FI Evening Grain Comments 12/10/21

PDF Attached

 

US
CPI inflation report came in near expectations. Soybeans were higher led by soybean meal. Jan soybean oil traded and settled below a strong support level of 54 cents.
Corn ended lower and Chicago wheat rallied on oversold conditions. 

 

 

Weather

 

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• Ridge
  building over Argentina next week will bring on warmer temperatures and help to block precipitation from reaching far southern Brazil and immediate neighboring areas of Uruguay and southern Paraguay
• This
  event limits rain to the period from Sunday into Tuesday and after that mostly dry weather is expected
  
• Rainfall
  Sunday through Tuesday will be distributed relatively well, but amounts will be a little light for a lasting boost in soil moisture.
  
• Moisture
  totals of 0.25 to 0.75 inch with a few 1.00 to 2.00-inch amounts will be welcome, but the greater amounts may not be widespread enough to fix all crop moisture shortage issues
• Crop
  moisture stress in Parana, Brazil and immediate neighboring areas in Paraguay and Mato Grosso do Sul has already been occurring this week and it will be a concern through the weekend
• Relief
  is expected Sunday into Tuesday, although it is still debatable how significant that may or may not be
• World
  Weather, Inc. believes the relief will be temporary and more stress will evolve later this month
• Portions
  of Rio Grande do Sul, Brazil will also experience a mostly dry scenario for much of the next two weeks resulting in slowly rising crop stress
• Rain
  will occur late this weekend and early next week, but it will not be enough to restore ideal soil moisture  and the following full week should be dry with seasonable temperatures
• Yield
  potentials could be threatened eventually, but conditions remain mostly favorable today
• Center
  west through northern parts of center south and northeastern Brazil will continue to experience frequent rainfall that will maintain a good long term outlook for soybean, corn, rice and other crop development
• Some
  areas in northern Minas Gerais, southern Bahia and southern Tocantins might turn a little too wet for a brief period, but no damage is expected to crops
• Argentina
  has some potential for warmer weather next week especially in the north and if that occurs there will be an acceleration in drying rates
• Some
  crop stress may begin to evolve since topsoil moisture is already a little restricted
• Subsoil
  moisture in Argentina is still rated favorably and will carry crops into next week with a limited amount of concern over dryness
• Timely
  rain will become more important to Argentina’s drier areas as we move through the second half of this month
• Northern
  and east-central parts of the nation are driest today
• California,
  the Great Basin and portions of the Rocky Mountain region will encounter stormy weather this weekend through next week
  
• Significant
  snowfall will accumulate in the Sierra Nevada and some of the mountains to the east in the Rocky Mountain States
• Significant
  rainfall is also expected along the coast and in the central valleys
• Some
  strong wind will also occur in coastal areas
• Snowpack
  will improve in the mountains
• U.S.
  hard red winter wheat production areas will not likely see much “significant” precipitation for the next ten, although a few showers may occur briefly late next week
• A
  couple of weather disturbances coming from California and the southwestern desert region may pass through a part of the central and southern Plains Dec. 18-25 that may offer a little relief to dryness in wheat production areas
• Confidence
  is low, but there is potential for at least “some” precipitation during that week
• The
  high Plains region will be most disfavored for significant moisture
• Today’s
  forecast models have removed rain from the wheat region and that change was needed
• Snow
  is falling from northern Nebraska and far southern South Dakota through southern Minnesota and Wisconsin to upper Michigan today and tonight
• Snow
  accumulations of 3 to 8 inches are expected in southern South Dakota and northern Nebraska with a few amounts to 10 inches in southeastern South Dakota
• Snowfall
  of 6 to 12 inches and locally more than 14 inches will occur from southern Minnesota to upper Michigan
  
• Travel
  delays should be expected and some stress to livestock is anticipated
• As
  of dawn today south-central South Dakota was reporting 8-10 inches of snow and the southern Black Hills had 15 inches on the ground
• U.S.
  eastern and southern Midwest will be impacted by rain today and again during the second half of next week and into the following weekend
  
• A
  larger winter storm “may” impact the northern U.S. Plains, upper Midwest and eastern Canada’s Prairies Wednesday into Thursday
• Significant
  snow and some rain may accompany the event
• Near
  blizzard conditions are possible
• The
  storm is a little weaker today than advertised Thursday and that change was needed
• Rain
  will also occur from this system in the central and eastern Midwest, Delta and interior southeastern states – mostly during the second weekend of the forecast
• Another
  large storm “may” impact the Midwest early in the week of Dec. 20
• This
  event has been relocated to the southeast of where the forecast models were advertising it to be earlier this week.
  
