FI Morning Grain Comments 12/12/22

PDF attached

 

Good
morning.

 

January
soybeans are down more than 20 cents on weakness in outside related vegetable oil markets and weaker CBOT soybean meal. China is (further) easing China covid restrictions. Outside vegetable oil markets were lower, specifically Malaysian palm oil and China
palm oil, despite good Malaysian December 1-10 shipment data. Argentina is back from a 2-day holiday. Weekend rains were welcome but not all areas benefited from them. Offshore values were leading SBO higher by about 14 points earlier this morning and meal
$7.80 short ton lower. Recall soybean meal prices were up 4.50 to 6.40/short ton on Friday while soybean oil was lower. US wheat futures are higher on renewed Black Sea shipping concerns. Russia over the weekend attacked Ukraine’s energy infrastructure. Agriculture
Minister Mykola Solky does not expect see a suspension of grain exports from Odesa after the attacks but did admit there were problems. US temperatures will be cold, at least for the 6-10 period, across the majority of the US and snow coverage is very light
for this time of year, potentially raising the risk for winter grain crop damage. The winter storm expected to roll across the US early this week is badly needed. Corn futures are higher. We think they are mainly following strength in wheat. China’s National
Statistics Bureau (or NBS) reported the 2022 soybean crop increased a large 24 percent to 20.3 million tons, and corn output up 1.7 percent from good weather to 277.2 million tons. All wheat China crop production was 137.72 million tons, up 0.6 percent from
2021.  For comparison, China’s CASDE had 272.55 million tons for corn and 19.48 million for soybeans.

 

 

Weather

Argentina
saw hot temperatures over the weekend but also received some welcome rain Friday night into Saturday. Rain across BA was on the drier side. Brazil was on the dry side for the south and west but will see good rain over the next couple of weeks. The US will
see a welcome winter storm this week, boosting snow coverage. Temps will turn colder for the US over the next two weeks. Eastern Europe and the western CIS will see two winter storms this week.

 

 

 

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 12, 2022

• Argentina
  was hot in the central and north Friday and then it received some welcome rain Friday night and Saturday
• Brazil
  weather was dry biased in the west and south during the weekend, but rain is expected in many areas in the next two weeks
• South
  Africa will continue to receive frequent rain in the coming week to ten days
• Australia’s
  harvest weather will be good in the south
• Rain
  in Queensland and northeastern New South Wales, Australia will be welcome when it occurs, but it will be slow to evolve
• Europe’s
  cold spell will last through this week and then turn warmer
• Two
  winter storms will impact eastern Europe and the western CIS this week producing significant snow
• Some
  heavy snow already occurred in parts of Ukraine and Russia during the weekend
  
• North
  Africa receive some rain during the weekend and needs more
• U.S.
  weather will be dominated by a change in temperature this week and very cold conditions in some areas this weekend into next week
  
• A
  major winter storm will impact the north-central United States this week with some of the storm’s snow reaching into Canada as well
  
• Blizzard
  conditions are likely in the Dakotas
• U.S.
  hard red winter wheat areas in the west-central and southwestern Plains will remain dry this week
• Rain
  will fall additionally in the U.S. Delta and Tennessee River Basin this week

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

CFTC
Commitment of Trader Report

The
got it wrong for the fund position for corn and soybean oil, by a mile. Funds sold more than 55,000 contracts and 40,000 contracts than expected by trade estimates.  Funds and managed money were large sellers for the week ending December 6 for corn and soybean
oil, yet open interest went up for that period.

 

 

 

 

 

 

 

Macros

Canada
Q3 Household Debt-To-Income Ratio Falls To 182.4% From 182.6% In Q2

Canada
Q3 National Net Worth Falls 3.3% To C$17.17 Trillion From C$17.75 Trillion In Q2

 

 

Corn

·        
Corn futures are
higher. We think they are mainly following strength in wheat.

·        
China’s National Statistics Bureau (or NBS) reported the 2022 soybean crop increased a large 24 percent to 20.3 million tons, and corn output up 1.7 percent from good weather, to 277.2 million tons. During the crop season we heard
the opposite when it came to weather. Rice production fell 2 percent to 137.72 million tons.  All wheat China crop production was 137.72 million tons, up 0.6 percent from 2021.  For comparison, China’s CASDE had 272.55 million tons for corn and 19.48 million
for soybeans.

·        
China hog futures sank Monday with prices hitting their lowest level since June, in part to weaker demand ahead of the Lunar New Year . China hog producers increased production ahead of holiday sales with an expectation for prices
to firm during the month of December but that backfired from slower than expected sales after slaughter.

 

Export
developments.

·        
None reported

 

Soybeans

·        
January soybeans are down more than 20 cents on weakness in outside related vegetable oil markets and weaker CBOT soybean meal. China is further easing China covid restrictions. Outside vegetable oil markets were lower, specifically
Malaysian palm oil and China palm oil, despite good Malaysian December 1-10 shipment data.

·        
Argentina is back from a 2-day holiday. Argentina saw better than expected rains over the weekend that could boost soybean planting progress. Not all areas saw good rain. BA was on the drier side. Argentina drought conditions
are considered worst in 50 years.

·        
AmSpec reported Malaysia December 1-10 palm oil shipments at 480,404 tons, above 420,447 tons previous period month earlier. ITS reported a 6 percent increase to 492,960 tons from 466,943 month ago.

·        
February Malaysia palm oil was down 258 ringgit to 3737 and cash down $45.00/ton at $922.50.

·        
China soybean futures were down 0.9%, meal 0.5% lower, soybean oil 2.1% lower and palm off a large 4.2%.

·        
Rotterdam vegetable oils were
5-10 euros lower from early Friday morning. Rotterdam meal was 2.50-5.00 euros lower.

·        
Offshore values were leading SBO higher by about 14 points earlier this morning and meal $7.80 short ton lower.
Soybean
meal prices were up 4.50 to 6.40/short ton on Friday while soybean oil was lower.

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat futures are higher on renewed Black Sea shipping concerns. Russia over the weekend attacked Ukraine’s energy infrastructure. Agriculture Minister Mykola Solky does not expect see a suspension of grain exports from Odesa
after the attacks but did admit there were problems.

·        
US temperatures will be cold, at least for the 6-10 period, across the majority of the US and snow coverage is very light for this time of year, potentially raising the risk for winter grain crop damage.

·        
The winter storm expected to roll across the US early this week is badly needed.

·        
A major winter storm will impact the north-central United States this week with some of the storm’s snow reaching into Canada as well

 

 

·        
Paris March wheat was higher 2.00 euros earlier at 304.75 euros a ton.

·        
Last week the French AgMin reported 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.

·        
Two winter storms will impact eastern Europe and the western CIS this week producing significant snow events.

·        
Egypt has enough wheat for reserves sufficient for 5.5 month. Strategic reserves of sugar, rice, and cooking oil were sufficient for 3.4, 6.6, and 5.7 months, respectively.

·        
Russia wants to change the grain export deal as they prefer more shipments destined to poor countries.

 

Export
Developments.

·        
None reported over the weekend.

·        
Results awaited: the Philippines seeks 110,000 tons of feed wheat 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.