FI Evening Grain Comments 03/07/23

PDF Attached

Wednesday
is USDA report day. A preview sheet is attached. Soybean meal fell in the nearby positions for the first time in five sessions. IL soybean meal basis eased $8/short ton from Monday. There were no 24-hour USDA sales this morning. Soybeans fell from lower meal
and corn. Chicago wheat was higher on technical buying. Funds still hold a large short position for Chicago wheat. Note Chicago wheat hit a 17-month low yesterday. The USD was up a large 129 points as of around 2 pm CT. WTI crude oil fell more than $3/barrel.

Weather

Map

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SA Week 1 Accum Precipitation (mm) Forecast

World
Weather, INC.

MOST
IMPORTANT WEATHER FOR THE DAY

Canada’s
central Prairies will get some welcome snow this weekend

Once
the snow melts this spring it should help to moisten the topsoil
Central
parts of the Prairies have been snow free for an extended period of time and soil moisture is low in many areas

Two
more waves of snow will move through the northern U.S. Plains and upper Midwest through the weekend

Additional
snowfall was reduced by the computer forecast models overnight which was a welcome change

Snowfall
Thursday into the weekend will vary from 2 to 7 inches from the Dakotas and northern Nebraska into the Great Lakes region with parts of Iowa, southern Minnesota, northwestern Illinois and southern Wisconsin getting 6 to 12 inches

Flood
potentials are still rising for the Red River Basin of the North and in a part of the upper Mississippi River Basin; however, most of the moisture will help improve water levels on the Mississippi River and will improve soil conditions for spring planting
once the ground firms up

Some
of the moisture will help end drought conditions
Flooding
is not a sure thing – much will depend on how the snow melts

A
gradual melting will limit flood potentials

A
North America weather pattern trend change is expected next week with a northwesterly flow pattern expected in Canada and the north-central through the northeastern U.S.

This
change should squelch the frequent precipitation pattern in the northern Plains and upper Midwest – at least for a while

Three
areas of abundant U.S. precipitation are expected in the coming week to ten days

Central
and northern California through the Cascade Mountains of Washington and Oregon will see abundant to excessive precipitation again

Some
of the mountainous locations already have snow water equivalents in the snow of 1.5 to more than 2.0 times normal

Northern
Plains and upper Midwest will be wetter than usual as will a part of the Great Lakes region
The
northern and central Delta and Tennessee River Basin into Georgia will also be wetter than usual over the next week to ten days

West
and South Texas, the Texas Coastal Bend and northeastern Mexico will continue to receive restricted rainfall and remain in a drought

Greater
rain is needed and may evolve a little later this spring, but there is not much suggested through March 17

South
America rainfall will be restricted over the next ten days from Santa Fe, southern Chaco and northeastern Buenos Aires, Argentina into Rio Grande do Sul, Brazil, Uruguay and southwestern Paraguay

These
areas will experience dry or mostly dry weather through March 17 and many locations are already quite dry resulting in crop moisture stress

Western
and far southern Argentina showers and thunderstorms during the next ten days will support late season crop development

Southern
and western Buenos Aires, La Pampa, San Luis, western Santiago del Estero, western Cordoba and areas from Salta to western Formosa will receive most of the precipitation during this period of time and crop conditions will benefit, although it is getting late
in the year for some crops

ECMWF
model has suggested improved rainfall for Bahia, Espirito Santo and northeastern Minas Gerais for next week

Some
of this advertised rain is likely overdone, but there is some support for the change

Showers
are expected, but confidence in a general soaking like that advertised is not high

Center
west and center south Brazil are advertised to trend wetter again during the weekend next week

The
moisture boost will be a concern for unharvested soybeans and unplanted Safrinha corn, but the moisture will be good for all previously planted Safrinha crops

Late
planted crops need to be well watered over the next few weeks so that the soil is completely saturated when monsoonal precipitation ends in April

That
way the late planted crops will have a fair chance of moving through reproduction while there is still beneficial moisture in the ground
Most
likely, some of the late planted corn will yield a little lighter than usual without an extended period of rain in late April and May

