FI Morning Grain Comments 12/08/22

PDF attached

 

Good
morning.

 

Private
exporters reported the following sales activity:

118,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

718,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

 

WTI
crude oil is sharply higher after the 622,000 barrel per day Keystone pipeline was shut down from a leak. This is lending support to agriculture markets. USD is near unchanged and US equities higher. Soybean oil is gaining on meal this morning in part to a
recovery from global energy prices. Soybeans, corn and Chicago wheat are higher. Gains in wheat are limited from competitive Black Sea supplies. South Korea bought additional South American corn. Brazil’s Conab reported a slightly bullish crop production report.
Argentina is closed for holiday.

 

 

 

Weather

Argentina
will see light rain today bias southern Cordoba, southern Buenos Aires, and northern Cordoba through Saturday. Brazil will see additional rain this week. Europe will see two storms over the next week. US rainfall improves for the Midwest and Delta.

 

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 8, 2022

• Badly
  needed rain will impact northern Argentina in two waves over the next five days
• Friday
  night into Sunday will bring rain to the central and north
• Monday
  and Tuesday will bring a second wave of rain to east-central and northern portions of the nation
  
• Model
  divergence is high over the total rainfall for this period
• World
  Weather, Inc. believes 0.50 to 1.50 inches and local totals 2.00 inches will be possible
• Relief
  from persistent heat will improve grain, oilseed and cotton conditions from these two events, but drought will prevail
• Net
  drying will occur in southern Argentina through Monday
• Some
  rain fell in Argentina overnight with moisture totals of 0.05 to 0.60 inch occurring from Buenos Aires to southern Santa Fe and southern Cordoba
• Excessive
  heat impacted Argentina Wednesday with highs of 100 to 106 Fahrenheit common from central Cordoba and central Santa Fe to Chaco, Formosa and Corrientes
• Extreme
  highs of 108 to 113 occurred in Santiago del Estero
• Brazil
  crop areas will see timely rainfall over the next two weeks with some periods of sunshine as well
• A
  major U.S. winter storm is likely in the northern Plains and upper Midwest  early next week with blizzard conditions in the Dakotas and neighboring areas while moderate to heavy rain falls across the central and especially the upper Midwest
• Waves
  of rain will continue to impact the northern Delta and Tennessee River Basin through the next week to ten days  maintaining saturated soil and increasing runoff for the lower Mississippi River Basin
• Another
  wave of significant rain and mountain snow will impact central and northern California and western portions of Washington and Oregon this weekend
• U.S.
  hard red winter wheat areas in the west-central and southwestern Plains will continue dry for the next ten days
• Northern
  Europe will be coldest relative to normal in the North and Baltic Sea regions this weekend through mid-week next week with a stronger demand for supplemental heating fuel expected
• Stormy
  weather is still expected in southern and eastern Europe; including Ukraine and far western Russia beginning this weekend and lasting through most of next week
• Tropical
  Cyclone Mandous formed in the Bay of Bengal and will reach the lower coast of India near Chennai Friday afternoon
• The
  storm will bring heavy rain inland across southern Andhra Pradesh and northeastern Tamil Nadu Friday and then dissipate, but remnants of the storm will bring rain to some other interior southern and west-central India locations during the weekend
• Weak
  tropical disturbance will evolve near the Philippines and bring heavy rain to northern parts of the nation this weekend
• Australia
  weather will remain favorable during the next two weeks for winter crop harvesting, although a few showers are likely
• Eastern
  Queensland cotton and sorghum areas will get some additional rain next week, but interior parts of the state will still need greater moisture

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

 

Brazil’s
Conab
reported a slightly bullish crop production report, for soybeans and corn. Brazil’s December update lowered the soybean crop by 100,000 tons to 153.5 million, 100,000 tons below an average trade guess and 28 million above year ago. Brazil corn production was
estimated by Conab at 125.8 million tons, 600,000 tons below November, 1.9 million tons below an average trade guess and 12.7 million above 2021-22. Most of the reduction for all corn were in the southern states of RGDS, Santa Catarina, Parana and Goias.

