FI Morning Grain Comments 01/13/22

PDF attached

 

Good
morning. 

 

The
US will be on holiday this upcoming Monday. The CBOT ag markets are lower from selling ahead of the upcoming weekend rains for Argentina and southern Brazil. As mentioned above, the US will be on holiday and many traders will not want to hold long positions
over a 3-day weekend with a potential SA weather event. News is light.  Morning weather models are indicating improving conditions for Brazil (wetter south and less frequent rain central and northern areas). Argentina rains are still on deck for Sunday into
early next week. South Korea’s MFG seeks 140k corn. Iraq as expected bought 150k Australian wheat (rumored yesterday).  Japan bought milling wheat. Results are awaited for Iran for wheat, Algeria for wheat, and China’s wheat auction. Baltic Dry Index fell
7.6% this morning to 1,873. Malaysian palm futures traded higher by 121 ringgit to 5,040, at a 10-week high. Offshore values are leading CBOT soybean oil 44 points lower and meal $0.90 lower.

 

 

Weather

 

BA
Grains Exchange

 

BA
Grains Exchange

 

U.S.
WEATHER FORECASTER CPC: LA NIÑA LIKELY TO CONTINUE INTO THE SPRING (67% CHANCE DURING MARCH-MAY 2022) AND THEN TRANSITION TO ENSO-NEUTRAL (51% CHANCE DURING APRIL-JUNE 2022) – Reuters News

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 13, 2022

• Argentina
  was hot again Wednesday with highs of 100 to 110 Fahrenheit (38-43C). 
• The
  heat will continue through Saturday with extremes of 110 to 116 (43-47C) possible just before rain begins. 
  
• An
  extreme temperature reading or two even hotter cannot be ruled out
• Mostly
  daily highs will be 100 to 110 into Saturday
• Rain
  is expected in a limited manner late Saturday and into Sunday, but it will increase Monday into Wednesday impacting central and northeastern parts of the nation most significantly, but there will be some lighter rain in the southwest.
  
• Today’s
  model runs have reduced the heavy rainfall potential suggested at mid-day and last evening in Buenos Aires, southern Cordoba and neighboring areas for late next week, but it still rains and the change was needed.
  
• The
  bottom line is still going to be good for Argentina even though more rain will be needed outside of the northeast.
  
• Brazil’s
  weather still looks good with less rain in the north favoring soybean maturation and eventual harvesting.
  
• The
  mix of rain and sunshine will prove ideal for farming activity and crop development.
  
• Paraguay
  and some areas nearby in southwestern Brazil may not get as much rain as desired, but showers and thunderstorms are expected.
•  Most
  of Brazil’s weather will be supportive of good crop development and fieldwork.
  
• Not
  much change was noted elsewhere in the world.
• A
  snowstorm will move through North Dakota to Iowa tonight and Friday  and then it will move through the Ohio River Basin to the northeastern U.S. and southeastern Canada
• Accumulations
  of 2 to 6 inches and local totals of 6-13 inches will occur from North Dakota to Iowa
• Similar
  amounts may occur from Kentucky and the immediate Ohio River Valley area into New York, New England and neighboring areas of Quebec, Canada
• U.S.
  hard red winter wheat areas will remain dry over the next ten days
• California
  and most of the interior western U.S. will also be dry for the next ten days
• Rain
  is still advertised from Arizona to southern Texas for late next week by the GFS model, but World Weather, Inc. is not confidence over that event at all
• More
  precipitation will fall in the southeastern U.S. through mid-week next week and then the region will start trending drier
• Russia
  is advertised colder in the Jan. 21-28 period, but plenty of snow will be on the ground to protect winter crops
• Frequent
  snow will continue to pile up in western Russia – some of the depths will become substantial
• India’s
  rain in the southeast will diminish by Saturday and the nation’s weather will become tranquil again for a while
• Recent
  rain has been a boon to winter crop development
• Eastern
  Australia needs greater rainfall, especially in Queensland
• Western
  Europe and northwestern Africa will be dry biased for the next ten days
• Rain
  is needed in southwestern Morocco
• Rain
  may be heavy at times in the next ten days in eastern Malaysia and southern Philippines

