FI Morning Grain Comments 10/13/22

PDF attached

 

Good
morning.

US
CPI (M/M) Sep: 0.4% (est 0.2%; prev 0.1%)

US
CPI (Y/Y) Sep: 0.6% (est 8.1%; prev 8.3%)

US
CPI Core (M/M) Sep: 8.2% (est 0.2%; prev 0.6%)

US
CPI Core (Y/Y) Sep: 6.6% (est 6.5%; prev 6.3%)

 

Private
exporters reported the following sales activity:

-264,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-242,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

 

US
equities are lower, USD up 39 points and WTI off more than $1.10. CBOT agriculture markets are lower on the USD and negative influence from outside markets. Look for global recession concerns to dominate trading influence today. Day after USDA October S&D
report and traders are back focused on US logistical issues, Black Sea shipping concerns and weather. Palm futures fell 71 overnight and cash was off $15 to $865/ton. Offshore values are leading SBO lower and meal higher. There were no major changes to the
US weather forecast. Brazil is unchanged and Argentina turned slightly unfavorable. The Midwest will see light rain across the northeastern and central areas today. Parts of the southern Great Plains will see rain to return to OK and TX late this weekend.
Brazil will see additional rain while Argentina will be dry over the next week. 

 

 

 

Weather

 

World
Weather, INC.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 13, 2022

• Another
  small reduction in potential rain was noted in a part the southernmost U.S. wheat country in the overnight model runs
• The
  remainder of Texas still gets some rain, but key wheat areas in hard red winter wheat areas are expected to remain drier biased for an extended period of time
• Good
  drying conditions are expected across the central and western U.S. Midwest in the next ten days
• Rain
  overnight in the interior southeastern U.S. and a part of the Delta may help to briefly increase river levels, but no sustainable change is anticipated from this event
• Other
  waves of rain are expected in the Delta and Tennessee River Basin this weekend and again Oct 25-26 that might have a similar result of raising water levels briefly and then reducing them again
• This
  trend could help increase barge loads briefly, but much more rainfall will be needed to make a more sustainable change
• Improving
  far western U.S. shower potential is evolving for after October 22, although no drought busting rain is likely
• Canada’s
  Prairies drought changes little to none over the next ten days, but some showers may evolve after Oct. 22
• European
  and GFS Ensembles are trying hard to bring some moisture to Argentina
• Not
  much change noted in Brazil today
• Europe
  rainfall will be most significant in central and northern France and part of western and central Germany in the coming week while net drying is likely in most other areas outside of the North Sea region
• Warm
  weather is expected to prevail in Europe and western Asia
• Cool
  weather will continue in South America except in northeastern Brazil where near to above normal temperatures are likely
• Eastern
  Australia will get more rain today and then take a break until next week when rain falls frequently from Tuesday into the following weekend
• Wheat,
  barley and canola quality will continue at risk of declining conditions with wheat protein levels falling
• Eastern
  China will continue dry biased over the next ten days
• China’s
  Meteorology Agency implies the drought in northern parts of the Yangtze River Basin is over
• India
  rainfall will be greatest in the south and east next ten days with some welcome drying in central areas
• Greater
  rainfall advertised for eastern South Africa next week and into the following weekend will improve summer crop planting

Source:
World Weather INC

 

Bloomberg
Ag Calendar

Thursday,
Oct. 13:

• US
  CPI
• EIA
  weekly US ethanol inventories, production, 10:30am
• Malaysian
  Cocoa Board releases 3Q grind data
• Bursa
  Malaysia’s East Malaysia palm oil conference, day 2
• New
  Zealand Food Prices
• HOLIDAY:
  Thailand

Friday,
Oct. 14:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am

• China’s
  first batch of Sept. trade data, including soybean, edible oil, rubber and meat imports
• 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
• HOLIDAY:
  Thailand

Source:
Bloomberg and FI

 

 

 

 

 

Macros

US
CPI (M/M) Sep: 0.4% (est 0.2%; prev 0.1%)

US
CPI (Y/Y) Sep: 0.6% (est 8.1%; prev 8.3%)

US
CPI Core (M/M) Sep: 8.2% (est 0.2%; prev 0.6%)

US
CPI Core (Y/Y) Sep: 6.6% (est 6.5%; prev 6.3%)

US
Real Avg Hourly Earnings (Y/Y) Sep: -3.0% (prev -2.8%)

US
Real Avg Weekly Earnings (Y/Y) Sep: -3.8% (prev -3.4%)

US
Initial Jobless Claims Oct 8: 228K (est 225K; prev 219K)

US
Continuing Claims Oct 1: 1368K (est 1365K; prevR 1365K)

 

 

Corn

·        
Corn futures are lower from broad based commodity selling and higher USD. US and global inflation concerns are back in play.

