FI Morning Grain Comments 12/01/22

PDF attached

 

Good
morning.

 

USDA:
Private exporters reported sales of 114,300 metric tons of corn for delivery to Mexico during the 2022/2023 marketing year.

 

News
outlets, citing sources, reported the US EPA may officially announce a small increase in 2023 renewable fuel blending obligations to 20.82 billion from 20.63 billion in 2022. Traders found the 2023 increase on the low side and sold CBOT soybean oil futures
overnight. Many traders were looking for a 1.0-1.5-billion-gallon increase, at least for 2023. The following year, 2024, was pegged to grow about a billion to 21.87 billion and 2025 to 22.68 billion. Conventional (ethanol) was reported, from sources, to be
left at 15 million gallons in 2023 before rising to 15.25 billion in 2024 and 2025. Advanced was seen at 5.82 billion gallons in 2023, 6.62 billion in 2024 and 7.43 billion in 2025. The EPA will also allow electric vehicle companies, like Tesla, to generate
credits (D3 credit pool).

 

CBOT
soybeans are under pressure from lower soybean oil while meal is higher from product spreading. CBOT crush was down 17.50 cents earlier at $1.74. Wheat is lower despite a lower USD and higher WTI crude oil. Corn turned higher near the end of the electronic
session. US equities are pointing towards a higher open from good US economic data. The US House passed a bill to avert the rail strike. It now goes to the Senate. USDA export sales for all-wheat and SBO came in below expectations. Soybeans, soybean meal and
corn were at the low end of a range of trade expectations. It was another week of large reductions for the unknown category for soybeans of 702,900 tons. End users will likely take advantage of the dip in soybean oil as the mandates will not change projections
for the US soybean oil balance sheet, set to show as increase biofuel production this and next crop season, further tightening stocks. Offshore values were leading SBO higher by about 66 points earlier this morning and meal $6.50 short ton lower.

 

 

 

Weather

The
weather outlook was mostly unchanged. Argentina will see rain across 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 for the remainder of the 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 DECEMBER 1, 2022

• Southern
  Europe is expecting a stormier weather pattern to evolve next week and continue into mid-month with frequent bouts of rain and snow expected
• Northern
  and central Europe will be colder than usual during the next couple of weeks with central areas expecting near normal temperatures in this first week of the outlook
• Bitter
  cold in Russia will expand to the west from the New Lands over the next few days and no snow is expected to fall leaving eastern Ukraine and portions of Russia’s Southern Region snow free when the coldest conditions evolve; however, temperatures are not expected
  to drop below the damage threshold in this particular round of cold which should leave wheat unscathed
  
• Russia
  and Ukraine temperatures will turn colder in the second week of December, but significant should fall before that occurs
• Cooling
  is impacting Europe with temperatures below normal expected in the North and Baltic Sea regions during the next couple of weeks raising energy demand
• Argentina
  weather will continue drier than usual over the next two weeks, despite a few showers infrequently
• Argentina
  temperatures will be hot at times especially next week with temperatures back over 100 Fahrenheit
  
• Brazil
  weather will continue favorably mixed supporting good crop development and the drier areas in center west will see improved rainfall during the coming week
• U.S.
  hard red winter wheat areas will continue missing significant moisture and drought status will remain
• U.S.
  Tennessee River Basin will get another round of significant rain next week restoring some concern over flood potentials
• California
  is expecting significant precipitation in waves over the next full week producing significant snowfall in the mountains and raising soil moisture in the central Valleys
• Florida
  and some of the Gulf of Mexico coastal areas will be drier than usual over the next ten days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
Export Sales

USDA
export sales for all-wheat and SBO came in below expectations. Soybeans, soybean meal and corn were at the low end of a range of trade expectations. It was another week of large reductions for the unknown category for soybeans of 702,900 tons.

 

Soybean
sales showed sales of 693,800 tons for 2022-23 that included China 927,400 tons, including524,000 MT switched from unknown destinations and decreases of 70,200. The Netherlands included 177,900 tons, including 209,500 tons switched from unknown destinations
and decreases of 1,000. Iraq included 44,100 tons, including 42,000 tons switched from the Netherlands.

 

Soybean
meal sales were 185,200 tons, well below 516,400 tons previous week, and shipments were 234,200 tons. Soybean oil sales were net reductions of 2,300 tons and shipments only 2,500 tons.