Source:
World Weather, inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

USDA
Export Sales

China
showed up for soybeans, sorghum, and cotton. USDA soybean export sales were ok for soybeans at 735,700 tons, but below average for this time of year. New crop sales of 183,000 tons were as expected.  Meal and soybean oil sales were poor.  Corn export sales
fell short of a range of expectations, below 500,000 tons, and wheat was only 264,400 tons with nothing posted for new-crop.  Overall bearish, IMO. 

 

 

 

Macros

US
PPI Final Demand (M/M) Dec: 0.2% (est 0.4%; prev 0.8%)

–
PPI Final Demand (Y/Y) Dec: 9.7% (est 9.8%; prev 9.6%)

–
PPI Ex-Food, Energy (M/M) Dec: 0.5% (est 0.5%; prev 0.7%)

–
PPI Ex-Food, Energy (Y/Y) Dec: 8.3% (est 8.0%; prev 7.7%)

US
Initial Jobless Claims Jan 8: 230K (est 200K; prev 207K)

–
Continuing Claims Jan 1: 1559K (est 1733K; prev 1754K; prevR 1753K)

US
PPI Final Demand For December 2021 – Official Report

The
Producer Price Index for final demand increased 0.2 percent in December, seasonally

adjusted,
the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 1.0

percent
in November and 0.6 percent in October. (See table A.) On an unadjusted basis, final

demand
prices moved up 9.7 percent in 2021, the largest calendar-year increase since data were

first
calculated in 2010.

 

Corn

·        
CBOT corn is lower along with other agriculture markets as longs liquidate ahead of the long US holiday weekend. 

·        
USD was 19 points lower and WTI crude down 20 cents. US equities are leaning towards a higher open.

·        
The Baltic Dry Index was down 7.6% to 1,873 points.

·        
Weekly US ethanol production was reported at 1.006 million barrels, down 42,000 barrels from the previous week and well below expectations. Stocks ballooned 1.552 million barrels to 22.911 million. The trade was looking for stocks
to increase 207,000 barrels. 

 

Comparing
Brazilian (1st and 2nd Crops), American, and Argentine Corn Yields

https://farmdocdaily.illinois.edu/2022/01/comparing-brazilian-1st-and-2nd-crops-american-and-argentine-corn-yields.html?utm_source=rss&utm_medium=rss&utm_campaign=comparing-brazilian-1st-and-2nd-crops-american-and-argentine-corn-yields

 

EIA
expects gasoline and diesel prices to fall in 2022 and 2023 as demand growth slows

https://www.eia.gov/todayinenergy/detail.php?id=50878&src=email

 

Export
developments.

·        
South Korea’s MFG group seeks 140,000 tons of corn on January 14 for arrival around April 23.

 

Soybeans

·        
CBOT soybean complex is trading lower from a general commodity selloff and expectations for rain across the dry areas of South America over the weekend into early next week.  Temperatures will remain hot in Argentina but will
ease by Sunday. 

·        
The US will be on holiday and many traders will not want to hold long positions over a 3-day weekend with the SA weather event. News is light. 

·        
Morning weather models are indicating improving conditions for Brazil (wetter south and less frequent rain central and northern areas).

·        
Malaysian palm futures traded higher by 121 ringgit to 5,040, at a 10-week high.

·        
Malaysian cash CPO was up $22.50/ton to $1,282.

·        
China soybean futures traded 0.4% lower, meal 0.2% higher, SBO up 0.6% and palm 0.9% higher. 

·        
China soybean cash crush values on our analysis were running at 196 cents/bushel (186 previous) versus 183 at the end of last week and 198 year ago. 

·        
Rotterdam soybean oil for the Feb-Apr position was about 17 euros lower and Rotterdam rapeseed oil 30 euros lower from this time previous session. SA soybean meal when imported into Rotterdam was running mostly 3-4 euros higher
(nearby Argentina down 1-2 euros).