• The
  change was needed and should verify 
• West
  Texas may get some needed moisture late next week and into the following weekend, but dry conditions are likely until then
  
• U.S.
  southeastern states will see a mix of rain and sunshine during the next two weeks with more sunshine than rain
• U.S.
  temperatures will be much warmer than usual during the next ten days in the central and eastern portions of the nation
• Cooling
  is still expected in the last ten days of December, but mostly in the north-central and western parts of the nation – at least initially.
• Australia
  winter crop harvest weather has improved and will continue more favorably through the next ten days
  
• No
  more crop quality concerns are expected through at least Dec. 20.
• Australia
  summer crop conditions are also improving after abundant to excessive rain recently
• China’s
  weather will continue rather tranquil through the next ten days to two weeks with brief periods of precipitation and more sunshine
  
• Temperatures
  will be non-threatening to wheat, rapeseed and livestock
• Southern
  India weather has been improving this week and this trend will continue for a while
• Too
  much rain in November hurt the quality of some late season crops and raised the need for replanting of many winter crops
• Absolute
  dryness is not likely, but rain expected should be brief and light enough to allow some crop development and farming activity to advance relatively well.
  
• The
  driest weather is expected in the Dec. 15-22 period
• Central
  and northern India weather will remain good for winter crop planting and establishment.
• Most
  winter crops are likely in the ground and are establishing well
• Early
  planted wheat and other small grains may be in the vegetative to early joint stage of development
• Harvest
  progress for summer crops has advanced well recently and little change is expected
• Morocco
  and northwestern Algeria remain too dry and significant rain must fall soon to get crops planted and established properly
• Soil
  moisture and rainfall have been sufficient in northeastern and north-central Algeria and far northern Tunisia, but greater rain is needed in interior crop areas
• Rain
  prospects for the drier areas are not very good for the next ten days
• Europe’s
  weather is expected to become more tranquil during the next ten days
• Romania
  and Spain are the two driest countries in the continent today and some relief should come to Romania in this coming week while the heart of Spain may be left dry for a while
• Soil
  moisture elsewhere in Europe has been and will continue to be favorable for winter crops which are dormant or semi-dormant in many areas
• Western
  parts of Russia, Belarus and central and western Ukraine will get periods of rain and snow through the next ten days maintaining favorable soil moisture for use in the spring
• No
  crop threatening cold is expected in any winter crop region
• Limited
  precipitation will continue in the lower half of the Volga River Basin, far eastern Ukraine and Russia’s Southern Region for a while
• South
  Africa summer crops will experience a good mix of rain and sunshine over the next ten days supporting additional planting and establishment
• Production
  potentials are good this year especially with La Nina prevailing
• West-central
  Africa rainfall is expected to be greatest in Liberia and Sierra Leon during the next ten days
• Coastal
  areas of Ivory Coast will also be wet biased while most other coffee, cocoa, sugarcane, rice and cotton areas in the region will be left dry
  
• Favorable
  harvest conditions will prevail outside of the wettest areas
• Ethiopia
  rainfall will be minimal over the next seven days resulting in net drying conditions which are not unusual at this time of year
• Showers
  and thunderstorms will occur routinely in coffee, cocoa, rice and sugarcane areas from Tanzania into Uganda and Kenya through December 17
• Indonesia,
  Malaysia and Philippines rainfall will be widespread over the next two weeks, but its intensity should decrease from west to east over the coming week
• Some
  flooding may evolve, although western parts of Luzon Island and a part of Mindanao will only receive light precipitation
• The
  second week of the forecast may trend drier in western parts of Indonesia
• A
  tropical cyclone will evolve south of Guam this weekend and move toward the Philippines.
  
