FI Evening Grain Comments 01/09/22

PDF Attached

 

USDA:
Private exporters reported the following activity:

-176,784
metric tons of corn for delivery to Mexico during the 2021/2022 marketing year

-120,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

 

CBOT
agriculture prices traded in a wide, choppy trade.  Many markets were two-sided. A sharply lower USD provided support. Meal was the leader to the upside on Friday. Several block trades were done this week for the back 2022 contracts. Several reports are due
out next week, including USDA on Wednesday. On Friday this was the GFS midday model discussion via World Weather Inc.

South
America (Week 2-Discussion of significant model changes)  

·        
The GFS model was wetter in much of Argentina Jan. 15-18 with mostly light rain and some dry areas from central La Pampa to central and southern Buenos Aires

·        
The GFS model reduced rain from Mato Grosso into Goias with reductions in light rain extending into Minas Gerais Jan. 14-16

·        
The GFS model reduced rain from Paraguay to Santa Catarina, Parana, Sao Paulo, and southern Minas Gerais Jan. 17-19

·        
The GFS model reduced rain in central and northern Argentina Jan. 20-21

·        
The GFS model reduced rain from southern Paraguay to central and northern Rio Grande do Sul, Santa Catarina, and southern Parana Jan. 19-21

 

Weather

 

 

 

 

Eastern
US soil moisture levels are very good, but US winter wheat crop areas out west could use additional precipitation.

 

 

 

Sunday
Maps for SA:

Good
rain for southern Brazil and parts of Argentina are slated for the 17-19^th period and Jan 23-25^th.

 

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• Cold
  conditions in the U.S. this morning are grabbing a little attention
• Areas
  from the central U.S. Plains into the lower Midwest were in the positive single digits Fahrenheit most often, but numerous pockets of negative single digit readings were also noted
• Snow
  free conditions occurred from central Missouri to central Indiana and west-central Ohio where most of the coldest conditions occurred
• A
  pocket northeast of St. Louis, Mo in Illinois reported more significantly cold temperatures dropping to -9 and lower, but the area impacted was extremely small
• Most
  of the region from the central Plains to Ohio should not have experienced any serious wheat damage
  
• Single
  digit low temperatures also occurred southward into the northwest half of Oklahoma with Armour (located northwest of Oklahoma City) slipping to +2 Fahrenheit
• No
  snow was on the ground in Oklahoma, the Texas Panhandle or far southern Kansas
  
• The
  temperatures were most likely above the damage threshold
• Central
  Minnesota morning temperatures today dropped to the range of upper -20s through to -39 Fahrenheit – the region is snow covered and there are no winter crops in the region
• Positive
  and negative single digit low temperatures also occurred in western Kentucky and Tennessee this morning, but those areas were buried in snow
• Snow
  fell significantly Thursday from Kentucky and the northern and central parts of Tennessee through Pennsylvania, West Virginia and northwestern Virginia to the southern New England coast and areas southward into Delaware
• Accumulations
  varied from 4 to 10 inches with local totals getting up to 12 inches in Connecticut and eastern Massachusetts as well as in West Virginia.
  
• Totals
  snowfall to 8 inches occurred in parts of Kentucky and Tennessee
• Thursday’s
  snow event will continue today along the upper Atlantic Coast with more heavy snow expected along the New England coast
• U.S.
  weather during the next ten days will include restricted precipitation in hard red winter wheat areas, but a little precipitation may occur infrequently
  
• West
  Texas may get some light precipitation during the middle part of next week, but resulting moisture totals will be no more than 0.50 inch with many areas getting less than 0.30 inch
• South
  Texas may get some precipitation infrequently over the next couple of weeks, but the moisture will be limited in significance and brief in duration
  
• Central
  and southern California and the southwestern desert region will be dry for the next couple of weeks
• Precipitation
  will continue periodically in the Pacific Northwest with the Cascade mountains and coastal areas of Washington and Oregon wettest
  