·        
Offshore values are leading CBOT soybean oil 44 points lower and meal $0.90 lower.

 

 

Export
Developments

·        
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 lower despite results awaited on a few import tenders for the balance of the week. The USD is down again today and may limit losses, but export sales again were poor and are weighing on trade sentiment. Japan bought
milling wheat.

·        
EU wheat basis the March position was 3.75 lower at 267.50 eros a ton. 

·        
Strategie Grains lowered their European Union soft wheat exports for 2021-22 to 31.2 MMT from 31.5 MMT due to strong competition from Argentina and Black Sea countries in Africa.

·        
(Reuters) – The International Grains Council (IGC) on Thursday raised its forecast for 2021/22 global wheat production, partly driven by an improved outlook for the crop in Australia.  In its monthly update, the inter-governmental
body increased its 2021/22 world wheat crop outlook by four million tons to 781 million tons. The IGC also cut its forecast for global corn (maize) production in the 2021/22 season by 5 million tons to 1.207 billion tons with projections for Argentina and
Brazil downwardly revised.

 

Export Developments.

·        
Iraq bought about 150,000 tons of Australian wheat for Feb-Mar shipment. Price was said to be about $447/ton.

·        
Japan bought 107,555 tons of milling wheat. Original tender details as follows:

·        
Results awaited: Algeria seeks milling wheat on January 13 for FH March shipment.

·        
Results awaited: Iran’s GTC seeks at least 60,000 tons of milling wheat for Feb-Mar shipment.

·        
Results awaited: Japan in a SBS imported tender seeks 80,000 tons of feed wheat and 100,000 tons of feed barley on January 13 for arrival in Japan by March 17.

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

·        
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. 

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

 

Rice/Other

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

 

USDA Export Sales

China showed up for soybeans, sorghum and cotton. USDA soybean export sales were ok for soybeans at 735,700 tons, but
below average for this time of year. New crop sales of 183,000 tons were as expected.  Meal and soybean oil sales were poor.  Corn export sales fell short of a range of expectations, below 500,000 tons, and wheat was only 264,400 tons with nothing posted for
new-crop.  Overall bearish, IMO. 

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING  1/6/2022

 

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	38.4	2,041.2	1,446.4	92.5	4,318.3	5,770.9	0.0	14.0
SRW	65.9	679.9	499.2	75.8	1,698.0	1,087.8	0.0	37.0
HRS	96.2	1,259.6	1,816.4	57.6	3,076.6	4,294.9	0.0	0.0
WHITE	30.9	805.6	2,456.5	32.5	2,101.3	3,098.5	0.0	0.0
DURUM	33.0	54.2	100.8	0.0	112.7	488.9	0.0	33.0
TOTAL	264.4	4,840.5	6,319.3	258.4	11,307.0	14,741.0	0.0	84.0
BARLEY	0.0	19.0	13.7	0.0	11.5	16.9	0.0	0.0
CORN	457.7	25,790.0	28,661.5	1,011.8	15,664.6	16,720.6	0.0	1,512.0
SORGHUM	20.9	3,576.3	3,219.2	139.6	1,752.6	2,059.5	0.0	0.0
SOYBEANS	735.6	10,803.7	14,561.1	1,020.1	31,633.7	40,911.7	183.0	466.1
SOY MEAL	104.2	2,880.4	2,822.8	207.8	3,350.2	3,464.7	-0.7	35.5
SOY OIL	-2.9	232.6	247.9	12.6	205.1	254.3	-0.1	0.3
RICE
L G RGH	0.0	175.4	202.9	1.7	584.0	787.0	0.0	0.0
M S RGH	0.0	10.5	15.6	0.3	3.2	13.3	0.0	0.0
L G BRN	0.1	3.7	10.5	0.2	27.3	22.7	0.0	0.0
M&S BR	0.5	67.7	45.3	1.1	16.5	50.7	0.0	0.0
L G MLD	18.4	64.7	72.2	11.7	404.6	298.0	0.0	0.0
M S MLD	2.4	100.7	171.5	2.4	181.6	211.0	0.0	0.0
TOTAL	21.3	422.7	518.1	17.3	1,217.1	1,382.7	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	401.0	7,789.8	6,066.2	167.6	3,204.4	5,798.0	38.3	1,152.5
PIMA	2.4	225.2	243.1	9.3	154.0	352.7	0.0	5.3

 

 

This
summary is based on reports from exporters for the period December 31, 2021 – January 6, 2022.

