FI Morning Grain Comments 01/21/222

PDF attached

 

Good
morning. 

 

USDA
reported private exporters reported the following activity:

• 132,000
  metric tons of soybeans for delivery to China during the 2021/2022 marketing year
• 247,800
  metric tons of corn received in the reporting period for delivery to unknown destinations during the 2021/2022 marketing year

 

CBOT
soybean prices are lower this morning on light profit taking and export sales coming in near the lower end of expectations. Soybean meal is lower while soybean oil extended its rally on strength in palm oil. Corn turned mixed after the open on improving export
developments.  Wheat was lower on technical selling, but a higher USD may limit losses. WTI crude was trading lower at the time this was written. Look for end of week positioning. SA rains this weekending will again be important, but some are questioning if
the arrival of them will be too late for Brazil.

 

 

Weather

 

 

World
Weather Inc.

WEATHER
EVENTS AND FEATURES TO WATCH

• Another
  cold morning occurred today in the U.S. Midwest
• Lowest
  temperatures in Missouri and Illinois slipped to the negative and positive single digits Fahrenheit with little to no snow on the ground in some wheat production areas raising some concern over crop damage4
• Not
  much, winterkill was suspected, although temperatures were near and below the damage threshold.
  
• Many
  winter crops in the region should have been sufficiently hardened against the cold to minimize permanent damage, but some impact cannot be ruled out
• Cool
  temperatures also occurred in the central U.S. Plains this morning with single digit lows common southward through the heart of Oklahoma and eastern parts of the Texas Panhandle
  
• Most
  of this wheat was not seriously impacted by the cold, but the combination of drought and this week’s does raise some concern over crop conditions
• A
  large part of Nebraska reported low temperatures Thursday morning below zero and that was a concern for wheat as well as some of the Oklahoma temperatures this morning
  
• World
  Weather, Inc. does not believe much, if any, serious damage occurred from this week’s cold weather
• Another
  bout of bitter cold is expected in the northern half of the Plains and Midwest during mid-week next week with temperatures likely to be similar to those of this morning.
  
• After
  that there is likely to be a warmer bias developing in some of these areas as January ends
• Heavy
  rain fell overnight in Argentina from northwest through central Buenos Aires with amounts varying from 1.50 to 5.87 inches (38-149mm)
• Local
  flooding was suspected
• Another
  band of significant rain occurred in the interior southwest of Buenos Aires where amounts varied from 0.50 to nearly 2.00 inches
• Showers
  surrounded these two areas of greatest rainfall producing light amounts of moisture.
  
• The
  northeast half of Argentina was dry Thursday and temperatures continued hot in the far northeast with extremes to 110 Fahrenheit in Formosa
• Argentina’s
  forecast has not changed today relative to that of Thursday
• Additional
  rain is expected through Saturday from Buenos Aires to Cordoba and neighboring areas of southern Santiago del Estero and southern Santa Fe
• Some
  of this rain will be heavy varying from 1.00 to more than 4.00 inches resulting in an expansion in area subjected to at least flash flooding
• Local
  totals may get up over 4.00 inches and flooding might become more serious in a few locations
• Rain
  next week is expected to occur as scattered showers and thunderstorms intermixing with periods of sunshine
• Drier
  weather will evolve late next week into the early days of February
• Northeastern
  Argentina has the greatest need for rain and may see it evolve late next week into the following weekend
• Hot
  and dry conditions continued Thursday from northern Argentina through Paraguay and immediate neighboring areas of southern Brazil.
  
• Extreme
  highs of 100 to 108 Fahrenheit (38-42C) occurred from northwestern Rio Grande do Sul through all of Paraguay to northeastern Argentina with Formosa reaching 110
  