• British
  Columbia coastal areas will experience some of the greatest precipitation and strongest wind periodically
• Northwestern
  U.S. Plains and southwestern Canada’s Prairies will continue to experience restricted precipitation
• Midwest,
  Delta and Tennessee River Basin areas will be wettest during the next ten days with frequent periods of rain and some snow
• Southeastern
  states will experience some periodic precipitation
• Crop
  conditions in Argentina are deteriorating a little every day that goes by without rain
• Topsoil
  moisture is rated very short in much of the nation with those areas getting rain most recently having “short” topsoil moisture
• Temperatures
  Thursday were more seasonable, but the weather was dry
• Temperatures
  late this weekend through all of next week will be in the range of 95 to 110 degrees Fahrenheit with a few hotter readings in the drier areas of the north
• Subsoil
  moisture is also becoming depleted in many crop areas in the central and north making the situation critically dry already and the longest stretch of hot, dry, weather has not begun yet
• Subsoil
  moisture in southern Cordoba, northeastern La Pampa, southeastern San Luis and areas southeast to central Buenos Aires has been good in recent weeks supporting crops while rainfall has been restricted, but the subsoil moisture in this region is now marginally
  adequate to short and another ten days of dry and warm to hot weather will deplete that inducing more serious stress in this more important summer crop region
• Some
  crop loss is expected
• The
  most recently planted crops will run the highest risk of failure without rain and with temperatures excessively hot
• Early
  planted corn and sunseed are reproducing and are losing yield potential and the trend will last for ten days
• Week
  two weather in Argentina, Jan. 15-19, will offer some scattered showers and thunderstorms, but it is unclear how significant that rain may or may not be
• Temperatures
  may also trend a little less hot during that period of time
• Brazil
  weather Thursday and early today included rain from the northeastern and central parts of Sao Paulo through Minas Gerais to Goias with lighter showers and thunderstorms in Mato Grosso, Tocantins, western Bahia and northern Mato Grosso do Sul.
  
• Rainfall
  was greatest from southern and eastern Goias into Sao Paulo and much of Minas Gerais where 0.50 to 2.50 inches resulted
• Rainfall
  elsewhere was not much more than 0.50 inch
• Temperatures
  were near to below average
• Southern
  Brazil weather is advertised a little drier today than yesterday suggesting less relief from dryness in western Parana and southern Mato Grosso do Sul as well as Paraguay
  
• Rio
  Grande do Sul gets little to no rain during the next ten days suggesting it will experience the greatest potential decline in crop development if the forecast is correct
• Less
  rain in southwestern Brazil relative to previous days should raise a flag of caution since the region could become drier biased again threatening late season crops after recent relief from dryness
• Northern
  Brazil rainfall should continue frequent and abundant from Minas Gerais into Tocantins and eastern Mato Grosso during the next week, but less rain will evolve in the following week
• The
  wet bias will maintain concern over crop quality, although daily rain amounts are not likely to be great enough to cause any “epic-like” flood event, but concern about local flooding should continue
• Less
  frequent and less significant rain should evolve in northern crop areas late next week into the following weekend, although showers and thunderstorms will continue periodically with a little more sunshine intermixing
• Paraguay
  is unlikely to get nearly as much rain as neighboring areas of Brazil may get over the next ten days and crop stress in the nation will remain serious – like that of Argentina
• Canada’s
  Prairies will receive waves of snow during the next two weeks with northern and eastern areas getting the greatest amounts
• East-central
  and southern Alberta and west-central and southwestern Saskatchewan are still in a serious drought and the snowfall in those areas will be light and provide very little relief when it melts
• Temperatures
  will trend much warmer next week
• Northern,
  central and eastern India have been and will continue to receive rain over the coming week that will moisten the topsoil and help support crop development ahead of reproduction
• Wheat,
  millet, rapeseed and some pulse crops will be among the beneficiaries of the precipitation
  
