FI Morning Grain Comments 01/20/22

PDF attached

 

Good
morning. 

 

Due
to the Martin Luther King, Jr. holiday remembrance, the next U.S. Export Sales Report will be released on Friday, January 21, 2022.

 

Hot
and dry early February forecast for South America continues to support soybeans this morning while grains are lower on technical selling (MN wheat exception). The USD was 10 points higher earlier this morning and WTI crude oil $0.62 lower. Russia/Ukraine tensions
drove up wheat prices past two sessions. Yesterday President Biden hinted Russia may strike Ukraine, among other negative comments. Several global import tenders and net drying across the US Great Plains are limiting losses for KC wheat.  Palm oil reached
a record high overnight. Malaysian palm futures traded higher by 71 ringgit to 5,326. Malaysian cash CPO was up $12.50/ton to $1,292.50. China soybean futures traded 1.4% higher, meal 1.6% higher, SBO up 1.2% and palm 0.8% higher.  Offshore values this morning
were leading CBOT soybean oil 100 points lower and meal $1.90 lower. A Bloomberg poll looks for weekly US ethanol production to be up 7,000 barrels to 1.013 million from the previous week and stocks up 259,000 barrels to 23.170 million.

 

 

 

Weather

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 20, 2022

• Greater
  than expected rain fell in north-central Buenos Aires, Argentina overnight, but the area impacted was relatively small. 
  
• Extremely
  warm to hot weather continued at the same time from northwestern Rio Grande do Sul, Brazil through all of Paraguay with highs of 100 to 108 Fahrenheit (38-42C).
  
• Most
  of Brazil dried out Wednesday and the same occurred in northern and southwestern Argentina.
  
• Today’s
  South America outlook is still very similar to that of Wednesday with more heavy rain coming to Buenos Aires and areas northwest to Cordoba and Santiago del Estero through the weekend
  
• Additional
  hot and dry weather is expected in Paraguay and southern Brazil through Tuesday.
  
• After
  Tuesday, weather conditions should change allowing less rain in southern and central Argentina and bringing much needed rain to parts of Paraguay and southern Brazil.
  
• Most
  of center west and center south Brazil will experience a very good mix of weather during the next ten days favoring crops and fieldwork.
  
• Not
  much change occurred in the rest of the world overnight.
• U.S.
  hard red winter wheat areas and west Texas are still unlikely to see much rain or snow and the same is true for California and the interior western states.
  
• The
  U.S. Delta and southeastern states will get some periodic light precipitation.
  
• Waves
  of cool air will come and go from Canada’s Prairies through the northern U.S. Plains to the Midwest and Atlantic Coast States, although bitter cold  will be limited to just a few days at a time.
  
• India
  will get some rain in the north over the next several days
• Western
  Europe and northwestern Africa will continue dry biased
• There
  is no threatening cold slated for Russia, Ukraine or eastern Europe
• East-central
  China will be wetter than usual in the coming week
• Queensland,
  Australia still needs greater rain
• South
  Africa will see an erratic rainfall pattern for a while

Source:
World Weather, inc.

 

 

 

 

Bloomberg
Ag Calendar

Thursday,
Jan. 20:

• 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:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am

• 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

Natural
Gas trades down 2% from its previous close – CME

 

Corn

·        
CBOT corn is lower following weakness in wheat, slowdown in global import developments, higher USD and lower crude oil.   

·        
(Reuters) – The French farming ministry on Thursday said that a total of 2.5 million birds needed to be killed as the southwest of the country faces several outbreaks of bird flu. Around 1.2 million animals have already been culled

·        
A Bloomberg poll looks for weekly US ethanol production to be up 7,000 barrels to 1.013 million from the previous week and stocks up 259,000 barrels to 23.170 million.

·        
Bloomberg: U.S. Cattle on Feed Placements Seen Up 2.5%.  December placements onto feedlots seen rising y/y to 1.89m head. 

 

POLL-U.S.
December cattle placements seen up 2.6% from year ago -analysts – Reuters News

Jan
19 (Reuters) – The following are analysts’ estimates for the U.S. Department of Agriculture’s monthly Cattle on Feed report, which is due on Friday at 2 p.m. CST (2000 GMT).