Europe
weather will turn more active over the next ten days with France, Germany and the U.K getting a notable boost in precipitation and soil moisture

The
change should improve water supply and long term soil moisture for use this spring

Eastern
Europe and the western CIS will also see a boost in precipitation this weekend through next week maintaining moisture abundance in those areas
West-central
India received some rain Monday and early today with moisture totals to 0.27 inch

The
precipitation was not enough to counter evaporation with high temperatures in the 80s and 90s Fahrenheit

India
has a good chance for additional showers in the central and interior north this week with rainfall of a trace to 0.60 inch of rain resulting

Maharashtra,
Gujarat, Rajasthan, Madhya Pradesh, Chhattisgarh and a few neighboring areas will be wettest

The
moisture will all be welcome for late reproducing and filling crops, though not enough to seriously raise soil moisture for induce a big change in winter crop production potential
The
moisture will help hold back temperatures keeping them warm, but not excessively hot

North
Africa weather is expected to continue restricted of moisture during the next ten days, although a few showers will produce up to 0.35 inch of moisture over the next ten days; mostly in coastal areas
Central
Queensland, Australia rainfall is expected to evolve in the second half of this week and during the weekend with 2.00 to 4.00 inches of rain and locally more than five inches possible by early next week

Southern
Queensland and far northern New South Wales will also receive some rain with 0.75 to more than 3.00 inches expected with only sporadic and light shower activity occurring farther to the west and south

China’s
Yangtze River Basin and areas southward into to a part of the coastal provinces will receive waves of rain

Moisture
totals will vary from 0.75 inch to more than 4.00 inches over the next ten days

Northern
and eastern most parts of the Yangtze River Basin will be driest with some areas getting less than 0.75 inch resulting in net drying

Other
areas in China will continue drier biased with temperatures well above normal this week and more seasonably warm this weekend into next week

China’s
bottom line will be mostly good for those rapeseed areas that get moisture, but net drying is likely in most other areas and the warmer weather this week will stimulate aggressive new crop development in rapeseed areas and greening in wheat areas to the north
Philippines
rainfall will be light to locally moderate most days through the coming week

Weather
conditions in the next ten days should be mostly good for the nation

Indonesia
and Malaysia rainfall will occur abundantly during the next two weeks with all areas impacted and no area experiencing much net drying
Mainland
areas of Southeast Asia will receive very little rain of significance for a while which is normal for this time of year
South
Africa weather will be favorably mixed during the next two weeks with alternating periods of rain and sunshine likely

Similar
conditions occurred during the weekend, although more drying than rain was noted

West-central
Africa showers increased Friday through Sunday and additional rain is expected over the next ten days

Resulting
rainfall will be good for coffee and cocoa flowering and for sugarcane development and rice planting

Greater
rainfall may still be needed in some areas

Recent
temperatures have been heating up, but that is not unusual prior to the start of seasonal rainfall

Middle
East precipitation is expected to be erratic with some areas getting heavier rain than others

Iraq
and Iran will receive greater rain in this coming week and the change will be welcome for winter wheat development and eventual cotton planting

Eastern
Africa precipitation will be greatest in Tanzania during the next ten days which is not unusual at this time of year

Some
rain is expected to develop in Ethiopia, Uganda and Kenya over time, although amounts should be light

Eastern
Mexico and portions of Central America will receive rain during the next ten days

The
precipitation will be most organized in Central America with Costa Rica and Panama wettest, but some areas in western Honduras, northwestern Nicaragua and Guatemala this weekend into next week

Moisture
totals may be enough to stimulate premature coffee flowering and that potential event should be closely monitored

Mostly
likely the advertised rain is overdone and will be reduced in future forecast model runs.

