FI Morning Grain Comments 12/09/22

PDF attached

 

Good
morning.

 

US
PPI Final Demand (M/M) Nov: 0.3% (est 0.2%; prev 0.2%)

US
PPI Core (M/M) Nov: 0.4% (est 0.2%; prev 0.0%)

US
PPI Final Demand (Y/Y) Nov: 7.4% (est 7.2%; prev 8.0%)

US
PPI Core (Y/Y) Nov: 6.2% (est 5.9%; prev 6.7%)

 

The
USDA report today will close out a volatile week in the agriculture markets.
CBOT agriculture markets are mixed in a pre-USDA report trade. USD turned higher post US PPI report on inflation concerns, WTI crude is higher and US equities indicating a lower open. Major changes in USDA’s report may include lower US corn exports, a potential
change in US soybean oil soybean oil for biofuel demand, smaller Argentina soybean & corn production. January soybean meal made a fresh contract high overnight. January soybeans are near a 3-month high on ongoing talk over Argentina drought conditions and
improving US soybean export demand.

 

 

 

Weather

 

Last
24-hours

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 9, 2022

• Argentina
  was hot again in the north and many areas will be that way again today, but brief cooling is expected during the weekend
• Above
  normal temperatures will continue in Argentina next week and into the following weekend
• Argentina
  rainfall will be restricted during the much of the next ten days, but the most organized rainfall is expected in central and northern parts of the nation today through Sunday; after that, net drying is expected once again for at least a full week
• Far
  southern Brazil is now on an accelerated drying trend which may deplete moisture quickly in Rio Grande do Sul and reduce it other areas nearby over the next ten days
• Heavy
  rain is expected in some center west through center south Brazil crop areas during the next ten days to two weeks
• A
  north-central U.S. storm next week will bring substantial snow and blizzard conditions to a part of the northern Plains and significant rain to the Mississippi River Basin, Delta and Ohio River Basins
• West-central
  and southwestern U.S. hard red winter wheat areas will continue to deal with drought conditions over the next two weeks, despite a little moisture from next week’s storm in some of the peripheral areas of the region
• Northern
  Europe’s cold surge will peak this weekend and early next week with a strong supplemental heating fuel demand likely
• Southern
  Europe precipitation began increasing Thursday and several waves of significant rain and snow will impact southern and eastern parts of the continent during the next ten days
• Southern
  India will receive Tropical Cyclone Mandous today with widespread rain likely and some local flooding
• Another
  tropical cyclone may impact Sri Lanka and far southern India late next week, but confidence is lower for that systems
• A
  tropical disturbance passing eastern Philippines this weekend will induce some heavy rain along the east coast of Luzon Islands and Samar island, but little to no crop damage is expected
• Good
  harvest weather will continue in Australia through the coming week
• South
  Africa will be quite wet in this first week of the outlook and then will trend drier in the following week

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
Dec. 12:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• HOLIDAY:
  Thailand

Tuesday,
Dec. 13:

• Malaysian
  Palm Oil Board’s monthly data on stockpiles, production and exports
• France’s
  agriculture ministry to release estimates on crop production and winter plantings
• New
  Zealand Food Prices
• EU
  weekly grain, oilseed import and export data

Wednesday,
Dec. 14:

• EIA
  weekly US ethanol inventories, production, 10:30am
• FranceAgriMer’s
  monthly report on grains outlook

Thursday,
Dec. 15:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Malaysia’s
  Dec. 1-15 palm oil exports

Friday,
Dec. 16:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options

Saturday,
Dec. 17:

• No
  major event scheduled

Sunday,
Dec. 18:

• China’s
  second batch of November trade data, including corn, pork and wheat imports

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

Macros

US
PPI Final Demand (M/M) Nov: 0.3% (est 0.2%; prev 0.2%)

US
PPI Core (M/M) Nov: 0.4% (est 0.2%; prev 0.0%)

US
PPI Final Demand (Y/Y) Nov: 7.4% (est 7.2%; prev 8.0%)

US
PPI Core (Y/Y) Nov: 6.2% (est 5.9%; prev 6.7%)

Canadian
Capacity Utilisation Rate Q3: 82.6% (est 82.2%; prev 83.8%)

 

Corn

·        
Corn futures are
higher on Argentina crop concerns, technical buying and higher WTI crude oil.
The
USDA report today will close out a volatile week in the agriculture markets.

·        
USD turned higher post US PPI report on inflation concerns.

·        
China’s monthly CASDE report showed no monthly changes to their corn and soybean balance sheets. They lowered cotton consumption by 200,000 tons to 7.5 million, down 5.1% from 2021-22.

·        
Taiwan reported their first case of H5N1 bird flu resulting the culling over 5000 ducks.

 

Export
developments.

·        
None reported

 

Soybeans

·        
January soybean meal made a fresh contract high overnight before paring gains. January soybeans are near a 3-month high on ongoing talk over Argentina drought conditions and improving US soybean export demand. Soybean oil turned
mixed before the electronic break.

·        
Major changes in USDA’s report may include lower US corn exports, a potential change in US soybean oil soybean oil for biofuel demand, smaller Argentina soybean & corn production.

·        
An Indonesian senior energy ministry official mentioned that country may increase biodiesel blending to 35 percent as early as January 2023. They are currently using B30. The palm oil-based fuel allocation for 2023 is estimated
at 13 million kiloliters, up from 11.03 million projected for 2022.

·        
February Malaysia palm oil was up 52 ringgit to 3995 and cash up $10.00/ton at $967.50.

·        
China soybean futures were up 0.1%, meal 1.2% higher, soybean oil 0.3% higher and palm up 0.3%.

·        
Rotterdam vegetable oils were
mixed from early yesterday morning. Rotterdam meal was 5-12 euros higher.

·        
Offshore values were leading SBO lower by about 29 points earlier this morning (846 higher for the week to date) and meal $080 short ton higher ($6.00 lower for the week).

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat futures are higher on follow through technical buying and steady global demand. Egypt bought additional Russian wheat on Thursday.

·        
We look for little change in the US S&D later today and expect USDA to lower Argentina crop production by at least 2 million tons and raise Australia production.

·        
Paris March wheat was lower by 1.25 euros earlier at 306.00 euros a ton, near a multi month low.

·        
French wheat ratings were rated 97% good/excellent for the week ending December 5, down one point from the previous week and compares to 98% year ago. Winter barley and durum wheat were unchanged on the week at 97% and 98%, respectively.

 

Export
Developments.

·        
Egypt’s GASC bought 260,000 tons of Russian wheat in a private deal on Thursday at $354/ton for late December through February shipment.

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

 

Rice/Other

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