FI Morning Grain Comments 12/19/22

PDF attached

 

Good
morning.

 

USD
was slightly lower, WTI crude oil higher and US equity futures mixed. CBOT ag markets are mixed to lower. A recovery in US energy prices is supporting soybean oil while meal is trading down sharply from a forecast calling for rain across Argentina this weekend.
Soybeans and grains are lower. Look for a choppy trade this week. There were no major global export developments reported over the weekend.

 

 

 

 

 

 

 

 

 

Weather

Last
seven days

 

7-day
outlook

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 19, 2022

• Extremely
  cold temperatures impacting central parts of North America during mid- to late-week this week will bring all kinds of problems
• Blizzard
  conditions are likely from the central U.S. Plains to the Great Lakes region Wednesday night into Saturday
• Extreme
  low temperatures in the -30s and -20s are likely in the northern Plain
• Subzero-degree
  low temperatures will occur southward to the Texas Panhandle northern Oklahoma, central Illinois and northern Indiana
• Freezes
  will occur southward to the central Gulf of Mexico Coast
• Sugarcane
  will experience notable freezes in Louisiana
• Citrus
  areas in Florida will be exposed to some frost and freezes, although it is unclear whether there is a viable threat to the crop yet
• Wind
  speeds gusting between 30 and 60 mph will occur with the blizzard from eastern Nebraska and eastern Kansas through Iowa and northern Missouri to the Great Lakes region
• Snowfall
  will range from 4 to 12 inches with a band of much greater snowfall
• Considerable
  blowing and drifting of snow is expected
• Wind
  chill warnings are likely to be issued and frost bite potentials will rise greatly
• A
  huge increase in energy demand is expected in the central U.S. for a few days beginning Wednesday and lasting into the weekend
• Cold
  air in the eastern United States is expected to be brief and not as potent as that in the central states
• Livestock
  stress will be very high in the western Corn and soybean production areas
• Argentina
  will get some needed rain Thursday night into Sunday bringing relief to recent drying
• Argentina’s
  second week weather outlook is more unstable than that advertised last week which implies additional opportunities for rain
• Some
  of the rain from Argentina will reach into southern Brazil and Paraguay, but the relief from dryness will be a little erratic leaving some areas with ongoing need for more rain
• Southern
  Brazil reported rain Sunday resulting in some improved topsoil moisture after recent drying, but much more rain will be needed
• Northern
  Brazil is still expected to become to wet this week in southern Tocantins, southwestern Bahia, northern Minas Gerais, northern Goias and in a few locations in northern and eastern Mato Grosso
• Eastern
  Europe received its second major winter storm during the weekend further burying the region from southern Germany and northern Italy to western Russia and parts of western and northern Ukraine in very heavy snow
  
• Transportation
  delays resulted and livestock concerns have been high
• Europe
  will be trending warmer this week
• No
  bitter cold will impact Asia or Europe in the coming week
• Australia,
  China and India weather has not changed from that of Friday

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

• Weekly
  USDA Broiler Report

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

Monday,
Dec. 26:

• HOLIDAY:
  US, UK, Australia, Hong Kong, Singapore, several other countries
• CBOT
  hard open for nighttime session

Tuesday,
Dec. 27:

• Malaysia
  Dec. 1-25 palm oil exports
• HOLIDAY:
  UK, Australia, Hong Kong

Wednesday,
Dec. 28:

• Weekly
  USDA Broiler Report

Thursday,
Dec. 29:

• EIA
  weekly US ethanol inventories, production, 10:30am
• Vietnam’s
  general statistics department releases monthly coffee, rice and rubber export data

Friday,
Dec. 30:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am

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

Saturday,
Dec. 31:

• Malaysia’s
  Dec. 1-31 palm oil export data by cargo surveyor AmSpec

Source:
Bloomberg and FI

 

 

 

 

Locations

 

 

 

 

CFTC
Commitment of Traders

Funds
and commercials changed their tune for the week ending December 13, exception soybean oil and wheat. There were no major surprises to the fund positions. For soybeans, traditional funds were a little more long than expected and Chicago wheat 11,000 contracts
more short than what the trade estimated.

