FI Morning Grain Comments 11/03/22

PDF attached

 

Good
morning.

 

The
US dollar is on fire this morning after Federal Reserve’s Powell late on Wednesday indicated it may take time to slow the pace of rate increases. The large more in the USD by 160 points is sending most commodity markets lower, including CBOT agriculture futures. 
Black Sea fighting continues but grain inspectors are returning to work. Seven grain ships carrying 290,000 tons left Ukraine early Thursday. Wheat is leading the grains lower on follow through selling from the grain deal. Export developments
were slow. The soybean complex is lower. Palm oil eased overnight after hitting a 12-week high. Offshore values this morning were leading soybean oil 222 points lower earlier this morning and meal $3.10 short ton lower.

 

 

 

Weather

Nebraska
will see rain today into Friday along with northern KS and parts of OK & TX, and then again Monday. The Midwest will see rain across the northwestern areas today and west central areas Friday before moving into the central areas Saturday before drying down
Sunday int Monday. Brazil’s weather will be good for plantings over the next several days. Rain will favor Bahia and Minas Gerais. Argentina will be dry through Monday. 

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 3, 2022

• Not
  many changes overnight
• Eastern
  Australia has a week of limited rainfall and net drying and then another rain event slated at the end of next week and into the following weekend in a part of New South Wales and Victoria
• Argentina
  and western and southern Brazil will experience a week of net drying while rain in northeastern Brazil diminishes
  
• Rain
  returns to parts of center west and southern Brazil late next week and into the following weekend, although resulting rainfall will be light initially varying from 0.25 to 0.75 inch with a few 1.00 to 2.00 inch amounts
• Relief
  from dryness is expected, but greater rain will be needed in some areas
• Eastern
  Argentina, Uruguay and portions of Rio Grande do Sul will likely stay dry while rain develops in other Argentina and Brazil locations late next week and into the following weekend
• GFS
  model is too aggressive with rainfall in Argentina, Uruguay and far southern Brazil Nov. 11-12
• Rain
  in the western Corn and Soybean Belt and Delta this weekend will help improve topsoil moisture and induce a little more runoff into the rivers
• Rainfall
  of 0.60 to 1.50 inches should be common with local totals getting up close to 3.00 inches in a narrow band from northern Missouri to southern Wisconsin
• Waves
  of snow and some rain will impact Canada’s Prairies over the next ten days setting the stage for better moisture potential in the soil for spring 2023
• U.S.
  high Plains region (including western hard red winter wheat areas) will be drier than usual through the next few weeks
• An
  area of disturbed tropical or subtropical weather will evolve in the southwestern Atlantic Ocean and northeastern Caribbean Sea this weekend that will drift toward the southeastern U.S. next week possibly bringing some light to locally moderate rain to areas
  from Florida to Virginia; confidence is low on the significance of this system
• Otherwise,
  the southeastern United States will be drier than usual through the next couple of weeks
  
• California’s
  Sierra Nevada will get their first rain of the season Sunday into Wednesday with some snow in the highest elevations
• U.S.
  Pacific Northwest will continue to see periodic rain and mountain snowfall into next week
  
• Portions
  of central and western Europe will receive rain in the coming week while eastern areas are dry biased
• Most
  of the continent will be dry biased in the second week with exception of northwestern areas where waves of rain are likely
• Most
  of Europe and Asia will experience warmer than usual weather during the next two weeks
  
• Rain
  is still likely in east-central China next week to benefit wheat and a few northern rapeseed production areas
• Second
  week weather could bring some needed moisture to the Yangtze River Basin, but model divergence leaves confidence low
• Far
  southern India will continue very wet over the next ten days to two weeks; this impacts Kerala and Tamil Nadu
• Seasonal
  rains will continue to ramp up in South Africa during the next two weeks
• Routinely
  occurring rain likely in Indonesia and Malaysia next ten days to two weeks
  

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

USDA
Export Sales

USDA
export sales were at the low end of expectations for soybeans and corn. Wheat was within expectations. USDA reported meal and oil sales below a range of estimates. Net sales of 830,200 MT for 2022-23 primarily for China (745,000 MT, including 404,300 MT switched
from unknown destinations and decreases of211,300 MT).

