FI Evening Grain Comments 09/02/22

PDF Attached

 

Attached
are our updated US S&D’s. CFTC COT will be released at a later time.

 

General
rebound for most outside related commodity markets supported ag prices. Rain returns to the southern Delta today and southern/eastern areas Sat-Sun. The Midwest will see rain across the far north central/southeast areas Friday, southeast Sat-Sun, and south
central/eastern area Monday. EU will see rain bias the western areas through Monday. China will see rain across parts of the Yangtze Valley through Monday.

 

 

Weather

 

WEATHER
EVENTS AND FEATURES TO WATCH

• Eastern
  Argentina received some rain overnight and the precipitation will wind down today
• Western
  Argentina is still too dry and unlikely to get significant rain in the next ten days
• Southern
  Brazil will receive some periodic rainfall over the coming week favoring winter crops and some early corn planting near the Paraguay border in southwestern Brazil
• Relief
  from drought is expected in western and central Europe during the coming week with waves of rain from the U.K. and France into southeastern Europe.
  
• Temperatures
  will be warm into early next week and then gradually cooling during the balance of next week
  
• Crop
  stress and drought will be eased during the week next week in France and the U.K., along with a few areas in Germany, but more rain will still be needed to make a bigger difference in the moisture profile
• Western
  CIS crop areas have dried out quite a bit recently with the exception of far northwestern Russia and immediate neighboring areas where rain has bolstered the topsoil
• Dryness
  is widespread in Ukraine, Russia’s Central and Southern Region and across the New Lands, but this is good for spring and summer crop maturation and harvest progress
• Rain
  is needed for winter wheat and rye planting, germination, emergence and establishment
• Western
  Russia, Ukraine, Belarus and the Baltic States are expecting some rain during the coming week to ten days that will force dryness back to the southeast over time
• Russia’s
  Southern Region will be last to get rain, but they also have the longest period of time to get winter crops established before cold weather arrives
• Temperatures
  will be cool in western Russia and neighboring areas in eastern Europe during the coming week and some frost and a few light freezes will be possible, although cloudiness will hinder much of that potential and limit it to pockets across the region
• Frost
  and freezes in northwestern Russia are not unusual at this time of year
• Interior
  eastern China will be dry for the next ten days
• Areas
  from the Yangtze River Basin to the North China Plain will receive little to no rain and temperatures will be seasonable
• Drought
  conditions will not change much in the Yangtze River Basin leaving rice and a few other crops; including some grain and oilseed crops in central and southern parts of the basin too dry hurting production potentials
• Far
  northeastern China may receive some heavy rain early next week due to the passing of Typhoon Hinnamnor, but resulting rainfall is not likely to be damaging
• Eastern
  Heilongjiang will be most impacted
• Xinjiang,
  China weather is expected to trend warmer in the next ten days to two weeks and precipitation is expected to diminish
• This
  pattern will be very good for cotton and corn maturation as well as early harvesting
• Typhoon
  Hinnamnor was located 306 miles south southwest of Okinawa, Japan at 0900 GMT today moving south northwesterly at 4 mph and producing a sustained wind speed of 92 mph and gusts to 115 mph.
• Typhoon
  force wind was occurring out 50 miles from the center of the storm while tropical storm force wind was occurring out 170 miles
  
• The
  storm will turn to the north this weekend and threaten the Korean Peninsula with torrential rain and damaging wind speeds
• The
  storm will stay far enough to the east of central and southern China to minimize any impact there, although some rain is expected in coastal areas
• Western
  Japan’s main islands will feel the influence of Hinnamnor as well along with China, but no direct adversity is currently expected
  
