FI Morning Grain Comments 11/28/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 110,000 metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year.

 

Mostly
lower trade in US agricultures futures on renewed global recession concerns, lower WTI crude oil, and expectations for Argentina to increase soybean and product exports over the next couple of months. Unrest in China over Covid lockdowns and declining profits
at China industrial firms (NBS reported Jan-Oct fell 3.0%) renewed recession fears and that is weighing on some commodities. WTI crude oil hit its lowest level since late December 2021. Soybean oil is sharply lower on weaker EU vegetable oil prices and lower
energy markets.  CFTC Commitment of Traders is due out after the close.

 

Argentina
officially launched their new “soybean dollar” at a rate of 230 pesos per USD. It includes products. The official rate is currently around 165 pesos. The government aims to collect around $3 billion to strengthen reserves. We heard they are lowering the soybean
meal and soybean oil tax rate by two points to 31 percent, an incentive for crushers looking to export products. Earlier last week we read up to 12 million tons of old crop soybeans could be theoretically sold, but the government said that number is closer
to 5 million tons. In September about 13 million tons of soybeans changed hands.

 

Malaysia
is on holiday. China January soybeans were down 0.3%, meal 0.6% lower, soybean oil down 1.4% and palm oil off 0.8%. Rotterdam vegetable oils were about 50 euros lower from this time Friday morning for the nearby positions and rapeseed oil 15 euros lower. SA
meal was mixed lower. Offshore values this morning were leading soybean oil 52 points lower earlier this morning and meal $0.10 higher. South Korea’s NOFI group bought 138,000 tons of optional origin corn for March arrival. Tenders will be conducted this week
by Turkey, Jordan, and Pakistan.

 

 

 

 

Weather

Rain
over the weekend was as expected for the US Midwest & Delta and near expectations for the Great Plains. Precipitation will occur across the Midwestern south central and northwestern areas Tuesday, and eastern areas Wednesday. For the Great Plains, northern
CO and NE will see a wintery mix Tuesday. Rest of the Great Plains will see net drying through the end of the workweek. Argentina’s southwestern BA saw rain over the weekend. BA will see rain through Tuesday, while from Wednesday into Thursday, Argentina’s
Cordoba, south Santa Fe, Buenos Aires will benefit from precipitation. Brazil will see rain this week across most growing areas, drier bias MGDS and RGDS.

 

 

Past
seven days

 

World
Weather, INC.

 

 

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
Nov. 28:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop harvesting for corn and cotton; winter wheat planting and condition, 4pm

Tuesday,
Nov. 29:

• Vietnam’s
  General Statistics dept releases November coffee, rice and rubber export data
• EU
  weekly grain, oilseed import and export data
• Roundtable
  on Sustainable Palm Oil (RSPO) 2022 conference, Kuala Lumpur, Nov. 29-30

Wednesday,
Nov. 30:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysia’s
  November palm oil exports
• US
  agricultural prices paid, received, 3pm

Thursday,
Dec. 1:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Australia
  commodity index
• USDA
  soybean crush, DDGS production, corn for ethanol, 3pm

Friday,
Dec. 2:

• FAO
  World Food Price Index
• Canada’s
  StatCan to release wheat, canola and barley production data, 8:30am
• 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

Source:
Bloomberg and FI

 

 

 

 

 

Macros

 

Corn

·        
Corn futures are
lower on weaker energy markets and market jitters over global recession concerns. China expanded lockdowns over the past week after covid cases spiked. News for the corn market is light.

·        
The USD is lower. Earlier it briefly hit its lowest level since the second week of August.

·        
WTI crude oil fell below $74, hitting its lowest level since late December 2021.

·        
Position day is Tuesday for December expiry commodities. We should see positioning today and tomorrow ahead of it. We look for light deliveries for the main ag products, if any.

·        
US railroad strike could come as early as December 9. Roughly 30% of US freight, when measured by weight, is handled by trains.

 

Export
developments.

·        
South Korea’s NOFI group bought 138,000 tons of optional origin corn for March arrival at $332.39/ton c&f, $1.8270 over the March contract, and $1.7900 over the March.

 

Soybeans

·        
CBOT soybeans
and soybean oil are lower on weaker energy markets and Argentina rolling out another soybean dollar. Meal is higher on product spreading. China soybean import concerns loom as the country saw a spike in covid cases late last week into
this weekend.

·        
Argentina officially launched their new “soybean dollar” at a rate of 230 pesos per USD. It includes products. The official rate is currently around 165 pesos. The government aims to collect around $3 billion to strengthen reserves.
We heard they are lowering the soybean meal and soybean oil tax rate by two points to 31 percent, an incentive for crushers looking to export products. We look for any soybeans sold to flow more so to crusher than exporters. Earlier last week we read up to
12 million tons of old crop soybeans could be theoretically sold, but the government said that number is closer to 5 million tons. Cash traders agree with the 5 million tons. In September about 13 million tons of soybeans changed hands.

·        
It was rumored China may buy 1.0-1.5 million tons of soybeans from Argentina for Dec-Jan coverage. China was last estimated 30 percent covered for January.

·        
AgRural reported Brazil’s 2022-23 soybean planting progress at 87% complete as of November 24, up 7 points from a week earlier and compares to 90% last year. They are using a 150.5-million-ton soybean production estimate. 

·        
A US RVO announcement should be announced this week as the deadline for 2023, 2024, and 2025, is by end of business day November 30.
https://www.epa.gov/renewable-fuel-standard-program/news-notices-and-announcements-renewable-fuel-standard

·        
Egypt’s vegetable oil reserves are sufficient for five months.

·        
Malaysia is on holiday.

·        
China January soybeans were down 0.3%, meal 0.6% lower, soybean oil down 1.4% and palm oil off 0.8%.

·        
Rotterdam vegetable oils were about 50 euros lower from this time Friday morning for the nearby positions and rapeseed oil 15 euros lower. SA meal was mixed lower.

·        
Offshore values this morning were leading soybean oil 52 points lower earlier this morning and meal $0.10
higher.

 

Export
Developments

·        
None reported.

 

Wheat

·        
US wheat futures are lower in Chicago and KC while nearby Minneapolis is higher. High protein wheat demand by major importing countries has been very strong over the past several weeks. US weather is expected to be dry for the
US Great Plains after a small system far out west wraps up mid-week.

·        
Paris March wheat was lower by 3750 euros earlier at 314.75 euros a ton.

·        
Russia increased its export quota on nitrogen fertilizers by 750,000 tons until the end of 2022.

·        
Egypt said they have enough wheat reserves to last more than five months and sugar for four months. They bought 3.72 million tons so far for 2022-23. 

·        
Ukraine’s grain exports since July 1 fell 31.9% 17.2 million tons compared to the same period last year. 

6.6MMT
of wheat, down 54% y/y

1.4
MMT of barley, down 73% y/y

9.1
MMT of corn, up 66% y/y

 

Export
Developments.

·        
China auctioned off 39,995 tons of wheat from reserves, nearly 100 percent offered, on November 23, at 2,815 yuan per ton. China plans to auction off another 40,000 tons mid this week. 

·        
Turkey seeks 455,000 tons of milling wheat on November 29 for Dec/Jan shipment.

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

·        
Pakistan is in for 500,000 tons of wheat on November 30, two days later than previous announcement.

·        
Turkey seeks 495,000 tons of feed barley on December 1 for Jan through Feb shipment.

 

Rice/Other

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