FI Morning Grain Comments 11/30/22

PDF attached

 

Good
morning.

 

USDA
reported private exporters reported sales of 136,000 tons of soybeans for delivery to China during the 2022-23 marketing year.

 

The
soybean complex, corn, and Chicago wheat are higher this morning on widespread commodity buying. WTI crude oil is up sharply, USD down nearly 50 points and US equities mixed/higher. Powell will speak later today. Soybeans hit a two month high on follow through
rumors China will ease covid restrictions. Argentina weather concerns are adding to the bullish undertone.  A rebound in soybean meal and higher soybean oil is lending strength to soybeans, IMO. Corn and wheat are higher, but gains are limited on Black Sea
competition for wheat and SA corn. A Bloomberg poll looks for weekly US ethanol production to be down 3,000 thousand to 1038k (1025-1052 range) from the previous week and stocks down 100,000 barrels to 22.729 million. The EPA is expected to roll out their
RVO mandates today for 2023, 2024, and 2025. Some traders are looking for a 1.0-1.5 billion gallon increase.

 

 

 

 

Weather

The
weather outlook was mostly unchanged for the US than that of yesterday and slightly drier for Argentina. Weather forecaster Maxar noted temperatures in Argentina topped 100 degrees Fahrenheit in recent days and are expected to remain above normal over the
next two weeks. Argentina will see rain this week across Cordoba, northeastern Buenos Aires then Santa Catarina & Entre Rios before drying down over the weekend. Brazil’s northern areas are favorable while net drying is occurring across parts of the southern
and western growing areas. Rain will fall across Brazil’s northern and eastern areas through Friday and expand into central and western areas this weekend. The US Great Plains will be mostly dry this week with exception of weekend event across southern OK
and northern TX. The Midwest will be active over the next few days while the WCB will be mostly dry.

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 30, 2022

• Welcome
  rain fell from southern Cordoba and San Luis through central Buenos Aires overnight bringing some relief to dryness
• Most
  of the rain was light and will only provide temporary relief from recent dry and hot weather
• Areas
  northeast and southwest of the rain band did not receive much rain and very little is likely as the precipitation shifts northeast today and early Thursday
• Argentina’s
  bottom line will remain one of concern especially for Santa Fe, southeastern Santiago del Estero, Chaco and western Entre Rios where the poorest soil moisture is expected over the next ten days, despite some shower activity today and early Thursday
• Brazil
  weather is expected to remain favorably mixed over the next ten days with some improved soil moisture likely over time in Mato Grosso and neighboring areas that have been dry for a while
• Northern
  Europe is still expected to cool down, although no extreme cold is likely for a while
• Western
  and northern Russia will also be cool biased while southern Europe, including Ukraine, and Russia’s Southern Region will continue seeing normal temperatures
  
• There
  is no risk of winterkill in any part of Europe of the western CIS through the next ten days
• Eastern
  China’s greatest precipitation will continue near and south of the Yangtze River during the next couple of weeks
  
• Colder
  air is pushing winter crops into dormancy in the north
• India’s
  weather will be normal and favoring fieldwork of all kinds and additional development of early planted winter crops
• South
  Africa weather will be favorably mixed over the next two weeks
• Australia
  will see good harvest weather in the winter grain and oilseed production areas during the next two weeks
• U.S.
  hard red winter wheat areas will continue dry during the next ten days
• Heavy
  rain fell overnight in the interior southeastern parts of the U.S.; including southeastern Tennessee, northern Alabama, northern Georgia and northeastern Mississippi
  
• These
  areas will see additional waves of rain in the coming ten days keeping the region very wet
• A
  boost in precipitation is expected for California and western parts of Oregon and Washington state over the next week improving mountain snowpack and topsoil moisture
• Bitter
  cold will continue to come and go over the next ten days in the north-central U.S. with only brief shots of cooling in the eastern states

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

First
Notice Day Deliveries

 

 

 

Macros

US
House Speaker Pelosi: House To Vote On Paid Sick Leave For Rail Workers Wednesday

US
GDP Annualized (Q/Q) Q3 S: 2.9% (est 2.8%; prev 2.6%)

US
Personal Consumption Q3 S: 1.7% (est 1.6%; prev 1.4%)

US
GDP Price Index Q3 S: 4.3% (est 4.1%; prev 4.1%)

US
Core PCE (Q/Q) Q3 S: 4.6% (est 4.5%; prev 4.5%)

US
Wholesale Inventories (M/M) Oct P: 0.8% (est 0.5%; prev 0.6%)

US
Retail Inventories (M/M) Oct: -0.2% (est 0.5%; prevR -0.1%)

US
Advance Goods Trade Balance Oct: -$99.0B (est -$90.6B; prevR -$91.9B)

US
ADP Employment Change Nov: 127K (est 200K; prev 239K)

 

Corn

·        
Corn futures are
higher this morning on widespread commodity buying. Gains are limited on South American competition.