Today’s
Southern Oscillation Index was +8.18 and it was expected to move erratically lower over the coming week

Source:
World Weather and FI

Bloomberg
Ag calendar

Tuesday,
March 7:

EU
weekly grain, oilseed import and export data
US
Purdue Agriculture Sentiment
New
Zealand global dairy trade auction
Bursa
Malaysia’s palm oil conference and 2023 outlook, Kuala Lumpur, day 2
ABARES
Outlook 2023 conference, Canberra, day 1
HOLIDAY:
India

Wednesday,
March 8:

USDA’s
World Agricultural Supply and Demand Estimates (WASDE), 12pm
China’s
agriculture ministry (CASDE) releases monthly report on supply and demand for corn and soybeans
Bursa
Malaysia Palm Oil Conference and 2023 Outlook, Kuala Lumpur, day 3
EIA
weekly US ethanol inventories, production, 10:30am
ABARES
Outlook 2023 conference, Canberra, day 2

Thursday,
March 9:

USDA
weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
Port
of Rouen data on French grain exports
Brazil’s
Conab releases data on production, yield and area for corn and soybeans

Friday,
March 10:

ICE
Futures Europe weekly commitments of traders report
CFTC
commitments of traders weekly report on positions for various US futures and options, 3:30pm
Malaysian
Palm Oil Board’s data on stockpiles, production and exports
FranceAgriMer’s
weekly crop conditions reports
Brazil’s
Unica may release cane crush and sugar output data (tentative)
Coffee
festival in Dak Lak province, Vietnam

Source:
Bloomberg and FI

USDA
March report estimates

Due
out March 9

Soybean
and Corn Advisory

2022/23
Brazil Soybean Estimate Unchanged at 151.0 Million Tons

2022/234
Brazil Corn Estimate Unchanged at 121.0 Million Tons

2022/23
Argentina Soybean Estimate Lowered 1.0 mt to 31.0 Million

2022/23
Argentina Corn Estimate Lowered 1.0 mt to 40.0 Million

Macros

US
Crude Oil Futures Settle At $77.58/Bbl, Down $2.88 Or 3.58%

Brent
Crude Futures Settle At $83.29/Bbl, Down $2.89 Or 3.35%

UN
Chief Guterres To Meet Ukraine’s Zelenskiy In Kyiv On Wednesday To Talk Renewal Of Grain Export Deal – UN Spokesman

US
Oil Production Will Grow By About 500,000 Barrels Per Day, With 80% Or 90% Of That Coming From The Permian – Occidental Petroleum Executive

Fed
Chairman Jerome Powell will be speaking over the next two days to members of Congress, regarding monetary policy.

EIA:
Raises Forecast For 2023 World Oil Demand Growth By 370K Bpd, Now Sees 1.48 Mln Bpd Y/Y Increase

–
Cuts Forecast For 2024 World Oil Demand Growth, Now Sees 1.79M Bpd Y/Y Increase

EIA:
US 2023 Dry NatGas Production Seen At 100.67 Bcfd (Previously Saw 100.27 Bcfd)

–
Sees 2023 NatGas Consumption At 86.40 Bcfd (Previously Saw 87.04 Bcfd)

–
Sees 2024 Dry NatGas Production At 101.69 Bcfd (Previously Saw 101.68 Bcfd)

–
Sees 2024 NatGas Consumption At 86.06 Bcfd (Previously Saw 86.10 Bcfd)

101
Counterparties Take $2.170 Tln At Fed Reverse Repo Op. (prev $2.191 Tln, 101 Bids)

Corn

·
Corn futures
traded lower on lack of fresh news and improving US soil moisture levels after several bouts of precipitation through early March. US corn inspections are improving while soybeans are slowing.

·
The trade is expecting USDA on Wednesday to lower US corn exports by 25 to 50 million bushels (reflected in the trade average).

·
US weather will be good over the next week. Two systems will roll through the northern U.S. Plains and upper Midwest through the weekend, bias 2-7 inches for the Dakotas and northern Nebraska into the Great Lakes region. This
will further add to soil moisture levels.

·
Federal Reserve Chair Jerome Powell speech on Tuesday sent the USD sharply higher.

·
Corn plantings for Texas reached 20 percent, above a 5-year average of 13 percent.