• Some
  rain has already impacted northern India over the past couple of days
• Southern
  India will be relatively dry, although significant rain fell along the lower east coast during the weekend
• Europe
  weather has been and should continue to be good for dormant winter crops
• Concern
  about dryness in Spain may continue for a while, but soil moisture and snow cover should be sufficient for crops elsewhere over the next ten days
• North
  Africa precipitation will be limited to Tunisia and northeastern Algeria through the weekend
• Most
  other areas will be dry or mostly dry for 8-9 days
• Some
  rain will reach Morocco and Algeria in the week of Jan. 16
• Southwestern
  Morocco continues to be in a notable multi-year drought and dryness is also a concern in northwestern Algeria
• Crops
  elsewhere are doing relatively well
• Warmer
  temperatures in parts of Ukraine and Russia’s Southern Region recently induced a little rain while snow fell frequently to the north
• Snow
  cover has been receding from eastern Europe, Ukraine and Russia’s Southern Region, but there is no threatening cold coming anytime soon
• Cooling
  next week and into the following weekend will reverse the trend putting back some of the snow lost
• No
  threatening cold weather is expected anytime soon in Europe or the western CIS
• Snow
  cover will remain widespread across much of Russia and the northernmost part of Ukraine as well as some areas in eastern Europe
• Winter
  crops are in good conditions no change is expected
• China’s
  weather will continue mostly uneventful for a while, although periods of rain and a little snow will impact the Yangtze River Basin and areas southward during the next couple of weeks.
  
• The
  moisture will preserve the integrity of the 2022 rapeseed and southern wheat crops
• Snow
  will fall periodically in the far northeast while the Yellow River Basin and southern coastal provinces receive little to no precipitation
• Temperatures
  will be near to slightly warmer than usual
• Southeast
  Asia oil palm, citrus, sugarcane, coffee, cocoa, rice and other crop areas of Indonesia, Malaysia and Philippines will receive frequent bouts of rain over the next two weeks
• Some
  heavy rain is possible, but no serious widespread flood problem is expected
• Local
  flooding will be possible, though
• Mainland
  areas of Southeast Asia will be mostly dry during the next ten days except Vietnam coastal areas where some moderate to heavy rain will be possible late this week and into the weekend
• Australia
  weather outlook has not changed much
• Rain
  fell significantly to the immediate west of the Great Dividing Range in New South Wales Thursday
• More
  than 2.00 inches resulted in some areas
• Thunderstorms
  are expected to continue in central and eastern parts of New South Wales and a few interior southeastern Queensland locations into Monday with other showers occurring periodically over the next ten days
• Rainfall
  will be greatest along the western slopes of the Great Dividing Range in New South Wales today and then diminish after that
• The
  precipitation may continue next week as isolated to scattered showers and thunderstorms that will benefit summer crops in both Queensland and New South Wales, although the rain in Queensland will be most restricted
• Temperatures
  will be near to above normal
• Late
  season winter crop harvesting in southern Australia should not be seriously impacted by rain since most of the crop has been harvested
• South
  Africa will experience a good mix of rain and sunshine during the next two weeks
• The
  long term summer outlook remains favorable
• Western
  summer crop areas have the greatest need for rain and they should get at least some periodically
• Temperatures
  will be seasonable
• West-central
  Africa precipitation will be limited to coastal areas and temperatures will be a little warmer than usual
• East-central
  Africa will be erratic, but it is expected daily through the next ten days supporting coffee, cocoa, rice sugarcane and other crops
• Middle
  East precipitation is increasing with improved soil moisture likely over the next ten days
• Some
  beneficial moisture has already occurred in Pakistan, Afghanistan, Iraq and Iran
• Winter
  crops will benefit from whatever rain falls, but it is not expected to be evenly distributed for a while
• Mexico
  weather will trend wetter in far southern and some extreme eastern crop areas during the coming week
• Some
  showers may evolve in north-central areas Jan. 11-14
• Central
  America precipitation will be greatest along the Caribbean Coast , but including a fair amount of Panama and Costa Rica during the next ten days
• A
  few showers will occur in Guatemala periodically as well, although rainfall will be light
• Western
  Colombia and western Venezuela precipitation is expected to occur periodically in coffee, corn, rice and sugarcane production areas during the next ten days,  but no excessive rain is expected
• Today’s
  Southern Oscillation Index was +10.53 and it was expected to drift lower for a while this week
• New
  Zealand rainfall is expected to continue getting less than usual precipitation this week with temperatures near to above normal

