FI Evening Grain Comments 03/15/23

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NOPA’s
US crush was seen slightly supportive for soybean oil and neutral for soybeans and meal. USDA: Private exporters reported sales of 667,000 metric tons of corn for delivery to China during the 2022/2023 marketing year. Negative financial headlines sent global
equities and energy markets lower. Soybeans and meal ended lower. Soybean oil was also down but well-off session lows despite WTI crude oil off more than $4.00 as of 1 pm CT.
Nearby
soybean oil ended higher and back months lower. Nearby corn was also higher and back months lower. US wheat finished higher led by Chicago.

 

Weather

The
US and South American weather forecast were mostly unchanged from that of yesterday. For Argentina, heat and dryness will mainly prevail this week. Light rain does favor Santa Fe, Entre Rios, east Buenos Aires today, and La Pampa, southwest Buenos Aires this
weekend. Brazil will see additional showers for the central and southern areas this week. US temperatures are warming up.

 

 

MOST
IMPORTANT WEATHER FOR THE DAY

• Rain
  was favorably distributed in central and southeastern Buenos Aires Tuesday after occurring in western parts of the province and in areas northeast into southern and western Cordoba Monday night into Tuesday morning.
  
• Overnight
  rainfall varied from 0.30 to 1.77 inches, although most amounts were less than 0.75 inch
• The
  two-day precipitation has offered some relief from dryness and improved a few of the late season soybean, sunseed and peanut crops in the region.
  
• Sorghum
  might have also benefited from the rain
• Showers
  also occurred in central Argentina, but their distribution was very sporadic resulting in only a few pockets of relief from recent dryness
• Argentina
  weather has been so hot and dry in recent weeks that it will take much more rain than that reported in the past two days to break drought in Santa Fe, Entre Rios and immediate neighboring areas
• Central
  portions of Argentina will remain driest over the next ten days.
• Showers
  and thunderstorms will scatter across many areas in the nation, but the more significant rain is expected in western and southern parts of the nation, including many of the areas reporting rain in the past two days
• Brazil
  rainfall has become more sporadic and light allowing greater sunshine and some drying to occur in parts of soybean and corn country
• Much
  more drying is needed, but if the pattern prevails – as it should during the coming week – there should be some improvement in the potential for late season harvesting and planting
• Mato
  Grosso harvesting may be a little more sluggish than that from northern Rio Grande do Sul to Minas Gerais because of greater rain and greater rain frequency
• Brazil’s
  northern crop areas from center west to Tocantins, Goias, Maranhao and Piaui will likely see the highest degree of repetition in rainfall during the next two weeks
• Some
  fieldwork disruption is anticipated and concern over the quality of some soybeans may result
• North
  Africa drought like conditions are prevailing and limited rainfall over the next ten days will perpetuate the situation in many areas
• Widespread
  rain is needed and it is needed now more than any other time since wheat and barley are reproducing and filling
• Lower
  production is expected because of dryness this season
• India’s
  anticipated shower activity later this week into next week will slow winter crop maturation, but there may be a few immature crops that will see improved quality because of the moisture
• The
  greatest rain is expected in east-central through southeastern parts of the nation including Bangladesh and the far Eastern States
• The
  moisture will be most beneficial to winter rice and sugarcane
• No
  serious damage is expected to winter wheat because of shower activity, but the situation will need to be closely monitored due to the potential for a little too much moisture to develop in a small part of the production region.
• Eastern
  Australia weather has turned drier biased once again and that pattern will last for at least the next ten days
• Recent
  rain in Queensland was ideal for dryland sorghum, cotton and other crops, but more moisture is needed for the late season crops
• Irrigated
  crops have performed well this year and no change is expected, despite hotter temperatures coming up in the next seven days
• Dryland
  crops will become more stressed as the heat accelerates the region dry again
• China’s
  Yangtze River Basin will get abundant rainfall in the coming week to ten days improving rapeseed development conditions and improving early rice planting and early development potentials
• China’s
  Yellow River Basin and North China Plain may see a little shower activity over the next ten days, but resulting precipitation is unlikely to be great enough for a serious improvement in soil moisture
• Recent
  unusually warm temperatures depleted topsoil moisture and some precipitation will be needed in the next few weeks to ensure the best possible start to aggressive crop development
• Wheat
  has already broken dormancy and is greening up and beginning some minor crop development
• Rain
  will be needed soon to sustain new growth or cooling will be necessary to slow crop moisture demand and development potential
• China
  temperatures are advertised to continue warmer than usual over the next ten days
• Western
  CIS temperatures continue notably warmer than usual allowing snow to melt
• Significant
  runoff is suspected in many western Russia and Belarus locations due to the snow melt and recent precipitation
• Europe
  precipitation continues most significant in the north and it will remain greatest in that region and some western parts of the continent over the next ten days
• Eastern
  Spain and the lower Danube River Basin remain too dry and need significant moisture, but that is unlikely for a while
• Other
  areas in eastern Europe will be drying down in the coming ten days, but no other areas outside of the lower Danube Basin will experience enough dryness to raise market worries
• U.S.
  Midwest will see periods of light precipitation and experience mild to cool temperatures over the next ten days
• Sufficient
  moisture is expected to support spring planting when that time arrives, but warmer soil temperatures will be needed
• U.S.
  hard red winter wheat areas will get some light precipitation infrequently during the next couple of weeks, but resulting precipitation is unlikely to change drought status and most crop areas in the west will continue in need of significant moisture
• U.S.
  Northern Plains precipitation will be light and somewhat sporadic for a while, but colder than usual temperatures will limit snow melt
• Concern
  over snowpack in the Red River Basin of the North from the U.S. into southern Manitoba, Canada will continue especially while temperatures are cold
• The
  longer temperatures are cold and little of the snowpack is melting the higher the potential becomes that the snow will melt quickly later in the spring when temperatures suddenly turn warmer
• The
  region will be closely monitored for flooding if the snow melts too fast and occurs while significant rain is falling
• Similar
  situations led to serious flooding in 2011, 2009, 1997 and numerous other years in the past with many of the floods occurring in at the end of La Nina winters
• Recent
  precipitation from the lower Delta to southern Georgia and northern Florida has improved topsoil moisture and more precipitation is forthcoming to perpetuate that situation in this next two weeks
• South
  Texas and the Texas Coastal Bend planting of corn, sorghum and some cotton is underway, but dryland production areas (especially in the south) need significant rain
• Some
  precipitation is expected over the next ten days, but more will be needed to bolster soil moisture for long term crop development especially in unirrigated areas
• West
  Texas precipitation will continue restricted over the next two weeks, although totally dry weather may not occur
• Some
  parts of the dryland production region need a tremendous amount of rain to restore soil moisture and water supply
• Precipitation
  in California will continue periodically over the coming week, but its frequency and intensity should be reduced
  
