi River levels should be light
• Another
  bout of rain is possible in the eastern Plains and western Corn Belt this weekend into early next week that may help add a little more runoff to the river systems, but big water level changes are not anticipated
• U.S.
  west-central high Plains will miss out on most of the significant rain potential that may occur this weekend into next week in the eastern Plains and western Midwest
• Snow
  will fall from Montana and southern Alberta into western and northern Saskatchewan during mid-week this week slowing travel and stressing some livestock while raising the potential for a little improved soil moisture when the snow melts
• Australia
  will experience one more bout of significant rain today into Tuesday morning in the east and then a week of drying is likely
• South
  Africa will receive sufficient rain to support spring and summer crop planting and emergence
• Brazil
  will receive widespread rain early this week and then experience a full week of drying in center west and southern parts of the nation after that
• Aggressive
  fieldwork should occur during the drier period
• Europe
  weather will trend wetter later this week into next week especially in the central and west
• Drought
  will prevail in the lower Danube River Basin and greater rain will still be needed from eastern Spain into southern France

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

CFTC
Commitment of Traders

Traditional
funds were more long than estimated for corn, meal and soybean oil, and near expectations for soybeans and wheat.

 

 

 

 

 

 

Reuters
table

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
184,704      8,471    361,488      5,367   -491,168    -21,900

Soybeans           
26,882     16,252    115,544      2,385   -119,071    -23,236

Soyoil             
57,005     13,599    102,163      4,137   -172,000    -15,189

CBOT
wheat         -50,607     -9,124    102,544     -1,606    -45,686     10,715

KCBT
wheat           5,827     -2,272     46,995     -1,298    -51,982      3,059

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
264,374     10,112    218,630     -1,162   -476,353    -21,099

Soybeans           
75,411      8,548     73,937      1,875   -113,354    -22,564

Soymeal            
86,030     15,234     80,383        930   -216,583    -22,717

Soyoil             
95,161     20,187     84,970       -385   -191,348    -14,443

CBOT
wheat         -36,052    -14,001     61,235        515    -37,828      9,608

KCBT
wheat          24,626     -1,644     27,503        357    -48,141      2,539

MGEX
wheat           3,483       -326      1,009        172     -5,403        503

                
———- ———- ———- ———- ———- ———-

Total
wheat         -7,943    -15,971     89,747      1,044    -91,372     12,650

Live
cattle         65,722     28,423     52,884        135   -129,725    -23,145

Feeder
cattle       -5,871      3,147      3,058       -543      5,052     -1,029

Lean
hogs           55,433     19,646     46,126       -870    -84,799    -13,283

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
48,372      4,087    -55,023      8,062  1,862,587      6,299

Soybeans          
-12,639      7,541    -23,355      4,599    721,646   -126,131

Soymeal            
22,649      4,216     27,521      2,337    426,681     12,185

Soyoil             
-1,616     -2,811     12,832     -2,547    482,923     23,802

CBOT
wheat          18,895      3,864     -6,250         14    411,948      7,561

KCBT
wheat          -3,147     -1,763       -840        511    174,982         65

MGEX
wheat           2,380        -54     -1,469       -296     58,197       -307

                
———- ———- ———- ———- ———- ———-

Total
wheat         18,128      2,047     -8,559        229    645,127      7,319

Live
cattle         18,618     -1,074     -7,499     -4,339    346,666     25,512

Feeder
cattle       -1,325        545       -913     -2,119     61,690        918

Lean
hogs           -4,486     -1,311    -12,274     -4,182    256,898      9,645

 

 

Macros

OPEC
Maintains View That World Oil Demand To Plateau After 2035

OPEC
Raises 2023, Medium-Term And 2045 Oil Demand Forecasts; 2022 World Oil Outlook

European
inflation 10.2%

 

 

Corn

·        
Corn prices are higher on Black Sea shipping concerns after Russia announced they will not extend the Ukraine safe passage agreement. There is no known timeline if it will be extended but expect Russia to lay out demands if talks
resume. Fertilizer shipments from Russia could become a topic in future discussions.

