FI Morning Grain Comments 11/29/22

PDF attached

 

Good
morning.

 

Look
for positioning today ahead of December First Notice Day deliveries. WTI
crude oil is rallying on expectations for OPEC to cut oil production and rumors of China easing covid controls. The USD is lower and US equities mixed. Mixed trade in CBOT ags. CBOT soybeans and soybean oil are higher on follow through buying. The trade is
waiting for the EPA to roll out their RVO mandates that are due out by end of November, for 2023, 2024, and 2025.
https://www.epa.gov/renewable-fuel-standard-program/news-notices-and-announcements-renewable-fuel-standard 
Higher WTI crude and an 18-day high in palm futures are supporting soybean oil. Soybean meal is lower on product spreading and lower corn futures. US wheat futures are mostly on lack of direction.

 

 

 

Weather

The
weather outlook improved for the US Midwest, Delta and Brazil than that of yesterday. Precipitation will occur across the Midwestern south central and northwestern areas today, and eastern areas Wednesday. For the Great Plains, northern CO and NE will see
a wintery mix today. Rest of the Great Plains will see net drying through the end of the workweek. Argentina’s BA will see rain through today, 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.

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 29, 2022

• Argentina
  dryness relief tonight into Thursday will be restricted, but any rain will be better than none
• The
  greatest relief is expected from southeastern Buenos Aires to southern Cordoba where 0.50 to 1.50 inches will result with a few totals in southeastern Buenos Aires getting 3.00 inches
• Northeastern
  and southwestern Argentina will stay drier than usual through the next two weeks, although there will be potentials for other showers evolving in the middle to latter part of next week further out in time during early December
• Brazil
  weather is expected to improve with the drier areas in the west and south receiving a boost in precipitation late this week into next week
  
•  Cooling
  in North America will not adversely impact winter crops, but it will pressure more crops into dormancy
• Cooling
  in Europe will be confined mostly to the north and the impact on heating fuel demand should be low, but the North and Baltic Sea regions and northwestern Russia will be trending cooler than usual next week
• Europe’s
  greatest rain will be in the southern parts of the continent during the next ten days while the north cools down
• Western
  CIS cooling is non-threatening and brief periods of light precipitation will continue
  
• China’s
  greatest rain will remain near and south of the Yangtze River Valley maintaining moisture abundance in the region
• South
  Africa weather will remain favorably mixed over the next two weeks
• U.S.
  weather will continue at status quo with navigable river levels to remain low and the west-central Plains staying dry
• California’s
  central valleys will get rain again late this week and into the weekend with snow in the Sierra Nevada
• Additional
  waves of precipitation will continue into next week
• West
  Texas rainfall may return briefly this weekend into early next week
• Eastern
  Midwest, Delta and southeastern states will see the greatest precipitation for a while and some improved runoff potential is expected
• Heavy
  rain may impact the northern Coast of California and southwestern Oregon during the next ten days
• Australia
  weather will be wettest in eastern Queensland and far northeastern New South Wales during the next ten days favoring sugarcane and some summer grain and cotton
• Good
  winter crop maturation and harvest weather is expected elsewhere.
• South
  Africa weather will remain favorably mixed over the next ten days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

FI
First Notice Day Delivery estimates

No
changes in registrations overnight.

 

 

 

USDA inspections versus Reuters trade range
Wheat	198,519	versus	200000-400000	range
Corn	302,350	versus	400000-850000	range
Soybeans	2,022,443	versus	1800000-2250000	range

 

CFTC
Commitment of Traders

No
surprises

 

 

 

 

Macros

OPEC+
Seen Considering Deeper Output Cuts As Oil Market Falters – BBG

Canadian
GDP (M/M) Sep: 0.1% (est 0.1%; prevR 0.3%)

Canadian
GDP (Y/Y) Sep: 3.9% (est 3.8%; prev 4.0%)

Canadian
Quarterly GDP Annualized Q3: 2.9% (est 1.5%; prevR 3.2%)

Canada
GDP Seen Flat In Oct. After 2.9% Annualized Q3 Expansion

 

Corn

·        
Corn futures are
lower on improving South American weather despite a lower USD. USDA corn inspections reported Monday were poor.

·        
Look for positioning today ahead of December First Notice Day deliveries. We look for light deliveries for the main ag products, if any.

·        
WTI crude oil is rallying on expectations for OPEC to cut oil production and rumors of China easing covid controls.