 

 

 

Macros

US
Initial Jobless Claims Oct 29: 217K (est 220K; prev 217K)

US
Continuing Claims Oct 22: 1485K (est 1450K; prev 1438K)

US
Trade Balance Sep: -$73.3B (est -$72.2; prevR -$65.7B)

US
Nonfarm Productivity Q3 P: 0.3% (est 0.5%; prev -4.1%)

US
Unit Labor Costs Q3 P: 3.5% (est 4.0%; prev 10.2%)

BOE
Raises Its Key Interest Rate by 0.75 of a Percentage Point

 

 

Corn

·        
Corn prices are weaker from a very strong USD and lower energy markets. World corn import tender announcements slowed after SK bought corn earlier this week. USDA export sales were at the low end of expectations.

·        
StoneX estimated the US corn crop at 14.109 billion bushels from previous 14.056 billion (174.5 versus 173.9 previous). USDA is at 13.895 billion. We are using 13.831 billion.

·        
The USDA report is November 9 and we look for the US corn yield to be lowered from 171.9 bu/acre to 171.4 based on the last US crop rating. We see USDA trimming US corn exports by 50 million bushels to 2.100 billion.

·        
USDA’s weekly Broiler Report showed eggs set in the United States down 2 percent and chicks placed up 3 percent.  Cumulative placements from the week ending January 8, 2022, through October 29, 2022, for the United States were
8.10 billion. Cumulative placements were up 2 percent from the same period a year earlier.

·        
US weekly ethanol production increased 7,000 barrels to 1.040 million and stocks decreased 59,000 barrels to 22.232 million. A Bloomberg poll looked for weekly US ethanol production to be up 5,000 thousand and stocks up 51,000.

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT
soybeans are lower from a higher USD and lower outside related markets. Soybeans were up five consecutive days prior to today. Soybean meal is lower and soybean oil off more than 70 points after shooting up yesterday in part to Brazil’s plan to increase biodiesel
blending rates. Brazil soybean oil is now a premium over Argentina soybean oil. Malaysia palm oil fell overnight after hitting a 12-week high on Wednesday.

·        
USDA export sales were at the low end of expectations for soybeans and below for the products.

·        
US soybean exports during September were 78 million bushels, about 5 million higher than expected and compares to 122 million during August and 80 million September 2021.

·        
Brazil’s main road leading to the Paranagua port is no longer being blocked by protesters.

·        
CBOT deliveries for November soybeans were 430 contracts with Bunge stopping 419.

·        
At a palm oil conference, LMC International Chairman James Fry estimated Indonesia palm oil production will rise 2 million tons in 2023.

·        
Malaysia January palm oil futures was down 61 Ringgit to 4,337 and cash was down $5.00/ton to $982.50/ton.

·        
China November soybeans were down 0.8%, meal off 1.1%, soybean oil up 1.1% and palm oil 1.4% higher.

·        
Rotterdam vegetable oils were 20-25 euros higher from this time yesterday morning. SA meal was 1-3 euros lower.

·        
Offshore values this morning were leading soybean oil 222 points lower earlier this morning and meal $3.10 short ton lower.

·        
StoneX estimated the US soybean crop at 4.413 billion bushels from previous 4.442 billion (50.9 versus 51.3 previous). USDA is at 4.313 billion. We are using 4.309 billion.

·        
Argentina sold 71 percent of their 44 million ton soybean crop . October 20-26 sales were 323,100 tons, up from 164,000 tons previous week.

 

Export
Developments

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

 

Wheat

·        
US and EU wheat futures are lower on follow through selling after Ukraine grain shipments resumed.