• The
  storm will bring heavy rain, strong wind and some potential flooding to a part of the nation during the middle to latter part of next week
• Mainland
  areas of Southeast Asia will see seasonable drying over the next ten days, although coastal areas of Vietnam will receive frequent rain
  
• One
  last wave of heavy rain is expected in southwestern British Columbia and western most Washington State including some of the more important ports from the Puget Sound into Vancouver and neighboring areas of British Columbia this weekend
  
• Delays
  in the loading and shipping of some goods and services may result due to flooding, but the worst of the stormy pattern may be passing
• Frequent
  rain could still induce some delays
• Friday
  through the weekend coming up will be the next stormy period
• Next
  week’s weather will improve with much less storminess expected
• Ontario
  and Quebec weather will improve briefly after this weekend, but another storm system will bring significant moisture to the region late next week and/or in the following weekend.
• Mexico
  precipitation will be limited to the east coast over the next ten days with areas from Tamaulipas to Veracruz and Chiapas most impacted
• Resulting
  rainfall will rarely bolster soil moisture for very long
• Net
  drying is expected in most other areas
• Central
  America precipitation will be greatest along the Caribbean Coast , but including a fair amount of Panama and Costa Rica
• Middle
  East weather is a little dry from Syria, Iraq, Israel and Jordan to Iran while portions of Turkey have favorable soil moisture.
  
• Not
  much change is expected through mid-week next week
• Rain
  late next week and into the following weekend may impact a few northern Iraq and western Iran locations while other areas from Syria to Jordan and Israel will remainder biased through most of next week
• Colombia
  and Venezuela precipitation is expected to occur periodically in coffee and sugarcane production areas during the next ten days,  but no excessive rain is expected
• Today’s
  Southern Oscillational Index was +11.80 and it was expected to move a little lower over the next few days
• New
  Zealand rainfall is expected to be turn wetter than usual over the coming week with greatest rain in North Island and northernmost parts of South Island
• Temperatures
  will be seasonable

 

 

Bloomberg
Ag Calendar

Friday,
Dec. 10:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Malaysian
  Palm Oil Board’s data on November palm oil reserves, output and exports
• Malaysia’s
  Dec. 1-10 palm oil exports
• HOLIDAY:
  Thailand

Monday,
Dec. 13:

• Monthly
  MARS bulletin on crop conditions in Europe
• USDA
  export inspections – corn, soybeans, wheat, 11am
• Ivory
  Coast cocoa arrivals

Tuesday,
Dec. 14:

• Australia
  ​Agricultural Commodity Statistics 2021
• ​Vietnam’s
  customs dept to release November commodity trade data
• EU
  weekly grain, oilseed import and export data
• New
  Zealand Food Prices

Wednesday,
Dec. 15:

• EIA
  weekly U.S. ethanol inventories, production
• U.S.
  Green Coffee Association releases monthly inventory data, 3pm
• Brazil’s
  Unica publishes cane crush, sugar output data (tentative)
• Malaysia’s
  Dec. 1-15 palm oil exports

Thursday,
Dec. 16:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Bangladesh

Friday,
Dec. 17:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• USDA
  FAS issues world coffee report, with supply-demand data

Saturday,
Dec. 18:

• China’s
  2nd batch of Nov. trade data, including imports of cotton, corn, wheat and sugar

Source:
Bloomberg and FI

 

 

 

CFTC
Commitment of Traders

Funds
were buyers of corn and soybeans for the week ending 12/7 while they sold Chicago wheat, soybean meal and soybean oil.  Funds were less long beans, wheat, and the products.   For corn they were, for a change, near expectations. The managed money net long position
for soybean oil was down 23,600 contracts to 58,800 contracts since November 23.