All
figures, except headcount, for feedlots with 1,000-plus head of cattle shown as percentage vs year ago:

                                                               
Range                   Average               Mln head

On
feed January 1                            99.5-100.1           99.8                        11.943

Placements
in December              100-105                102.6                     1.892

Marketings
in December              100-102.1             100.8                     1.868

 

USDA
Broiler Report:

• Broiler-Type
  Eggs Set in the United States Up 1 Percent
• Broiler-Type
  Chicks Placed in the United States Down 2 Percent
• Cumulative
  placements from the week ending January 8, 2022 through January 15, 2022 for the United States were 370 million. Cumulative placements were down 2 percent from the same period a year earlier.

 

Export
developments.

·        
None reported

 

 

 

 

Soybeans

·        
Soybeans and oil are seeing follow through buying from South American weather forecasts calling for hot and dry weather for early February. Meal turning lower in the front months, in part to lower corn. USDA will likely need to
lower their Argentina and Brazil soybean production estimates by at least 2.5 and 3.5 MMT, respectively.

·        
Yesterday the USDA Attaché cut their Brazil soybean estimate to 136 million tons.

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Brasilia_Brazil_12-31-2021.pdf

·        
China soybean import demand has been lagging from higher soybean prices and natural slowdown ahead of the China New Year holiday break.

·        
Malaysian palm futures traded higher by 71 ringgit to 5,326, a record high.

·        
Malaysian cash CPO was up $12.50/ton to $1,292.50.

·        
AmSpec Agri reported Jan 1-20 Malaysian palm oil exports at 633,531 tons, down 36.4 percent from 996,331 tons shipped during December 1 – 20.  ITS reported a 38.4 percent decline to 660,866 tons. 

·        
China soybean futures traded 1.4% higher, meal 1.6% higher, SBO up 1.2% and palm 0.8% higher. 

·        
China soybean cash crush values on our analysis were running at 184 cents/bushel versus 195 at the end of last week and 190 year ago. 

·        
Rotterdam soybean oil for the Feb-Apr position was about 8 euros higher and Rotterdam rapeseed oil 20 euros lower from this time previous session. SA soybean meal when imported into Rotterdam was running mostly 2-6 euros higher.

·        
Offshore values this morning were leading CBOT soybean oil 100 points lower and meal $1.90 lower.

 

Export
Developments

·        
Today the USDA seeks 7,540 tons of vegetable oil in 4-liter cans for Feb 16-Mar 15 shipment.

 

China
imported 32.3 million tons of U.S. soybeans in 2021,
up 25% from 25.89 million tons in 2020. Brazil supplied 58.15 million tons in 2021, down 9.5% from 64.28 million in 2020. For 2022, Brazil may supply less than 55 million tons, depending on crop size and quality, and the US should pick up for the balance of
3.5-4.5 million tons, assuming China imports expand 1-2 million tons from 2021. 

 

 

Wheat

·        
US Chicago and KC wheat futures are lower while Minneapolis is mixed to mostly higher as Russian/Ukraine tensions continue to support high protein wheat.  Several global import tenders are limiting losses. 

·        
U.S. President Joe Biden on Wednesday said he thinks Vladimir Putin doesn’t want a full-blown war but will “move in” on Ukraine after amassing troops at the border.  – Bloomberg

·        
Commodity Weather Group suggested 20 percent of the US winter wheat crop could be exposed to winterkill this week with the cold snap and net drying. 

·        
EU wheat basis the March position was 0.75 lower earlier at 274.00 eros a ton.

·        
France shipped 4 more cargoes of wheat to Morocco and are loading barley for China. 

 

Export Developments.

·        
Taiwan bought 49,395 tons of US wheat on Jan 20 for LH March shipment. The purchase involved 30,150 tons of U.S. dark northern spring wheat of 14.5% protein content bought at $414.16 a ton FOB U.S. Pacific Northwest coast. Another
14,600 tons of hard red winter wheat of 12.5% protein was bought at $401.60 a ton FOB and 4,645 tons of soft white wheat of 11% protein was bought at $430.91 a ton FOB. (Reuters)

·        
Japan bought 72,351 tons of food wheat.

·        
Algeria bought 205,000 tons of feed barley at around $324/ton c&f for LH Feb/FH Mar shipment.

·        
Turkey bought at least 275,000 tons of feed barley out of 345,000 tons sought, at $316-$331/ton. The tender seeks shipment between Feb. 15 and March 10. 

·        
Results awaited: Iran’s GTC seeks 60,000 tons of milling wheat on January 20 for February – March shipment. 

·        
Jordan seeks 120,000 tons of feed barley on January 26 for July – August shipment. 

·        
Jordan retendered on wheat seeking 120,000 tons on February 1 for July – August shipment.

 

Rice/Other

·        
South Korea seeks 46,344 tons of rice from (mainly) China on Jan 27.