·        
Seven grain and oilseed ships carrying 290,000 tons left Ukraine early Thursday.

·        
There is still some uncertainty over the safe passage agreement as it is still set to expire November 19.

·        
USDA export sales for all-wheat were within expectations.

·        
Export developments were slow. Jordan is back in next week for barley.

·        
Paris December wheat was down 1.50 euros earlier at 339.75 euros a ton. Yesterday the December contract filled Monday’s gap.

 

Export
Developments.

·        
China plana to auction off 40,000 tons of wheat from state reserves on November 9.

·        
Jordan issued an import tender for 120,000 tons of hard milling wheat set to close November 15 for March/April shipment.

·        
Jordan is back in for 120,000 tons of barley for March/April shipment on November 16 for March/April shipment.

 

Rice/Other

·        
None reported

 

USDA
Export Sales

 

 

U.S.
EXPORT SALES FOR WEEK ENDING  10/27/2022

 

	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	85.7	777.6	1,887.2	37.1	2,575.2	3,272.9	0.0	6.3
SRW	20.9	508.1	600.0	8.1	1,656.9	1,308.4	0.0	6.6
HRS	97.1	1,085.2	1,025.4	63.0	2,532.3	2,427.5	0.0	10.8
WHITE	144.4	923.8	728.7	9.7	1,972.9	1,607.5	0.0	0.3
DURUM	0.0	61.7	72.4	0.2	77.7	77.3	0.0	0.0
TOTAL	348.1	3,356.4	4,313.6	118.1	8,815.1	8,693.6	0.0	24.0
BARLEY	-1.5	10.1	22.8	0.0	3.9	7.3	0.0	0.0
CORN	372.2	10,321.7	25,115.0	450.2	4,145.7	5,893.5	0.0	311.0
SORGHUM	12.2	279.8	2,748.0	9.2	44.1	269.4	0.0	0.0
SOYBEANS	830.2	22,407.1	21,422.7	2,651.8	9,890.7	10,581.3	0.0	0.0
SOY MEAL	122.2	3,316.7	3,769.9	243.0	653.4	912.9	0.6	2.2
SOY OIL	-2.4	23.4	112.7	2.2	6.2	21.1	0.0	0.6
RICE
L G RGH	5.0	73.0	222.3	17.0	115.1	315.9	0.0	0.0
M S RGH	0.0	10.9	6.8	0.6	7.2	2.3	0.0	0.0
L G BRN	0.1	6.0	8.4	0.1	4.1	16.4	0.0	0.0
M&S BR	0.0	4.7	54.3	0.0	2.9	14.4	0.0	0.0
L G MLD	100.1	114.6	86.3	81.7	222.6	218.5	0.0	0.0
M S MLD	14.0	44.9	67.6	1.6	76.1	94.6	0.0	0.0
TOTAL	119.2	254.1	445.6	101.0	428.0	662.1	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	191.8	5,964.2	6,450.3	119.0	2,665.9	2,058.5	11.2	1,101.2
PIMA	1.2	83.6	215.2	0.1	20.3	84.2	0.0	0.9

 

 

Export
Sales Highlights

This
summary is based on reports from exporters for the period October 21-27, 2022.

Wheat:
Net sales of 348,100 metric tons (MT) for 2022/2023 primarily for South Korea (82,100 MT), Indonesia (63,000 MT), Mexico (60,800 MT, including decreases of 100 MT), Taiwan (40,200 MT), and Japan (26,500 MT), were offset by reductions for Vietnam (100 MT).
 Exports of 118,100 MT were primarily to Mexico (59,700 MT), Taiwan (35,700 MT), Trinidad and Tobago (9,700 MT), South Korea (8,600 MT), and Vietnam (3,200 MT). 