• Stress
  to livestock and crops continued at an extreme
• Production
  cuts are continuing
• Paraguay,
  northern Argentina and neighboring areas of Mato Grosso do Sul, Parana and Rio Grande do Sul will continue hot and dry through Tuesday of next week
• A
  breakdown of high pressure aloft over South America is still expected during mid- to late-week next week resulting in a rising potential for rain in the drought stricken areas of Paraguay and all neighboring areas of southern Brazil and northern Argentina
• Rainfall
  will begin erratically, but most crop areas should get rain at one time or another by February 1
• Yield
  losses will not be reversed, but the change will stop the decline in crop conditions and production
• There
  is potential for another ridge of high pressure to evolve over Argentina during February, but its impact on agriculture should be less than that of earlier this month
• Brazil
  crop areas away from the southwest and Rio Grande do Sul will be favorably mixed during the next two weeks supporting good early season soybean maturation and harvest progress while supporting ongoing crop development
• Sufficient
  rainfall is expected in Safrinha crop areas to support planting, germination and emergence on into February
• U.S.
  hard red winter wheat production areas are unlikely to see much precipitation of significance over the next ten days to two weeks
  
• Waves
  of cold will continue to move through the U.S. north-central and Midwestern states through mid-week next week and then some warming is anticipated
• Temperatures
  will be colder than usual in this first week of the outlook from the northern Plains to the Atlantic Coast while warmer biased in the far western states
• U.S.
  Delta, Tennessee River Basin and southeastern states will see enough precipitation during the next ten days to maintain adequate to abundant soil moisture
  
• Recent
  rainfall in the lower Delta has helped to east low soil moisture and more rain is possible in the region over this coming week
• Florida
  is also a little dry as are a few areas in neighboring border areas southern Georgia and southeastern South Carolina, but these areas will see at least some rain in the next ten days
• Florida
  citrus areas will be closely monitored for cool weather, but as of today there is no threat of damaging cold in the production region
• Cold
  air advertised for Feb. 1-2 in today’s 06z GFS model run was overdone and unlikely to verify
• Snow
  is expected to accumulate in North Carolina tonight and some areas of freezing rain and sleet will also occur especially in northeastern South Carolina
• Travel
  issues are likely
• Snow
  accumulations will range from 3 to 8 inches with eastern North Carolina getting some of the greater amounts
• California
  and the far western states will continue missing precipitation events over the next ten days and temperatures will be warmer than usual
• Mountain
  snowpack is still favorable for this time of year, but relative to the April 1 peak of the snowfall season the region is reporting 56-60% of that normal
• There
  is plenty of time for improving weather, but none is expected for a while
• Canada’s
  southwestern Prairies continue to miss significant precipitation and snow events
• Drought
  remains very serious from this region and southward into Montana and the western most Dakotas
• Some
  precipitation is expected in these areas during the coming ten days, but it will be light and probably will not impact the long term outlook
• Interior
  parts of Washington and Oregon will continue to get limited precipitation
• Mountain
  snowpack is abundant in the Cascade Mountains and the northern Rocky Mountains
• Snow
  will continue to fall often in these areas protecting runoff potentials for irrigated crops in the spring
• Cold
  air in the eastern U.S. during the coming week will bring waves of precipitation to the southeastern states preventing those areas from drying out
  
• West
  Texas will be dry for the next ten days
• Western
  Europe precipitation is expected to be restricted during the next ten days while eastern parts of the continent get precipitation periodically
• There
  will be no threat of crop damaging cold in any part of the continent
• Eastern
  Europe will see a boost in snow cover during the next week to ten days
• Spain
  and Portugal need moisture
• Western
  parts of Russia, Ukraine and neighboring areas will see waves of snow and some rain during the next ten days keeping winter crops adequately protected from any threatening cold – if such a risk evolves
• No
  damaging cold is expected in snow free areas
• Northwestern
  Africa will continue dry biased and a little warmer than usual during the next ten days and perhaps longer
• Southwestern
  Morocco is driest along in the northeast Morocco/northwestern Algeria border area
• Rain
  is needed in these areas, but winter crops are semi-dormant and do not need much moisture until the second half of February and March
• Northern
  India will get some light rain late this weekend into early next week
• The
  moisture will further support high yielding winter crops this year, although reproduction will occur mostly in February
• Recent
  rain events and that coming up should have crops in better than usual conditions ahead of reproduction
• South
  Africa’s forecast provides and erratic rainfall pattern for a while
• The
  coming week of weather will allow for some welcome drying to take place
• Sufficient
  soil moisture and timely showers will maintain a very good outlook for 2022 production, despite some pockets of excessive rain and hail damage this summer
• Australia’s
  weather is expected to be favorably mixed over the next two weeks, but a larger volume of rain will be needed in some dryland crop areas in Queensland
  
• The
  expected precipitation in this next ten days should be sufficient to help crops develop well, especially in New South Wales
• Crop
  stress may continue to be an issue in the drier areas of Queensland
• Indonesia,
  Malaysia and Philippines rainfall should occur routinely over the next two weeks support most crop needs.
  
