FI Morning Grain Comments 03/01/23

PDF attached

 

Good
morning.

 

First
day of meteorological spring. New month/new money. Soybeans are higher on rumors China bought US PNW soybeans, but some said they washed US cargoes and bought Brazil origin. Yesterday we heard China may sell back 1.0 million tons of Argentina soybeans they
bought earlier to Argentine processors. Soybean oil and meal are higher bias the vegetable oil positions despite lower
WTI crude oil by 32 cents. The USD is lending support to the soybean complex and limiting losses in grains by trading lower by about 49 points. We are hearing US corn
is cheapest among the largest exporters through early June. A Bloomberg poll looks for weekly US ethanol production to be down 5,000 thousand barrels to 1024k (1008-1036 range) from the previous week and stocks up 188,000 barrels to 25.776 million.

 

The
morning weather forecast was unchanged for the US and SA. Argentina will see light rain through Saturday and Brazil will see scattered showers through the end of the week. A winter storm is rolling across a large portion of the central US through Saturday,
improving soil moisture levels. Its early March meaning traders will become more focused on Northern Hemisphere plantings. For that growing season, there is already some concern that a quick transition to El Nino could yield drier than normal conditions for
the US Midwest and increase risks for Australia’s wheat crop during the second half of 2023. We have a long way to go but changes in the ENSO pattern should be monitored over the next several months.

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR MARCH 1, 2023

• Subscribers
  be sure to see special stories written recently regarding the following
• Drought
  in Canada’s Prairies
• Argentina
  drought parallel to 2009 continues and in 2009 the drought lasted deeply into the autumn
• Quick
  transitions from prolonged La Nina to El Nino weather patterns can lead to drier summers in U.S.
  
• Excessive
  flooding expected in Peninsular Malaysia
• Weather
  overnight did not offer significant changes to Argentina’s weather which is expected to continue drier than usual through the next ten days
• Far
  northern Argentina will get some beneficial moisture
• Brazil
  will continue to see rain fall frequently with the interior south continuing to get rain most often and experiencing the greatest delays
• India’s
  rain potential has not improved greatly, but a few showers are expected this weekend and next week
  
• Eastern
  China rapeseed areas should not be seriously impacted by the current drying trend – at least not for a while, but the trend could prevail for a while making that a greater issue in time
• China
  wheat areas will remain seasonably dry, but warm temperatures will slowly raise soil temperatures
• Eastern
  Australia dryness will continue a concern for unirrigated summer crops
• Showers
  will occur in eastern most areas most often
• South
  Africa rainfall will be favorable dispersed over the next ten days
• Europe
  will continue drier biased for another week, although some showers will occur at times across the south
  
• Northeastern
  parts of North Africa will receive some beneficial moisture
• U.S.
  temperatures are still advertised to be cooler than usual in the west and north-central states as well as in southwestern Canada’s Prairies for a while
• The
  cold will push into the U.S. Plains and western Corn Belt during the second week of the outlook
• U.S.
  west-central and southwestern Plains may not get much precipitation for a while
• South
  Texas, northeastern Mexico and the Texas Coastal Bend are advertised to get some moisture late in the second week of March, but confidence is low
• U.S.
  Delta, lower eastern Midwest and Tennessee River Basin will be wet biased for a while
• Southern
  California gets some rain today and central and northern areas will be impacted during the weekend and early next week along with the Cascade Mountains of Washington and Oregon
• Snow
  fell significantly again overnight from central and southern North Dakota and northern South Dakota into west-central and interior northern Minnesota with 4 to 10 inches resulting
• More
  snow will fall in the northern U.S. Plains late this weekend into early next week
  
• Flood
  potentials will be rising in the U.S. Red River Basin of the North this spring if significant snow continues to fall without any melting during the balance of winter

Source:
World Weather and FI

 

Bloomberg
Ag calendar

Wednesday,
March 1:

• Dubai
  Sugar Conference, day 3
• EIA
  weekly US ethanol inventories, production, 10:30am
• USDA
  soybean crush, DDGS production, corn for ethanol, 3pm
• Global
  Grain and Animal Feed Asia 2023, Singapore, day 1

Thursday,
March 2:

• Dubai
  Sugar Conference, day 4
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Global
  Grain and Animal Feed Asia 2023, day 2

Friday,
March 3:

• FAO
  World Food Price Index, grains report
• 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
• Global
  Grain and Animal Feed Asia 2023, day 3

Source:
Bloomberg and FI

 

 

 

Macros

German
CPI (Y/Y) Feb P: 8.7% (exp 8.5%; prev 8.7%)

German
CPI EU Harmonised (Y/Y) Feb P: 9.3% (exp 9.0%; prev 9.2%)

German
CPI (M/M) Feb P: 0.8% (exp 0.5%; prev 1.0%)

German
CPI EU Harmonised 0.7% (M/M) Feb P: (exp 0.7; prev 0.5%)

 

 

Corn

·        
Corn futures turned
lower but a lower USD is limiting losses.