Wheat:  Net
sales of 264,400 metric tons (MT) for 2021/2022 were up noticeably from the previous week, but down 20 percent from the prior 4-week average.  Increases primarily for the Philippines (50,000 MT), Mexico (42,300 MT, including decreases of 18,500 MT), Algeria
(33,000 MT), Japan (26,800 MT), and Jamaica (22,000 MT), were offset by reductions primarily for the French West Indies (11,500 MT).  Exports of 258,400 MT were up 23 percent from the previous week and 2 percent from the prior 4-week average.  The destinations
were primarily to Japan (60,300 MT), Indonesia (60,300 MT), Mexico (56,100 MT), Nicaragua (33,000 MT), and Taiwan (28,500 MT).

Corn: 
Net sales of 457,700 MT for 2021/2022 were up 79 percent from the previous week, but down 59 percent from the prior 4-week average.  Increases primarily for Mexico (278,800 MT, including decreases of 20,600 MT), Japan (233,000 MT, including 101,500 MT switched
from unknown destinations), China (70,200 MT, including 68,000 MT switched from unknown destinations), Canada (27,000 MT, including decreases of 1,100 MT), and Nicaragua (16,900 MT), were offset by reductions primarily for unknown destinations (216,300 MT). 
Exports of 1,011,800 MT were up 3 percent from the previous week, but down 1 percent from the prior 4-week average.  The destinations were primarily to Mexico (347,800 MT), China (274,700 MT), Japan (131,700 MT), Saudi Arabia (73,300 MT), and Costa Rica (49,300
MT).

Optional
Origin Sales: 
For 2021/2022, the current outstanding balance of 381,000 MT is for unknown destinations (309,000 MT), Italy (63,000 MT), and Saudi Arabia (9,000 MT).

Barley: 
No net sales or exports were reported for the week. 

Sorghum: 
Net sales of 20,900 MT for 2021/2022 resulting in increases for China (143,900 MT, including 68,000 MT switched from unknown destinations and decreases of 500 MT), were offset by reductions for unknown destinations (123,000 MT).  Exports of 139,600 MT were
up 88 percent from the previous week, but down 18 percent from the prior 4-week average.  The destinations were to China (139,300 MT) and Mexico (300 MT).

Rice: 
Net sales of 21,300 MT for 2021/2022 were down 23 percent from the previous week and 63 percent from the prior 4-week average.  Increases were primarily for Haiti (16,200 MT), Canada (2,300 MT), Mexico (1,100 MT, including decreases of 200 MT), Belgium (500
MT), and New Zealand (300 MT).  Exports of 17,300 MT were down 68 percent from the previous week and 63 percent from the prior 4-week average.  The destinations were primarily to Haiti (7,200 MT), Mexico (5,500 MT), Canada (2,500 MT), Taiwan (1,100 MT), and
Belgium (500 MT). 

Exports
for Own Account:
For 2021/2022, the current exports for own account outstanding balance is 100 MT, all Canada.

