FI Morning Grain Comments 12/05/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 130,000 metric tons of soybeans for delivery to China during the 2022/2023 marketing year.

 

CBOT
agriculture markets are rebounding today. The USD is lower by 4 points, WTI crude up more than $2.10 and US equities are lower. The EU and other countries agreed to cap any payment for Russian oil at $60 a barrel. OPEC+ will leave their production target unchanged.
Argentina’s weather forecast calls for net drying through Wednesday before light rain develops for southern Cordoba and Buenos Aires Thursday-Friday. The rain maybe countered by evaporation as temperatures will remain above normal. Most of Brazil will see
rain this week. 91 percent of Brazil’s soybean crop had been planted, slightly below last year’s pace. Southern Brazil is in need of rain.

 

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 5, 2022

• Argentina
  weather will continue stressful for crops in this coming week due to limited rain and warm to hot temperatures
• A
  better chance for rain will evolve in portions of the nation during the December 12-19 period, although a general soaking is still not being advertised
• Brazil
  weather will be favorably mixed this week, but pockets in the west and far south may continue to see an erratic rainfall pattern at times
• No
  critically dry conditions are likely, but Rio Grande do Sul will continue to dry out, despite some short term bouts of rain
• U.S.
  hard red winter wheat areas will continue dry biased, especially in Kansas, Colorado, Nebraska and northwestern parts of the Texas Panhandle over the next ten days
• West
  Texas cotton harvesting will advance with little risk of precipitation
• California
  crop areas received some needed moisture during the weekend with heavy snow in the mountains and good rain in the central valleys
• Additional
  snowfall is likely in the next ten days further raising mountain snowpack and improving the outlook for spring runoff, although the region is a long way from the finish line and much more snow is needed
• Snow
  depths are now greater than usual for this date, but still well below the April 1 norm.
  
• Flooding
  rain is expected this week in the Tennessee, River Basin, Kentucky and the northern U.S. Delta
• North
  America temperatures will be colder biased in Canada and the north-central and northwestern U.S. this week before
  
  “possibly” shifting southeast next week
• Australia
  harvest weather will advance well; rain is needed in sorghum and cotton areas of interior east-central Australia
• South
  Africa weather will trend wetter this week
• Northern
  Europe will be cooler than usual this week while the south is mild to warm with a boost in precipitation likely
• China
  precipitation will be more limited this week with no threatening cold
• A
  tropical cyclone will form in the Bay of Bengal this week before impacting southern India Thursday into the weekend

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
Dec. 5:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop harvesting for corn and cotton; winter wheat planting and condition, 4pm
• New
  Zealand commodity prices
• Malaysia’s
  Dec. 1-5 palm oil exports
• HOLIDAY:
  Thailand

Tuesday,
Dec. 6:

• EU
  weekly grain, oilseed import and export data
• Australian
  crop report & Abares agricultural commodities
• Purdue
  Agriculture Sentiment, 9:30am
• New
  Zealand global dairy trade auction

Wednesday,
Dec. 7:

• China’s
  first batch of November trade data, including soybean, edible oil, rubber and meat imports
• EIA
  weekly US ethanol inventories, production, 10:30am

Thursday,
Dec. 8:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Vietnam’s
  customs releases Nov. coffee, rice and rubber export data
• EU
  Agricultural Outlook conference, Dec. 8-9, Brussels
• Brazil’s
  Conab data on area, yield and output of corn and soybeans
• HOLIDAY:
  Argentina, Chile

Friday,
Dec. 9:

• USDA’s
  World Agricultural Supply and Demand Estimates (WASDE), 12pm
• China’s
  agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
• 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
• Cane
  crush and sugar production data by Brazil’s Unica (tentative)
• HOLIDAY:
  Argentina

Source:
Bloomberg and FI

 

CFTC
Commitment of Traders

As
of last Tuesday, traditional funds were more long than expected for corn, soybeans and wheat than expected. Soybean products were off a touch but near expectations ahead of the positioning ahead of the EPA announcement. As of Friday, we saw large net long
reductions for soybeans and soybeans oil since Tuesday, with more room to sell, in our opinion.  Wheat was not as short as expected early last week but don’t discount the short position to continue to influence possible selling in the other commodity markets
if bearish developments arise (Black Sea ample supplies and Paris wheat selling). The Investment funds, in our opinion, have been rethinking their inflationary positions over the past week.

 

 

 

 

 

 

 

 

 

Macros

Canadian
Building Permits (M/M) Oct: -1.4% (est 7.9%; prev -17.5%)

 

Corn

·        
Corn futures are
higher after softening last week from sharply lower soybean oil. Bottom picking in ags were noted this morning. News is light. Some companies are done trading for the remainder of the year.

·        
 The USD is lower but did pare losses from overnight.

·        
WTI crude oil is providing support.

 

Export
developments.

·        
None reported

 

Soybeans

·        
Soybeans are higher from higher meal and a strong uptick in WTI crude oil. The USD was down earlier but pared most losses. US equities are lower.

·        
China is easing covid restrictions by lowering testing requirements, a sign they might be getting back to business by allowing workers to return to factories, at least in full force.

·        
Brazil soybean plantings reached 91 percent, 3 points below this time last year.  Corn reached 93 percent and is in good shape. Southern Brazil weather should be monitored as it’s on the drier side.

·        
February Malaysia palm was up 15 ringgit to 3967 and cash up $5.00/ton at $975.

·        
China soybean futures were up 0.4%, meal 0.5% lower, soybean oil 0.3% lower and palm off 0.3%.

·        
Rotterdam vegetable oils were unchanged
to sharply lower from this time Friday morning.  Rotterdam meal was 3.00-6.50 euros higher.

·        
Offshore values were leading SBO higher by about 410 points earlier this morning and meal $0.30 short ton higher. Recall soybean oil was down 450 points on Friday.

 

Export
Developments

·        
Private exporters reported sales of 130,000 metric tons of soybeans for delivery to China during the 2022-23 marketing year.

 

Wheat

·        
US wheat futures are higher on bottom picking and a slightly lower USD.

·        
Paris March wheat was lower by 0.50 euro earlier at 307.25 euros a ton.

·        
Australia estimated a record 36.6 million ton wheat crop, a 1% increase over the previous record set last year. This comes after heavy rains hit the southeastern areas over the last couple of months. Barley production is due to
reach 13.4 million tons, the fourth-largest crop on record, with canola expected to hit a record 7.3 million tons.

 

Export
Developments.

·        
Pakistan bought 500,000 tons of wheat at an average of $372/ton c&f for LH Dec-Feb 8 shipment.

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

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

 

Rice/Other

·        
None reported