 

Corn
export sales were 602,700 tons for 2022-23, primarily for Mexico (387,100 MT, including decreases of 2,700 MT), unknown destinations (78,500 MT), Hong Kong (34,000 MT), and Japan (27,700 MT, including 25,100 MT switched from unknown destinations). 

 

All-wheat
export sales of 155,500 tons were primarily for Algeria (58,300 MT, including decreases 1,700 MT),Mexico (32,800 MT, including decreases of 2,000 MT), Japan (26,700 MT), Nigeria (25,000 MT), and South Korea (6,100 MT).

 

Net
pork sales of 20,100 tons for 2022 were primarily for Mexico (11,800 MT, including decreases of 400 MT), Japan (4,000 MT, including decreases of 200 MT), South Korea (1,800 MT, including decreases of 100 MT). Pork sales have been very good this quarter.

 

 

 

Macros

US
Initial Jobless Claims Nov 26: 225K (est 235K; prev 240K)

US
Continuing Claims Nov 26: 1608K (est 1570K; prev 1551K)

US
Personal Income Oct: 0.7% (est 0.4%; prev 0.4%)

US
Personal Spending Oct: 0.8% (est 0.8%; prev 0.6%)

US
Real Personal Spending Oct: 0.5% (est 0.5%; prev 0.3%)

US
PCE Deflator (M/M) Oct: 0.3% (est 0.4%; prev 0.3%)

US
PCE Deflator (Y/Y) Oct: 6.0% (est 6.0%; prev 6.2%)

US
PCE Core Deflator (M/M) Oct: 0.2% (est 0.3%; prev 0.5%)

US
PCE Core Deflator (Y/Y) Oct: 5.0% (est 5.0%; prev 5.1%)

 

EU
Governments Tentatively Agree On $60 /Per Barrel Price Cap On Russian Seaborne Oil, Poland Has Until 1500 GMT To Agree – EU Diplomat

Adjustment
Mechanism Would Keep Price Cap On Russian Seaborne Oil 5% Below Market Price Based On IEA Figures

If
Poland Agrees, EU Governments Will Approve The Deal In Written Procedure By Friday

 

Corn

·        
Corn futures turned
higher near the end of the electronic session from a sharply lower USD and higher crude oil. 

·        
US RVO headlines for conventional biofuel of 15 billion for 2023 and modest increase for 2024 was in line with projections.

·        
The US House passed a bill to avert the rail strike. It now goes to the Senate.

·        
The weekly Broiler Report showed eggs set in the US down 2 percent and chicks placed down 1 percent from a year ago. Cumulative placements from the week ending January 8, 2022, through November 26, 2022 for the United States were
8.84 billion. Cumulative placements were up 2 percent from the same period a year earlier.

·        
Weekly ethanol production fell 23,000 barrels per day to 1.018 million and stocks increased 105,000 barrels to 22.934 million. A Bloomberg poll looked for weekly US ethanol production to be down 3,000 thousand and stocks down
100,000 barrels to 22.729 million.

 

Export
developments.

·        
South Korea’s KFA bought 65,000 tons of South America or South American corn in a private deal for March arrival at $334.98/ton c&f.

·        
In another tender, South Korea’s KFA bought 69,000 tons of South America or South American corn in a private deal for Dec 20-Jan 20 shipment at $334.98/ton c&f.

 

 

 

 

Soybeans

·        
CBOT soybeans
traded two-sided overnight and are currently lower following the sharp decline in soybean oil after news outlets reported EPA RVO’s for advanced well below expectations for 2023. EPA may issue a modest increase for their total mandate for 2023. Traders were
looking for a 1.0-1.5 billion gallon increase.

·        
BOF traded 2800x on last night’s open between 71.31 to 69.50 gapping lower off the 71.88 settlement.

·        
End users will likely take advantage of the dip in soybean oil as  the mandates will not change projections for the US soybean oil balance sheet, set to show as increase biofuel production this and next crop season, further tightening
stocks.

·        
Yesterday EIA reported 934 million pounds of soybean oil was used during September for biofuel production, very close to USDA’s projection. This compares to 756 million pounds September 2021. USDA was only off 2 million pounds
from their biofuel estimate. 10.348 billion is the final 2021-22 use, up from 8.920 billion in 2020-21.

·        
US EPA official announcements, when updated should be posted here:
https://www.epa.gov/renewable-fuel-standard-program/news-notices-and-announcements-renewable-fuel-standard

·        
Selected major China cities are easing covid restrictions in part to the anger associated with the lockdowns.