Corn: 
Net sales of 372,200 MT for 2022/2023 primarily for Mexico (193,000 MT), Japan (132,100 MT, including 107,100 MT switched from unknown destinations), unknown destinations (69,600 MT), Canada (23,100 MT), and Costa Rica (9,900 MT, including decreases of 1,100
MT), were offset by reductions primarily for China (65,900 MT).  Exports of 450,200 MT were primarily to China (144,300 MT), Mexico (144,200 MT), Japan (107,100 MT), Jamaica (20,000 MT), and Taiwan (13,100 MT). 

Barley: 
Total
net sales reduction of 1,500 MT for 2022/2023 were for Japan.  No exports were reported for the week. 

Sorghum: 
Total net sales of 12,200 MT for 2022/2023 were for Mexico.  Exports of 9,200 MT were to Mexico.

Rice:
 Net
sales of 119,200 MT for 2022/2023 were primarily for the Dominican Republic (77,300 MT), Haiti (15,200 MT), Japan (13,200 MT), Mexico (5,400 MT), and Jordan (4,000 MT). Exports of 101,000 MT were primarily to the Dominican Republic (78,300 MT), Colombia (15,100
MT), Mexico (3,500 MT), Canada (1,300 MT), and Saudi Arabia (1,100 MT).

Soybeans: 
Net sales of 830,200 MT for 2022/2023 primarily for China (745,000 MT, including 404,300 MT switched from unknown destinations and decreases of 211,300 MT), Spain (198,000 MT), the Netherlands (151,000 MT, including 147,500 MT switched from unknown destinations
and decreases of 500 MT), Germany (82,800 MT), and Japan (51,700 MT, including 29,600 MT switched from unknown destinations), were offset by reductions for unknown destinations (525,100 MT) and Bangladesh (55,000 MT).  Exports of 2,651,800 MT were primarily
to China (1,994,900 MT), the Netherlands (151,000 MT), Egypt (125,300 MT), Mexico (108,700 MT), and Germany (82,800 MT). 

Optional
Origin Sales:
For 2022/2023, the current outstanding balance of 300 MT, all South Korea.

Export
for Own Account:
For 2022/2023, new optional origin sales of 29,500 MT were reported for Canada.  Decreases were reported for Canada (68,600 MT). The current exports for own account outstanding balance is 22,500 MT, all Canada.

Export
Adjustments:
Accumulated exports of soybeans to the Netherlands were adjusted down 82,828 MT for week ending October 13^th.  The correct destination for this shipment is Germany.

Soybean
Cake and Meal: 
Net sales of 122,200 MT for 2022/2023 primarily for Mexico (40,400 MT), Morocco (30,000 MT), Canada (17,900 MT), Colombia (14,900 MT), and the Netherlands (9,100 MT, including 7,500 MT switched from Ireland), were offset by reductions primarily for Ireland
(9,700 MT) and unknown destinations (7,100 MT).  Total net sales of 600 MT for 2023/2024 were for Canada.  Exports of 243,000 MT were primarily to the Philippines (49,600 MT), the Dominican Republic (47,400 MT), Ireland (27,800 MT), Mexico (25,200 MT), and
Colombia (25,000 MT).

Soybean
Oil: 
Total net sales reductions of 2,400 MT for 2022/2023 were for Canada.  Exports of 2,200 MT were to Canada (1,600 MT) and Mexico (600 MT).

Cotton: 
Net
sales of 191,800 RB for 2022/2023 primarily for China (122,000 RB), Pakistan (23,200 RB), Turkey (15,800 RB, including decreases of 1,500 RB), Bangladesh (11,000 RB), and Nicaragua (8,800 RB switched from Vietnam), were offset by reductions primarily for Indonesia
(10,400 RB).  Net sales of 11,200 RB for 2023/2024 were reported for Indonesia (10,600 RB) and Japan (600 RB).  Exports of 119,000 RB were primarily to China (43,400 RB), Bangladesh (17,000 RB), Mexico (15,700 RB), Pakistan (12,500 RB), and Turkey (8,500 RB). 
Net sales of Pima totaling 1,200 RB were reported for Indonesia (1,000 RB) and China (200 RB).  Exports of 100 RB were to Japan. 

