FI Morning Grain Comments 04/12/22

PDF attached

 

Good
morning.

 

Inflation
concerns and ongoing fund buying are driving agriculture prices higher. US CPI was up 1.2% from the previous month (highest month over month since 2005).  Year over year was up 8.5% (highest in 41 years). The US Administration granted E15 ethanol blending,
at least for the short term. We see no changes to the US corn balance sheet over the next couple of months but long term, if this stands, we will increase our US corn for ethanol use. 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR APRIL 12, 2022

• Excessive
  rain and flooding  occurred Monday and early today in southern  parts of Natal, South Africa causing damage to personal property, infrastructure and some agricultural areas
• A
  North American blizzard is getting underway today and will be most impacting this afternoon through Thursday
  
• North
  Dakota and Manitoba, Canada will be most impacted with the eastern and central parts of North Dakota to feel the greatest impacts
  
• livestock
  stress, travel disruptions, rising flood potentials and further delays to spring planting are expected
• Western
  U.S. hard red winter wheat areas, West Texas and portions of South  Texas will be dry or mostly dry for the next ten days
• No
  rain will fall in northern Mexico or the southwestern desert coffee production areas
• U.S.
  lower Midwest, Delta and Tennessee River Basin areas will continue fighting surplus moisture issues in the ground for a while
  
• some
  fieldwork will advance, but spring planting will be not move along very good until warmer temperatures accelerate drying between storms
• Southwestern
  portions of Canada’s Prairies may get some  needed precipitation during the second week of the outlook, but resulting amounts are not likely to be very great
• Argentina
  will experience net drying for the next seven to 10 days
• Heavy
  rain fell  in southern Paraguay, and southwestern Brazil Monday and the rain will shift mostly into Parana and southwestern Mato Grosso do Sul, Brazil before shifting northeast and passing through many areas that had been drying out recently
  
• Only
  partial relief is expected
• Good
  harvest weather will continue in India
• Europe
  weather will be tranquil in central parts of the continent and spring crop development and winter crop development should advance well
• Western
  Russia remains too wet with more rain and snow likely in the  coming week
• China
  weather will be wettest in the south while the north sees a restricted amount of rain
• Australia’s
  summer crop areas will be steadily drying out over the next ten days
• North
  Africa, Spain and Portugal weather is still rated relatively well
• Remnants
  of Tropical  Cyclone Megi produced additional heavy rain in east-central parts of the Philippines
  
• Drying
  is needed in the central Philippines
• Coffee,
  cocoa,, sugarcane and rice areas in Central Africa are expected to remain favorably wet
• Indonesia
  and Malaysia as well as the Philippines will experience frequent rainfall over the next ten days
• Overall
  the bottom line for market mentality is not greatly different from that of Monday

Source:
World Weather Inc.

 

USDA
Scheduled Release Dates for Agency Reports and Summaries

https://www.usda.gov/media/agency-reports

 

2022
CME Globex Trading Schedule

https://www.cmegroup.com/tools-information/holiday-calendar.html

 

Bloomberg
Ag Calendar

Tuesday,
April 12:

• France
  Agriculture Ministry report; 2022 crop plantings
• EU
  weekly grain, oilseed import and export data
• U.S.
  winter wheat condition, 4pm

Wednesday,
April 13:

• EIA
  weekly U.S. ethanol inventories, production, 10:30am
• China’s
  first batch of March trade data, incl. soybean, edible oil, rubber and meat imports
• FranceAgriMer
  report; monthly French grains outlook
• New
  Zealand food prices
• Holiday:
  Thailand

Thursday,
April 14:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• May
  ICE white sugar contract expiry
• HOLIDAY:
  Argentina, India, Thailand

Friday,
April 15:

• ICE
  Futures Europe weekly commitments of traders report
• U.S.
  green coffee stockpiles data released by New York-based National Coffee Association
• FranceAgriMer
  weekly update on crop conditions
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• HOLIDAY:
  Major markets closed due to Good Friday holiday

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range    

Wheat                 
411,012                 versus   250000-450000  range

Corn                     
1,418,827             versus   1100000-1950000             range

Soybeans           
766,232                 versus   500000-900000  range

 

Macros

US
CPI (M/M) Mar: 1.2% (est 1.2%; prev 0.8%)

US
CPI Ex Food And Energy (M/M) Mar: 0.3% (est 0.5%; prev 0.5%)

US
CPI (Y/Y) Mar: 8.5% (est 8.4%; prev 7.9%)

US
CPI Ex Food And Energy (Y/Y) Mar: 6.5% (est 6.6%; prev 6.4%)

US
Real Average Hourly Earning (Y/Y) Mar: -2.7% (prev -2.6%; prevR -2.5%)

US
Real Average Weekly Earnings (Y/Y) Mar: -3.6% (prev -2.3%; prevR -2.2%)

 

Corn

·        
Corn futures are higher following a E15 blend announcement by the White House and higher outside related markets (wheat and soybeans). Bear spreading was a feature during the electronic session.

·        
Nothing materially changes over the short term for our US corn for ethanol demand. Long term it could lead to higher corn use but by a minimal 100 million bushels, then 200 million longer term after US gas station adapt.

·        
US export demand should remain the driver over the short term.

 

Export
developments.

·        
South Korea’s NOFI bought 207,000 tons of corn for July and August arrival ($377.55-$379.40/ton). 

 

Soybeans

·        
The CBOT soybean complex is higher on follow through fund buying, lower USD (choppy and rebounded), and inflation concerns.

·        
(Reuters) – Indonesia’s 2022 crude palm oil production is estimated at 48.24 million tons, up from 46.85 million tons in 2021, according to agriculture ministry data presented at a parliamentary hearing on Tuesday.

·        
June Malaysian palm oil settled 172 ringgit higher to 6,177. Cash palm was up $35 at $1,565 per ton.

·        
China May soybeans decreased 0.8 percent, meal was down 0.50 percent, palm up 0.7 percent and palm up 1.5 percent. 

·        
Rotterdam vegetable oil prices were 5 euros higher and meal 3-6 euros lower.

·        
Offshore values were leading soybean oil 114 points higher and meal $4.20 higher.

 

Export
Developments

·        
China plans to auction off another 500,000 tons of soybeans later this week.

 

Wheat

·        
US wheat is higher on follow through fund buying and lower USD. Global supply concerns were noted by the news outlets but keep in mind SA is planting more wheat and India is exporting a large amount of wheat. US remains too expensive
for the global market.  Look for an eventual pause in the US futures rally. It appears the EU market is now driving Chicago prices higher.

·        
Earlier May Paris wheat futures were up 12.50 euros at 392 euros.

·        
France’s AgMin pegged the soft wheat area at 4.79 million hectares (mln ha), down 3.9% on 2021 and 0.7% below the average of the past five years.

 

Export
Developments.

·        
Egypt seeks wheat on Wednesday for late May and/or June shipment.

·        
Japan seeks 114,645 tons of food wheat later this week.

·        
Jordan passed on 120,000 tons of barley. 

·        
Results awaited: Algeria floated another import tender for wheat. The wheat is sought for shipment in several periods from the main supply regions including Europe: May 1-10, May 11-20, May 21-31, June 1-10, June 11-20 and June
21-30.

·        
Jordan seeks 120,000 tons of milling wheat for LH May and/or through July shipment on April 13.

 

Rice/Other

·        
None reported