 

 

USDA
export sales

Good
export sales were posted for soybeans that included China (839,600 MT, including 396,000 MT switched from unknown destinations and decreases of108,200 MT), Mexico (143,300 MT, including 47,500 MT switched from unknown destinations and decreases of 300 MT)
and Germany (140,400 MT). Soybean meal sales were within expectations and soybean oil poor. Shipments of meal were ok. Corn export sales improved from the previous week and were within expectations. All-wheat sales were within expectations but slow for this
time of year. Pork sales were 7,900 tons. US soybean commitments are running near year ago level and at a rate that should reach USDA’s export projection while corn commitments are very slow and suggest USDA maybe too high on their export projection.

 

 

 

 

Macros

US
Initial Jobless Claims Dec 3: 230K (est 230K; prev 225K)

US
Continuing Claims Nov 26: 1671K (est 1618K; prev 1608K)

Keystone
Pipeline Shut Down After Oil Leak Detected – BNN BBG

 

Corn

·        
Corn futures are
higher from strength in US energy prices and higher wheat. Gains are limited after South Korea bought additional SA corn.

·        
Brazil corn production was estimated by Conab at 125.8 million tons, 600,000 tons below November, 1.9 million tons below an average trade guess and 12.7 million above 2021-22. Most of the reduction for all corn were in the southern
states of RGDS, Santa Catarina, Parana and Goias.

·        
Argentina corn planting was 32.7% complete, 7 points below a year ago, according to the BA Grains Exchange. Argentina’s AgMin reported corn sales were 72.8% for the current crop, below 75.3% a year ago.

·        
EIA reported US weekly ethanol production increased a large 59,000 barrels to 1.077 million, a surprise. Production has been swinging around over the past few weeks. US ethanol stocks were up 323,000 barrels to 23.257 million,
up for the third consecutive week.

 

Export
developments.

·        
South Korea’s NOFI group bought 69,000 tons of corn from South America for up to 138,000 tons sought for Jan 10-Feb 10 shipment, at $329.99 per ton.

 

Soybeans

·        
January soybean futures hit their highest level since September 22 overnight in part to higher US energy prices. Soybean oil share is rebounding for the same reason.  Ongoing drought concerns for Argentina and southern Brazil
continues to support the market.

·        
Argentina is closed for holiday.

·        
Yesterday the Buenos Aires Grains Exchange warned the soybean area could be cut from the drought. Only 37.1% of the planned soybean area of 16.7 million hectares was planted. 

·        
Argentina’s AgMin reported soybean sales were 74.2% for the current crop, still behind 76.9% a year ago.

·        
Brazil’s Conab December update lowered the soybean crop by 100,000 tons to 153.5 million, 100,000 tons below an average trade guess and 28 million above year ago.

·        
February Malaysia palm oil was down 26 ringgit to 3943 and cash down $10.00/ton at $957.50.

·        
China soybean futures were up 0.5%, meal 2.2% higher, soybean oil 0.1% lower and palm down 1.4%.

·        
Rotterdam vegetable oils were
32.50-35.00 euros lower from early yesterday morning. Rotterdam meal was 8-13 euros higher.

·        
Offshore values were leading SBO lower by about 19 points earlier this morning and meal $0.70 short ton lower.

 

Export
Developments

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 25,000 tons of non-GMO soybeans. The deadline is Dec. 13, for arrival between December 2023 and June 2024.

·        
Under the 24-hour announcement system, private exporters reported the following:

• 118,000
  metric tons of soybeans for delivery to China during the 2022/2023 marketing year
• 718,000
  metric tons of soybeans for delivery to unknown destinations during the 2022-23

 

 

Wheat

·        
US wheat futures are higher on follow through technical buying and higher outside markets.

·        
Paris March wheat was higher by 1.00 euro earlier at 308.25 euros a ton, still near a multi month low.

 

Export
Developments.

·        
The Philippines seeks 110,000 tons of feed wheat on Friday for shipment between February and May.