·        
First Notice Day deliveries for December corn were 308.

·        
China’s Ministry of Agriculture and Rural Affairs reported the sow herd increased by 0.4% in October from September to 43.79 million sows, 0.7% larger than a year ago.

·        
Kenya will temporarily drop their import duty on 900,000 tons of corn to boost stocks.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 3,000 thousand to 1038k (1025-1052 range) from the previous week and stocks down 100,000 barrels to 22.729 million.

 

Export
developments.

·        
South Korea’s MFG bought 69,000 tons of South America corn for Jan 10-Feb 8 shipment. 50% was bought at an outright price of $336 a ton c&f and 50% at $1.8423/bushel c&f over the March.

·        
South Korea’s FLC bought 65,000 tons of South America corn at an estimated $335.95 a ton c&f for shipment from South America in 2023 between Jan. 1 and Jan 20

 

 

 

 

Soybeans

·        
CBOT soybeans
hit a two month high on follow through rumors China will ease covid restrictions and Argentina weather concerns. A rebound in soybean meal and higher soybean oil is lending strength to soybeans, IMO.

·        
Weather forecaster Maxar noted temperatures in Argentina topped 100 degrees Fahrenheit in recent days and are expected to remain above normal over the next two weeks. Brazil’s northern areas are favorable while net drying is occurring
across parts of the southern and western growing areas.

·        
The US EPA is expected to roll out their RVO mandates today for 2023, 2024, and 2025.
Some
traders are looking for a 1.0-1.5 billion gallon increase. https://www.epa.gov/renewable-fuel-standard-program/news-notices-and-announcements-renewable-fuel-standard

·        
Indonesia set their reference price for crude palm oil at $824.32 per ton for December 1-15 shipment, using a reference price at $33 per ton and levy at $85 per ton, unchanged from the November 16-30 period.

·        
India raised the base import prices of crude palm oil and soybean oil.

·        
Good Malaysian palm oil export supported palm futures overnight. AmSpec reported November palm oil exports at 1.499 million tons versus s1.475 million during October. ITS reported a 5.6% increase to 1.580 million tons from 1.496
million during October.

·        
Malaysia February palm oil futures was up 15 ringgit to 4,234 and cash was up $13.00/ton to $1,011/ton. For the month palm futures were up 4.5%.

·        
China January soybeans was up slightly%, meal 0.7% higher, soybean oil up 1.4% and palm oil up 1.5%.

·        
Rotterdam vegetable oils were mixed from this time yesterday morning. SA meal was mostly 3-12 euros higher.

·        
Offshore values this morning were leading soybean oil 27 points higher earlier this morning and meal $10.40
higher.

 

 

 

 

Export
Developments

·        
USDA reported private exporters reported sales of 136,000 tons of soybeans for delivery to China during the 2022-23 marketing year.

 

Wheat

·        
US wheat futures for Chicago and KC are rebounding after around a three-month low established this week, but gains are limited on Black Sea competition.

·        
US winter wheat crop conditions improved from the previous week but remain well below average ahead of dormancy.

·        
Paris March wheat was higher by 3.25 euros earlier at 316 euros a ton.

·        
USDA crop conditions for winter wheat increased 2 points to 34 percent, lowest since at least 1988 when USDA started reporting fall winter wheat crop conditions. Traders were looking for a one point increase. 91 percent of the
winter wheat was emerged, up from 87 percent previous week and one point above average.

·        
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.

 

Export
Developments.

·        
Pakistan started getting offers for 500,000 tons of wheat. The lowest price offered was believed to be $372.00 a ton c&f for Russian origin.

·        
Algeria seeks 50,000 tons of optional origin soft milling wheat, valid until December 1, for January shipment.

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

·        
China plans to auction off 40,000 tons of wheat from reserves on December 7. 

·        
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.

·        
India ended their ban on rice exports after imposing it three months ago on exports of organic non-basmati rice and broken rice.