FI Morning Grain Comments 11/22/22

PDF attached

 

Good
morning.

 

USD
is lower and WTI crude oil higher. News is light ahead of the US holiday (Thursday). A rail union rejected a labor deal and that raises the threat for a US strike in about two weeks. Egypt started getting offers for their import tender for vegetable oils.
US winter wheat conditions were unchanged from the previous week, one point below trade expectations. US Great Plains will remain mostly dry over the next week. Soybean oil is higher, influenced by outside related markets. Grains are higher bias bull spreading.
EU milling wheat (December) is up a strong 9.25 euros a ton this morning, highest in three weeks.

 

Weather

Some
changes were seen Tuesday morning for the US and South America weather forecast. The 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. Rain should favor the US
Midwest southwestern areas Thursday. The Delta turned wetter for the rest of this week. Argentina will dry 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 22, 2022

• Another
  round of excessive heat is expected in Argentina over the next five days with highs rising through the 80s and 90s Fahrenheit and a few extremes reaching over 100
  
• Argentina
  will be dry through the weekend except for some rain in southern Buenos Aires and La Pampa this weekend
• Rain
  next week is greatest from southern Santa Fe and Entre Rios into Buenos Aires while areas to the north are still drier biased
• Brazil’s
  crop areas from Mato Grosso do Sul to Rio Grande do Sul will get some rain today and Wednesday, but then be dry through early next week
• This
  region will be closely monitored for rainfall in the second week of the outlook since without it there could be a little concern over crop moisture and future development potential
• For
  now, though, the outlook is favorable for timely rainfall in the second week
• Otherwise,
  Brazil should see a good mix of rain and sunshine, including Mato Grosso and Goias
• Too
  much rain may fall from Espirito Santo and a part of both northern Minas Gerais and Bahia into Tocantins where flooding is eventually expected
• U.S.
  southern Plains have potential for rain and snow to evolve Thursday through Saturday
  
• This
  will generate rain and snow across the Texas Panhandle, Oklahoma and south-central and eastern portions of Kansas wheat production areas
• The
  moisture will be light and beneficial, but it will miss the west-central high Plains
  
• Snow
  will accumulate in the Texas Panhandle and immediate neighboring areas into southern Kansas and Oklahoma
• U.S.
  Delta and southeastern states will receive precipitation in waves from Thursday through Sunday ending Monday
• The
  moisture may be sufficient to induce a little rise on the lower Mississippi River level
• Precipitation
  in the lower eastern Midwest should be light
• California
  will receive some needed moisture again next week favoring the Sierra Nevada
• No
  changes in Europe, CIS, India, South Africa or Australia weather overnight
• Cooling
  is expected in eastern China next week as some of the bitter cold from eastern Russia moves southeast
• No
  crop threatening cold is currently expected

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

Macros

Canadian
Retail Sales (M/M) Sep: -0.5% (est -0.5%; prevR 0.4%)

Canadian
Retail Sales Ex Auto (M/M) Sep: -0.7% (est -0.6%; prevR 0.5%)

Philadelphia
Fed Non-Manufacturing Regional Business Activity Index -13.6 In Nov Vs -14.9 In Oct

Philadelphia
Fed Non-Manufacturing Firm-Level Business Activity Index -2.6 In Nov Vs 11.2 In Oct

Philadelphia
Fed Non-Manufacturing New Orders Index -6.3 In Nov Vs -5.5 In Oct

Philadelphia
Fed Non-Manufacturing Full-Time Employment Index 10.0 In Nov Vs 13.3 In Oct

Philadelphia
Fed Wage And Benefit Cost Index 41.5 In Nov Vs 49.9 In Oct

 

USDA
inspections versus Reuters trade range

Wheat                 
279,904                 versus   75000-300000                     range

Corn                     
495,395                 versus   235000-700000  range

Soybeans           
2,329,082             versus   1000000-2500000             range

 

Corn

·        
Corn futures are
higher on technical buying, lower USD, higher WTI crude oil and good US demand. There was some chatter China may import more corn to ease high domestic prices, but that is speculation in my opinion as they harvested a large 2022 crop. China’s recent CASDE
calls for less corn imports for the 2022-23 season.

·        
The US corn harvest was 96 percent, 2 points below expectations.

·        
The trade will be monitoring the US rail situation. After a union rejected a White House broker deal, a strike could develop in about two weeks. A strike could cost the US economy 2 billion dollars per day.

·        
December CBOT options expire on Friday.

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT soybeans
are higher on strength in soybean oil. Higher WTI crude oil and heating oil along with a higher trade in Malaysian palm oil is supporting soybean oil. Product spreading is sending soybean meal lower.

·        
News for the soybean complex is light. The US soybean harvest is nearly complete.

·        
Brazil is over 80 percent complete for soybean plantings while Argentina is catching up to average after getting rain last week.

·        
Brazil plans to keep its biodiesel mandate at ten percent until March 31. From April onward the mandate increases to 15%. Brazil’s feedstock for biodiesel accounts for about 70 percent soybean oil. Some traders are worried about
the large increase from 10 percent to 15 percent.

·        
Malaysia February palm oil futures was up 149 ringgit to 4,004 and cash was up $35/ton to $945/ton.

·        
China November soybeans were down 0.6%, meal 0.9% higher, soybean oil 0.7% lower and palm oil up 0.8%.

·        
Rotterdam vegetable oils were up 5 euros  from this time yesterday morning. SA meal was mixed.

·        
Offshore values this morning were leading soybean oil 39 points higher earlier this morning and meal $0.80
higher.

 

Export
Developments

·        
Egypt’s GASC started receiving offers for vegetable oils for Jan 10-31 arrival and lowest offer was $1,406 a ton c&f for 15,000 tons of sunflower oil. The lowest offer for soyoil was $1,496 a ton c&f for 30,000 tons.

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

 

Wheat

·        
US wheat futures are mixed with nearby contract higher on bull spreading, limiting upside movement in the back months. The USD is lower and that is providing some support. Grains are trading higher in general on North America
winter grain crop concerns and a dry bias expected over the next week for the US Great Plains.

·        
Eastern TX doers have a chance for rain Wednesday, but other areas will see net drying accelerate with temperatures warming above 40 degrees.

·        
US winter wheat ratings were unchanged from the previous week and remain lowest since USDA began reporting back in the mid 1980’s. At 32 percent they are below 44 percent year ago. Traders were looking for a one point improvement.
87 percent of the crop is emerged.

·        
Paris December wheat was up 9.25 euros earlier at 340 euros a ton. Good demand for EU wheat was noted last week and again Monday.

·        
Ukraine winter grain plantings are 94 percent complete or 4.4 million hectares, including 3.8 million wheat. Plantings slowed in recent days after a storm rolled through some of the growing areas, boosting soil moisture levels.

 

Export
Developments.

·        
Taiwan bought 43,400 tons of milling wheat from the US for Jan shipment. It included 26,800 tons of dark northern spring wheat at $420.71 a ton FOB, 12,650 tons of hard red winter wheat at $425.12 a ton FOB, and 3,950 tons of
soft white wheat at $354.57 a ton,  FOB.

·        
Algeria seeks at least 50,000 tons of durum wheat on Wednesday for last half December and first half January arrival.

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

·        
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 hard milling wheat on November 29 for March/April shipment.

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade Corp. passed on 50,500 tons of rice sourced from the United States. They floated another import tender for 63,600 tons of rice from the United States set to close Nov. 24.