·        
US corn is cheapest among the largest exporters through early June.

·        
Argentina confirmed a case of bird flu disease at a industrial poultry farm, prompting them to poultry exports ($350 million annual value).

·        
China’s sow herd fell by 0.5% at the end of January compared with the prior month, data from the Ministry of Agriculture and Rural Affairs showed on Wednesday. The herd of 43.67 million sows was 1.8% higher than a year earlier.

·        
Brazil as expected (gradually) resumed taxes on gasoline and ethanol at 0.47 real and 0.02 real per liter, respectively.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 5,000 thousand barrels to 1024k (1008-1036 range) from the previous week and stocks up 188,000 barrels to 25.776 million.

 

Export
developments.

• No
  24-hour sales

 

 

 

 

Soybeans

·        
CBOT soybeans are
higher on rumors China bought US PNW and/or Gulf soybeans but some said they washed US cargoes and bought Brazil origin. Yesterday we heard China may sell back 1.0 million tons of Argentina soybeans they bought earlier to Argentine processors. Later Bloomberg
noted 500,000 tons were switched to Brazil origin. Soybean oil and meal are higher bias the vegetable oil positions despite lower WTI crude oil.

·        
Later USDA NASS will update January soybean and corn usage.

·        
A Reuters trade estimate calls for the January US soybean crush to be reported at 189.6 million bushels (188.4-191.0 range), up from 187.4 million during December and compares to 194.3 million January 2022. End of February soybean
oil stocks are estimated at 2.349 billion pounds (2.349-2.450 range), up from 2.306 billion at the end of December and compares to 2.500 billion January 2022. Bloomberg estimates are below.

·        
Argentina producers launched a protest this week over taxes, exchange rates and financial support.

·        
India will end their duty-free import quota of 2 million tons of crude sunflower oil for the next fiscal starting from April 1, which could increase imports of palm oil. This comes after they already decided to end duty free imports
of crude soybean oil for the new fiscal year.

·        
Cargo surveyor SGS reported February Malaysian palm exports at 1,131,939 tons, 18,647 tons above a month ago or up 1.7%, and 110,348 tons below a year ago or down 8.9%.

·        
Malaysia May palm futures were up 40 ringgit to 4,182 and May cash was up $10.00 at $975.00/ton. 

·        
China soybeans were near down 0.4%, meal down 1.2%, SBO down 0.3% and palm oil futures down 0.3%.

·        
Nearby Rotterdam vegetable oils were
mixed from this time yesterday morning and meal mostly 6.00-12.50 euros lower.

·        
Offshore values were leading SBO higher by about 67 points this morning and meal $7.20 short ton
higher. 

 

 

Soybean
oil for biodiesel production
was less than expected during the month of December and we lowered our soybean oil for 2022-23 SBO feedstock estimate by 50 million pounds to 11.800 billion, 200 million above USDA.

 

 

Export
Developments

·        
Turkey’s state grain board TMO cancelled their 48,000 ton crude sunflower oil tender.  Prices were too high. 

·        
Today China planned to auction off 32,472 tons of soybean oil from state reserves.

 

Wheat

·        
US wheat futures turned lower from follow through selling and lower EU wheat futures.

·        
Paris May wheat was down 2.75 euros earlier at 273.75 per ton. 

·        
Ukrainian grain exports reached 5.2 million tons in February, above 5.05 million tons year ago. 2022-23 grain exports are running nearly 26% below year ago at 32.3 million tons. It included 11.3 million tons of wheat, 18.6 million
tons of corn and about 2 million tons of barley.

·        
Traders are waiting for news over the Black Sea grain export deal.

 

Export Developments.

·        
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.

·        
Taiwan flour millers bought 48,975 tons of US wheat for PNW shipment between April 19 and May 3. Wheat types sought include dark northern spring, hard red winter and white wheat.

·        
Thailand bought 30,000 tons of Australian wheat at $336/ton c&f for May shipment.

·        
Jordan’s state grain buyer bought 100,000 tons of optional origin feed barley at $284/ton c&f for LH June and FH July shipment.

·        
Yesterday Turkey bought 790,000 tons of wheat for March 8-April 7 and April 10-May 10 shipment.

·        
Japan’s AgMin seeks 70,065 tons of food-quality wheat from the United States and Canada later this week.

·        
Turkey seeks 440,000 tons of feed barley on March 2.

 

Rice/Other

·        
(Reuters) – Indonesia’s rice output is estimated at 13.79 million tons for the January to April harvest period this year, up 0.56% from a year earlier, data from the country’s statistics bureau showed on Wednesday. The figure
represents rice produced for household consumption and do not include output used in industries and animal feed. Around 4.51 million hectares of rice plantations are expected to reach harvest between January and April this year, compared with 4.41 million
hectares in the same period last year, although the bureau warned the threat of heavy rain in some regions could disrupt production.