• Western
  portions of Luzon Islands, Philippines will need a boost in rainfall soon
• A
  tropical disturbance may threaten the Philippines this weekend and into next week, but it should have a low impact
• Wind
  damage is not likely
• Rainfall
  should be light to moderate impacting the eastern islands more than anywhere else
• Northern
  Laos and northern Vietnam received rain in the first half of this week bolstering topsoil moisture
• Additional
  light rain may come and go over the next week to ten days
• Coffee
  flowering is possible, although temperatures may be cool enough to restrict that potential
• Any
  flowering will be limited to the northern parts of Vietnam near the Red River
• Most
  other areas in mainland crop areas of Southeast Asia have been seasonably and are unlikely to see much precipitation which is normal for this time of year
• Coastal
  areas of Vietnam will get some rain periodically
• China’s
  weather will be wettest in the Yangtze River Basin and interior southern parts of the nation through the next two weeks
• Winter
  crops are dormant or semi-dormant and expected to remain in good condition for the next ten days
• Some
  snow and freezing rain may occur periodically as well
• Northern
  China precipitation will be restricted for the next two weeks which is normal for this time of year
• West-central
  Africa precipitation will remain confined to coastal areas for a while
• Coffee
  and cocoa maturation and harvest progress is advancing well
• There
  is very little risk of a notable Harmattan wind that would threat crops
• Ethiopia
  will be dry-biased again in the coming week while Tanzania, Uganda and southwestern Kenya get periodic rainfall all of which is normal for this time of year
• Today’s
  Southern Oscillation Index is +4.20
• The
  index may move erratically for a while
• New
  Zealand rainfall will continue lighter than usual  over the next ten days
• The
  nation has been drying out in recent weeks
• Temperatures
  have been seasonable
• Mexico
  will experience waves of rain in the east and in a few southern locations during the next ten days
• No
  general soaking of rain is expected, although precipitation will be greater than usual in the east
• Any
  precipitation would be welcome, but greater amounts are desired especially in northern parts of the nation where winter crops could be negatively impacted in unirrigated areas by ongoing dryness in the next few weeks
  
• Central
  America precipitation will be greatest along the Caribbean Coast , but including a fair amount of Panama and Costa Rica
• Guatemala
  will also get some showers periodically
• Western
  Colombia and western Venezuela precipitation is expected to occur periodically in coffee, corn, rice and sugarcane production areas during the next ten days,  but no excessive rain is expected
• Colombia
  will be much wetter than Venezuela
• Many
  areas in Venezuela may experience net drying

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

Monday,
Jan. 24:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Ivory
  Coast cocoa arrivals
• Brazil’s
  Unica to release cane crush, sugar output data during the week (tentative)
• U.S.
  cold storage data for pork, beef and poultry; poultry slaughter, 3pm
• USDA
  total milk production, 3pm

Tuesday,
Jan. 25:

• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  Jan. 1-25 palm oil exports
• Moscow
  Agros Expo conference, Jan. 25-27

Wednesday,
Jan. 26:

• EIA
  weekly U.S. ethanol inventories, production
• HOLIDAY:
  Australia, India

Thursday,
Jan. 27:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Paris
  Grain Day conference, Jan. 27-28
• Port
  of Rouen data on French grain exports

Friday,
Jan. 28:

• 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

 

 

 

 

USDA
export sales were slightly above a range of expectations for corn. Sorghum export sales were 477,500 MT and a marketing-year high. Soybeans were near the low end of expectations, but the products were better than expected. China posted the bulk of the beans
but a lot of it was switched from unknown.  All-wheat came in near the upper range of expectations. 