• The
  second week of the outlook should be notably drier, although a few showers may still linger periodically
• West-central
  Africa rainfall is expected to increase through Tuesday of next week bolstering soil moisture and improving conditions for flowering coffee and cocoa
• Weekend
  precipitation was limited and net drying occurred while temperatures were very warm
• Turkey
  will receive frequent bouts of rain over the next ten days bolstering soil moisture for wheat development and rice and cotton planting
• Other
  spring planting will benefit from the coming moisture boost
• Other
  areas in the Middle East are unlikely to get much volume of rain during the next two weeks, although some timely rain will fall in western Iran, northern Iraq and northern Syria during the middle and latter parts of this week
• 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 a little drier than usual, but the environment will be good for early season crop maturation and harvesting
• Greater
  rain will soon be needed to maintain the best possible late season crop conditions
• Eastern
  Africa precipitation is expected to scatter from Tanzania to Ethiopia over the next ten days
• The
  moisture will be good for ongoing crop development
• 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
• Most
  likely the advertised rain is overdone and will be reduced in future forecast model runs.
  
• Today’s
  Southern Oscillation Index was +2.80 and it was expected to move lower over the coming week

Source:
World Weather, INC.

 

Bloomberg
Ag calendar

Wednesday,
March 15:

• EIA
  weekly US ethanol inventories, production, 10:30am
• FranceAgriMer
  monthly grains balance sheet
• Malaysia’s
  March 1-15 palm oil export data
• Eurasian
  agri-commodities conference, Kazakhstan, day 1
• Grain
  Export Conference, Paris

Thursday,
March 16:

• IGC
  grains market report
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Eurasian
  agri- commodities conference, Kazakhstan, day 2
• Port
  of Rouen data on French grain exports

Friday,
March 17:

• ICE
  Futures Europe weekly commitments of traders report
• CFTC
  commitments of traders weekly report on positions for various US futures and options, 3:30pm
• FranceAgriMer’s
  weekly crop conditions reports
• USDA
  cattle on feed

Source:
Bloomberg and FI

 

 

 

 

US
Acreage

Results
of the annual Allendale US acreage survey…corn +1.8 to 90.414, soybeans +0.3 to 87.768 and all-wheat +3.0 to 48.706.

 

Macros

101
Counterparties Take $2.056 Tln At Fed Reverse Repo Op. (prev $2.043 Tln, 95 Bids)

US
Retail Sales Advance (M/M) Feb: -0.4% (exp -0.4%; prev 3.0%)

Retail
Sales Ex-Auto (M/M) Feb: -0.1% (exp -0.1%; prev 2.3%)

Retail
Sales Ex-Auto And Gas Feb: 0.0% (exp -0.2%; prev 2.6%)

US
PPI Final Demand (M/M) Feb: -0.1% (exp 0.3%; prev 0.7%)

PPI
Ex Food And Energy (M/M) Feb: 0.0% (exp 0.4%; prev 0.5%)

PPI
Final Demand (Y/Y) Feb: 4.6% (exp 5.4%; prev 6.0%)

PPI
Ex Food And Energy (Y/Y) Feb: 4.4% (exp 5.2%; prev 5.4%)

US
Empire Manufacturing Mar: -24.6 (exp -7.9; prev -5.8)

Retail
Sales Ex-Auto (M/M) Feb: -0.1% (exp -0.1%; prevR 2.4%)

Retail
Sales Ex-Auto And Gas Feb: 0.0% (exp -0.2%; prevR 2.8%)