• Typhoon
  Hinnamnor may eventually reach the high latitudes in the northwestern Pacific  Ocean where it may merge with a deepening mid-latitude trough of low pressure inducing a very intense storm west of the Aleutian Islands
• A
  very strong ridge of high pressure may briefly evolve late next week and into the following weekend over the Gulf of Alaska pushing much colder air southward through Canada to the north-central United States Sep. 10-14
• This
  may bring the season’s first frost and light freeze event to a part of Canada’s Prairies
• The
  impact of frost and freezes should be relatively low, but some negative impact is possible on late season corn, flax and soybean crops in the eastern Prairies
• Confidence
  over the cold surge is still low, but the logic is in place and close monitoring of Typhoon Hinnamnor and Canada’s Prairies is warranted
• Drying
  in western Canada, the U.S. Pacific Northwest, the northern half of the U.S. Plains and western Corn Belt over the coming week will be ideal for maturing spring and summer crops and supporting their harvest
• Some
  rain is expected in Canada’s Prairies and a small part of the upper Midwest in the second weekend of the forecast ahead of cooler air
  
• Eastern
  U.S. Midwest weather is expected to trend drier into Saturday, but rain is predicted to evolve later in the weekend and advance daily through the eastern Midwest through the first half of next week.
  
• Areas
  near the Ohio River will be wettest
• Rain
  will fall frequently in the southern U.S. Plains, Delta and southeastern states during the coming ten days to two weeks, but the precipitation is advertised lighter today than that of most other days this week.
  
• Two
  tropical cyclones predicted to evolve near the Mexico coast over the next week will bring moisture into western and northern Mexico and some of this precipitation may stream to New Mexico and Texas further perpetuating waves of rain across those areas for
  the next week and possibly ten days
• Model
  divergence is still high on this event
• World
  Weather, Inc. still sees some potential for rain from the second tropical cyclone to merge with a cool front moving through the southern and eastern U.S. in another week bringing greater moisture to some crop areas, but the timing will have to be just right
  and the models today are not much interested in that potential
• The
  first tropical cyclone will move up the west coast of Mexico this weekend and then turn off to the west after impacting Baja California.
  
• Western
  and northern Mexico will trend wetter because of the two developing tropical cyclones along its coast today
  
• Tropical
  Storm Danielle formed over the central North Atlantic Ocean Thursday and was expected to intensify to hurricane status today without moving much
• Danielle
  will begin moving to the northeast next week and poses no threat to land
• Two
  tropical disturbances are still being monitored in the Atlantic Ocean by the U.S. National Hurricane Center today
  
• Neither
  of the disturbances is expected to threaten North America and both will remain over open water in the Atlantic Ocean
  
• The
  system near the Cabo Verde Islands is not likely to survive more than another day or two at the most and will eventually dissipate
• The
  disturbance east of the Leeward Islands is expected to pass northeast of the northern Leeward Islands this weekend and it may become a tropical Depression thereafter, but the system is more likely to turn away from North America rather than be a threat
  
• The
  Greater Antilles are unlikely to be significantly impacted by the system and the same is true for the Bahamas
• North
  Africa showers at this time of year are always welcome, but have a minimal impact and that will be the case over the next ten days
• Northwestern
  India and Pakistan are drying down and that will be good for early planted cotton and other early season crops
• Pakistan
  is cleaning up from its recent flooding and crop damage assessments will continue for a few weeks
• Central,
  southern and eastern India will continue to experience periods of rain during the next two weeks
• Precipitation
  should slowly increase over the next two weeks
• Ontario
  and Quebec weather remains mostly good for corn and soybeans with little change likely
• Rain
  is ending after a wet period this week
• the
  environment will be good for late season crop development,  maturation and early season harvesting
• Mexico’s
  drought in the northeast continues and will not likely end without the help from a tropical cyclone
• Increased
  rainfall from monsoonal precipitation is expected, though, and that will help ease some of the driest conditions
• Western
  and southern Mexico will be wetter biased over the next couple of weeks especially with the help of two tropical cyclones near the west coast.
  
