FI Morning Grain Comments 11/21/22

PDF attached

 

Good
morning.

 

Commodity
selling is seen today on currencies, Covid concerns, this US trade and unchanged weather outlook. USD was up a large 82 points at the time this was written and WTI down about 80 cents. Shortened week with US on holiday this Thursday and early close Friday.
China economic slowdown concerns continue to circulate. US covid and flu cases are also on the rise. Ukraine/Russia situation is of concern after heavy shelling occurred over the weekend. Offshore values this morning were leading soybean oil 85 points lower
earlier this morning and meal $4.40 lower. Argentina is closer to roll out a second “soybean dollar” sometime in December. Range was estimated between 215-225 pesos per USD. That would be up from 200 back in September when they last rolled it out. December
CBOT options expire on Friday. China sold 40,152 tons of wheat from reserves, 100 percent of what was offered at an average price of 2,934 yuan per ton ($409.52/ton). Turkey seeks 40,000 tons of rice on November 25 for Dec 5-Feb 15 shipment. Jordan seeks 120,000
tons of milling wheat on November 29 for March and April shipment. Jordan seeks 120,000 tons of barley on November 23 for March and April shipment.

 

 

 

 

Weather

No
major changes were seen for the US and South America weather forecast from that of Friday. US trends drier this week with a few showers for eastern TX and wintery mix for the Midwest areas of the northwestern states later this workweek. Argentina will see
light rain across Cordoba and northern Santa Fe today before drying down through Friday. Brazil will see additional rain through Wednesday. West-central Brazil will begin to dry down soon and will remain dry throughout the week.

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 21, 2022

• Argentina
  rainfall during the weekend was locally great in central Buenos Aires, eastern La Pampa, central and southwestern Cordoba, San Luis and northwestern Santiago del Estero where some 1.00 to 2.00-inch amounts resulted
• Areas
  from southeastern Santiago del Estero and northern Cordoba to central Santa Fe and parts of Entre Rios were dry
• Brazil
  experienced net drying during the weekend except in the northeast where 1.00 to 2.00 inches of moisture occurred in several areas. Rain did develop overnight in some western and far southern parts of the nation and that trend will increase early this week
• Brazil
  will experience a good alternating pattern of rain and sunshine during the next two weeks, though a close watch on rain amounts is still Warranted in western and southern most parts of the nation where dryness could evolve relatively quickly and easily if
  it turns warmer and some rainfall is missed or lighter than expected
• Argentina
  temperatures will turn warmer than usual during the coming weekend into early next week to accelerate drying
• East-central
  and southern China crop areas are expected to continue trending wetter during the next ten days with most areas from the Yangtze River Basin southward to the coast getting rain at one time or another
• Improved
  rapeseed emergence and establishment will result
• Far
  southern India will remain wet over the next ten days
• A
  tropical disturbance in the Bay of Bengal is expected to impact Andhra Pradesh early to mid-week this week, but no crop damage is expected
• U.S.
  weather was generally dry during the weekend Thursday except Lake Effect snow in the Great Lakes region and rain from southeastern Texas to Louisiana
  
• Temperatures
  were cold
• U.S.
  hard red winter wheat areas will remain mostly dry especially in the high Plains region over the next two weeks
• West
  Texas harvest weather will remain good for the next ten days
• U.S.
  cold weather will abate this week with near to above normal temperatures likely late this week into early next week, but cooling is expected in western Canada and the northwestern U.S. next week
  
• Eastern
  Australia (away from Victoria) will continue to see less frequent and less significant rain over the next ten days supporting better winter crop maturation and harvest conditions
• Summer
  crop planting, emergence and establishment conditions will improve as well
• Victoria
  and southeastern South Australia will continue to see waves of rain maintaining wet conditions
• Western
  Australia weather will remain fine
• Europe
  and CIS weather will remain plenty wet during the next ten days except in the Baltic Plain
• Relief
  from drought is expected in the lower Danube River Basin as well as southern France, but eastern Spain will continue in need of greater rain.
• South
  Africa weather is still expected to be favorably mixed for all of agriculture and fieldwork

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
Nov. 21:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop harvesting for corn and cotton; winter wheat plantation and condition, 4pm
• MARS
  monthly report on EU crop conditions
• Malaysia’s
  Nov. 1-20 palm oil exports
• USDA
  total milk production, 3pm
• HOLIDAY:
  Argentina

Tuesday,
Nov. 22:

• EU
  weekly grain, oilseed import and export data
• US
  cold storage data for beef, pork and poultry, 3pm
• EARNINGS:
  Sime Darby Plantation

Wednesday,
Nov. 23:

• EIA
  weekly US ethanol inventories, production, 10:30am
• USDA
  red meat production, 3pm
• HOLIDAY:
  Japan

Thursday,
Nov. 24:

• Port
  of Rouen data on French grain exports
• Cane
  crush and sugar production data by Brazil’s Unica (tentative)
• HOLIDAY:
  US

Friday,
Nov. 25:

• 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
• Malaysia’s
  Nov. 1-25 palm oil export data

Source:
Bloomberg and FI

 

 

 

 

 

CFTC
Commitment of Traders

The
funds sold a large amount of corn and soybean meal for the week ending Tuesday November 15. For corn, the traditional funds sold 52,000 futures and options (combined) contracts. For soybean meal they sold 17,000. The trade missed the net long position for
traditional futures only funds position by a large 39,700 contracts. They were also well off on their net long position for soybeans by 19,000 contracts and soybean meal by 12,500 9all less long than expected). We could see some technical buying in light of
the CFTC positions as some longs could bottom pick.

 

 

 

 

 

 

Reuters
Table

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn      
        103,617    -49,624    361,352        780   -427,394     37,630

Soybeans           
44,261    -11,502    125,467      5,315   -140,762      7,149

Soyoil             
68,939      4,726    108,636      1,868   -192,536     -9,242

CBOT
wheat         -60,490     -2,009    107,057     -1,979    -40,428      4,677

KCBT
wheat           3,665     -2,584     46,787        454    -49,972      1,811

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
176,831    -60,831    238,170      4,727   -424,628     36,084

Soybeans           
92,965    -10,943     82,069      5,306   -134,665      7,765

Soymeal            
75,710    -19,710     85,396      3,655   -204,740     20,297

Soyoil            
110,371      5,160     82,520     -1,487   -207,549     -7,749

CBOT
wheat         -46,780     -3,876     66,665      1,719    -33,596      3,847

KCBT
wheat          21,281     -3,152     32,505      1,507    -50,065        556

MGEX
wheat             158     -2,897      1,622       -288     -1,680      3,329

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

Total
wheat        -25,341     -9,925    100,792      2,938    -85,341      7,732

Live
cattle         50,160    -12,021     53,326        253   -116,440     10,684

Feeder
cattle       -6,606       -613      3,235        -69      4,891        152

Lean
hogs           55,800      1,287     46,280        487    -84,502     -1,676

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
47,202      8,805    -37,575     11,214  1,851,206    -68,872

Soybeans          
-11,404     -1,167    -28,966       -961    711,647      8,162

Soymeal            
21,875      2,672     21,758     -6,915    440,919    -12,548

Soyoil               
-302      1,427     14,960      2,648    536,578     18,217

CBOT
wheat          19,849       -998     -6,139       -690    448,452      4,749

KCBT
wheat          -3,241        770       -480        318    173,978      1,264

MGEX
wheat           1,623       -418     -1,723        274     48,903     -3,460

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

Total
wheat         18,231       -646     -8,342        -98    671,333      2,553

Live
cattle         15,871       -657     -2,918      1,739    348,144     -3,691

Feeder
cattle       -2,457     -1,217        936      1,746     61,534      2,852

Lean
hogs           -6,093        -54    -11,485        -43    259,198      6,795

 

 

 

Macros

US
Chicago Fed Nat Activity Index Oct: -0.05 (est -0.03; prevR 0.17)

US
Chicago Fed Nat Activity Index – Full Report

 

 

Corn

·        
Corn futures are
lower following weakness in wheat and a higher USD not to mention ongoing selling in WTI crude oil. Most US ag markets were lower on technical selling. Weather looks ok for the US and South America over the next week, exception US Great Plains where more precipitation
is needed.

·        
China economic slowdown concerns continue to circulate. A single Covid positive test put a major University on lockdown. Beijing cases more than doubled the past few days. US covid and flu cases are also on the rise.

·        
The US has a gap in the trading week with US on holiday this Thursday and early close Friday. Expect a thin trade as the week matures.

·        
December CBOT options expire on Friday.

·        
CFTC’s Commitment of Traders report indicated funds were heavy net sellers for the futures only and futures and & options position for corn as of last Tuesday and ended up largest percentage sellers since mid-March 2020.  They
likely dumped long positions ahead of the official Russia announcement to extend the Black Sea shipping deal.