 

 

 

Macros

Canadian
PPI (M/M) Nov: -0.4% (est -0.4%; prev 2.4%)

Canadian
PPI (Y/Y) Nov: 9.7% (prev 10.1%)

Canadian
Raw Materials Prices (M/M) Nov: -0.8% (est -1.3%; prev 1.3%)

Canadian
Raw Materials Prices (Y/Y) Nov: 8.0% (prevR 8.6%)

 

 

Corn

·        
CBOT corn futures fell
Monday morning in part to lower soybeans and wheat as weather forecasts pumped some rain for Argentina this upcoming weekend. 

·        
Coceral sees a larger grain production for UK and EU, combined, for 2023, to 304.4 million tons for 2023 from a forecast of 285.1 million in 2022. Soft wheat alone was estimated to increase to 143.2 MMT from 140.7 million in 2022.

·        
January options expire Friday.

·        
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.

·        
China corn imports during November were 740,000 tons, down 5.8% from year ago. YTD are down 26.9 percent to 19.75 million tons.  The steep decrease for imports is not alarming given the stats bureau reported a larger production
that CASDE.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
CBOT soybeans are lower following weakness in soybean meal related to Argentina precipitation forecasts for this upcoming weekend. SBO is higher on product spreading and higher energy prices. Not much has changed fundamentally
and traders are likely watching SA weather.

·        
Dorab Mistry sees Malaysia’s palm oil production around 19 million tons for 2023 and Indonesia output to increase 1.5 million tons.  The Malaysian palm stocks are expected to fall below 2 million tons by the end of Q1 2023. Prices
were estimated in a range of 3,500 and 5,000 ringgit per ton from now until the end of May.

·        
Indonesia’s November Palm Oil Exports Fall 13.5% M/m: Intertek  (Bloomberg) — Exports fell to 2.7 million tons in Nov. from 3.1 million tons shipped in the previous month, cargo surveyor Intertek Testing Services says in an emailed
statement.

·        
(Bloomberg) — India’s oilmeal exports rose to 407,193 tons in November from 213,154 tons in October, according to the Solvent Extractors’ Association of India.

• Rapeseed
  meal exports rose to 134,952 tons from 98,571 tons in October
• Soymeal
  exports rose to 164,075 tons from 40,196 tons in October
• Rice-bran
  extract exports rose to 55,888 tons from 34,305 tons in October

·        
February Malaysia palm oil was up 11 ringgit to 3929 and cash down $2.50/ton at $940.

·        
China soybean futures were up 0.3%, meal 0.9% lower, soybean oil 1.6% lower and palm down 1.0%.

·        
Rotterdam vegetable oils were
5-20 euros higher from early Friday morning. Rotterdam meal were 1-3 euros lower

·        
Offshore values were leading SBO lower by about 16 points earlier this morning and meal $1.30 short ton higher.

 

Export
Developments

·        
Turkey seeks 24,000 tons of crude sunflower oil on December 23 for delivery between January 2 and February 15, 2023.

 

Wheat

·        
US wheat futures are lower after additional ships were able to disembark Ukraine despite lack of power for several areas across the country.

·        
Paris March wheat was lower 1.50 euro earlier at 296.00 euros a ton.

·        
Egypt is looking at measures to cool inflation for food. Reuters noted “Egypt’s annual headline inflation hit 18.7% in November, according to official data, while core inflation, which strips out more volatile items, reached 21.5%.”

·        
Egypt wheat stocks are sufficient for 4.8 months. Nearly 4 million tons were imported so Far in 2022.

·        
Iraq’s trade ministry said they have enough wheat sufficient for 2 months of consumption. 460,000 tons is currently monthly consumptions. Look for them to float additional import tenders.

·        
Russia’s currency fell 2.9% at one point on Monday, a signal exports could increase for countries that can still finance grain shipments.

 

Export
Developments.

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

 

Rice/Other

·        
(Bloomberg) — The Philippines will import around 2.5 million tons of rice next year, smaller than the 2022 purchases as local harvests improve, an agriculture official said.

·        
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.