Source:
World Weather, inc.

 

Bloomberg
Ag Calendar

Monday,
Jan. 10:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Malaysian
  Palm Oil Board’s data for December output, exports and stockpiles
• Malaysia’s
  Jan. 1-10 palm oil exports
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Japan

Tuesday,
Jan. 11:

• EU
  weekly grain, oilseed import and export data
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans

Wednesday,
Jan. 12:

• China
  farm ministry’s CASDE outlook report
• USDA’s
  monthly World Agricultural Supply and Demand Estimates (WASDE) report, noon
• USDA’s
  NASS 2021 summary of crop acreages and yields, noon
• USDA’s
  quarterly stockpiles data for commodities, including wheat, barley, corn, soybeans and sorghum, noon
• EIA
  weekly U.S. ethanol inventories, production
• USDA’s
  Farm Service Agency issues 2021 crop size data gathered from producers, 1pm
• New
  Zealand Commodity Price

Thursday,
Jan. 13:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Suedzucker
  quarterly earnings
• Agrana
  nine- month earnings
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports

Friday,
Jan. 14:

• China’s
  December trade data
• ICE
  Futures Europe weekly commitments of traders report, ~1:30pm
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm

Source:
Bloomberg and FI

 

Bloomberg
Trade Estimates for the January USDA crop/stocks reports.

 

 

 

 

 

 

 

CFTC
Commitment of Traders

 

Largest
discrepancy in the Commitment of Traders reports was that the funds net long position was not as long as expected, by 19,700 contracts.  The funds were also not as long as expected for soybeans, by 8,700.  Both position results may have little impact on prices. 
The net long traditional fund position for corn was down a small amount as of last Tuesday and for soybeans the net long position is highest since July 13, 2021.  Chicago wheat is headed to near a flat position for funds futures only if prices continue to
decline. 

 

 

 

 

CFTC
via Reuters

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
268,991    -13,799    438,828      4,594   -658,237     25,076

Soybeans           
85,850      5,140    180,909      3,798   -227,666     -2,812

Soyoil              
9,016      7,427    120,970      2,698   -137,078    -12,350

CBOT
wheat         -36,068     -5,570    124,628      3,214    -79,112      5,111

KCBT
wheat          21,486     -8,166     59,571     -2,142    -84,508      8,229

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
365,905     -7,440    261,167        921   -648,855     25,468

Soybeans           
98,919        839    140,056      5,299   -232,737     -4,504

Soymeal            
70,768      9,606     87,067         51   -210,986     -7,660

Soyoil             
53,188      7,794     91,223     -2,896   -141,957     -9,523

CBOT
wheat         -19,845     -8,071     77,397      3,892    -62,438      4,019

KCBT
wheat          51,813     -7,593     24,792       -805    -72,213      7,369

MGEX
wheat           9,481     -2,549      1,643        516    -20,667      3,505

                
———- ———- ———- ———- ———- ———-

Total
wheat         41,449    -18,213    103,832      3,603   -155,318     14,893

Live
cattle         72,346      2,743     80,277       -766   -155,806       -443

Feeder
cattle        7,326      5,646      3,792        240     -1,997     -2,761

Lean
hogs           55,674     -2,044     56,825       -394   -104,542        530