 

 

 

 

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
242,978     21,334    425,782     -5,261   -635,586    -28,904

Soybeans           
13,500      6,946    183,256     -8,256   -157,837     -1,219

Soyoil             
17,470        839    120,642     -7,632   -142,406      6,108

CBOT
wheat         -21,377        718    116,678     -3,685    -88,604      2,304

KCBT
wheat          29,177     -4,027     58,846        476    -91,272      1,551

=================================================================================

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
332,501     17,232    268,095     -2,402   -635,001    -28,826

Soybeans           
37,882      4,457    146,122     -2,972   -168,583     -1,829

Soymeal            
27,898     -9,783     89,251     -3,450   -160,461     16,327

Soyoil             
58,828     -5,532     95,821     -2,780   -150,966      5,126

CBOT
wheat             721     -5,480     67,720       -843    -70,555      2,070

KCBT
wheat          59,575     -2,793     28,156        408    -79,345      1,582

MGEX
wheat          12,545     -1,659      1,056       -289    -27,646      1,324

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

Total
wheat         72,841     -9,932     96,932       -724   -177,546      4,976

Live
cattle         79,850      1,333     81,830      1,134   -163,132     -1,618

Feeder
cattle        4,998         92      3,572       -267       -934        532

Lean
hogs           47,204     -9,168     58,265        980    -96,055      4,798

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
67,578      1,165    -33,173     12,831  1,724,182     42,788

Soybeans           
23,499     -2,185    -38,919      2,529    791,580        700

Soymeal            
18,569     -1,549     24,742     -1,545    418,151    -12,166

Soyoil             
-7,977      2,501      4,295        685    425,461    -11,057

CBOT
wheat           8,812      3,589     -6,697        665    440,731     -8,799

KCBT
wheat         -11,634     -1,198      3,249      2,001    247,516     -3,863

MGEX
wheat           7,987     -1,129      6,059      1,753     79,583        259

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

Total
wheat          5,165      1,262      2,611      4,419    767,830    -12,403

Live
cattle         20,234       -920    -18,782         72    350,160    -19,220

Feeder
cattle         -501       -505     -7,135        148     47,184      1,647

Lean
hogs            7,943      1,234    -17,358      2,157    285,784     -3,454

 

Macros

US
CPI (M/M) Nov: 0.8% (est 0.7%; prev 0.9%)

CPI
(Y/Y) Nov: 6.8% (est 6.8%; prev 6.2%) CPI Ex Food And Energy (M/M) Nov: 0.5% (est 0.5%; prev 0.6%) CPI Ex Food And Energy (Y/Y) Nov: 4.9% (est 4.9%; prev 4.6%)

Canadian
Capacity Utilization Rate Q3: 81.4% (est 83.0%; prev 82.0%)

 

Corn

·        
CBOT corn ended lower after trading two-sided. Eventually wheat/corn spreading and soybeans easing off contract highs influenced prices.  China buying Ukrainian corn this week over US origin is bearish. 
China bought an unknown amount of Ukraine corn for January through April shipment, according to Rueters. 

·        
March corn ended up 1.0% for the week.

·        
Fund were even in corn today.

·        
Canadian corn imports have surged in the western part of the country due to high wheat feed wheat prices.

·        
Argentina plans to loosen restrictions on beef exports.

 

Export
developments.

·        
China bought a large amount of Ukrainian corn this week. 

 

EIA:
The Brent crude oil price decline on November 26 was among the largest in years

https://www.eia.gov/todayinenergy/detail.php?id=50618&src=email

 

Updated
12/9/21

March
corn is seen in a $5.50 to $6.20 range

 

Soybeans

·        
Soybeans ended higher from strength in soybean meal. Renewed concerns over US supply shortages of dry lysine drove meal higher. January soybean meal hit buy stops after trading through its 200-day MA
of $363.80/short ton. Soybean oil fell on meal/oil spreading and technical selling. January soybean oil fell to its lowest level since mid-June. Some of the selling was technical. January soybean oil traded through its 54-cent strong support level.  It hit
a low of 53.94. A  close below 54 in coming days suggests the next level of support at 52.00 cents. 

·        
Funds bought an estimated net 3,000 soybean contracts, bought 7,000 soybean meal, and sold 4,000 soybean oil. 