·        
Mexico’s president and U.S. Secretary of Agriculture Tom Vilsack held a meeting yesterday afternoon over GMO corn. Some progress was made but the United States warned of legal action, citing economic losses and violation of the
USMCA agreement. Mexico previously announced they are banning GMO corn imports starting 2024.

·        
US railroad strike could come as early as December 9. Latest news was the Biden Administration was putting pressure on unions and companies to get a deal done.  Roughly 30% of US freight, when measured by weight, is handled by
trains.

·        
(Bloomberg Government) — The Biden administration denied a request for truckers who transport livestock, insects, and aquatic animals to be exempt from some federal regulations on driving time…The Federal Motor Carrier Safety
Administration rejected the request, saying it wouldn’t meet an acceptable safety level, according to a notice set to publish in the Federal Register on Tuesday.

·        
South Africa’s CEC issued its final corn production estimate for the 2021-22 season and sees a 5.7% decrease from previous year (16.315MMT) to 15.387 million, including 7.790 million tons of white corn and 7.597 million tons of
yellow. 

 

Export
developments.

·        
South Korea’s MFG bought an estimated 70,000 tons of corn in a tender for up to 140,000 tons, either from South Africa or South America, at $336.45/ton c&f and $185.75 over the March contract, for March arrival.

 

 

 

Soybeans

·        
CBOT soybeans
(three-week high) and soybean oil are higher on follow through buying. The trade is waiting for the EPA to roll out their RVO mandates that are due out by end of November, for 2023, 2024, and 2025.
https://www.epa.gov/renewable-fuel-standard-program/news-notices-and-announcements-renewable-fuel-standard 
Higher WTI crude oil and an 18-day high in palm futures are supporting CBOT soybean oil futures. Soybean meal is lower on product spreading and lower corn futures.

·        
Soybean oil had a technical outside day higher yesterday. A higher close is needed today to confirm the reversal.

·        
Monday was the start of the Argentina soybean dollar. We heard about 500,000 tons of soybeans moved today and crushers bought them all.

·        
After a one-day holiday, Malaysia February palm oil futures was up 79 ringgit to 4,219 and cash was up $18.00/ton to $998.00/ton.

·        
China January soybeans were down 0.3%, meal 0.1% lower, soybean oil up 2.1% and palm oil up 2.7%.

·        
Rotterdam vegetable oils were about 5 euros higher from this time yesterday morning. SA meal was mostly 1-2 euros lower.

·        
Offshore values this morning were leading soybean oil 99 points lower earlier this morning and meal $3.90
lower.

·        
USDA US soybean export inspections as of November 24, 2022, were 2,022,443 tons, near the high end of a range of trade expectations. Major countries included China for 1,496,590 tons, Italy for 135,970 tons, and Mexico for 33,932
tons. US soybean inspections have been good over the past few weeks and on a daily adjusted basis so far for the month of November, they are running a touch better than October. We raised our November soybean export estimate by 15 million bushels and our 2022-23
crop year forecast was lifted by the same amount to 1.990 billion bushels, still well below 2.045 billion projected by USDA. Our US carryout is 275 million bushels, down from 15 previous and compares to 220 million by USDA.

 

 

Export
Developments

None
reported 

 

Wheat

·        
US wheat futures are mostly lower on lack of direction. There are again rumors of additional wheat soon arriving into the US east coast.

·        
Paris March wheat was lower by 0.75 euro earlier at 314.50 euros a ton.

·        
USDA crop conditions for winter wheat are delayed until this afternoon due to a system error. US winter wheat crop rating was expected by the trade to increase one point.  Estimates ranged from 32% to 35%. For the US winter wheat
area, 75% was experiencing drought as of November 22. Kansas, which produced about a quarter of the winter wheat crop, was at 89% (46% exceptional). Note for the spring wheat area, 77 percent was experiencing drought.

·        
Ukraine planted 4.5 million hectares of winter grains, 94 percent of the expected area, including 3.8 million hectares of winter wheat.  The winter area is down from 6.2 million year earlier.

·        
USDA US all-wheat export inspections as of November 24 were 198,519 tons, below a range of trade expectations.

 

Export
Developments.

·        
Turkey bought 455,000 tons of milling wheat for Dec/Jan shipment at various prices, between $322.89 and $344.00 per ton.

·        
Algeria seeks 50,000 tons of optional origin soft milling wheat on Wednesday (November 30), valid until December 1, for January shipment.

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

·        
China plans to auction off 40,000 tons of wheat mid this week. 

·        
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

·        
Rice futures hit their highest level since June 2020.

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