FI Morning Grain Comments 11/04/22

PDF attached

 

Good
morning.

 

The
USD gave back 128 points this morning after a sharp rise on Thursday. This is lifting US agriculture futures higher. More jobs were added in the US during the month of October. WTI crude oil is very strong, up more than $4.00 and US equities are pointing towards
a higher open. Look for positioning ahead of the weekend today.

 

As
of 7:45 am CT (so far this week)

 

 

 

 

Weather

Rain
will fall across eastern NE, KS, OK and northeastern TX today, and again eastern NE on Tuesday. The Midwest will see rain across the west central areas today 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. There is still some concern for plantings across southern Brazil where rain is needed. Rain will favor Bahia and Minas Gerais. Argentina will be dry through Monday. 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 4, 2022

• Not
  many changes overnight
• A
  week of net drying is likely in center west and southern Brazil, Uruguay, Paraguay and Argentina before rain develops in the second week of the outlook
• Any
  showers that occur in this first week will not generate much moisture of significance
  
• Australia
  will also experience a week of net drying with greater rain resuming in the southeast during the second week of the forecast
• Europe
  weather will be warmer than usual for much of the next two weeks
• Rain
  in Europe will be greatest in the west and central parts of the continent into early next week and then drier for much of the region in the following week
  
• Remnants
  of Hurricane Martin will reach Ireland and the United Kingdom late in the weekend and early next week producing some windy conditions, rough seas and moderate rainfall, but damaging weather is only going to be localized
• U.S.
  weather will favor rain from Oklahoma to Wisconsin and western Illinois this weekend and possibly again late next week into the following weekend
• The
  ground is getting wetter in Iowa, Missouri and immediate neighboring areas so that runoff might increase, but a serious change in river water levels on the Mississippi will not be likely without some kind of major rain event in the Ohio River Basin, Delta
  and upper Midwest and these areas will not see great enough rainfall to seriously change the bottom line in the next two weeks
• No
  relief to drought in the high Plains region of U.S. hard red winter wheat country is expected during the next two weeks  
• Some
  welcome rain will fall in California’s Sierra Nevada next week to help improve soil moisture and runoff potentials later this winter
• Rain
  and mountain snow will impact the U.S. Pacific Northwest periodically in the coming week
  
• South
  Africa will experience increasing precipitation to support better spring planting and emergence conditions
• Far
  southern India will be excessively wet for a while
• Indonesia
  and Malaysia weather will remain abundantly wet over the next couple of weeks
  

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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, 3:30 pm

Monday,
Nov. 7:

• China’s
  first batch of October trade data, including soybean, edible oil, rubber and meat imports
• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop harvesting for corn, soy, cotton; winter wheat plantation and condition, 4pm
• Vietnam’s
  customs dept releases Oct. coffee, rice and rubber export data

Tuesday,
Nov. 8:

• France’s
  agriculture ministry updates 2022 crop production estimates
• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  India

Wednesday,
Nov. 9:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, 12pm
• France
  AgriMer monthly grains outlook
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• EIA
  weekly US ethanol inventories, production, 10:30am
• Brazil’s
  Conab issues production, area and yield data for corn and soybeans

Thursday,
Nov. 10:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Malaysian
  Palm Oil Board’s data on stockpiles, production and exports
• Malaysia’s
  Nov. 1-10 palm oil export data
• Cane
  crush and sugar production data by Brazil’s Unica

Friday,
Nov. 11:

• ICE
  Futures Europe weekly commitments of traders report
• DELAYED:
  CFTC commitments of traders weekly report on positions for various US futures and options, usually released Fridays, will be published Monday, Nov. 14
• New
  Zealand Food Prices
• HOLIDAY:
  US, France, Canada

Saturday,
Nov. 12:

• Atlantic
  Council Global Food Security Forum, Bali, day 1

Sunday,
Nov 13:

• Atlantic
  Council Global Food Security Forum, Bali, day 2

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

Macros

US
Changes In Nonfarm Payrolls Oct: 261K (est 193K; prev 263K)

US
Unemployment Rate Oct: 3.7% (est 3.6%; prev 3.5%)