 

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
71,365     -3,077    -49,582    -15,872  1,865,691     22,589

Soybeans           
32,855      4,491    -39,093     -6,126    789,340     21,901

Soymeal            
25,888     -3,472     27,263      1,475    436,279      5,975

Soyoil             
-9,547      2,400      7,094      2,224    422,697      2,853

CBOT
wheat          14,334      2,916     -9,448     -2,756    439,485      5,758

KCBT
wheat          -7,843     -1,049      3,451      2,078    247,064      2,544

MGEX
wheat           6,860       -180      2,683     -1,292     77,161       -436

                
———- ———- ———- ———- ———- ———-

Total
wheat         13,351      1,687     -3,314     -1,970    763,710      7,866

Live
cattle         18,932      1,484    -15,750     -3,018    381,779     20,465

Feeder
cattle          360        -76     -9,481     -3,050     49,318      3,076

Lean
hogs            8,095      1,287    -16,053        621    264,825      1,877

 

Macros

75
Counterparties Take $1.530 Tln At Fed Reverse Repo Op. (prev $1.511 Tln, 74 Bids)

US
Change In Nonfarm Payrolls Dec: 199K (est 450K; prev 210K; prevR 249K)

–
Unemployment Rate Dec: 3.9% (est 4.1%; prev 4.2%)

–
Avg. Hourly Earnings (M/M) Dec: 0.6% (est 0.4%; prev 0.3%; prevR 0.4%)

–
Avg. Hourly Earnings (Y/Y) Dec: 4.7% (est 4.2%; prev 4.8%; 5.1%)

US
Private Payrolls Dec: 211K (est 365K; prev 235K; prevR 270K)

–
Manufacturing Payrolls Dec: 26K (est 35K; prev 31K; prevR 35K)

–
Government Payrolls Dec: K (prev -25K)

Canadian
Net Change In Employment Dec: 54.7K (est 25K; prev 153.7K)

–
Unemployment Rate Dec: 5.9% (est 6.0%; prev 6.0%)

–
Full Time Employment Change Dec: 122.5K (est 5.3K; prev 79.9K)

–
Part Time Employment Change Dec: -67.7K (est 10K; prev 73.8K)

 

New
Covid variant called ‘Deltacron’ detected in Cyprus; 25 cases so far

https://www.wionews.com/world/new-covid-variant-called-deltacron-detected-in-cyprus-25-cases-so-far-443447

 

Corn

·        
CBOT corn traded higher today after soybeans and wheat staged a rebound, and soybean meal futures surged higher. The USD was sharply lower. USDA announced corn sold to Mexico.

·        
Funds bought an estimated net 4,000 contracts on Friday.

·        
March corn was up 2.3% for the week. 

·        
US employment increased less than expected in December.

·        
Other news is light.

·        
Yesterday the Buenos Aires Grain Exchange reported the Argentine corn crop rated 40% good & excellent compared to 58% week earlier.

 

Export
developments.

·        
USDA this morning reported private exporters sold 176,784 tons of 2021-22 corn to Mexico. 

 

Wholesale
electricity prices trended higher in 2021 due to increasing natural gas prices

https://www.eia.gov/todayinenergy/detail.php?id=50798&src=email

 

Updated
1/3/22

March
corn is seen in a $5.60 to $6.20 range

 

Soybeans

·        
CBOT soybeans settled 19.25-24.25 cents higher on dry SA weather over the next week and sharply higher soybean meal that rallied $9.20 to $14.00 short ton.  Soybean oil finished lower in the front four months.  March soybean meal
hit a all-time contract high today of $431.80.  It settled at $425.  US rail soybean meal basis across the interior eased $3-4 for a few locations. Truck basis was mostly unchanged ($5 lower Mankato).

·        
Some factors that supported soybean meal:

• Index
  rebalancing. Rumor funds need to buy 35,000 soybean meal contracts.
• Lack
  of meal offers out of Argentina on top of Argentina producers reserve sellers of soybeans.
  
