FI Morning Grain Comments 02/22/23

PDF attached

 

Good
morning.

 

USD
is slightly lower and WTI off 30 cents. FED will release minutes later today. The soybean complex is lower on technical selling, but losses are limited on SA weather worries. Some estimates for Argentina soybean production are near 30 million tons. Offshore
values were leading SBO lower by about 152 points this morning and meal $4.60 short ton lower.  US wheat futures extended losses this morning on widespread commodity selling and talk of Russia competition. Egypt is in for wheat. CBOT corn futures are lower
this morning on outside related commodity selling and lack of fresh news.

 

Fund
estimate

 

 

Weather

Light
rain will favor Cordoba, Santa Fe, Entre Rios, southeast Buenos Aires Wednesday. Brazil’s Mato Grosso, Goias, south Minas, Sao Paulo, MGDS, Parana, and Santa Catarina through Saturday. The US will see multiple weather warnings/watches this week coast to coast.
The upper US, today bias ECB, will see a winter storm through Thursday. Snow is expected to fall across north NE, north CO Wed, rain in east KS, east OK, east TX, and then rain for east OK Friday through Saturday. Some northern Plain states could see 2 feet
of snow.

 

 

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR FEBRUARY 22, 2023

• Another
  week of poor rainfall is expected in southern Argentina and then some increase in shower activity is possible
• Brazil
  weather will continue moist over the next two weeks with periods of rain maintaining some challenge for soybean maturation and harvesting as well as Safrinha corn planting
• Progress
  will be made, albeit slowly especially in Parana, Sao Paulo, eastern Mato Grosso do Sul and southern Minas Gerais
• Net
  drying is likely in parts of northeastern Brazil
• Timely
  rain is expected in Rio Grande do Sul
• Bitter
  cold in Canada and the north-central U.S. will prevail into the weekend, but warming should follow for a few days before another round of bitter cold evolves in early March
• U.S.
  hard red winter wheat areas will not be harmed by the coming bitter cold because the coldest areas will get snow ahead of the coldest conditions
• West-central
  and southwestern portions of the U.S. Plains will continue drier biased for the next two weeks
• Unusually
  warm temperatures in the southern Plains, Delta and southeastern United States will continue through the weekend and then trend a little cooler next week
  
• Northern
  Europe and northwestern Asia will turn cooler in week 2 of the outlook, but temperatures will be warm in this first week of the outlook
• Southeastern
  China will be drier than usual over the next two weeks, but today’s soil moisture is favorably rated for rapeseed and the coming rice planting season
• Wheat
  in China is still in good condition with little change likely
• Snow
  and some rain will fall frequently in western Russia and Ukraine to maintain high flood potentials in the spring
• Negative
  North Atlantic Oscillation will bring cooler weather to northern Europe and a more active weather pattern across southern Europe and possible in North Africa as well

Source:
World Weather and FI

 

Bloomberg
Ag calendar

Wednesday,
Feb. 22:

• Suspended
  until February 24 – CFTC commitments of traders

• National
  Farmers’ Union Conference, Birmingham, day 2
• Grain
  Forum Dubai 2023, day 2
• USDA
  total milk production, 3pm
• US
  poultry slaughter, 3pm

Thursday,
Feb. 23:

• USDA’s
  acreage outlook for corn, soy, wheat and cotton
• The
  USDA’s Agricultural Outlook Forum, Arlington, day 1
• EIA
  weekly US ethanol inventories, production, 10:30am
• Port
  of Rouen data on French grain exports
• Sugar
  production and cane crush data from Brazil’s Unica (tentative)
• USDA
  red meat production, 3pm
• HOLIDAY:
  Russia

Friday,
Feb. 24:

• USDA’s
  full outlook for corn, soy, wheat and cotton

• The
  USDA’s Agricultural Outlook Forum, Arlington, day 2
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• 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
• US
  cattle on feed, 3pm
• US
  cold storage data for beef, pork and poultry, 3pm

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
373,429                 versus   300000-525000  range

Corn                     
622,841                 versus   500000-750000  range

Soybeans           
1,578,066             versus   1000000-1965000             range

 

Macros

US
MBA 30-Yr Mortgage Rate Feb 17: 6.62% (prev 6.39%)

US
MBA Mortgage Applications Feb 17: -13.3% (prev -7.7%)

US
Home-Purchase Applications Drop To 28-Year Low As Rates Jump – BBG

Redfin
Reports U.S. Homeowners Have Lost $2.3 Trillion in Value Since June Peak

Median
U.S. Home Sale Price Was $383,249 In Jan

Canada
New Housing Price Index Jan: -0.2% ( prev 0.0%)

 

Corn

·        
CBOT corn futures
are lower this morning on outside related commodity selling and lack of fresh news.