US
Average Hourly Earnings (M/M) Oct: 0.4% (est 0.3%; prev 0.3%)

US
Average Hourly Earnings (Y/Y) Oct: 4.7% (est 4.7%; prev 5.0%)

US
Change In Private Payrolls Oct: 233K (est 200K; prevR 319K)

US
Change In Manufacturing Payrolls Oct: 32K (est 12K; prevR 23K)

US
Average Weekly Hours All Employees Oct: 34.5 (est 34.5; prev 34.5%)

US
Labour Force Participation Rate Oct: 62.2% (est 62.3%; prev 62.3%)

US
Underemployment Rate Oct: 6.8% (prev 6.7%)

Canadian
Net Change In Employment Oct: 108.3K (est 10.0K; prev 21.1K)

Canadian
Unemployment Rate Oct: 5.2% (est 5.3%; prev 5.2%)

 

 

Corn

·        
Corn prices are higher from a sharply lower USD (US jobs report was supportive), technical buying along with a $4.00+ rise in WTI crude oil.

·        
News is light.

·        
Look for positioning today.

·        
IHS Markit sees the US corn production at 13.981 billion bushels (13.839 previous), above USDA’s 13.895 billion estimate. We are using 13.831 billion.

 

Export
developments.

·        
None reported

 

Soybeans

·        
Soybean oil futures are again higher, supporting soybeans and meal. Wek to date January soybeans are up 53 cents, December meal down $6.30 and December SBO up a large 492 points.

·        
CBOT deliveries (Thursday evening) for November soybeans slowed to 21 contracts with Bunge stopping all of them.

·        
HedgePoint warned the Brazil soybean crop could fall below 150 million tons from adverse La Nina conditions. Conab is at 152.35 million tons, up 21 percent from 2021-22.

·        
IHS Markit sees the US soybean corn production at 4.313 billion bushels (4.327 previous), above USDA’s 4.313 billion estimate. We are using 4.309 billion.

·        
A poll for October Malaysia palm oil stocks calls for a 9.3% increase from September to 2.53 million tons and production to increase 3 percent to 1.82 million.

·        
Malaysian palm futures appreciated 9 percent this week.

·        
Malaysia January palm oil futures was up 30 Ringgit to 4,367 and cash was up $10.00/ton to $992.50/ton.

·        
China November soybeans were up 0.6%, meal off 0.2%, soybean oil up 0.3% and palm oil 0.5% lower.

·        
Rotterdam vegetable oils were 5-20 euros higher from this time yesterday morning. SA meal was 1.00-5.50 euros lower.

·        
Offshore values this morning were leading soybean oil 80 points higher earlier this morning (168 lower for the week to date) and meal $9.80 short ton higher ($5.70 higher for the week). 

 

Export
Developments

·        
South Korea’s NOFI group passed on 60,000 tons of soybean meal for arrival in South Korea around April 15. Lowest offer was believed to be $517.77/ton c&f.

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

 

Wheat

·        
US wheat futures are higher on technical buying after the USD trended lower after surging yesterday. Concerns over the Argentina wheat crop were renewed after the BA Grains Exchange lowered their production estimate.

·        
Paris December wheat was up 1.00 euros earlier at 341.75 euros a ton.

·        
The BA Grains Exchange estimated the Argentina wheat crop at 14 million tons, down from 15.2 million tons previously. USDA is at 17.5 million tons. Look for USDA to lower production next week by 2.5-3.0 million tons. Many private
traders are penciling in 12 to 13 million tons.

·        
Last week USDA reported the initial US winter wheat ratings at a record low (at least since ’88) at 28 percent good/excellent.  But that was with 87 percent of the area planted and only 62 percent emerged. Next week we look for
a 3-point increase as more and more states north and east of the problem states of TX, OK and KS get more accurate readings. Rain over the last seven days across KS, TX, and OK should have also aided crop development.

 

Export
Developments.

·        
Yesterday Iraq bought about 150,000 tons of wheat from Canada, Lithuania and possibly Australia. Lowest price was for 50,000 tons of Canada wheat at $489.80/ton. Lithuania wheat was sold at $499/ton c&f.

·        
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