FI Morning Grain Comments 12/20/22

PDF attached

 

Good
morning.

 

No
24-H sales at the time this was written. USD
was down 57 points earlier, WTI crude up about $0.91, and US equities mixed/lower. The outside markets are helping CBOT soybeans and corn futures. US wheat futures are mixed with KC & MN higher. Chicago wheat is lower, perhaps in part from the forecast calling
for a large winter storm to roll across the US later this week. The large move in the USD is related to Japan yield spreads after they left their rates unchanged (spot). Talk of improving South American weather might be capping gains, but long term computer
outlooks vary. Taiwan Flour Millers’ Association seeks 56,000 tons of grade 1 US milling wheat on Dec. 22 for shipment from the U.S. Pacific Northwest coast between Feb. 10 and Feb. 24, 2023. Japan seeks 144,441 tons of wheat later this week from the US and
Canada for arrival by March 5. Offshore values were leading SBO lower by about 68 points earlier this morning and meal $5.80 short ton higher.

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 20, 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 eastern 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 Plains
• Subzero-degree
  low temperatures will occur southward to the Texas Panhandle, central Oklahoma, central Illinois and northern Indiana
• Freezes
  will occur southward to South Texas and the entire central Gulf of Mexico Coast
• Sugarcane
  will experience notable freezes in Louisiana
• Fruits
  and vegetable crops will be damaged in South Texas
• 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 – late weekend temperatures will be coldest
• 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 3 to 10 inches with much greater snowfall near the Great Lakes
• 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, but rainfall has been reduced over that of Monday’s forecast
• Argentina’s
  second week weather outlook is expected to be unsettled generating some periodic showers and thunderstorms
• This
  morning’s models are probably a little too dry for the second week
• 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
• Northern
  Brazil is still expected to become a little too wet this week in southern Tocantins, southwestern Bahia, northern Minas Gerais, northern Goias and in a few locations in northern and eastern Mato Grosso
• Europe
  will be trending warmer this week and the greatest precipitation will be in the far west and north
• No
  bitter cold will impact Asia or Europe in the coming week
• Australia,
  China and India weather has not changed from that of Monday

Source:
World Weather INC

 

Bloomberg
Ag Calendar

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

 

 

 

 

Soybean
and Corn Advisor

2022/23
Brazil Corn Estimate Unchanged at 125.5 Million Tons

2022/23
Brazil Soybean Estimate Unchanged at 151.0 Million Tons

2022/23
Argentina Soybean Estimate Lowered 2.0 mt to 45.0 Million

2022/23
Argentina Corn Estimate Unchanged at 47.0 Million Tons

 

 

Macros

BoJ
Keeps Monetary Policy Steady

–         
Maintains Short-Term Interest Rate Target At -0.1%

–         
Maintains 10-Year JGB Yield Target Around 0%

US
Housing Starts Nov: 1427K (est 1400K; prevR 1434K)

 

US
Building Permits Nov: 1342K (est 1480K; prevR 1512K)

US
Housing Starts (M/M) Nov: -0.5% (est -1.8%; prevR -2.1%)

US
Building Permits (M/M) Nov: -11.2% (est -2.1%; prevR -3.3%)

Canadian
Retail Sales (M/M) Oct: 1.4% (est 1.5%; prevR -0.6%)

Canadian
Retail Sales Ex Auto (M/M) Oct: 1.7% (est 1.4%; prevR -0.8%)

Philadelphia
Fed Non-Manufacturing Regional Business Activity Index -17.1 In Dec Vs -13.6 In Nov

Philadelphia
Fed Non-Manufacturing Firm-Level Business Activity Index 3.4 In Dec Vs -2.6 In Nov

Philadelphia
Fed Non-Manufacturing New Orders Index -6.1 In Dec Vs -6.3 In Nov

Philadelphia
Fed Non-Manufacturing Full-Time Employment Index 3.4 In Dec Vs 10.0 In Nov

Philadelphia
Fed Wage And Benefit Cost Index 42.9 In Dec Vs 41.5 In Nov

 

 

Corn

·        
CBOT corn futures are
higher in the front three months as computer forecasts vary for Argentina rain over the next week. Christmas is generally thought to be the pivot point for Argentina crop production. Uncertainty over the long term is keeping traders on edge. Many crop forecasts
have been slashed already for soybeans and corn could be next. Argentina is expected to get rain later this week, which is badly needed as 62 percent of the soybean crop had been planted and corn was 63 percent complete.

·        
Recession concerns are in mind. The US is expected to roll out a 1.7 trillion dollar spending bill. The 4000+ page bill was passed by the House. US housing data was better than expected exception longer term outlook with building
permits coming in much lower than expected.

·        
The US will see a major storm later in the work week accompanied by cold temperatures which should support feed demand.

·        
Reuters shipping data suggests 1.15 million tons of Brazilian corn is booked by China and will ship over the next 30 days (17 vessels). 44 million tons of corn could be exporter by Brazil, according to Anec.

·        
Ukraine may see a 22 percent decrease in 2023 grain plantings to 8.7 million hectares, according to UBN media outlet, but oilseeds could see a 32 percent increase to 9.7 million hectares  – Ukrainian Agribusiness Club. Grain production
may end up near 34 million tons, a 37 percent decrease from 2022.

·        
January options expire Friday.

 

U
of I: China and the World’s Increasing Need for Cropland

Zulauf,
C. “China and the World’s Increasing Need for Cropland.” farmdoc daily (12):192, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, December 19, 2022.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
Day after funds were heavy sellers for soybeans (-10k) and meal (-10k), CBOT soybeans, meal and soybean oil are all higher from a weaker USD and higher WTI crude oil. Offshore values are mixed.

·        
AmSpec reported Malaysian palm oil exports for the 1-20 December period at 921,811 tons, about unchanged from the previous period month earlier.

·        
Traders will be watching the upcoming rainfall for Argentina later this week. Note long term models are not promising.

·        
March Malaysia palm oil was down 60 ringgit to 3869 and cash down $7.50/ton at $932.50.

·        
China soybean futures were down 0.6%, meal 0.5% lower, soybean oil 0.1% lower and palm up 0.3%.

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

·        
Offshore values were leading SBO lower by about 68 points earlier this morning and meal $5.80 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 mixed with Chicago lower, KC higher and MN higher. A major storm system will hit the Great Plains starting Wednesday, boosting soil moisture.

·        
Paris March wheat was 1.50 euros lower earlier at 296.25 euros a ton.

 

 

Export
Developments.

·        
Taiwan Flour Millers’ Association seeks 56,000 tons of grade 1 US milling wheat on Dec. 22 for shipment from the U.S. Pacific Northwest coast between Feb. 10 and Feb. 24, 2023.  Wheat types sought include dark northern spring,
hard red winter and white wheat.

·        
Japan seeks 144,441 tons of wheat later this week from the US and Canada for arrival by March 5.

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

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seek 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.