·
France reported a H5N1 bird flu outbreak among red foxes northeast of Paris.

·
Safras & Mercado reported Brazil second corn plantings at 63.6% of the 16.9 million hectare crop, nearly a 15 point increase from the previous week and below 74.8% at this time last year. The pace is not all that bad considering
the delays in soybean harvesting from too much rain. Brazil’s second corn crop is expected to reach 94.9 million tons. Conab will update supply on Thursday.

·
Brazil is expected to produce six billion liters of corn ethanol in the 2023-24 season (April through March), up a large 36.7% from 2022-23, according to trade group Unem. That amounts to 1.6 billion US gallons. 2022 US ethanol
production was 15.36 billion gallons.

·
A Bloomberg poll looks for weekly US ethanol production to be up 9,000 thousand barrels to 1012k (996-1025 range) from the previous week and stocks up 143,000 barrels to 24.918 million.

·
The United States Trade Representative’s office is looking to open a dialog with Mexico over the GMO corn import ban for human consumption. Mexico is the largest US customer.

USDA
Attaché: China Livestock and Products Semi-Annual “Pork
production and imports, and beef production are all forecast to grow in 2023.”

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Livestock%20and%20Products%20Semi-Annual_Beijing_China%20-%20People%27s%20Republic%20of_CH2023-0032.pdf

Table

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Export
developments.

No
24-hour sales were reported by USDA.
Taiwan’s
MFIG seeks up to 65,000 tons of corn on March 8 for April 25 and May 25 shipment.

Updated
03/7/23

May
corn $6.00-$6.90

July
corn $5.75-$7.00

Soybeans

·
Soybean futures traded lower from weakness in soybean oil, meal and corn. A slowdown for US soybean exports added to the negative undertone. Inspections yesterday were lowest since late September. Soybean meal climbed earlier
before profit taking set in. Argentina crop concerns drove the local (Arg.) soybean meal pellet export price to $579 per ton fob yesterday, up 6 percent over a two-day business day period, according to Oil World. For the US, IL soybean meal basis today fell
$8.00 short ton to 10 over the May. CIF was down $3/unch at $25/$35 over.

·
CBOT crush margins fell hard today. May went out at $2.0275, down 18.75 cents. Some think the good crush margins may have put too much meal on the market.

·
Traders are not looking for USDA to change their US export forecast on Wednesday, and leave ending stocks about unchanged. Stocks will change March 31 when USDA updates their quarterly stocks estimate. Our working estimate for
March 1 soybean stocks is 1.760 billion bushels, down 9 percent from year earlier but well above 1.564 billion two years ago.

·
Soybean oil share basis the May positions hit new lows on Tuesday. Lower palm oil over the past couple sessions and bullish undertone in meal pulled oil share below 37.40 percent. We think this might be a little overdone.

·
Malaysian Biodiesel Association (MBA) expects biodiesel exports to fall to a 6-year low of around 300,000 tons for 2023.

·
Brazil producer selling of soybeans reached 35.4% as of March 3, up nearly 5 points from the previous month and compares to 48.5 year ago and 51.7 percent average, according to Safras & Mercado. Last week and yesterday we saw
a good amount of SA producer selling.

·
Brazil’s Mato Grosso state agency IMEA suggested the soybean crop was increased in early March to 44.3 million tons, up 3.5% from February and 8.4% above year ago. This comes after 88 percent of the crop had been harvested across
Mato Grosso. Meanwhile, Brazil’s Rio Grande do Sul state agency lowered its soybean output estimate to 14.1 million tons from the previous 20.5MMT previously due to drought conditions. RGDS is still expected to see a 54 percent increase from last season.

·
APK-Inform warned Ukraine sunflower seed exports may decrease 29 percent to up to 1.2 million tons during the Sep-Aug 2022-23 crop year. They were a record 1.63 million tons for 2021-22. 1.2 million tons is still a large amount,
but some importers may seek out alternative oilseeds to fill the gap.