• Central
  America rainfall has occurred routinely and will continue to do so favoring many crops
• Rain
  in Australia is expected to be favorably mixed over the next two weeks
• The
  bottom line still looks very good for most of the nation’s crops
• Queensland
  should experience increased rainfall and rising soil moisture over the period with two waves of rain expected
• Temperatures
  will be seasonable
• Southeast
  Asia rainfall is expected to be frequent and significant during the next ten days to two weeks
  
• All
  areas are expected to be impacted and sufficient rain is expected to bolster soil moisture for long term crop development need
  
• Local
  flooding is expected
• South
  Africa will receive erratic showers of limited significance in the south, west and east leaving north-central areas dry
• Most
  of the resulting rain is not likely to be great enough for a serious impact on soil moisture, but some southern areas will get enough to maintain favorable early spring crop development potential
• The
  outlook is not unusual for this time of year and crops are poised to perform well in the spring if timely rain evolves
• Central
  Africa showers and thunderstorms have recently increased in some key coffee and cocoa production areas during the next two weeks.
  
• Recent
  rain in Ivory Coast and Ghana has brought relief to seasonal drying and will likely support mid-crop flowering if follow up rain occurs as needed
• Nigeria,
  Cameroon, Benin and other coffee and cocoa production areas should see relatively good crop weather over the next couple of weeks
• East-central
  Africa rainfall will continue to occur most frequent and significantly in Ethiopia, Uganda and southwestern Kenya over the next two weeks
• Good
  coffee, cocoa and other crop development conditions will prevail
• Today’s
  Southern Oscillation Index was +7.91 and it will move higher over the next few days

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Monday,
Sept. 5:

• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  Sept. 1-5 palm oil export data
• New
  Zealand Commodity Price
• HOLIDAY:
  US, Canada

Tuesday,
Sept. 6:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• US
  crop conditions for corn, soybeans and cotton; spring wheat harvesting, 4pm
• New
  Zealand global dairy trade auction
• US
  Purdue Agriculture Sentiment
• Abares
  releases quarterly reports on Australian crops and agricultural commodities

Wednesday,
Sept. 7:

• China’s
  first batch of August trade data, including soybean, edible oil, rubber and meat imports
• Canada’s
  StatCan releases wheat, durum, canola and barley stockpile data, 8:30am
• HOLIDAY:
  Brazil

Thursday,
Sept. 8:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Black
  Sea Grain and Oilseeds conference, Rostov-on-Don, Russia
• EIA
  weekly US ethanol inventories, production, 11am
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans

Friday,
Sept. 9:

• 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
  weekly update on crop conditions
• Vietnam’s
  customs department releases August coffee, rice and rubber exports
• Brazil’s
  Unica to release cane crush and sugar output data (tentative)
• HOLIDAY:
  Korea

Source:
Bloomberg and FI

 

 

 

 

 

US
area/ supply estimates.

StoneX:

US
soybean yield 51.3 vs. 51.8 previous

US
soybean production 4.515 billion vs. 4.490 previous

US
corn yield 173.2 vs. 176.0 previous

US
corn production 14.168 vs. 14.417 previous

 

Macros

US
Nonfarm Payrolls Aug: 315K (est 298K; prev 528K)

Unemployment
Rate (M/M) Aug: 3.7% (est 3.5%; prev 3.5%)

Average
Hourly Earnings (M/M) Aug: 0.3% (est 0.4%; prev 0.5%)

Average
Hourly Earnings (Y/Y) Aug: 5.2% (est 5.3%; prev 5.2%)

 

US
Factory Orders July: -1% (est 0.2%, prevR 1.8%)

US
Durable Goods Orders JulF: -0.1% (est 0.0%, prev 0.0%) 

Ex
Transportation JulF: 0.2% (est 0.3%, prev 0.3%)

 

107
Counterparties Take $2.173 Tln At Fed Reverse Repo Op (prev $2.173 Tln, 105 Bids)

 

 

Corn

·        
A broad-based rally in outside related markets drove CBOT agriculture prices higher on Friday. US is on holiday Monday and CBOT ags will reopen Monday night at 7 pm CT.

·        
CBOT corn ended higher in part to private estimates indicating USDA could potentially lower the September US corn yield by at least 3 bushels per acre. US payroll data is lending support to US equities.

·        
A lower USD and higher WTI crude oil market lent support. 

·        
French corn ratings again declined, by 2 points for the week ending August 29, to 45 percent, lowest on record and compare to 91 percent year earlier. Look for USDA to take EU corn production down 1-2 million tons September 12.