Soybeans: 
Net sales of 735,600 MT for 2021/2022 were up 92 percent from the previous week, but down 1 percent from the prior 4-week average.  Increases primarily for China (301,800 MT, including 264,000 MT switched from unknown destinations and decreases of 1,200 MT),
Mexico (187,900 MT, including decreases of 1,400 MT), Egypt (175,800 MT, including 57,500 MT switched from China and decreases of 3,700 MT), Bangladesh (57,500 MT, including 55,000 MT switched from unknown destinations), and Indonesia (33,900 MT, including
decreases of 200 MT), were offset by reductions primarily for unknown destinations (109,000 MT).  Net sales of 183,000 MT for 2022/2023 were for unknown destinations (120,000 MT) and China (63,000 MT).  Exports of 1,020,100 MT were down 42 percent from the
previous week and 43 percent from the prior 4-week average.  The destinations were primarily to China (489,000 MT, including 69,500 MT – late), Mexico (107,700 MT), Egypt (106,800 MT), Pakistan (68,800 MT), and Spain (59,900 MT).

Export
for Own Account:
For 2021/2022, exports for own account totaling 59,900 MT to Canada were applied to new or outstanding sales.  Decreases of 100 MT were reported for Canada.  The current exports for own account outstanding balance is 3,000 MT, all Canada.

Late
Reporting:
For 2021/2022, exports totaling 69,500 MT of soybeans were reported late to China.

Soybean
Cake and Meal: 
Net sales of 104,200 MT for 2021/2022 were up noticeably from the previous week, but down 16 percent from the prior 4-week average.  Increases primarily for Mexico (26,200 MT, including decreases 1,000 MT), Morocco (24,000 MT), Colombia (22,300 MT, including
15,000 MT switched from unknown destinations and decreases of 23,000 MT), Canada (18,200 MT, including decreases of 1,400 MT), and the Dominican Republic (11,500 MT), were offset by reductions primarily for unknown destinations (13,000 MT).  Net sales reductions
of 700 MT for 2022/2023 resulting in increases for Canada (1,900 MT), were more than offset by reductions for the Netherlands (2,000 MT) and Japan (700 MT).  Exports of 207,800 MT were down 9 percent from the previous week and 16 percent from the prior 4-week
average.  The destinations were primarily to Colombia (77,900 MT), the Philippines (48,300 MT), Mexico (32,600 MT), Canada (29,200 MT), and Guatemala (9,500 MT). 

Optional
Origin Sales:  For 2021/2022, the current outstanding balance of 50,000 MT is for Venezuela.  

Soybean
Oil: 
Net sales reductions of 2,900 MT for 2021/2022–a marketing-year low–were down noticeably from the previous week and from the prior 4-week average.  Increases reported for South Korea (300 MT) and the Dominican Republic (200 MT), were more than offset by
reductions for Canada (3,000 MT) and India (400 MT). 
Total net sales reductions of 100 MT for 2022/2023 were for Canada.  Exports of 12,600 MT were down 70 percent from the previous week and 28 percent from the prior 4-week average.  The destinations were to the Dominican Republic (9,200 MT), Mexico (1,600 MT),
Colombia (1,500 MT), and Canada (300 MT).

Cotton: 
Net sales of 401,000 RB for 2021/2022 were up noticeably from the previous week and up 85 percent from the prior 4-week average.  Increases were primarily for China (139,500 RB), India (74,700 RB), Turkey (53,200 RB), Pakistan (38,400 RB), and Vietnam (36,600
RB, including 300 RB switched from China).  Net sales of 38,300 RB for 2022/2023 were primarily for Pakistan (36,500 RB).  Exports of 167,600 RB were up 60 percent from the previous week and 27 percent from the prior 4-week average.  The destinations were
primarily to China (59,000 RB), Vietnam (26,900 RB), Turkey (19,400 RB), Mexico (18,000 RB), and Pakistan (13,700 RB).  Net sales of Pima totaling 2,400 RB were down 46 percent from the previous week and 49 percent from the prior 4-week average.  Increases
were primarily for China (1,700 RB), Pakistan (300 RB), and Brazil (300 RB).  Exports of 9,300 RB were up 29 percent from the previous week and 37 percent from the prior 4-week average.  The destinations were primarily to Peru (4,800 RB), Indonesia (1,700
RB), India (1,600 RB), China (500 RB), and Vietnam (400 RB).