·        
Japan bought 154,957 tons of wheat later this week for arrival by March 5. Original details as follows:

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on December 21 for shipment with 40 days of contract signing.

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING  12/1/2022

 

	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	76.9	868.5	1,963.1	45.8	2,846.2	3,806.6	0.0	6.3
SRW	28.5	550.6	632.7	7.0	1,690.0	1,502.7	0.0	13.6
HRS	16.4	1,302.5	1,123.4	84.6	2,853.1	2,779.8	0.0	10.8
WHITE	66.9	1,075.9	765.9	87.4	2,233.8	1,851.5	0.0	0.3
DURUM	1.1	91.7	35.9	32.6	129.1	97.2	0.0	0.0
TOTAL	189.9	3,889.2	4,521.1	257.4	9,752.2	10,037.9	0.0	31.0
BARLEY	0.0	6.1	21.5	0.5	5.5	9.0	0.0	0.0
CORN	691.6	12,370.6	26,011.4	900.1	6,673.4	10,551.3	0.0	969.0
SORGHUM	3.5	186.4	3,417.3	72.0	174.1	931.0	0.0	0.0
SOYBEANS	1,716.2	17,700.8	15,300.6	2,247.6	21,173.1	23,439.4	30.0	40.0
SOY MEAL	226.2	3,579.8	3,473.6	260.9	1,755.4	2,156.3	15.0	18.3
SOY OIL	0.5	18.8	185.3	0.4	11.9	123.1	0.0	0.6
RICE
L G RGH	27.7	142.3	170.9	1.0	135.1	523.6	0.0	0.0
M S RGH	3.0	14.7	6.5	0.5	10.2	2.6	0.0	0.0
L G BRN	0.1	6.4	4.5	0.4	6.7	25.3	0.0	0.0
M&S BR	0.2	9.8	68.5	0.3	4.7	14.8	0.0	0.0
L G MLD	18.3	122.8	59.2	2.9	206.3	321.9	0.0	0.0
M S MLD	28.5	94.2	66.9	3.9	91.1	124.7	0.0	0.0
TOTAL	77.7	390.2	376.5	8.9	454.1	1,012.9	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	32.6	5,352.4	7,220.4	141.1	3,381.2	2,507.5	26.4	1,170.5
PIMA	1.4	77.2	240.5	6.9	36.1	117.7	0.2	1.1

 

 

Export Sales Highlights

This summary is based on reports from exporters for the period November 25-December 1, 2022.

Wheat:
Net sales of 189,900 metric tons (MT) for 2022/2023 were primarily for China (65,000 MT), Iraq (50,000 MT), Mexico (34,200 MT, including decreases of 100 MT), Italy (15,700 MT, including decreases of 400 MT), and Haiti (7,000 MT).  Exports of 257,400 MT were
primarily to the Philippines (110,000 MT), Japan (35,000 MT), Algeria (32,600 MT), Mexico (31,700 MT), and Nigeria (30,000 MT). 

Corn: 
Net sales of 691,600 MT for 2022/2023 primarily for Mexico (333,100 MT, including decreases of 32,400 MT), China (204,900 MT, including 189,200 MT switched from unknown destinations), Costa Rica (122,300 MT), Guatemala (32,100 MT), and Honduras (28,800 MT),
were offset by reductions for unknown destinations (108,700 MT).  Exports of 900,100 MT were primarily to China (474,900 MT), Mexico (344,200 MT), Japan (39,300 MT), Canada (24,400 MT), and Taiwan (6,300 MT). 

Barley: 
No net sales were reported for the week.  Exports of 500 MT were to Japan.

Sorghum: 
Net sales of 3,500 MT for 2022/2023 primarily for China (71,400 MT, including 68,000 MT switched from unknown destinations), were offset by reductions for unknown destinations (68,000 MT).  Exports of 72,000 MT were to China (71,400 MT) and Mexico (600 MT).