·        
The US is soon expected to announce 2 years of biofuel blending mandates, instead of just one, providing longer-term certainty for biofuel producers and end users. 2023-2025 are the years they may address. 2023 decision was due
no later than November 16.

·        
Baltic Dry Index rose 8.4 percent to 1,086 points.

·        
China is going to further open up its commodity and financial markets to foreign investors, if they qualify “under the Qualified Foreign Institutional Investor (QFII) scheme and its yuan-denominated sibling, RQFII.” (Reuters)

 

Export
developments.

Taiwan’s
MFIG group seek 65,000 tons of corn on September 7 for November and/or early shipment from the US.

 

Updated
8/29/22

December
corn is seen in a $6.00-$7.00 range. Next level of resistance is seen at $7.25.

 

Soybeans

·        
Soybeans, meal and oil ended higher on strength in outside commodity markets and positioning ahead of the long US holiday weekend.  Traders should monitor overseas markets on Monday to get an indication how US CBOT products will
open up Monday evening.

·        
Safras reported Brazil forward sales were 18.6% as of September 2, up slightly from August and compares to 26% year ago and 26% average. 151.5 million tons is what they expect for 2022-23 harvest.

·        
Ukraine started sunflower and soybean harvest but it’s too early to gather data for quality of the crops.

·        
Malaysia traded 79 ringgit lower to 3915 and cash was down $18.50/ton to $972.50/ton.

·        
Heavy rain is forecast for Malaysia’s Sabah, Sarawak, Johor and Pahang today through Sunday.

 

Export
Developments

·        
Results are awaited on China selling 500,000 tons of soybeans out of reserves.

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 30,000 tons of GMO-free soybeans on September 6 for arrival in SK between November 12 and Dec 12, and another arrival period of October 30 and November 30.

·        
USDA’s AMS CCC seeks to sell 3,150 tons of vegetable oil on September 7 for shipment for Oct 1-31 (Oct 16 to Nov 15 for plants at ports).

 

Updated
8/23/22

Soybeans
– November is seen in a $13.75-$16.00 range

Soybean
meal – December $390-$445

Soybean
oil – December 63.00-71.00

 

Wheat

·        
US wheat ended higher on Friday from a weaker USD and technical buying. News was very light.

·        
The FAO world food price index fell for the fifth consecutive month to 138 points from a revised 140.7 for July. The record was set in March at 159.7.

·        
Paris December wheat was down 1.00 euro at 320 per ton and over the week was nearly unchanged. 

·        
Ukraine wheat prices are cheap enough to undercut Russia supplies, from what we read in  DTN story overnight. AgriCensus’ s forward physical curve confirms that.

·        
The Russian export duty on wheat was set at 3,368.9 rubles ($66.58) per ton from September 7 to 13, 2022, based on an indicative price of $329.3 per ton.  Previous is 4,053.8 rubles.

·        
Russia has had problems exporting their wheat crop. Bloomberg noted July and August shipments fell 22 percent form a year ago.

 

US
Wheat Associates

“The
HRW harvest is all but complete as samples continue to be analyzed in the lab. The SW crop is progressing quickly; local reports are of very good protein, moisture and test weights. HRS harvest is over 60% complete and initial sample data show test weight
average of 61.3 lb/bu (80.6 kg/hl) and average protein 14.8% (12% mb). The first northern durum samples are in with the current grade a U.S. No. 1 Hard Amber Durum.”

 

 

Export
Developments.

·        
Egypt in a direct purchase bought 120,000 tons of Russian wheat at $340/ton for November  10-30 shipment.

·        
Jordan seeks 120,000 tons of wheat on September 6.

·        
Jordan seeks 120,000 tons of barley on September 7 for Feb-Mar shipment. 

·        
Bangladesh seeks 50,000 tons of milling wheat on September 18.  It’s for optional origin with shipment within 40 days of contract signing.

 

Rice/Other

Bangladesh
seeks 50,000 tons of rice on September 6.

 

Updated
8/29/22

Chicago
– December $7.25-$10.00

KC
– December $8.00-$11.00

MN – December
$8.00-$11.50