Optional
Origin Sales: 
For 2021/2022, the current outstanding balance of 8,800 RB is for Pakistan. 

Exports
for Own Account: 
For 2021/2022, the
current exports for own account outstanding balance is 100 RB, all Vietnam.

Hides
and Skins:
Net sales for the 2022 marketing year, which began January 1, totaled 188,800 pieces, primarily for China (124,500 whole cattle hides, including decreases of 13,500 pieces), Mexico (17,000 whole cattle hides, including decreases of 400 pieces), South Korea
(16,800 whole cattle hides, including decreases of 1,000 pieces), Taiwan (16,400 whole cattle hides), and Indonesia (10,300 whole cattle hides, including decreases of 100 pieces), were offset by reductions for Thailand (8,400 pieces).  Net sales reductions
of 400 pieces were carried over from the 2021 marketing year, which ended December 31.  Exports for the period ending December 31 of 195,200 pieces brought accumulated exports to 20,003,400 pieces, down 6 percent from the prior year’s total of 21,233,400 pieces. 
The destinations were primarily to China (132,800 pieces), South Korea (18,100 pieces), Thailand (18,000 pieces), Mexico (13,800 pieces), and Brazil (5,700 pieces). 

Net
sales for 2022 marketing year, which began January 1, totaled 31,300 wet blues primarily for China (8,800 unsplit, including decreases of 1,000 pieces), Vietnam (8,800 unsplit), Thailand (5,600 unsplit), Taiwan (5,100 unsplit), and Mexico (1,700 unsplit),
were offset by reductions for Italy (100 unsplit).  In addition, net sales of 200 grain splits were reported for Italy.  There were no net sales carried over from the 2021 marketing year which ended on December
31. 
Exports for the period ending December 31 of 32,800 wet blues brought accumulated exports to 6,929,900 wet blues, up 15 percent prior year total of 6,040,100 wet blues.  The primary destinations were China (16,800 unsplit), Italy (8,000 unsplit), and Vietnam
(8,000 unsplit).  Net sales of splits totaling 296,000 pounds for 2022 marketing year were for China.  Accumulated exports of splits in 2021 totaled 19,559,400 pounds, up 17 percent from the prior year’s total of 16,779,200 pounds.  Exports of 41,000 pounds
were to China. 

Beef:
Net sales for 2022 marketing year, which began January 1, totaled 9,700 MT primarily for Japan (2,600 MT, including decreases of 300 MT), Mexico (1,400 MT), South Korea (1,400 MT, including decreases of 500 MT), China (1,100 MT, including decreases of 400
MT), and Egypt (500 MT), were offset by reductions for the United Arab Emirates (100 MT).  Net sales of 900 MT were carried over from the 2021 marketing year, which ended December 31.  Exports for the period ending December 31 of 8,600 MT brought accumulated
exports to 925,100 MT, up 9 percent from the prior year total of 851,800 MT. The primary destinations were to South Korea (3,100 MT), Japan (1,900 MT), China (1,700 MT), Taiwan (500 MT), and Mexico (500 MT). 

Pork:
Net sales for 2022, which began January 1, totaled 19,800 MT primarily for Mexico (10,100 MT, including decreases of 300 MT), Japan (3,100 MT, including decreases of 500 MT), South Korea (2,100 MT, including decreases of 600 MT), China (1,400 MT, including
decreases of 400 MT), and Canada (1,300 MT, including decreases of 500 MT), were offset by reductions for Peru (200 MT) and the Philippines (100 MT).  Net sales reductions of 3,100 MT was carried over from the 2021 marketing year, which ended December 31. 
Exports for the period ending December 31 of 20,500 MT brought accumulated exports to 1,791,700 MT, were down 8 percent from the prior year total of 1,938,000 MT.  The primary destinations were to Mexico (10,700 MT), China (2,800 MT), Japan (2,800 MT), South
Korea (1,500 MT), and Canada (900 MT). 

January
13, 2022                                             1                FOREIGN AGRICULTURAL SERVICE/USDA