FI Morning Grain Comments 11/16/22

PDF attached

 

Good
morning.

 

Private
exporters reported the following sales activity:

-150,000
metric tons of hard red spring wheat for delivery to Iraq during the 2022/2023 marketing year

-1,866,900
metric tons of corn for delivery to Mexico. Of the total, 1,242,060 metric tons is for delivery during the 2022/2023 marketing year and 624,840 metric tons is for delivery during the 2023/2024 marketing year.

 

CBOT
agriculture markets are softer led by wheat this morning as traders shifted their focus back to hopes the Ukraine grain trade corridor agreement will be extended. Some are downplaying the political ramifications from reports of missiles hitting Poland. Poland’s
President Andrzej Duda said the missile that hit Poland killing two people was probably a Ukrainian air defense missile. Russia comments at the G20 summit in Bali were favorable for regarding extension of the Black Sea grain deal. South America is expected
to see additional rain through the end of the week. A Bloomberg poll looks for weekly US ethanol production to be down 4,000 thousand to 1047k (1020-1063 range) from the previous week and stocks up 126,000 barrels to 22.318 million.

 

 

 

Weather

US
weather forecast is unchanged. The Great Plains will see mostly dry weather through Sunday. Temperatures will be on the cooler side and will put some of the winter wheat into dormancy. The Midwest will see light precipitation today across the northeastern
states through Saturday. Argentina is wetter for this weekend. Some rain will fall across La Pampa and southwest BA Thursday through Friday and Cordoba Saturday. Brazil’s Mato Grosso, Goias, Minas Gerais and Bahia will see rain through Sunday.

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 16, 2022

• Argentina
  is advertised by the ECMWF model to be a little wetter today relative to that of Tuesday for this weekend
  
• The
  change, if it verifies, would offer a little more moisture to the nation’s grain and oilseed areas resulting in a little better environment for planting emergence and establishment
• Some
  delay to fieldwork may occur, but the moisture is needed to ensure favorable planting conditions next week
• Not
  much change was noted in Brazil overnight the first five days are still advertised dry or mostly dry in center west and far southern parts of the nation while rain falls abundantly in northeastern portions of crop country
  
• Rain
  will then return to center west and southern Brazil next week with little change in the projected amounts relative to Tuesday
• U.S.
  weather is warmer in the second week of the outlook today which fits well with the developing MJO event that is expected in Southeast Asia during that week
• U.S.
  weather is advertised to be relatively dry (some light precipitation) with no major storm systems during the first week of the outlook
  
• U.S.
  week two weather will include increased precipitation in the Pacific Northwest and a new storm system from eastern  Texas and the Delta into Michigan
• This
  weather system had been erroneously placed too far to the west at mid-day Tuesday resulting in too much rain and snow for hard red winter wheat country – This change was necessary and is correct
• The
  06z GFS model run is too dry in the latter part of next week in the Midwest, eastern Texas and the Delta
• U.S.
  hard red winter wheat production areas are expected to be drier biased during much of the coming two weeks especially in the high Plains region where drought is most significant
• Rain
  and mountain snow will return to the Sierra Nevada in the second half of next week and into the following weekend with precipitation also impacting a larger part of the Pacific Northwest
  
• Not
  much change was noted in Europe or the CIS, although cold weather in Ukraine and other eastern European crop areas was reduced in intensity, duration and area impacted for the week next week
• Europe
  will continue moving into a wetter environment during the next week to ten days improving soil moisture in the drier areas of France, Spain, Italy and the lower Danube River Basin
  
• Today’s
  outlooks are wetter for Ukraine and neighboring areas as well
• China’s
  Yangtze River Basin and southeastern coastal provinces are still slated to receive significant precipitation over the next ten days to two weeks
  
• Northeastern
  China may trend much colder late in the second week of the outlook
• Australia’s
  eastern grain, oilseed and cotton areas are still advertised to experience net drying over the coming ten days with the exception of Victoria where significant rain will fall this weekend and again about one week later
• Far
  southern India will trend wetter this weekend into next week, but the tropical cyclone expected this weekend could remain over the Bay of Bengal for a longer period of time before moving inland and it looks to be a weaker event today relative to that of Tuesday

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Wednesday,
Nov. 16:

• EIA
  weekly US ethanol inventories, production, 10:30am
• World
  Rice Conference in Phuket – day 2
• Global
  Grain Geneva conference – day 2
• Panel
  on global food crisis at Bloomberg New Economy Forum

Thursday,
Nov. 17:

• International
  Grains Council’s monthly report
• USDA
  weekly net- export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• World
  Rice Conference in Phuket – day 3
• Global
  Grain Geneva conference – day 3

Friday,
Nov. 18:

• China’s
  second batch of Oct. trade data, including corn, pork, wheat imports
• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options
• FranceAgriMer
  weekly update on crop conditions
• US
  cattle of feed, 3pm

Sunday,
Nov 20:

• China’s
  third batch of October trade data, including soy, corn and pork imports by country

Source:
Bloomberg and FI

 

 

 

 

Macros

US
Retail Sales Advance (M/M) Oct: 1.3% (est 1.0%; prev 0.0%)

US
Retail Sales Ex Auto (M/M) Oct: 1.3% (est 0.5%; prev 0.1%)

US
Retail Sales Ex Auto And Gas Oct: 0.9% (est 0.2%; prevR 0.6%)

US
Retail Sales Control Group Oct: 0.7% (est 0.3%; prevR 0.6%)

US
Import Price Index (M/M) Oct: -0.2% (est -0.4%; prev -1.2%)

US
Import Price Index Ex Petroleum (M/M) Oct: -0.2% (est -0.8%; prev -0.5%)