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

Export
for Own Account:
For 2022/2023, the current exports for own account outstanding balance of 63,900 RB are 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 350,800 pieces for 2022 primarily for China (220,600 whole cattle hides, including decreases of 7,700 pieces), Mexico (64,000 whole cattle hides, including decreases of 2,400 pieces and 12,400 whole cattle hides – late), South Korea (45,400 whole
cattle hides, including decreases of 600 pieces), Thailand (6,900 whole cattle hides, including decreases of 2,100 pieces), and Turkey (3,800 whole cattle hides), were offset by reductions primarily for Brazil (400 pieces) and Vietnam (200 pieces).  Total
net sales of 4,600 calf skins were for Italy.  In addition, total net sales of 1,500 kip skins were for Canada.  Total net sales of 10,800 pieces for 2023 were for China.  Exports of 779,600 whole cattle hides exports were primarily to Mexico (357,900 pieces,
including 12,400 pieces – late), China (314,100 pieces), South Korea (38,000 pieces), Thailand (23,300 pieces), and Brazil (17,300 pieces).  In addition, exports of 5,600 calf skins were to Italy.

Net
sales of 153,900 wet blues for 2022 primarily for China (114,800 unsplit), Italy (19,500 unsplit and 1,800 grain splits, including decreases of 1,100 unsplit and 200 grain splits), Vietnam (8,500 unsplit), India (6,800 unsplit), and South Korea (2,300 grain
splits), were offset by reductions for Hong Kong (2,000 unsplit).  Net sales of 12,700 wet blues for 2023 were reported for Italy (10,700 unsplit) and Hong Kong (2,000 unsplit).  Exports of 194,200 wet blues were primarily to Italy (70,800 unsplit and 4,200
grain splits), China (50,800 unsplit), Vietnam (27,900 unsplit), Thailand (26,100 unsplit), and Hong Kong (5,000 unsplit).  Net sales reductions of 4,500 splits resulting in increases for South Korea (4,800 splits), were more than offset by reductions for
Vietnam (9,300 splits).  Exports of 268,100 pounds were to Vietnam.

Late
Reporting:
For 2022, net sales and exports totaling 12,400 pieces of whole cattle hides were reported late for Mexico.

Beef: 
Net sales of 9,200 MT for 2022 primarily for Japan (3,000 MT, including decreases of 400 MT), South Korea (1,900 MT, including decreases of 600 MT), Taiwan (1,800 MT, including decreases of 100 MT), Canada (1,100 MT, including decreases of 100 MT), and Mexico
(700 MT), were offset by reductions for China (900 MT).  Net sales of 3,800 MT for 2023 were primarily for Japan (2,500 MT).  Exports of 18,000 MT were primarily to South Korea (5,200 MT), Japan (3,900 MT), China (2,800 MT), Mexico
(1,700 MT), and Taiwan (1,300 MT). 

Pork: 
Net sales of 47,900 MT for 2022 primarily for Mexico (12,700 MT, including decreases of 400 MT), China (11,200 MT, including decreases of 400 MT), Japan (9,300 MT, including decreases of 200 MT), Canada (3,900 MT, including decreases of 500 MT), and Australia
(3,600 MT), were offset by reductions for the Philippines (100 MT). 
Net sales of 500 MT for 2023 were for China.  Exports of 30,700 MT were primarily to Mexico (14,100 MT), China (4,700 MT), Japan (3,200 MT), South Korea (2,900 MT), and Canada (1,400 MT).

Late
Reporting:
For 2022, net sales totaling 400 MT of pork were reported late for Panama (100 MT), Vietnam (100 MT), the Dominican Republic (100 MT), and South Korea (100 MT). Exports totaling 200 MT were reported late to the Dominican Republic (100 MT) and South Korea (100
MT).

November
3, 2022                                          1                 FOREIGN AGRICULTURAL SERVICE/USDA