·        
February Malaysia palm was down 156 ringgit and cash down 2.3% or $23.00/ton at $987.50.

·        
China soybean futures were down 0.1%, meal 0.2% higher, soybean oil 0.5% higher and palm up 0.1%.

·        
Rotterdam vegetable oils were sharply
lower for the soybean oil positions (45-60 euros) and rapeseed oil unchanged for the Dec/Jan positions, from this time yesterday morning.  Rotterdam meal was mostly higher.

·        
Offshore values were leading SBO higher by about 66 points earlier this morning and meal $6.50 short ton lower.

 

 

Export
Developments

·        
USDA reported private exporters reported sales of 114,300 tons of corn for delivery to Mexico during the 2022-23 marketing year.

 

 

Wheat

·        
US wheat futures are lower on light technical selling despite a lower USD.

·        
US export developments have been quiet this week until Taiwan floated an import tender for 42,750 tons of US origin wheat.

·        
Paris March wheat was lower by 1.25 euros earlier at 314.75 euros a ton.

 

Export
Developments.

·        
Taiwan seeks 42,750 tons of US wheat on December 7 for Jan 25-Feb 8 shipment.

·        
Thailand bought about 123,000 tons of feed wheat from Australia at around $349/ton c&f for January (63k) and June shipment (60k).

·        
Turkey bought 495,000 tons of feed barley for Jan through Feb shipment. Ukrainian and Russian was thought to be origin. Prices ranged from $302.80 to $312.00 c&f.

·        
Algeria’s OAIC bought between 450,000 to 500,000 tons of optional origin milling wheat  between $354.00 to $355.50 a ton (c&f) for January shipment.

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

·        
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.

 

Rice/Other

·        
None reported

 

 

 

USDA Export Sales

 

U.S. EXPORT SALES FOR WEEK ENDING  11/24/2022

 

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	37.5	837.4	1,979.3	91.9	2,800.4	3,709.5	0.0	6.3
SRW	9.6	529.1	601.3	5.0	1,683.0	1,478.7	7.0	13.6
HRS	18.9	1,370.7	1,113.7	128.0	2,768.5	2,729.3	0.0	10.8
WHITE	31.2	1,096.5	748.0	27.6	2,146.3	1,810.1	0.0	0.3
DURUM	58.3	123.2	52.4	18.8	96.5	96.8	0.0	0.0
TOTAL	155.5	3,956.8	4,494.6	271.2	9,494.8	9,824.5	7.0	31.0
BARLEY	0.0	6.6	21.6	0.8	5.0	8.5	0.0	0.0
CORN	602.7	12,579.1	25,783.6	344.5	5,773.3	9,646.7	30.0	969.0
SORGHUM	5.1	254.8	3,278.9	1.8	102.1	754.3	0.0	0.0
SOYBEANS	693.8	18,232.3	16,096.7	2,117.0	19,065.8	21,070.4	0.0	10.0
SOY MEAL	185.2	3,614.5	3,576.3	234.2	1,494.5	1,851.1	-15.7	3.3
SOY OIL	-2.3	18.8	211.7	2.5	11.5	91.4	0.0	0.6
RICE
L G RGH	4.0	115.6	165.6	12.6	134.1	494.7	0.0	0.0
M S RGH	0.0	12.2	6.5	0.3	9.7	2.6	0.0	0.0
L G BRN	0.1	6.7	1.8	0.4	6.3	24.7	0.0	0.0
M&S BR	0.0	9.9	68.5	0.2	4.5	14.8	0.0	0.0
L G MLD	7.8	107.5	66.0	8.5	207.0	306.2	0.0	0.0
M S MLD	13.3	69.5	80.4	1.5	87.3	108.9	0.0	0.0
TOTAL	25.3	321.5	388.7	23.5	448.8	951.8	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	16.5	5,460.9	6,952.6	139.5	3,240.1	2,392.7	11.0	1,144.1
PIMA	1.8	82.6	242.2	1.3	29.2	109.0	0.0	0.9

 

 

This
summary is based on reports from exporters for the period November 18-24, 2022.