Rice:
 Net sales of 77,700 MT for 2022/2023 primarily for Jordan (27,400
MT), Panama (27,000 MT), Haiti (15,200 MT), Mexico (5,000 MT), and Canada (2,200 MT), were offset by reductions for Morocco (400 MT) and Colombia (100 MT).  Exports of 8,900 MT were primarily to Mexico (2,900 MT), South Korea (2,600 MT), Canada (2,400 MT),
Saudi Arabia (300 MT), and Germany (100 MT).

Export Adjustments:
Accumulated exports of long grain, milled rice to Jordan were adjusted down 3,628 MT.  Of the total 710 MT for week ending August 25^th, 353 MT September
22^nd, 990 MT October 13^th, 877 MT October 27^th, and 698 MT November 3^rd.  This class of rice was reported in error.  The correct class is medium, short and other classes, milled rice and included in this week’s report.

Soybeans: 
Net sales of 1,716,200 MT for 2022/2023 primarily for China (839,600 MT, including 396,000 MT switched from unknown destinations and decreases of 108,200 MT), Mexico (143,300 MT, including 47,500 MT switched from unknown destinations and decreases of 300 MT),
Germany (140,400 MT), Indonesia (120,800 MT, including 110,000 MT switched from unknown destinations and decreases of 100 MT), and unknown destinations (108,400 MT), were offset by reductions for Honduras (5,000 MT).  Total net sales of 30,000 MT for 2023/2024
were for China.  Exports of 2,247,600 MT were primarily to China (1,669,700 MT), Germany (140,400 MT), Indonesia (125,800 MT), Taiwan (96,400 MT), and Mexico (78,900 MT). 

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

Export for Own Account:
For 2022/2023, the current exports for own account outstanding balance is 6,300 MT, all Canada.

Export Adjustments: 
Accumulated exports of soybeans to the Netherlands were adjusted down 140,400 MT.  Of the total 69,925 MT for week ending November 17^th and 70,475 MT November 24^th.  The correct destination for these shipments is Germany. 

Soybean Cake and Meal: 
Net sales of 226,200 MT for 2022/2023 primarily for Mexico (104,800 MT, including decreases of 400 MT), Japan (24,300 MT, including decreases of 700 MT), Honduras (16,300 MT), unknown destinations (14,500 MT), and Nicaragua (13,900 MT), were offset by reductions
primarily for Ireland (7,500 MT) and Colombia (1,100 MT).  Total net sales of 15,000 MT for 2023/2024 were for Mexico.  Exports of 260,900 MT were primarily to Japan (100,600 MT), the Philippines (49,100 MT), Mexico (34,500 MT), the Dominican Republic (26,100
MT), and the Netherlands (21,000 MT).

Soybean Oil: 
Net sales of 500 MT for 2022/2023 were for Canada.  Exports of 400 MT were to Canada.

Cotton: 
Net sales of 32,600 RB for 2022/2023 primarily for China (11,000 RB, including decreases of 100 RB), Bangladesh
(7,300 RB, including decreases of 100 RB), Turkey (6,500 RB), Vietnam (4,300 RB, including 3,100 RB switched from Taiwan and 1,300 RB switched from South Korea), and Pakistan (3,400 RB, including decreases of 2,200 RB), were offset by reductions primarily
for Thailand (1,700 RB) and South Korea (1,300 RB).  Net sales of 26,400 RB for 2023/2024 were reported for Pakistan (22,000 RB) and Turkey (4,400 RB).  Exports of 141,100 RB were primarily to China (59,900 RB), Pakistan (36,200 RB), Mexico (10,000 RB), El
Salvador (7,000 RB), and Vietnam (5,600 RB).  Net sales of Pima totaling 1,400 RB primarily for China (1,100 RB, including 900 RB switched from Germany), Thailand (900 RB), Guatemala (600 RB), South Korea (300 RB), and Japan (200 RB), were offset by reductions
for Germany (900 RB) and India (800 RB).  Total net sales of 200 RB for 2023/2024 were for Guatemala.  Exports of 6,900 RB were primarily to India (2,600 RB), Indonesia (1,300 RB), Thailand (1,000 RB), Turkey (900 RB), and China (900 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 13,700 RB were to China.  Exports for own account totaling 4,400 RB to China were applied to new or outstanding sales.  The current exports for own account outstanding balance of 115,000 RB are for China
(71,100 RB), Vietnam (23,900 RB), Pakistan (18,100 RB), India (1,500 RB), and Indonesia (400 RB).  

