FI Morning Grain Comments 12/15/22

PDF attached

 

Good
morning.

 

USDA:
Private exporters reported sales of 101,600 metric tons of corn for delivery to Mexico.   
USD is strong, WTI crude lower and US equity futures lower. Gold is lower. Soybean oil is under pressure from weaker US energy markets while soybeans are mixed, and soybean meal higher on follow through buying. Corn is higher. Wheat is a touch higher from
improving global demand. There was some disappointing economic news out of China.
https://www.bloomberg.com/news/articles/2022-12-15/china-s-economic-activity-weakened-in-november-amid-covid-surge
They did relax on about 50 percent of their covid restrictions over the past two weeks. NOPA will release November crush on Thursday and the trade sees a record, for the month of November, crush of 181.4 million bushels. That would be a record for the adjusted
daily crush (6.049 million bushels), down from 184.5 million during October and up from 179.5 million year earlier. End of October soybean oil stocks are estimated to increase 6 percent to 1.528 billion from 1.528 billion at the end of October.

 

 

 

Weather

The
second week of the outlook improves for Argentina. Brazil will see rain in the northern and central crop areas although the far south could see crop stress from net drying. The longer-term forecasts for northern Argentina/southern Brazil, are dry for the month
of January. The US saw a large boost in snow coverage/soil moisture replenishment after a large storm swept across the Great Plains. Temps will turn colder for the US over the next two weeks.

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 15, 2022

• Snow
  continued to pile up in the north-central United States Wednesday
• Bitter
  cold air is still poised to move through the heart of North America next week and into the holiday weekend with moderating temperatures from west to east in the last week of this month
• Florida
  citrus areas may be at risk of frost and freezes near the Christmas holiday
• U.S.
  hard red winter wheat areas and some soft wheat areas in the Midwest will need more snow before the coldest air arrives to protect winter crops, but there is plenty of time for that to evolve
• Argentina’s
  overall outlook has not changed much today
• Showers
  occurred over night in central parts of the nation and drier weather will evolve and dominate over the coming week
• Unsettled
  weather is expected to be back in Argentina during the second week of the outlook, but resulting rainfall will still be lighter than usual
• Southern
  Brazil will continue to receive restricted rain and experience some net drying conditions over the next ten days and perhaps longer
• Temperatures
  were quite cool in northeastern and east-central Brazil Wednesday
• Argentina
  temperatures will ebb their way higher again during the weekend and especially next week
• Europe
  temperatures will be warming up next week rising above normal in some areas for a few days and then relaxing back closer to normal
• Abundant
  snowfall is still expected in the next few days from east-central Europe into western Russia including parts of western and northern Ukraine
• China
  weather is still quiet and the same is true for India
• Southern
  India may be impacted by more tropical weather next week and into the following weekend
• Australia’s
  wheat, barley and canola harvest conditions will remain mostly good
• Summer
  crop weather in eastern Australia may be a little dry for some areas in Queensland and northern New South Wales, but irrigated areas will stay in good shape

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
export sales were very good for soybeans (mostly China), corn and wheat. Text below. USDA may leave their US export estimate unchanged in their January S&D update and lower soybean oil and corn exports for the current crop year.  US corn exports have been
slow so far this month. The 958,900 tons reported for corn for the first week of December was somewhat a surprise with a bulk sold to central American countries.

 

 

 

 

Macros

US
Retail Sales Advance (M/M) Nov: -0.6% (est -0.2%; prev 1.3%)

–
Retail Sales Ex-Auto (M/M): -0.2% (est 0.2%; prev R 1.2%)

–
Retail Sales Ex-Auto & Gas (M/M): -0.2% (est 0.0%; prev R 0.8%)

–
Retail Sales Control Group (M/M): -0.2% (est 0.1%; prev R 0.5%)

US
Initial Jobless Claims (W/W) 10-Dec: 211K (est 232K; prev 230K)

–
Continuing Claims (W/W) 03-Dec: 1.671M (est 1.674M; prev 1.671M)