Wheat:
Net sales of 155,500 metric tons (MT) for 2022/2023 primarily for Algeria (58,300 MT, including decreases 1,700 MT), Mexico (32,800 MT, including decreases of 2,000 MT), Japan (26,700 MT), Nigeria (25,000 MT), and South Korea (6,100 MT), were offset by reductions
for Barbados (2,100 MT), Spain (900 MT), and Leeward and Winward Islands (100 MT).  Total net sales of 7,000 MT for 2023/2024 were for Mexico.  Exports of 271,200 MT were primarily to Taiwan (84,800 MT), Mexico (73,600 MT), South Korea (39,400 MT), Spain (19,100
MT), and Algeria (18,800 MT). 

Corn: 
Net sales of 602,700 MT for 2022/2023 were primarily for Mexico (387,100 MT, including decreases of 2,700 MT), unknown destinations (78,500 MT), Hong Kong (34,000 MT), Japan (27,700 MT, including 25,100 MT switched from unknown destinations), and Colombia
(27,200 MT).  Total net sales of 30,000 MT for 2023/2024 were for Mexico.  Exports of 344,500 MT were primarily to Mexico (193,100 MT), China (77,100 MT), Japan (25,100 MT), Canada (17,800 MT), and Honduras (8,300 MT). 

Barley: 
No net sales were reported for the week.  Exports of 800 MT were to Japan. 

Sorghum: 
Total net sales of 5,100 MT for 2022/2023 were for Mexico.  Exports of 1,800 MT were to Mexico.

Rice:
 Net
sales of 25,300 MT for 2022/2023 were primarily for Japan (13,000 MT), Haiti (7,100 MT, including decreases of 100 MT), Honduras (3,900 MT), Belgium (300 MT), and Canada (200 MT, including decreases of 800 MT).  Exports of 23,500 MT were primarily to Colombia
(11,400 MT), Haiti (7,100 MT), Canada (1,900 MT), Mexico (1,700 MT), and Saudi Arabia (500 MT).

Soybeans: 
Net sales of 693,800 MT for 2022/2023 primarily for China (927,400 MT, including 524,000 MT switched from unknown destinations and decreases of 70,200 MT), the Netherlands (177,900 MT, including 209,500 MT switched from unknown destinations and decreases of
1,000 MT), the United Kingdom (66,000 MT, including 60,000 MT switched from unknown destinations), Mexico (56,200 MT, including decreases of 2,900 MT), and Iraq (44,100 MT, including 42,000 MT switched from the Netherlands), were offset by reductions primarily
for unknown destinations (702,900 MT).  Exports of 2,117,000 MT were primarily to China (1,510,400 MT), the Netherlands (219,900 MT), Spain (95,100 MT), the United Kingdom (66,000 MT), and Mexico (55,800 MT). 

Optional
Origin Sales:
For 2022/2023, the current outstanding balance of 300 MT, all South Korea.

Export
for Own Account:
For 2022/2023, new exports for own account totaling 25,000 MT were to Canada.  Exports for own account totaling 66,000 MT to Canada were applied to new or outstanding sales.  The current exports for own account outstanding balance is 6,300 MT, all Canada.

Soybean
Cake and Meal: 
Net sales of 185,200 MT for 2022/2023 primarily for Colombia (83,000 MT), Denmark (45,000 MT), Canada (24,700 MT), Mexico (18,000 MT), and Ecuador (8,000 MT), were offset by reductions for the Philippines (16,400 MT) and Guatemala (2,600 MT).  Total net sales
reductions of 15,700 MT for 2023/2024 were for Canada.  Exports of 234,200 MT were primarily to Vietnam (53,300 MT), Mexico (49,300 MT), Colombia (48,100 MT), Ecuador (36,400 MT), and Canada (18,100 MT).

Soybean
Oil: 
Net sales reductions of 2,300 MT for 2022/2023 resulting in increases for Canada (100 MT), were more than offset by reductions for Mexico (2,400 MT).  Exports of 2,500 MT were to Mexico (2,200 MT) and Canada (300 MT).

Cotton: 
Net
sales of 16,500 RB for 2022/2023 primarily for India (5,700 RB), Indonesia (4,200 RB, including decreases of 500 RB), Pakistan (3,500 RB, including decreases of 2,200 RB), Peru (2,600 RB), and Vietnam (2,200 RB), were offset by reductions primarily for Turkey
(8,500 RB).  Total net sales of 11,000 RB for 2023/2024 were for Turkey.  Exports of 139,500 RB were primarily to China (38,300 RB), Pakistan (31,900 RB), Bangladesh (15,200 RB), Turkey (8,400 RB), and Mexico (8,100 RB).  Net sales of Pima totaling 1,800 RB
were primarily for China (1,800 RB, including 400 RB switched from Germany) and Thailand (400 RB), were offset by reductions for Germany (400 RB).  Exports of 1,300 RB were primarily to China (500 RB) and Taiwan (400 RB).  