·        
China might import Brazil corn as early as December, according to a Bloomberg article, in effort to replace Ukraine supplies and reduce dependency on US imports. China is expected to import more than 15 million tons of corn this
marketing year. Bloomberg noted 45 facilities located within Brazil are approved to export corn to China, with more to be added by the end of November.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 35,000 thousand to 924k (901-940 range) from the previous week and stocks up 16,000 barrels to 21.701 million.

·        
The weekly USDA Broiler report showed eggs set in the US up 3 percent and chicks placed up 5 percent. Cumulative placements from the week ending January 8, 2022 through October 8, 2022 for the United States were 7.54 billion.
Cumulative placements were up 1 percent from the same period a year earlier.

 

 

Export
developments.

·        
None reported

 

Soybeans

·        
The soybean complex is lower in large part to a higher USD and negative outside market influence. Prices reversed after US CPI data renewed global recession concerns. Most outside commodity markets are in the red. Offshore values
were suggesting a higher lead for soybean meal and lower for soybean oil. Palm oil futures fell 1.9 percent.

·        
USDA reported additional sales announcements. We look for China to buy more soybeans by the end of the week.

·        
NOPA is due out on Monday the 17^th (15^th falls on a weekend) and we look for the crush rate during the month of September to decline slightly on a daily adjusted basis from August to 159.9 million bushels,
up from 153.8 million year earlier. Soybeans were hard to source FH September across parts of the ECB, so that figure could end up on the high side of expectations when trade estimates are released.

·        
India September palm oil imports increased 18% from August to 1.17 million tons and soybean oil was up 7% to 261,815 tons. All edible vegetable oil imports rose 17% to 1.64 million tons, according to SEA.

·        
Malaysian December palm oil futures fell 71 points to 3,665 and cash was down $15/ton to $865/ton.

·        
China November soybeans were down 0.6%, meal 2.1% higher, soybean oil 0.5% higher and palm oil 0.1% lower.

·        
Rotterdam vegetable oils were unchanged to 10 euros higher from this time yesterday morning. SA meal was 10-17 euros higher.

·        
Offshore values were leading soybean oil 44 points lower earlier this morning and meal $2.40 short ton higher.

 

Export
Developments

·        
China plans to auction off 500,000 tons of soybeans from reserves on October 14, consisting of the 2019, 2020, and 2021 crop years.

·        
Under the 24-hour announcement system, USDA reported

-264,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year, and

-242,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

 

 

 

Wheat

·        
US wheat futures are lower on follow through bearish sentiment from the USDA report and widespread commodity selling. USDA’s large cut to US wheat exports to a multiple decade marketing year low was a reminder that the rise in
the USD over the past year to a 20-year high could hinder US shipments.

·        
Paris December wheat was off 3.75 euros at 349.50 per ton.

·        
China plans to sell 40,000 tons of wheat from reserves on October 12, from the 2014-2017 crops.

·        
Argentina’s weather outlook was unchanged and net drying is expected over the next week, further stressing the wheat crop. We think USDA’s estimate  is about 1-1.5 million tons too high.

 

Export
Developments.

·        
Iraq cancelled their import tender for 50,000 tons of wheat. They were in earlier this month.

·        
The Philippines are in for 165,000 tons of feed wheat on October 13 for Jan-Mar shipment.

·        
Japan bought 94,140 tons of food wheat from the US, Canada and Australia for arrival by January 31.

·        
Jordan opened another import tender for 120,000 tons of feed barley, set to close October 19.

·        
Japan in a SBS import tender seeks 70,000 tons of feed wheat and 40,000 tons of barley on October 19 for arrival by February 24.

·        
Mauritius seeks 25,800 tons of wheat flour, optional origin, on October 28 for January through September 30, 2023, shipment.

 

Rice/Other

·        
South Korea plans to buy 450,000 tons of rice for reserves this year October 20 through December to stabilize domestic prices. This would be up from 350,000 tons last year.

·        
South Korea seeks 90,100 tons of rice from the US, Vietnam and other origins on October 19 for arrival between Jan 20 and Apr 30.

·        
Mauritius seeks 6,000 tons of rice on October 20, optional origin, for Jan-Mar shipment.