 

 

 

 

Macros

Canadian
Retail Sales (M/M) Nov: 0.7% (est 1.2%; prev 1.6%; prevR 1.5%)

–
Retail Sales Ex-Autos (M/M) Nov: 1.1% (est 1.3%; prev 1.3%)

 

Corn

·        
CBOT corn turned mixed after the open, in part to corn/soybean spreading after yesterday’s nearby SH/CH ratio increased to 2.33, near its highest level since last week. Around the beginning of the year, it was near 2.25.  USDA
export sales were good. Sorghum sales were a marketing year high. USDA also announced 247,800 tons of corn was sold to unknown (received).

·        
Weekly US ethanol production increased a large 47,000 barrels per day to 1.053 million compared to a Bloomberg poll looking for an increase of 7,000 barrels. Ethanol stocks were up 681,000 barrels to 23.592 million (poll was looking
for a 259,000 barrel increase).  

 

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

 

IFES
2021: 2022 Market Outlook for Corn and Soybeans: Part II, Acreage

Irwin,
S. and J. Janzen. “IFES 2021: 2022 Market Outlook for Corn and Soybeans: Part II, Acreage.” Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, January 20, 2022.

https://farmdocdaily.illinois.edu/2022/01/ifes-2021-2022-market-outlook-for-corn-and-soybeans-part-ii-acreage.html?utm_source=rss&utm_medium=rss&utm_campaign=ifes-2021-2022-market-outlook-for-corn-and-soybeans-part-ii-acreage

 

Export
developments.

·        
Under the 24-hour announcement system, private exporters sold
247,800
metric tons of corn received in the reporting period for delivery to unknown destinations during the 2021/2022 marketing year.

 

Soybeans

·        
CBOT soybean prices are lower this morning on light profit taking and export sales coming in near the lower end of expectations. Soybean meal is lower while soybean oil extended its rally on strength in palm oil. WTI crude was
trading lower at the time this was written. Look for end of week positioning. SA rains this weekending will again be important, but some are questioning if the arrival of them will be too late for Brazil.

·        
Yesterday Brent crude oil this week hit its strongest level in over seven years. 

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

·        
Malaysian cash CPO was up $25/ton to $1,317.50.

·        
China soybean futures traded 0.8% higher, meal 1.1% higher, SBO up 1.2% and palm 0.2% 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 26 euros higher and Rotterdam rapeseed oil 10 euros lower from this time previous session. SA soybean meal when imported into Rotterdam was running mostly 1-3 euros lower.

·        
Offshore values this morning were leading CBOT soybean oil 135 points lower and meal $2.90 lower.

·        
Argentina soybean plantings for the 2021-22 campaign was 95% complete while corn planting was 88% finished.

·        
Argentina’s “political coalition Juntos por el Cambio presented a bill in the parliament Jan. 18 to eliminate export duties for soybean and corn farmers in regions where an agricultural emergency has been declared,” according
to a Platts story.  We don’t think this will pass. Argentina needs the dollars. Argentina has an export duty of 33% on soybeans, 31% on soybean oil and soybean meal, each, and 12% on corn.

 

Export
Developments

·        
Under the 24-hour announcement system, private exporters sold
132,000
metric tons of soybeans for delivery to China during the 2021/2022 marketing year.

·        
Turkey’s state grain board TMO seeks about 6,000 tons of crude sunflower oil on Jan. 28 for shipment between Feb. 8 and Feb. 25.

 

Wheat

·        
US wheat is lower on technical selling and light news. Charts look short term bearish. A lower USD may limit losses.

·        
The 8-14 day outlook for the US Great Plains appears to have welcome precipitation.

·        
EU wheat basis the March position was 1.25 lower at 272.50 eros a ton.

·        
Russia’s wheat export customs duty will fall to $95.80/ton next week, from $97.50.

 

Export Developments.

·        
South Korea flour mills bought 82,000 tons of milling from the United States for shipment in March in two consignments.

·        
Iran’s GTC started buying a more than expected (60k sought) milling wheat for February – March

shipment.  About 195,000 tons may have been purchased in three consignments of about 65,000
tons.

·        
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.