FI Morning Grain Comments 01/11/22

PDF attached

 

Good
morning. 

 

USDA:
Private exporters reported sales of 100,000 tons of soybeans for delivery to Mexico during the 2021/2022 marketing year.  Lower trade in soybeans and soybean meal. Conab reported a supportive Brazil corn production estimate and bearish soybean output. Soybean
oil is higher following strength in WTI crude oil.  USD is near unchanged and US equities mixed. CBOT corn futures are trading higher. Wheat futures are higher on follow through short covering. Look for positioning today ahead of the USDA reports due out Wednesday. 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 11, 2022

• Today’s
  market weather is all about Argentina. 
• The
  nation has no soil moisture, and no rain is expected through Saturday morning.
  
• Temperatures
  were in the upper 90s to 108 Fahrenheit (36-42C) Monday and will rise to the range of 100 to 110 (38-43) with extremes to 115 degrees (46C) during the next few days.
  
• Some
  computer models have been advertising 115 to 122 degree (46-50) highs late this week.
  
• Some
  of the heat advertised is a little overdone; however, 2014 was the last time that Argentina got this hot and World Weather, Inc. still believes the damage to crops and stress to livestock will be at an extreme for the next five days. 
  
• Enough
  heat and moisture stress has already occurred in Argentina in recent week to have hurt production, but conditions over the next five days will be at an extreme.
  
• Rain
  is still expected late this weekend into next week and sufficient amounts will occur to stop declining crop conditions in many areas, although southern Argentina crops may not get a good soaking for about ten days.
  
• Some
  of the crop damage in Argentina will not be reversible
• In
  Brazil conditions will continue to decline in Rio Grande do Sul over the next week while conditions farther north in the wetter biased areas of the nation will gradually improve as much needed drier weather evolves in the latter part of this week and lasts
  into next week.
• The
  environment in Brazil north of Rio Grande do Sul should be more favorable for a while following Thursday of this week.
  
• Not
  much change in the rest of the world today.
• Dry
  weather will continue in the U.S. Plains, California, Spain and Morocco.
• Most
  other areas in Europe in eastern parts of North Africa will experience good weather as will China, Russia and Southeast Asia.
  
• Queensland,
  Australia still needs significant moisture while New South Wales summer crops will do well for a while like South Africa.
  
• There
  is no threatening cold around the world in winter wheat production areas, although the central and eastern parts of North America will trend colder Jan. 18-25. 

Source:
World Weather, inc.

 

Bloomberg
Ag Calendar

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.

 

 

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
233,159                 versus   175000-400000  range

Corn                     
1,022,677             versus   600000-1250000                range

Soybeans           
905,149                 versus   950000-1500000                range

 

 

Macros

 

Corn

·        
CBOT corn is higher after Conab lowered their Brazil corn production estimate by a more than expected 4.3 million tons to 112.9 million tons. The trade was looking for 115.7 million tons. This compares to the low 87.05 million
tons produced a year ago.  Rain will develop across southern Brazil and Argentina later this week into next week.

·        
Look for positioning today ahead of the USDA reports due out Wednesday. 

·        
Overnight South Korea’s KFA bought 129,000 tons of corn for March and late April arrival, and SK’s NOFI bought 130,000 tons of corn for FH April arrival.

·        
WTI crude oil is up about $1.00 and equities are mixed. 

·        
UkrAgroConsult raised their Ukraine corn crop by 1.3 million tons to 40.5 million tons and exports to 33.8 million tons this season versus 32.7m tons previously. 

·        
Anec sees Brazil January corn shipments reaching 1.798 million tons in January versus 986,857 tons during January 2021.

·        
China plans to keep their tariff in place for US DDGS while the China AgMin conducts a year long “review” on anti-dumping and anti-subsidy measures that will run from Jan 12 until Jan 12, 2023. Anti-dumping duties were raised
to 42.2%-53.7% in January 2017, while the anti-subsidy tariffs were raised to 11.2%-12% from 10.0%-10.7%.

·        
USDA US corn export inspections as of January 06, 2022 were 1,022,677 tons, within a range of trade expectations, above 759,563 tons previous week and compares to 1,345,367 tons year ago. Major countries included Mexico for 296,512
tons, China for 274,654 tons, and Japan for 131,727 tons.

 

Export
developments.

·        
South Korea’s NOFI group bought 130,000 tons of feed corn all at an estimated $333.65 a ton c&f. One consignment was for arrival around April 1 and second for arrival around April 10. Offers for a third corn consignment for arrival
around April 30 were rejected.

·        
South Korea’s KFA bought 129,000 tons of feed corn. One consignment of 66,000 tons was bought at $338.35 a ton c&f for arrival in South Korea around March 31. Another consignment of 63,000 tons was bought at $335.30 a ton c&f
for arrival in South Korea in late April.

·        
Over the weekend The Korea Feed Association (KFA) bought around 130,000 tons of optional origin corn in two consignments each of about 65,000 tons, both at an estimated $334.17 a ton c&f. The first consignment was sought for arrival
around March 30 and second consignment was sought for arrival around April 20.