US
Philly Fed Business Outlook Dec: -13.8 (est -10.0; prev -19.4)

US
Empire Manufacturing Dec: -11.2 (est -1.0; prev 4.5)

Canadian
Housing Starts Nov: 264.2K (est 259.0K; prev 264.6K)

BoE
Raises Bank Rate By 50Bps To 3.5%, As Expected

 – 
Voted  6-3 To Raise Bank Rate To 3.5%

ECB
Raises Refinancing Rate, Marginal Lending Rate, Deposit Facility Rate By 50Bps As Expected

–
Refinancing Rate: 2.5% Vs 2.0%

–
Marginal Lending Rate: 2.75% Vs 2.25%

–
Deposit Facility Rate: 2.0% Vs 1.5%

 

 

Corn

·        
Corn futures are
higher following wheat. USDA reported better than expected export sales and under the 24-hour announcement system, private exporters sold 101,600 tons of corn to Mexico.

·        
Five South American countries reported bird flu outbreaks, causing Brazil to be “on alert”. They are taking some additional measures to prevent outbreaks.

·        
The USDA Broiler Report showed eggs set in the US up slightly and chicks placed up 1 percent. Cumulative placements from the week ending January 8, 2022, through December 10, 2022 for the United States were 9.22 billion. Cumulative
placements were up 2 percent from the same period a year earlier.

·        
US ethanol production for the week ending December 9 decreased 16,000 barrels (BB estimate was calling for down 16k) to 1.061 million barrels per day and stocks increased a large 1.152 million barrels (Est. +32k) to 24.409 million.

 

Export
developments.

·        
Private exporters reported sales of 101,600 tons of corn for delivery to Mexico

 

Soybeans

·        
CBOT soybeans are mixed, meal higher and soybean oil lower. Weaker US energy prices are weighing on SBO while meal is higher on follow through buying.

·        
Gains are limited in soybeans from unfavorable China economic data.

·        
SGS reported December 1-15 Malaysian palm oil exports at 634,618 tons, down 4.3% from 662,816 tons from the same period during November.

·        
NOPA will release November crush on Thursday and the trade sees a record, for the month of November, crush of 181.4 million bushels. That would be a record for the adjusted daily crush (6.049 million bushels), down from 184.5
million during October and up from 179.5 million year earlier. The record daily crush rate was set November 2020 with 6.034 million crushed each day. End of October soybean oil stocks are estimated to increase 6 percent to 1.528 billion from 1.528 billion
at the end of October.

·        
February Malaysia palm oil was down 72 ringgit to 3878 and cash down $12.50/ton at $940.00.

·        
China soybean futures were down 0.7%, meal 1.4% lower, soybean oil 0.4% lower and palm up 0.2%.

·        
Rotterdam vegetable oils were
7.50-20.00 euros lower from early yesterday morning. Rotterdam meal was 8-14 euros higher.

·        
Offshore values were leading SBO lower by about 18 points earlier this morning and meal $3.60 short ton lower.

 

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat is higher on improving global import demand and light technical buying.

·        
Global import developments have picked up with Algeria buying 500,000 tons of wheat yesterday and Tunisia picking up durum wheat.

·        
Paris March wheat was lower 0.50 euro earlier at 302.00 euros a ton.

·        
Russia exported 22 million tons of grain over the last five months and may export an additional 4-5 million tons by the end of the July-June crop year.

·        
The Rosario Grains Exchange sees the wheat harvest at around 11.5 million tons, down from a previous estimate of 11.8 million tons.

 

Export
Developments.

·        
Tunisia bought 125,000 tons of durum wheat for Jan 10 and Feb 25 shipment.

·        
Yesterday Algeria bought about 500,000 tons of wheat for February shipment at around $348-$349 per ton c&f.

·        
Iraq seeks 50,000 tons of milling wheat on Sunda, December 18.