·        
***Two key US railroad unions voted yesterday on the White House brokered labor agreement. Results of that are expected to be announced today. If they vote against the deal, Congress could assemble and pass legislation to avoid
a standstill within the industry. So far, three unions voted against ratifying the deal and seven accepted it. ***breaking news will be sent out separately

 

Canada:
Outlook For Principal Field Crops – November 18, 2022

https://agriculture.canada.ca/en/canadas-agriculture-sectors/crops/reports-and-statistics-data-canadian-principal-field-crops

 

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT soybeans
and soybean oil are lower while meal is catching a bid from a reversal from early morning product spreading. Look for a two-sided trade. A new rollout of the Argentina “soybean dollar” could pressure March and other nearby back month CBOT product contracts
and soybean futures, or at least cash premiums.

·        
Both Reuters and Bloomberg are reporting that Argentina is closer to roll out a second “soybean dollar” sometime in December. Range was estimated between 215-225 pesos per USD. That would be up from 200 back in September when
they last rolled it out. Argentine producers sold 72.2% of the 44 million tons soybean production for the 2021-22 crop (USDA 43.9MMT), down slightly from 74.2% during the same period year ago. 49.5 million tons is what USDA has penciled in for 2022-23, down
from 51 million tons estimated back in September. We are hearing Argentina crush rates are not as good as they were when they rolled out the September bump, so more soybeans this round could end up exported rather than be crushed. Either way, look for March
CBOT soybean oil and meal product premiums to come under pressure versus other contract months as Argentina could boost exportable product supply by as early as January 1. The Buenos Aires grains exchange reported 12% of the Argentina soybean crop planted
versus 29 percent year ago. They are using a 16.7 million hectare area.

·        
AmSpec reported November 1-20 Malaysian palm oil exports at 921,808 tons, up 2.9% from 895,522 tons from the same period during October.

·        
Cargo surveyor ITS reported November 1-20 palm oil shipments from Malaysia at 997,216 tons, up from 909,817 tons previous period month earlier, or up 9.6% increase.

·        
Malaysia is back from a one day holiday and February palm oil futures was up 5 ringgit to 3,855 and cash was off $7.50/ton to $910/ton.

·        
China November soybeans were down 1%, meal 0.2% higher, soybean oil 1.2% lower and palm oil down 0.7%.

·        
Rotterdam vegetable oils were down 5-12.50 euros lower from this time Friday morning. SA meal was mixed.

·        
Offshore values this morning were leading soybean oil 85 points lower earlier this morning and meal $4.40
lower.

 

Export
Developments

·        
Egypt’s GASC seeks vegetable oils on Tuesday for January 10-31 shipment via 180-day letters of credit.  They are also in for local vegetable oils.

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

 

Wheat

·        
US wheat futures are lower on slowing global trade developments and higher USD. Look for a light trade all of this week, which could also lead to some volatile swings.

·        
Paris December wheat was down 0.75 euro earlier at 325.00 euros a ton.

·        
IKAR estimated Russia 2022-23 grain exports at 53.5 million tons, up 1 million from previous. They see wheat at 44 million tons, up 2 million from their last estimate.

·        
The Rosario BOT estimated Argentina will only export 6.5 million tons of wheat in 2022-23, down from 7 million previous and below a 5-year average of 11.7 million tons.

 

US
Wheat Associates

“(US)
Basis was mixed in both the Gulf and PNW this week. Wheat traders noted that while export prices need to soften to attract export business, a strong domestic market is keeping basis from softening more. Farmer selling is slow, leading to a slight increase
in HRS basis in the Gulf and a firm HRS basis in the PNW. Railroads originated more grain carloads this week than last, and secondary rail rates decreased week-over-week. However, challenges with railroad logistics remain said one wheat trade. Although Russia’s
agreement to continue the Black Sea grain deal is relevant, grain markets were subdued following the extension’s announcement.”

 

Export
Developments.

·        
China sold 40,152 tons of wheat from reserves, 100 percent of what was offered at an average price of 2,934 yuan per ton ($409.52/ton).

·        
Turkey seeks 40,000 tons of rice on November 25 for Dec 5-Feb 15 shipment.

·        
Pakistan is in for 500,000 tons of wheat on November 28.

·        
Jordan seeks 120,000 tons of barley on November 23 for March and April shipment.

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

 

Rice/Other

·        
None reported