 

A
Positive Pig Report

Franken,
J. “A Positive Pig Report.” farmdoc daily (12):3, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, January 10, 2022.

https://farmdocdaily.illinois.edu/2022/01/a-positive-pig-report.html?utm_source=rss&utm_medium=rss&utm_campaign=a-positive-pig-report

 

 

Soybeans

·        
CBOT soybeans are lower on weakness in soybean meal and larger than expected Brazil soybean estimate.  Conab reported a surprise for the Brazil soybean crop of 140.5 million tons, much higher than expected by 4.7MMT (135.8MMT
average estimate) but still a record.

·        
Some others may see the dip in soybeans as a buying opportunity as they see the Brazil crop below 140 million tons. Conab is historically slow to revise down their soybean crop in poor weather years, and with harvesting is less
than one percent of the total crop the trade has a while to go to see a good picture of the size of the crop.

·        
Under the 24-hur announcement system, private exporters sold 100,000 tons of soybeans for delivery to Mexico during the 2021/2022 marketing year.

·        
Look for positioning today ahead of the USDA reports due out Wednesday. 

·        
Brazil started harvesting in Parana and Mato Grosso. Yields in Parana are coming in at very low levels.

·        
Anec sees Brazil January soybean shipments reaching 4.274 million tons in January versus 53,644 tons during January 2021.

·        
USDA US soybean export inspections as of January 06, 2022 were 905,149 tons, below a range of trade expectations, below 1,614,158 tons previous week and compares to 1,909,217 tons year ago. Major countries included China for 577,186
tons, Mexico for 92,622 tons, and Bangladesh for 57,469 tons.

·        
Cargo surveyor SGS reported month to date January 10 Malaysian palm exports at 325,601 tons, 222,778 tons below the same period a month ago or down 40.6%, and 47,151 tons above the same period a year ago or up 16.9%.

·        
Malaysian palm futures traded higher by 40 ringgit to 5,069, a 10-week high.

·        
Malaysian cash CPO was up $12.50/ton to $1,262.50.

·        
China soybean futures traded 0.6% lower, meal 0.1% lower, SBO up 0.5% and palm 0.5% higher. 

·        
China soybean cash crush values on our analysis were running at 183 cents/bushel (173 previous) versus 183 at the end of last week and 198 year ago. 

·        
Rotterdam soybean oil for the Feb-Apr position was about 13 euros lower and Rotterdam rapeseed oil 15 euros lower from this time previous session. SA soybean meal when imported into Rotterdam was running mostly 6-8 euros lower.  

·        
Offshore values are leading CBOT soybean oil 47 points higher and meal $1.20 higher.

 

Export
Developments

·        
Under the 24-hur announcement system, private exporters sold 100,000 tons of soybeans for delivery to Mexico during the 2021/2022 marketing year.

·        
The USDA seeks 7,540 tons of vegetable oil in 4 liter cans for Feb 16-Mar 15 shipment on January 19.

 

Wheat

·        
US wheat is higher on follow through short covering. 

·        
KC wheat is supported on weather forecasts calling for dry conditions across the central and southern Great Plains.

·        
EU wheat basis the March position was 0.75 higher at 276.25 eros a ton. 

·        
Euronext launched their durum wheat futures contracts today, but we see no size in any months listed.

·        
(Reuters) – Japan’s weather bureau said on Tuesday the La Nina phenomenon is continuing and that there is an 80% chance it will prevail through the end of the Northern Hemisphere winter and an 80% chance the conditions will end
in spring.

·        
USDA US all-wheat export inspections as of January 06, 2022 were 233,159 tons, within a range of trade expectations, above 230,361 tons previous week and compares to 281,356 tons year ago. Major countries included Japan for 60,270
tons, Indonesia for 60,266 tons, and Nicaragua for 33,000 tons.

 

USDA Attaché: Argentina 2021–22 soy crop at 46.5 million tons

Post reduces its projected Marketing Year (MY) 2021/22 soybean production to 46.5 million

metric tons (MMT), 3 MMT below USDA Official.

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Buenos%20Aires_Argentina_01-04-2022

 

Export Developments.

·        
Turkey seeks 335,000 tons of milling wheat on January 18.  

·        
South Korea’s NOFI rejected all offers for 65,000 tons of feed wheat for arrival around April 25. Lowest feed wheat offer was said to be $341.50 a ton c&f.

·        
Japan seeks 107,555 tons of milling wheat this week.

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

·        
Iraq extended their deadline for 50,000 tons of wheat, set to now close on January 13 instead of the 3^rd, from the US, Canada and Australia.

·        
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. 

 

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.

 

Reuters: “In the past 22 Januarys, the trade average for winter wheat acres was below the reported figure only five times. But three of those instances occurred in the last four years, consistent
with the leveling off in plantings after a steep decline mid-last decade.”

Source: Reuters