Optional
Origin Sales:
For 2022/2023, the current outstanding balance of 9,300 RB, all Malaysia.

Export
for Own Account:
For 2022/2023, new exports for own account totaling 6,600 RB were to China.  The current exports for own account outstanding balance of 105,700 RB are for China (61,800 RB), Vietnam (23,900 RB), Pakistan (18,100 RB), India (1,500 RB), and Indonesia (400 RB). 

Hides
and Skins: 
Net sales of 472,000 pieces for 2022 reported for China (338,200 whole cattle hides, including decreases of 10,600 pieces), Mexico (94,400 whole cattle hides, including  decreases of 2,700 pieces), South Korea (24,200 whole cattle hides, including decreases
of 6,600 pieces), Brazil (9,800 whole cattle hides, including decreases of 100 pieces), and Colombia (3,400 whole cattle hides), were offset by reductions for Indonesia (1,200 pieces), Thailand (800 pieces), and Turkey (100 pieces).  Net sales of 2,900 calf
skins reported for Italy (7,200 calf skins), were offset by reductions for China (4,300 calf skins).  In addition, net sales of 1,100 kip skins reported for China (1,300 kip skins), were offset by reductions for Belgium (200 kip skins).  Net sales of 46,300
pieces for 2023 reported for China (45,100 whole cattle hides) and South Korea (4,000 whole cattle hides), were offset by reductions for Brazil (2,800 pieces).  Exports of 424,000 whole cattle hides exports were primarily to China (301,300 pieces), Mexico
(38,500 pieces), South Korea (26,700 pieces), Thailand (22,800 pieces), and Indonesia (14,300 pieces).  In addition, exports of 1,300 kip skins were to Belgium.

Net
sales of 19,900 wet blues for 2022 primarily for China (12,500 unsplit, including decreases of 100 unsplit), Thailand (3,400 unsplit), Vietnam (2,400 unsplit), Italy (1,700 unsplit, including decreases of 2,000 unsplit), and India (900 unsplit), were offset
by reductions for Brazil (1,000 unsplit).  Net sales of 7,000 wet blues for 2023 were reported for Thailand (4,000 unsplit), Italy (2,000 unsplit), and Brazil (1,000 unsplit).  Exports of 167,100 wet blues were primarily to China (74,500 unsplit), Italy (30,000
unsplit and 1,800 grain splits), Vietnam (26,100 unsplit), Thailand (24,300 unsplit), and Taiwan (4,700 unsplit).  No net sales of splits were reported for week.  Exports of 56,000 splits were to China.

Beef: 
Net sales of 15,400 MT for 2022 primarily for China (7,200 MT, including decreases of 100 MT), Japan (2,600 MT, including decreases of 500 MT), Canada (1,900 MT, including decreases of 100 MT), South Korea (1,700 MT, including decreases of 400 MT), and Mexico
(800 MT, including decreases of 100 MT), were offset by reductions for Brazil (100 MT).  Net sales of 2,000 MT for 2023 were reported for Mexico (900 MT), Japan (500 MT), China (300 MT), Taiwan (200 MT), and Guatemala (100 MT). 
Exports of 15,800 MT were primarily to Japan (4,200 MT), South Korea (4,000 MT), China (3,000 MT), Mexico (1,400 MT), and Canada (800 MT). 

Pork: 
Net sales of 20,100 MT for 2022 were primarily for Mexico (11,800 MT, including decreases of 400 MT), Japan (4,000 MT, including decreases of 200 MT), South Korea (1,800 MT, including decreases of 100 MT), the Dominican Republic (900 MT, including decreases
of 100 MT), and Canada (500 MT, including decreases of 400 MT). 
Net sales of 3,800 MT for 2023 were primarily for Canada (1,200 MT), Colombia (1,000 MT), China (500 MT), Honduras (300 MT), and South Korea (200 MT). 
Exports of 29,700 MT were primarily to Mexico (14,900 MT), China (4,100 MT), Japan (3,000 MT), South Korea (1,900 MT), and Canada (1,800 MT).