·
USDA will update their S&D’s on Wednesday. Much of the focus will be on South American crop production. Many private estimates are well below USDA’s current projections, and we don’t think USDA will be that aggressive in lowering
corn and soybean production for Argentina.

·
China’s CASDE will be out later tonight, and we don’t look for major changes but will keep an eye on soybean imports for 2022-23 after trade data showed good imports during the Jan-Feb period.

·
Combined January – February China soybean imports topped 16.17 million tons, up 16 percent from the same period year ago, and highest since 2008. This is good sign China’s economy is rebounding.

·
(Reuters) – European Union soybean imports in the 2022/23 season that started in July had reached 7.48 million tons by March 5, versus 9.30 million by the same week in the previous season, data published by the European Commission
showed on Tuesday. EU rapeseed imports so far in 2022/23 had reached 5.67 million tons, compared with 3.54 million tons a year earlier. Soymeal imports over the same period totaled 10.53 million tons, against 11.17 million tons the prior season, while palm
oil imports stood at 2.34 million tons versus 3.59 million tons in 2021/22.

Table

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Reuters
trade estimates for Malaysian palm oil S&D due out March 10.

Export
Developments

·
None reported

Updated
03/07/23

Soybeans
– May $14.50-$16.00

Soybean
meal – May $430-$520

Soybean
oil – May 56-62

Wheat

·
Wheat futures ended higher for Chicago and KC, and lower for MN. Bottom picking was likely. Chicago wheat hit a 17-month low on Monday.

·
Australia wheat exports were a very good 3.3 million tons for the month of January, 25 percent above December and 25 percent above January 2022.

·
May Paris milling wheat officially closed down 1.75 euros, or 0.6%, at 270.00 euros a ton (about $285.00/ton).

·
United Nations Secretary-General Antonio Guterres is meeting with Ukrainian President Volodymyr Zelenskiy today to discuss the grain export deal.

·
Crop year to date Russia grain exports reached 40 million tons. Russia does not intent to curb exports for the remainder of the crop year.

·
ABARES raised Australian wheat production for 2022-23 to 39.2 million tons from 36.6 million previous.

·
SovEcon lowered their 2022-23 Russia wheat export estimate to 44.1 million tons from 44.2 million.

·
Brazil will start testing cultivation of GMO wheat, across two small plots in Cerrado and Minas Gerais.

·
Crop conditions for US winter wheat are slowly improving. Not all winter wheat areas are seeing an improvement. KS reported 17 percent of the winter wheat crop in G/E condition, down 2 points from the previous week and 64 percent
of the topsoil moisture in Kansas was short to very short, up from 60 percent week earlier. Texas winter wheat ratings were steady at 19 percent G/E.

Export
Developments.

·
Algeria seeks 50,000 tons of durum wheat on March 9 for April 1-15 and April 16-30 shipment.

·
Japan seeks 80,570 tons of food wheat from the US and Canada on Thursday.

·
Tunisia seeks 100,000 tons of durum wheat on Wednesday for April through May 15 shipment.

·
Jordan bought 60,000 tons of hard milling wheat at $315.30 C&F for FH Aug shipment.

·
Jordan seeks 120,000 tons of barley on Wednesday.

·
China will auction off 140,000 tons of wheat from state reserves on March 8. They sold 141,700 tons last week, or about 100 percent offered at 2795 yuan per ton.

·
Japan in a SBS import tender seeks 70,000 tons of feed wheat and 40,000 tons of barley for arrival in Japan by August 31 on March 8.

Rice/Other

·
YANGON, March 7 (Xinhua) — Myanmar exported 106,855 tons of rice in February this year, as compared to 171,811 tons of rice exported in January, the Myanmar Rice Federation (MRF) said on Tuesday. The Southeast Asian country also
exported 84,549 tons of broken rice in February, as compared to 97,024 tons of broken rice registered in January, the MRF data showed. China remained the top buyer of Myanmar’s rice and broken rice in February, purchasing 45,000 tons of rice and 64,321 tons
of broken rice during the period, the federation’s figures showed.