·        
Japan bought 154,942 tons of wheat. Original details below:

 

Rice/Other

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

·        
Bangladesh also seeks 50,000 tons of rice on December 27.

 

 

 

Export Sales Highlights

This
summary is based on reports from exporters for the period December 2-8, 2022.  

Wheat:
Net sales of 469,000 metric tons (MT) for 2022/2023 primarily for unknown destinations (164,000 MT), South Korea (89,400 MT), Japan (64,200 MT, including decreases of 1,000 MT), Mexico (55,100 MT, including decreases of 300 MT), and Taiwan (42,800 MT), were
offset by reductions primarily for China (65,000 MT).  Exports of 255,900 MT were primarily to Japan (62,500 MT), Mexico (62,400 MT), South Korea (58,900 MT), Nigeria (33,000 MT), and Guatemala (24,000 MT). 

Corn: 
Net sales of 958,900 MT for 2022/2023 were primarily for Guatemala (196,400 MT, including 14,700 MT switched from El Salvador), Mexico (170,800 MT, including decreases of 30,800 MT), unknown destinations (137,000 MT), Japan (79,100 MT, including decreases
of 900 MT), and El Salvador (78,800 MT).  Exports of 590,500 MT were primarily to China (207,700 MT, including 77,000 MT – late), Mexico (155,500 MT), Honduras (98,100 MT), Japan (60,300 MT), and Costa Rica (35,600 MT). 

Late
Reporting:
For 2022/2023, exports totaling 77,000 MT of corn were reported late for China.

Barley: 
No net sales or exports were reported for the week.

Sorghum: 
No net sales were reported for the week.  Exports of 1,200 MT were to Mexico.

Rice:
 Net
sales of 5,700 MT for 2022/2023 primarily for Guatemala (12,500 MT), Haiti (7,100 MT, including decreases of 100 MT), Honduras (3,000 MT), Canada (2,000 MT, including decreases of 800 MT), and Saudi Arabia (700 MT), were offset by reductions for Jordan (21,000
MT).  Exports of 15,300 MT were primarily to Haiti (7,100 MT), Mexico (3,500 MT), Canada (2,700 MT), Saudi Arabia (1,000 MT), and Belgium (300 MT).

Soybeans: 
Net sales of 2,943,400 MT for 2022/2023 were primarily for China (1,252,600 MT, including 197,000 switched from unknown destinations and decreases of 184,200 MT), unknown destinations (1,031,500 MT), Mexico (131,300 MT, including decreases of 10,700 MT), Japan
(123,300 MT, including 30,000 MT switched from China, 8,000 MT switched from unknown destinations, and decreases of 1,400 MT), and South Korea (118,600 MT, including 117,000 MT switched from unknown destinations and decreases of 5,100 MT).  Exports of 1,846,000
MT were primarily to China (1,058,900 MT), Mexico (140,000 MT), South Korea (119,200 MT), Bangladesh (117,500 MT), and Japan (93,600 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 50,400 MT were to Canada.  Decreases were reported for Canada (55,200 MT).  The current exports for own account outstanding balance is 1,500 MT, all Canada.

Soybean
Cake and Meal: 
Net sales of 209,600 MT for 2022/2023 primarily for Chile (45,000 MT), Saudi Arabia (45,000 MT switched from Poland), Vietnam (45,000 MT), Guatemala (31,700 MT), and Mexico (21,300 MT), were offset by reductions primarily for Poland (45,000 MT).  Exports of
174,000 MT were primarily to Morocco (32,000 MT), Canada (25,600 MT),  the Dominican Republic (23,800 MT), Mexico (23,700 MT), and Ireland (19,800 MT).

Soybean
Oil: 
Total net sales reductions of 200 MT for 2022/2023 were for Canada.  Exports of 400 MT were to Canada.