·        
Temperatures in Argentina and southern Brazil will fall again tonight, bringing potential frosts to some of the growing areas.

 

World
Weather inc.

 

 

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT
soybeans are higher on spillover strength in wheat and higher soybean oil despite a higher trade in the US dollar. Meal is mixed from bull spreading.

·        
Oil share is higher this morning and CBOT crush margins are firm bias the nearby positions.

·        
Brazil elections: Lulu likely won. Supports anti-poverty programs, broad-based coalition, and environmental concerns.

·        
First Notice Day CBOT deliveries for November soybeans were a large 440 contracts with no major commercial stoppers.

·        
Renewed concerns over covid-19 lockdowns in China could hinder upside movement in soybeans.

·        
Egypt’s vegetable oil stocks are sufficient for 5.3 months.

·        
ITS reported October Malaysian palm oil exports increased 5 percent to 1.496 million tons from 1.425 million during September. AmSpec reported 1.475 million tons, a 11.7 percent increase from 1.320 million.

·        
Malaysia January palm oil futures was up 65 Ringgit to 4,054 and cash was up $12.50/ton to $937.50/ton.

·        
China November soybeans were up 0.1%, meal up 0.3%, soybean oil 1.6% lower and palm oil 1.0% lower.

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

·        
Rotterdam vegetable oils were mostly unchanged for soybean oil and sharply higher for rapeseed oil, from this time Friday morning. SA meal was 10-12 euros higher.

·        
Offshore values this morning were leading soybean oil 62 points higher earlier this morning and meal $2.60 short ton lower.

·        
(Reuters) – Indonesia on Monday said it has extended its policy to waive a palm oil export levy until the crude palm oil reference price breaks $800 per tons and above, the economic ministry said in a statement on Monday. The
waiver was initially due to expire at the end of October.

 

 

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

• None
  reported

 

Wheat

·        
US wheat futures are higher after Russia announced they will not extend the Ukraine safe passage deal. Look for heavy negotiations over the next few weeks to get this deal extended. Russian exports will be one of the main focusses
for future talks.

·        
Nearby December Chicago, KC and MN futures gapped higher, above major moving averages; a signal prices could break out to the upside if the Black Sea situation escalates.  We see no major upside if Ukraine is still able to move
grain.

·        
Several headlines are out this morning surrounding the Russian announcement, but we are looking past many of them, concentrated on present shipments. Apparently, several ships left Ukraine on Monday carrying grain.

·        
Fighting escalated over the weekend across Ukraine and Crimea.

·        
Egypt said they have enough wheat to cover 5.1 months of supply. Look for them to tender soon.

·        
Paris December wheat was up 12.25 euros (gapped higher) earlier at 348.50 euros a ton.

·        
IKAR estimated 2023 Russia wheat production at 87 million tons from their current 101 million for 2022. 2022-23 Russia export potential for wheat was seen at 50 million tons, up 2 million from previous estimate.

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

·        
China sold 40,257 tons of wheat, crop-year 2014, 2015, 2016 and 2017, from reserves on October 26 at an average price of 2,843 yuan per ton ($392.14/ton).

 

Export
Developments.

·        
Pakistan bought 385,000 tons of wheat at $373.00/ton, optional origin, for LH November through FH January shipment. They were in for 500,000 tons.

·        
Result awaited: 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

·        
Egypt’s GASC bought 150,000 tons of sugar for Dec/Jan shipment.

·        
(Reuters) Vietnam’s rice exports in the January-October period are estimated to have risen about 17.2% from a year earlier to 6.07 million tons, government data showed on Saturday. Revenue from rice exports in the period is seen
up 7.4% to $2.7 billion. October rice exports from Vietnam, one of the world’s leading shippers of the grain, likely totaled 700,000 tons, worth $334 million.