FI Morning Grain Comments 01/14/22

PDF attached

 

 

Good
morning. 
The US will be on holiday Monday.

 

It
got up to around 108 degrees across parts of Argentina yesterday with no rain. The hot temperatures are causing power outages. Morning weather models turned a little more favorable for Argentina and Brazil. This weekend, southern Brazil and Argentina are slated
to get welcome relief that will last into early next week. US wheat futures extended losses led by MN high protein, from improving US weather conditions, slow US export demand and higher USD. Corn is higher on technical buying and higher meal. US soybeans
are higher (nearby), meal higher bias the nearby months, and soybean oil moderately lower in part to weakness in WTI crude and a lower close in palm oil futures.

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 14, 2022

• Crop
  stress and damage continues in Argentina.
• No
  soil moisture is present, no rain fell or will fall for two more days and temperatures have been and will continue in the range of 100 to 110 Fahrenheit (38-43) with a few extremes today and Saturday in the 110 to 116 degree range (43-45C).
  
• Dramatic
  cooling is expected Sunday through Wednesday and thunderstorms will produce 1.00 to 3.00 inches of rain, but mostly in the northeast half of Argentina.
  
• The
  southwest will not get nearly as much and will have to wait for a second storm system at the end of next week to get some additional relief.
  
• The
  bottom line remains one of relief for Argentina after Saturday, but the greatest improvement will occur in the northeast half of the nation. Additional rainfall may occur later this month, but another ridge of high pressure is possible in February.
  
• In
  Brazil, weather conditions are drying down beneficially
• Greatly
  improved early season soybean and corn maturation and harvest weather is expected for a while.
  
• Established
  and late planted crops will have good subsoil moisture to continue developing with.
  
• Timely
  rainfall will return for early season Safrinha crops later this month and next. 
  
• In
  the U.S., a snowstorm from North Dakota to Iowa and Missouri will occur today and tonight with 3-10 inches of accumulation
• The
  storm will become a raging nor’easter for the eastern United Sunday and Monday producing 6-12 inches and many 12-20 inch amounts in the northeastern parts of the nation and neighboring southeastern Canada.
  
• Outside
  of this weekend’s storm, U.S. weather will be tranquil for a while, but a big surge of cold is expected in the central part of the nation late next week.
  
• Northwest
  Africa remains quite dry
• Western
  Europe is drying out
• India’s
  weather is great after recent rain
• China’s
  weather is stable and mostly good.
• Bitter
  cold in Russia that had been advertised for the second week of the forecast has been reduced, but plenty of snow is on the ground to protect crops anyway.
  
• Additional
  snow will fall in western Russia and parts of Ukraine and Eastern Europe over the next ten days.
  
• New
  South Wales, Australia will get abundant rainfall in the next week to ten days while lighter and more sporadic showers occur in Queensland, Australia.
  
• South
  Africa may get a little too much rain in the coming week to ten days resulting in at least some flooding.
  
• Southeast
  Asia weather will continue wet from Indonesia and Malaysia into the Philippines with local flooding in eastern Malaysia and southern Philippines in the next week to ten days

Source:
World Weather, inc.

 

Bloomberg
Ag Calendar

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

Monday,
Jan. 17:

• China
  4Q pork output and inventory levels
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  U.S.

Tuesday,
Jan. 18:

• USDA
  export inspections – corn, soybeans, wheat, 11am

• China’s
  second batch of December trade data
• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• HOLIDAY:
  Malaysia

Wednesday,
Jan. 19:

• European
  quarterly cocoa grindings report (tentative)

Thursday,
Jan. 20:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• EIA
  weekly U.S. ethanol inventories, production
• China’s
  third batch of country-wise December trade data
• Port
  of Rouen data on French grain exports
• Malaysia’s
  Jan. 1-20 palm oil exports
• New
  Zealand food prices
• USDA
  red meat production, 3pm

Friday,
Jan. 21:

• 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
• U.S.
  cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

 

 

Macros

US
Retail Sales (M/M) Dec: -1.9% (est -0.1%; prev 0.3%)

–
US Retail Sales Ex. Auto (M/M) Dec: -2.3% (est 0.1%; prev 0.3%)

–
US Retail Sales Ex. Auto & Gas (M/M) Dec: -2.5% (est -0.2%; prev 0.2%)

–
US Retail Sales Control Group (M/M) Dec: -3.1% (est 0.0%; prev -0.1%)

US
Import Price Index (M/M) Dec: -0.2% (est 0.2%; prev 0.7%)

–
Import Price Index Ex-Petroleum (M/M) Dec: 0.3% (est 0.6%; prev 0.7%)

–
Import Price Index (Y/Y) Dec: 10.4% (est 10.8%; prev 11.7%)

US
Export Price Index (M/M) Dec: -1.8% (est 0.3%; prev 1.0%)

–
Export Price Index (Y/Y) Dec: 14.7% (est 16.0%; prev 18.2%)

US
Retail Sales (M/M) Prior Revised: 0.2%

–
US Retail Sales Ex. Auto (M/M) Prior Revised: 0.1%

–
US Retail Sales Ex. Auto & Gas (M/M) Prior Revised: -0.1%

–
US Retail Sales Control Group (M/M) Prior Revised: -0.5

 

 

Corn

·        
CBOT corn is higher in part to higher soybean meal and technical buying. Slowing US ethanol production may limit gains over the short term. 