Cotton: 
Net
sales of 18,600 RB for 2022/2023 primarily for South Korea (17,900 RB, including decreases of 100 RB), China (10,900 RB, including 6,600 RB switched from Vietnam), Mexico (4,600 RB, including 4,400 RB switched from Vietnam), Thailand (3,500 RB, including decreases
of 7,900 RB), and Pakistan (3,000 RB, including decreases of 8,800 RB), were offset by reductions primarily for Turkey (14,200 RB) and Vietnam (11,000 RB).  Net sales of 28,200 RB for 2023/2024 were reported for Turkey (23,800 RB) and Pakistan (4,400 RB). 
Exports of 141,900 RB were primarily to China (60,000 RB), Pakistan (25,400 RB), Mexico (22,700 RB), Turkey (5,200 RB), and Indonesia (4,500 RB).  Net sales of Pima totaling 1,300 RB primarily for Bangladesh (700 RB), China (500 RB), Taiwan (400 RB), and Vietnam
(400 RB), were offset by reductions for Peru (900 RB).  Exports of 3,800 RB were primarily to India (3,100 RB), Vietnam (400 RB), China (100 RB), Bangladesh (100 RB), and Japan (100 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 7,100 RB were to China.  Exports for own account totaling 2,700 RB to Pakistan (1,800 RB) and China (900 RB) were applied to new or outstanding sales.  The current exports for own account outstanding balance
of 118,000 RB are for China (77,300 RB), Vietnam (23,900 RB), Pakistan (14,900 RB), India (1,500 RB), and Indonesia (400 RB). 

Export
Adjustment: 
Accumulated exports of Pima cotton to Thailand were adjusted down 870 RB for week ending November 17^th.  This shipment was reported in error.

Hides
and Skins: 
Net sales of 402,700 pieces for 2022 primarily for China (275,900 whole cattle hides, including decreases of 19,900 pieces), Mexico (82,700 whole cattle hides, including decreases of 1,500 pieces), Brazil (21,900 whole cattle hides, including decreases of
4,900 pieces), South Korea (21,200 whole cattle hides, including decreases of 1,400 pieces), and Taiwan (3,600 whole cattle hides switched from China), were offset by reductions primarily for Thailand (2,100 pieces).  Net sales reductions of 5,000 calf skins
resulting in increases for China (2,100 calf skins), were more than offset by reductions for Italy (7,200 calf skins).  In addition, total net sales reductions of 300 kip skins were for China.  Net sales of 89,200 pieces for 2023 were primarily for China (54,300
whole cattle hides), Brazil (14,900 whole cattle hides), and Mexico (11,000 whole cattle hides).  Total net sales of 14,300 calf skins were for Italy.  In addition, total net sales of 11,500 kip skins were for China.  Exports of 441,200 whole cattle hides
exports were primarily to China (287,900 pieces), South Korea (50,400 pieces), Mexico (33,200 pieces), Thailand (27,800 pieces), and Brazil (22,900 pieces).  Exports of 4,600 calf skins were to Italy.  In addition, exports of 2,600 kip skins were to China.

Net
sales reductions of 21,800 wet blues for 2022 resulting in increases primarily for Vietnam (5,800 unsplit, including decreases of 8,600 unsplit), Italy (3,200 grain splits), and Bangladesh (800 unsplit), were offset by reductions primarily for China (9,600
unsplit), Italy (8,400 unsplit), Thailand (6,000 unsplit), India (4,200 grain splits), and Taiwan (2,000 unsplit).  Net sales of 139,200 wet blues for 2023 were primarily for Italy (83,900 unsplit), Vietnam (20,600 unsplit) China (12,900 unsplit), Hong Kong
(8,000 unsplit), and Thailand (6,000 unsplit).  Exports of 118,600 wet blues were primarily to Italy (51,700 unsplit), Vietnam (25,600 unsplit), China (18,500 unsplit), Thailand (7,200 unsplit), and Mexico (4,600 unsplit).  Net sales reductions of 28,300 splits
resulting in increases for China (44,000 pounds), were
more than offset by reductions for Vietnam (72,300 pounds). 
Total net sales of 83,700 splits for 2023 were for Vietnam.  Exports of 122,600 splits were to Vietnam.