• European
  buyers are having a hard time sourcing soybean meal from South America.  Some business could be shifted to the US.
  
• Rally
  in EU rapeseed futures might price out rapeseed meal, allowing more to turn to other oilmeals.
  
• USD
  was down sharply

·        
Funds bought an estimated net 13,000 soybeans, bought 7,000 soybean meal and sold 2,000 soybean oil. 

·        
We are hearing the recent surge in soybean meal prices led Brazil crush margins for March 2022 to appreciate to over $50/ton, a very high level. There might be some debate if crushers will prevail over exporters for the upcoming
soybean crop, but with production around the 137-140 million ton range, Brazil will have enough soybeans for both demand outlets through at least fall 2022. 

·        
The recent slide in soybean prices may have attracted some new-crop export pricing. We are hearing China may have bought 3 USG cargos for October shipment at around +114 over the November and 5-6 PNW cargoes also of  October at
+190 over the November. The CBOT soybean March contract earlier this week traded around 90 cents premium over the November 2022 before narrowing to around 88.50 cents. Earlier this morning the spread was around 80 cents. 

·        
Malaysian palm futures traded higher by 8 ringgit to 4,993.  The March position is up three consecutive weeks and for this week gained 6.5%.

 

Export
Developments

·        
We are hearing China is pricing new-crop US soybeans.

·        
Under the 24-hour announcement system, private exporters sold 120,000 tons of new-crop (2022-23) soybeans to unknown.

 

 

MPOB
is
due out Monday, first of many reports released next week.  A Reuters poll looks for Malaysia’s palm oil inventories at end-December to sink 4.9% from the previous month to 1.73 million tons, lowest in five months.

 

 

Updated
1/5/22

Soybeans
– March $13.00-$14.25

Soybean
meal – March $370-$435

Soybean
oil – March 53.00-61.00

 

Wheat

·        
US SRW wheat ended higher led by the front months after fund selling dried. Sharply higher soybeans lent support.  KC followed Chicago while MN ended mixed with March and May lower. 

·        
Technical selling and lack of US export developments was noted earlier. 

·        
Funds on the day bought 6,000 SRW (Chicago) wheat contracts.   

·        
There was an unconfirmed rumor China was in for US soft red winter.  Export prices don’t suggest this but the spreads did erupt today. 

·        
Reuters – Brazil was able to clear two wheat shipments at its key Santos port after a few days of delay caused by a protest by agricultural tax collectors as part of their campaign for higher wages, industry association Abitrigo
said.

·        
EU wheat basis the March position was 1.25 higher at 274.50 euros a ton. 

·        
Russia was on holiday.

·        
Yesterday IKAR reported Russian wheat with 12.5% protein content loading from Black Sea ports for supply in January stood at $330 a ton free on board (FOB), unchanged from late 2021.

 

Export
Developments.

·        
Jordan seeks 120,000 tons of wheat on January 18.  Possible shipment combinations are in 2022 between July 1-15, July 16-31, Aug. 1-15 and Aug. 16-31. 

·        
China plans to sell 500,000 tons of wheat from state reserves on January 12 to flour millers. 

·        
Results awaited: Iraq seeks 50,000 tons of wheat on January 3 from the US, Canada and Australia.

 

Rice/Other

·        
(Bloomberg) — U.S. 2021-22 cotton ending stocks seen as 3.46m bales, slightly above USDA’s previous est., according to the avg in a Bloomberg survey of seven analysts.  Estimates range from 3.0m to 3.85m bales.  Global ending
stocks seen 125,000 bales lower at 85.61m bales.

·        
Bangladesh seeks 50,000 tons of rice on January 16.

 

Updated 12/9/21

Chicago March $7.40 to $8.60 range

KC March $7.55 to $9.00 range

MN March $9.50‐$11.00