US
Import Price Index (Y/Y) Oct: 4.2% (est 4.1%; prev 6.0%)

US
Export Price Index (M/M) Oct: -0.3% (est -0.3%; prev -0.8%)

US
Export Price Index (Y/Y) Oct: 6.9% (est 7.1%; prev 9.5%)

US
MBA Mortgage Applications Nov 11: 2.7% (prev -0.1%)

US
MBA 30-Yr Mortgage Rate Nov 11: 6.9% (prev 7.1%)

Canadian
Housing Starts SA Oct: 267.1K (est 275.0K; prevR 298.8K)

Canadian
CPI NSA (M/M) Oct: 0.7% (est 0.8%; prev 0.1%)

Canadian
CPI (Y/Y) Oct: 6.9% (est 6.9%; prev 6.9%)

Canadian
CPI Core Common (Y/Y) Oct: 6.2% (est 5.9%; prevR 6.2%)

Canadian
CPI Core Median (Y/Y) Oct: 4.8% (est 4.8%; prev 4.7%)

Canadian
CPI Core Trim (Y/Y) Oct: 5.3% (est 5.3%; prev 5.2%)

 

 

Corn

·        
Corn futures are
lower as concerns ease over Black Sea issues, lower mineral oil and weakness in wheat. Global corn tender developments were quiet until USDA this morning reported 1.9 million tons of corn was sold to Mexico.

·        
Traders continue to roll out of the December contract. All CBOT corn open interest fell 14,680 yesterday. December OI fell 29,793 contracts.  First Notice Day Deliveries for December are November 30.

·        
CME feeder cattle nearly reached a one-month low yesterday.

·        
Bloomberg: US Cattle on Feed Placements Seen Down 3.6%.  October placements onto feedlots seen falling y/y to 2.17m head, according to a Bloomberg survey of ten analysts. That would be the lowest October reading since 2012.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 4,000 thousand to 1047k (1020-1063 range) from the previous week and stocks up 126,000 barrels to 22.318 million.

 

Export
developments.

·        
Under the 24-hour announcement system, USDA reported 1,866,900 tons of corn for delivery to Mexico. Of the total, 1,242,060 tons is for delivery during the 2022-23 marketing year and 624,840 tons is for delivery during the 2023-24
marketing year.

 

 

Soybeans

·        
CBOT soybeans,
meal and soybean oil are lower on bearish fundamentals, lower WTI and weakness in wheat. Palm oil futures fell for the third consecutive session. Ongoing China covid concerns were noted for palm oil demand.

·        
NOPA’s October US crush report yesterday confirmed strong soybean domestic usage and we expect that to continue well into the 2023 second quarter. The October soybean oil yield was a very good 11.92 pounds per bushel.

·        
South America is expected to see additional rain through the end of the week.

·        
The Soybean Processors Association of India expects 2022-23 soybean production to rise 1.3% to 12 million tons from 11.9 million in 2021-22.

·        
Malaysia February palm oil futures was down 44 Ringgit to 4,022 and cash was off $5.00/ton to $952.50/ton.

·        
China November soybeans were down 0.1%, meal slightly lower, soybean oil up 78% and palm oil down 0.6%.

·        
Rotterdam vegetable oils were unchanged to 20 euros lower from this time yesterday morning. SA meal was 1-7 euros higher.

·        
Offshore values this morning were leading soybean oil 98 points lower earlier this morning and meal $3.40
lower.

·        
NOPA reported the October soybean crush at 184.5 million bushels, at expectations, up 12.9 percent on a daily adjusted basis from September and up 0.3 percent from year ago, daily adjusted. Soybean oil stocks increased 68 million
pounds from the previous month to 1.528 billion pounds, only 7 million below an average trade guess.  We slightly increased our US soybean crush estimate to 2.241 billion bushels, 4 million below USDA and compares to 2.204 billion for 2021-22.

 

Export
Developments

·        
China plans to auction off 500,000 tons of soybeans from reserves on November 25.

 

Wheat

·        
US wheat futures are lower on easing concerns over the Ukraine grain shipping deal and Poland missile strikes. Jordan passed on 120,000 tons of barley.

·        
Egypt’s GASC is holding private talks to buy wheat. They last publicly cancelled a purchase for 280,000 tons of wheat on November 11 and have been holding private talks since then.

·        
Russia comments at the G20 summit in Bali were favorable for regarding extension of the Black Sea grain deal.

·        
Paris December wheat was down 2.50 euros earlier at 316.50 euros a ton, lowest since early September.

·        
China will auction off 40,000 tons of wheat from reserves on November 23.

·        
Ukraine’s state-run meteorological center reported the winter grain and rapeseed crops  rated good and satisfactory condition. 92 percent of the 4.4 million hectares had been sown (3.7 million wheat).

·        
Ukraine grain exports since July 1 were 15.6 million tons, down 30.8 percent from previous period year ago. That included 8.3 million tons of corn, 6 million wheat and 1.3 million barley.

 

Export
Developments.

·        
Under the 24-hour announcement system, USDA reported 150,000 tons of hard red spring wheat for delivery to Iraq for 2022-23 delivery. 

·        
Jordan passed in 120,000 tons of barley for March/April shipment for March/April shipment.

·        
Japan in a SBS import tender bought only 220 tons of feed barley. They were in for 70,000 tons of feed wheat and 40,000 tons barley for arrival by February 24.

·        
Japan seeks 94,687 tons of food wheat from the US and Canada later this week for arrival by February 28.

·        
Jordan seeks 120,000 tons of hard milling wheat on November 29 for March/April shipment.

 

Rice/Other

·        
None reported