·        
Morning weather models turned a little more favorable for Argentina and Brazil.

·        
USD was higher and WTI crude up 55 cents.

·        
China 2021 meat imports of 9.38 million tons were 5.4% below the 9.91 million tons in 2020. December’s meat imports of 654,000 tons were down 32% from a year ago.

·        
On Thursday:

o 
Argentina’s Rosario Grains Exchange lowered their Argentina corn crop by 8 million tons to only 48 million.  USDA is at 54 million tons for Argentina corn. 

o 
Argentina’s Buenos Aires grains exchange has yet to cut their estimate but it’s coming.  Today they trimmed the soybean planting area by 100,000 hectares to a total 16.4 million hectares due to dry weather.

o 
Agroconsult estimated the Brazil corn crop at 119.4 million tons (24.5MMT first crop), down from a late November projection of 124 million tons. Conab is at 112.9 million and USDA at 115 million tons. 

 

Export
developments.

·        
USDA reported 100,422 tons of corn sold to Mexico for 2021-22 delivery under the 24-hour announcement system.

·        
South Korea’s FLC bought about 65,000 tons of animal feed corn, optional origin, at an estimated $328.10 a ton c&f for arrival in South Korea around April 30.

·        
South Korea’s MFG bought 198,000 tons of corn in three consignments late April and early May arrival.  One consignment of 68,000 tons to be sourced from worldwide origins was said to have been sold at $328.20 a ton for arrival
in South Korea around April 30. A second consignment of 65,000 tons also to be sourced from worldwide origins was said to have been sold at $328.00 a ton c& for arrival in South Korea around May 3.A third consignment of 65,000 tons expected to be sourced from
South America or South Africa was said to have been sold at $327.69 a ton c&f for arrival in South Korea around May 8.

 

Soybeans

·        
US soybeans are higher (nearby), meal higher bias the nearby months, and soybean oil moderately lower in part to weakness in WTI crude and a lower close in palm oil futures.

·        
China imported 8.87 millio0n tons of soybeans during the month of December (up 18% from year earlier) and for all of 2021 they amounted to 96.52 million tons, down from 100.33 MMT year earlier.

Source:
Reuters

 

·        
NOPA’s December crush report will be released on Tuesday due to the Federal US holiday.  Trade estimates below. 

·        
Malaysia will keep their February crude palm oil export tax unchanged at 8 percent.

·        
Malaysian palm futures traded lower by 38 ringgit to 5,123.

·        
Malaysian cash CPO was down $5/ton to $1,277.50.

·        
China soybean futures traded 0.1% higher, meal 0.9% lower, SBO down 0.6% and palm 0.2% lower. 

·        
China soybean cash crush values on our analysis were running at 195 cents/bushel (196 previous) versus 183 at the end of last week and 198 year ago. 

·        
Rotterdam soybean oil for the Feb-Apr position was about 3 euros higher and Rotterdam rapeseed oil 20 euros lower from this time previous session. SA soybean meal when imported into Rotterdam was running mostly 1-4 euros lower.

·        
Offshore values are leading CBOT soybean oil 51 points higher (61 higher for the week to date) and meal $2.40 higher ($5.80 higher for the week).

·        
On Thursday:

o 
Agroconsult estimated the Brazil soybean crop at 134.2 million tons, down from a late November projection of 144.3 million tons. Conab is at 140.5 million and USDA at 139.0 million tons.  They noted the average yield could reach
a 6-year low.

o 
Argentina’s Rosario Grains Exchange lowered their Argentina soybean crop from 45 to 40 million tons, above USDA’s 46.5 MMT estimate. They also warned producers could see a $2.9 billion hit from drought conditions.

 

 

Export
Developments

·        
USDA reported 100,000 tons of soybeans sold to Spain for 2022-23 delivery under the 24-hour announcement system.

·        
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 futures extended losses from improving US weather conditions, slow US export demand and higher USD. But global demand improved this week with Algeria the latest with purchasing 500,000 to 570,000 tons of wheat.

·        
A welcome snow event (for crops) across parts of the central and upper winter wheat country will occur through Saturday. 

·        
EU wheat basis the March position was 1.50 lower at 264.25 eros a ton.

·        
Russian wheat during the Jan-Nov period decreased to 30.0 million tons in the first eleven months of 2001 from 33.7 million tons a year ago.

 

Export Developments.

·        
Algeria bought 500,000 ton 570,000 tons of wheat, expected to be sourced from South America and the Black Sea region, at $348-$350/ton c&f for March shipment. No sales of French wheat were reported.

·        
South Korea’s MFG bought 50,000 tons of feed wheat at $334/ton for shipment around March 20 and April. 

·        
Taiwan seeks 49,395 tons of US wheat on Jan 20 for LH March shipment.

·        
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.