·        
Cold temperatures this week for the northern US may slightly increase feed demand.

·        
US cattle and hog futures rallied on Tuesday on tight supplies and increase in wholesale pork prices.

·        
USDA Cattle on Feed is due out Friday and traders are looking for February 1 on feed to be reported slightly above January but down 3.5 percent from a year ago.

·        
On Thursday at the annual Ag Forum, USDA NASS will issue selected initial 2023-24
US acreage, yield, production, domestic use and ending stocks estimates and following morning the full US S&D’s will be issued.
https://www.usda.gov/oce/ag-outlook-forum

 

 

Due
out Friday…

 

Export
developments.

• Results
  awaited: Algeria’s ONAB seeks 30,000-40,000 tons of corn from Argentina for shipment by April 10.
  

 

Soybeans

·        
The soybean complex is lower on technical selling after the rally Tuesday, but ongoing SA weather worries are limiting losses. WTI crude oil was 29 cents lower and USD slightly lower.

·        
Argentina soybean production is largely estimated by the trade between 30 and 34 million tons. We are at 34MMT. USDA is at 41 million tons. Corn production is seen around 40 to 43 million tons.

·        
Palm oil futures hit a 7-week high after outside markets rallied on Tuesday over Argentina crop concerns.

·        
Brazil’s Rio Grande do Sul will see scattered showers through Wednesday and Thursday (bias northern areas).

·        
Malaysia will leave its March palm oil export tax at 8 percent and lowered the reference price to 3,710.35 ringgit ($835.85) per ton from 3,893.25 ringgit a ton from February.

·        
Malaysia May palm futures were up 5 ringgit to 4,146 and May cash was unchanged $975/ton. 

·        
China soybeans increased 0.7%, meal up 0.3%, SBO slightly lower% and palm oil futures up 0.3%.

·        
Nearby Rotterdam vegetable oils were
lower by about 2.50-10.00 euros from this time yesterday morning
and meal higher by 2.50-3.00 euros for Argentina and 2.50-3.50 higher for Brazil.

·        
Offshore values were leading SBO lower by about 152 points this morning and meal $4.60 short ton
lower. 

 

Export
Developments

·        
Egypt’s GASC) seeks vegetable oils ion February 23 for arrival April 1-20, for payment via 180-day letters of credit and at sight. They are also in for at least 3,000 tons of local soybean oil and 1,000 tons of local sunflower
oil for delivery April 5-25.

·        
Turkey’s state grain board TMO seeks about 48,000 tons of crude sunflower oil Feb. 24 for delivery March 13-April 13 and April 14-May 14.

 

Wheat

·        
US wheat futures extended losses this morning on widespread commodity selling
and talk of Russia competition. Lowest offer for Egypt in for wheat was $317.50/ton for Russian wheat.

·        
Paris May wheat was down 1.00 euro earlier at 285.25 per ton, just below Paris June corn of 288 euros per ton.

·        
France has seen its driest winter in 64 years (1959) and they may start rationing water use.

·        
Ukraine is aiming to keep the grain 2023 planted area the same size as 2022. They want to see additional ports added to the grain export deal, if extended. Ukraine would ideally like to see it extended for one year.

 

Export
Developments.

·        
Iraq seeks 200,000 tons of milling wheat this week from the US, Canada and/or Australia.

·        
Lowest offer $317.50 per ton for Russian wheat: Egypt’s GASC seeks wheat funded by the World Bank for April 1-15 shipment. They are in for cargoes of 30,000, 40,000 or 50,000, 55,000, or 60,000 tons plus or minus 5% from the last
crop for supply C&F. 

·        
Jordan’s state grain buyer bought about 60,000 tons of optional origin feed barley at an estimated $295/ton for shipment between June 1-15, June 16-30, July 1-15 and July 16-31.

·        
Japan bought 94,387 tons of food wheat later this week. Original details as follows.

·        
Turkey seeks an estimated 790,000 tons of milling wheat on February 28 for March 8-April 7 and April 10-May 10 shipment.

 

Rice/Other

·        
Egypt’s GASC bought 50,000 tons of imported white rice from their tender announced earlier this month.