Beef: 
Net sales of 10,900 MT for 2022 primarily for South Korea (4,100 MT, including decreases of 500 MT), Japan (3,700 MT, including decreases of 300 MT), Mexico (1,600 MT, including decreases of 100 MT), Taiwan (800 MT, including decreases of 100 MT), and Canada
(700 MT, including decreases of 100 MT), were offset by reductions for China (1,000 MT).  Net sales of 2,900 MT for 2023 primarily for Japan (1,100 MT) and Mexico (1,100 MT), were offset by reductions for China (100 MT) and Hong
Kong (100 MT).  Exports of 16,500 MT were primarily to South Korea (4,900 MT), Japan (4,700 MT), Mexico (1,700 MT), Taiwan (1,400 MT), and China (1,300 MT). 

Pork: 
Net sales of 14,400 MT for 2022 primarily for Mexico (9,600 MT, including decreases of 500 MT), China (2,500 MT, including decreases of 200 MT), Japan (1,600 MT, including decreases of 200 MT), Honduras (500 MT), and Canada (400 MT, including decreases for
400 MT), were offset by reductions primarily for Colombia (400 MT) and South Korea (300 MT). 
Net sales of 7,700 MT for 2023 primarily for South Korea (4,400 MT), Japan (2,100 MT), the Dominican Republic (600 MT), Colombia (300 MT), and Mexico (300 MT), were offset by reductions for China (200 MT). 
Exports of 34,200 MT were primarily to Mexico (17,400 MT), China (4,700 MT), Japan (3,200 MT), South Korea (3,000 MT), and Canada (1,700 MT).

U.S. EXPORT SALES FOR WEEK ENDING  12/8/2022

 

	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	145.3	889.6	2,194.9	124.3	2,970.5	3,901.2	0.0	6.3
SRW	50.8	593.5	685.7	7.9	1,697.9	1,536.5	0.0	13.6
HRS	143.3	1,371.1	1,183.5	74.6	2,927.7	2,849.8	0.0	10.8
WHITE	129.6	1,156.4	797.4	49.1	2,282.9	1,927.7	0.0	0.3
DURUM	0.0	91.7	35.9	0.0	129.1	97.2	0.0	0.0
TOTAL	469.0	4,102.2	4,897.3	255.9	10,008.1	10,312.3	0.0	31.0
BARLEY	0.0	6.1	20.6	0.0	5.5	9.9	0.0	0.0
CORN	958.9	12,739.0	26,866.6	590.5	7,263.9	11,644.9	0.0	969.0
SORGHUM	0.0	185.2	3,631.0	1.2	175.3	1,049.2	0.0	0.0
SOYBEANS	2,943.4	18,798.2	14,691.0	1,846.0	23,019.1	25,357.6	0.0	40.0
SOY MEAL	209.6	3,615.4	3,379.9	174.0	1,929.5	2,345.6	0.0	18.3
SOY OIL	-0.2	18.1	185.3	0.4	12.3	133.7	0.0	0.6
RICE
L G RGH	15.5	157.4	149.3	0.4	135.6	577.0	0.0	0.0
M S RGH	0.0	12.9	6.3	1.8	12.0	2.9	0.0	0.0
L G BRN	1.4	7.5	4.4	0.2	6.9	25.9	0.0	0.0
M&S BR	0.1	9.5	68.6	0.4	5.1	14.9	0.0	0.0
L G MLD	-13.5	99.2	59.1	10.1	216.4	325.0	0.0	0.0
M S MLD	2.2	94.1	80.0	2.3	93.5	127.8	0.0	0.0
TOTAL	5.7	380.6	367.6	15.3	469.4	1,073.5	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	18.6	5,229.2	7,375.4	141.9	3,523.1	2,639.0	28.2	1,198.7
PIMA	1.3	74.6	232.8	3.8	39.0	126.1	0.0	1.1