FI Morning Grain Comments 12/16/22

PDF attached

 

Good
morning.

 

USD
was down slightly, WTI crude sharply lower and US equity futures lower. Gold is higher. The South American and US weather forecast was mostly unchanged. Soybean meal is higher, lending support to soybeans. Soybean oil is lower following weakness in US energy
markets. Corn is near unchanged and wheat lower. Ongoing drought concerns for Argentina, southern Brazil and Paraguay could limit losses, if any, today.

 

 

 

Weather

Argentina
may see light rain across Cordoba and western La Pampa through Saturday. Rains next week will be limited. Most of Brazil will see rain bias central and northern areas. Most of the US will be on the dry side over the next week. US snow coverage could be better
across the central Great Plains after temperatures turned colder.

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 16, 2022

• More
  snow fell in the northern U.S. Plains and upper Midwest Thursday and early today
• Total
  storm accumulations of snow have reached 28 inches in south-central South Dakota, 26 inches in southeastern North Dakota, 30 inches in northeastern Minnesota and 48 inches in the Black Hills region of South Dakota
• Reports
  of 5-10 foot drifts have been received from parts of South Dakota
• 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 with some cool conditions already occurring a week from now
• 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
• Concern
  will be highest in the central and southwestern Plains for snow-free conditions and bitter cold temperatures, but there is plenty of time for potential change
• Argentina’s
  outlook hints of a little better rainfall
• The
  European model suggested greater rain in Argentina late next week and as we have mentioned in previous days some of that increase is quite likely
  
• There
  is also increasing potential for unsettled weather in the day 10-15 forecast period, although resulting rainfall will still be lighter than usual while occurring more frequently
• Argentina
  temperatures will ebb their way higher again during the weekend and especially early next week
• Cooling
  is likely late next week
• Southern
  Brazil will continue to receive restricted rain and experience some net drying conditions over the next ten days and perhaps longer
• 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
• Temperatures
  were quite cool in Australia Thursday, especially in the east
• 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
• There
  is potential  for greater rain in days 10-15

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

Monday,
Dec. 19:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• MARS
  monthly report on EU crop conditions
• USDA’s
  total milk production, 3am

Tuesday,
Dec. 20:

• China’s
  third batch of November trade data, including soy, corn and pork imports by country
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  Dec. 1-20 palm oil exports

Wednesday,
Dec. 21:

• EIA
  weekly US ethanol inventories, production, 10:30am

Thursday,
Dec. 22:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• US
  cold storage data for beef, pork and poultry, 3pm
• US
  red meat production, poultry slaughter, 3pm
• Port
  of Rouen data on French grain exports
• Sugar,
  cane and ethanol production data by Brazil’s Conab (tentative)

Friday,
Dec. 23:

• ICE
  Futures Europe weekly commitments of traders report, 1:30pm (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• USDA
  hogs and pigs inventory, cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

EPA
US RIN generation

2022

U.S.
GENERATED 1.27 BLN ETHANOL (D6) BLENDING CREDITS IN NOVEMBER, VS 1.24 BLN IN OCTOBER

U.S.
GENERATED 582 MLN BIODIESEL (D4) BLENDING CREDITS IN NOVEMBER, VS 477 MLN IN OCTOBER

 

Versus
2021

U.S.
GENERATED 1.26 BLN ETHANOL (D6) BLENDING CREDITS IN NOVEMBER, VS 1.2 BLN IN OCTOBER

U.S.
GENERATED 464 MLN BIODIESEL (D4) BLENDING CREDITS IN NOVEMBER, VS 431 MLN IN OCTOBER

 

 

Macros

 

Corn

·        
CBOT corn futures were
near unchanged at the electronic close. Higher wheat offset losses in the US energy markets.

·        
Southern Brazil corn crop prospects are falling. StoneX estimated Brazil’s southern state of RGDS corn crop at 4.51 million tons (early crop), down from 5.38 million previous. Recall Conab cut corn production for several southern
states, for the first crop, in their latest supply update.

·        
Argentina’s BA Exchange reported 43% of the corn crop was planted against 57 % last year.  The Argentina corn crop was rated 18% G/E.

·        
India is looking to soon boost its ethanol blend to 20 percent from current 10 percent.

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT soybeans are higher from strength in soybean meal. Soybean oil is lower on weakness in WTI crude oil, down more than $2.00 at the time this was written. WTI crude oil for the January contract is hovering around $74/barrel,
up from sup $71 that traded a week ago. Support could be seen at $70, a level that would entice the US to replenish the SPR (reserves).
https://www.qcintel.com/article/us-will-buy-back-spr-crude-at-low-70s-b-biden-energy-advisor-10010.html

·        
The soybean meal market continues to be supported by the poor weather in Argentina and good global demand. Earlier this week there was talk of US export interest out of the Gulf.

·        
Argentina producer selling of soybeans has been slower during the second rollout of the “soybean dollar” relative to the September program. Producers like holding inventory as a hedge for inflation and anticipation of rising domestic
prices if a short crop from drought conditions occurs. Another reason to hold onto the soybean crop is for hopes another support initiative would be rolled out this spring.

·        
Malaysian palm oil futures were higher on Friday basis the march position but down 1.95% for the week.

·        
Argentina’s BA Exchange reported 51% of soybeans are planted and rated 19% G/E (11% last week).

·        
Indonesia plans to roll out B35 on January 1, 2023, up from current B30. India raised the import base price of palm oil.

·        
Yesterday NOPA reported the November crush at 179.2 million bushels, 2.3 million below an average trade guess, below 184.5 million crushed in October and 179.5 million November 2021. End of November stocks came in 11 million pounds
above an average trade guess.

·        
February Malaysia palm oil was up 24 ringgit to 3918 and cash up $2.50/ton at $942.50.

·        
China soybean futures were down 0.8%, meal 1.2% higher, soybean oil 1.5% lower and palm down 0.5%.

·        
Rotterdam vegetable oils were
unchanged from early yesterday morning. Rotterdam meal were mixed.

·        
Offshore values were leading SBO lower by about 37 points earlier this morning (off 352 points for the week to date) and meal $6.20 short ton higher.

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat futures are lower on light technical selling and weaker outside related commodity markets.

·        
Part of Ukraine’s capital lost power from additional Russian strikes. Ongoing Black Sea shipping concerns may limit losses.

·        
Paris March wheat was lower 1.25 euro earlier at 297.75 euros a ton.

·        
Russia will increase their wheat export taxes for the December 21-27 period. Table is attached.

 

 

Export
Developments.

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

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 83,672 tons of rice from the United States for arrival in South Korea in 2023 between Feb. 1 and June 30. 

·        
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.

 

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International
One Lincoln Center
18 W 140 Butterfield Rd.

Oakbrook Terrace, Il. 60181

W: 312.604.1366

treilly@futures-int.com

ICE IM: 
treilly1

Skype: fi.treilly

 

 

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