Hides and Skins: 
Net sales of 488,000 pieces for 2022 primarily for China (340,500 whole cattle hides, including decreases of 18,200 pieces), Mexico (57,700 whole cattle hides, including decreases of 2,100 pieces), South Korea (51,200 whole cattle hides, including decreases
of 4,500 pieces), Turkey (38,000 whole cattle hides), and Taiwan (2,100 whole cattle hides), were offset by reductions for Brazil (400 pieces) and Canada (100 pieces).  Total net sales reductions of 2,200 calf skins were for China.  In addition, total net
sales reductions of 1,500 kip skins were for Canada.  Net sales of 48,400 pieces for 2023 were primarily for China (37,100 whole cattle hides) and South Korea (7,800 whole cattle hides).  Exports of 591,300 whole cattle hides exports were primarily to China
(394,000 pieces), Mexico (76,900 pieces), South Korea (56,000 pieces), Turkey (32,900 pieces), and Brazil (13,900 pieces).

Net sales of 10,800 wet blues for 2022 primarily for Mexico
(7,900 unsplit and 6,400 grain splits), Japan (4,800 grain splits), South Korea (3,600 grain splits), China (1,800 unsplit), and Vietnam (200 unsplit), were offset by reductions primarily for Hong Kong (9,000 unsplit), Thailand (2,800 unsplit), and Italy (1,900
grain splits and 100 unsplit).  Net sales of 213,400 wet blues for 2023 were reported for Italy (188,600 unsplit and 1,900 grain splits), Hong Kong (9,000 unsplit), China (7,500 unsplit), the Dominican Republic (3,200 unsplit), and Thailand (3,200 unsplit). 
Exports of 84,200 wet blues were primarily to Italy (14,800 unsplit and 3,600 grain splits), Thailand (18,000 unsplit), Hong Kong (13,000 unsplit), Vietnam (9,100 unsplit), and Mexico (3,500 unsplit and 3,200 grain splits).  Net sales reductions of 160,100
splits resulting in increases for Canada (3,800 pounds), were more than offset by reductions for South Korea (163,900 pounds). 
Total net sales of 156,000 splits for 2023 were for South Korea.  Exports of 118,200 splits were to South Korea.

Beef: 
Net sales of 1,600 MT for 2022 primarily for China (4,800 MT, including decreases of 300 MT), Japan (1,600 MT, including decreases of 1,100 MT), Mexico (900 MT, including decreases of 100 MT), Canada (500 MT, including decreases of 200 MT), and Taiwan (400
MT, including decreases of 200 MT), were offset by reductions primarily for South Korea (7,900 MT).  Net sales of 16,300 MT for 2023 were primarily for South Korea (13,100 MT), Japan (1,300 MT), Hong Kong (700 MT), China (300 MT), and
Guatemala (300 MT).  Exports of 16,900 MT were primarily to South Korea (5,100 MT), Japan (4,300 MT), Mexico (1,900 MT), China (1,600 MT), and Taiwan (1,300 MT). 

Pork: 
Net sales reductions of 7,900 MT for 2022 resulting in increases for Mexico (3,100 MT, including decreases of 4,000 MT), China (900 MT, including decreases of 300 MT), Honduras (200 MT), the Dominican Republic (200 MT, including decreases of 200 MT), and Chile
(100 MT), were more than offset by reductions primarily for Japan (4,400 MT), Australia (3,400 MT), South Korea (2,300 MT), and Canada (2,200 MT). 
Net sales of 2,400 MT for 2023 were primarily for Colombia (1,300 MT), Japan (500 MT), South Korea (200 MT), and Nicaragua (200 MT). 
Exports of 32,500 MT were primarily to Mexico (15,900 MT), China (4,700 MT), Japan (3,300 MT), South Korea (2,100 MT), and Canada (1,900 MT).