·        
US soybean oil is still favored over palm oil when imported into India. At the cash fob level, but the trade needs to see export developments to turn soybean oil futures around. 

·        
Meal over soybean oil today pulled the January oil share below 42.50 percent, lowest since June. 

·        
Malaysian palm oil futures traded up 22 ringgit and cash was unchanged at $1,192.50/ton. The contract was up 3% for the week.

·        
AmSpec reported December 1-10 Malaysian palm shipments at 544,059 tons, up slightly from 543,944 tons November 1-10.  ITS reported a 0.2% increase to 572,689 tons from the comparable period month ago.

·        
MPOB Malaysian palm data was not very supportive as end of November stocks came in 47,200 tons above expectations and exports fell short by 119,500 tons. However, production was less than expected and
imports far exceeded the average trade guess, leaving some to figure domestic use was near expectations.

November
MPOB versus Reuters estimates

·        
Japan said there is a 60 percent chance of La Nina lasting through the winter (NH).

·        
China crush margins on our analysis was last $1.95 ($2.02 previous) versus $2.22 at the end of last week and compares to $0.93 a year ago.

 

Export
Developments

·        
None reported 

 

 

Source:
Reuters and FI

 

Updated
12/10/21

Soybeans
– January $12.00 to $13.05 range, March $11.75-$13.50

Soybean
meal – January $330 to $375, March $315-$380

Soybean
oil – January 52.00 to 59.00, March 52.00-60.00 (down 200 both ends of the range)

 

Wheat

·        
US wheat was higher in Chicago and KC and mixed in Minneapolis. Oversold conditions and higher Matif wheat kicked off the buying. The selling pressure in Minneapolis limited gains in Chicago.  MN could
have been under pressure after Reuters noted China this week booked at least several hundred thousand tons of French wheat and barley, several thousand tons of Australian wheat, and also purchased Ukrainian corn and barley. This story did support March Paris
wheat (settled up 1.25 euros at 283.50/ton) but we think its bearish for US wheat as they didn’t participate. China was thought to have bought 6 to 10 cargoes of French wheat for January through March shipment. About 4 cargoes of French barley and up to 10
cargoes of Ukraine barley were booked for July through August next year.

·        
Funds bought an estimated net 4,000 Chicago soft red winter wheat contracts.

·        
For the week CBOT SRW was down 2.3%, K.C. HRW was down 2.6% and MGEX spring wheat was flat (Reuters)

·        
Britain wheat exports during October slowed to 119,332 tons from 159,953 tons, bringing Jul-Oct exports to 751,300 tons vs. 925,500 previous season for that period. 

·        
Egypt said they have enough wheat reserves to cover 5.1 months of consumption. 

·        
Russia’s export duty on wheat will increase to $91 per ton from $84.90 per ton as of December 15. Barley will rise to $78.70 per ton from $75.10 per ton, and on corn to $54.40 per ton from $54.30 per
ton. The new duty rates will be valid until December 21.

·        
Iraq plans to import 500,000 tons of wheat in January after securing funds from the Economic Ministerial Council.

·        
Central and western Ukraine are expected to see showers this week, improving soil moisture for wheat, according to Maxar.  (Bloomberg)

·        
Australia weather looks good through the next week.

 

Export
Developments.

·        
The Philippines passed on 300,000 tons of wheat 9 for Feb-Jun arrival. Results are awaited on 125,000 tons of feed barley. Prices for the wheat were too high.

·        
South Korea’s MFG bought 60,000 tons of Indian feed wheat at $351/ton c&f for Jan 20-Feb 15 shipment.

·        
Japan bought 260,312 tons of food wheat from the US and Canada. Original tender details:

·        
Japan in a SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of barley on December 15 for arrival by March 10.

·        
Jordan seeks 120,000 tons of feed barley on December 15.

 

Rice/Other

·        
South Korean Agro-Fisheries & Food Trade Corp. seeks another 22,000 tons of rice from the US, set to close Dec 16.

·        
Results awaited but no purchase was believed: South Korea seeks 22,000 tons of rice from the US on December 9 for arrival in South Korea from May 2022 and from August 2022.

 

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