FI Morning Grain Comments 01/24/22

PDF attached

 

Good
morning. 

 

Private
exporters reported the following activity:

• 150,000
  metric tons of corn for delivery to unknown destinations during the 2021/2022 marketing year
• 132,000
  metric tons of soybeans for delivery to China.  Of the total, 66,000 metric tons is for delivery during the 2021/2022 marketing year and 66,000 metric tons is for delivery during the 2022/2023 marketing year

 

Good
rains over the weekend for Argentina are pressuring prices. Brazil saw scattered rains.  Additional showers are expected in Argentina early this week and then again, a week from now. A good mix of rain and sunshine should occur in Brazil for the next couple
of weeks. Lower Malaysian palm oil futures by 48 MRY and a $1.46 lower trade in US WTI crude oil is weighing on CBOT soybean oil, which is limiting losses in meal due to spreading. Rotterdam vegetable oils are lower led by EU rapeseed oil. Argentina meal was
unquoted while Brail meal was 1-7 euros lower. Offshore values are leading both products lower. Corn is on the defensive. There were no export developments over the weekend. Wheat is higher on escalating Ukraine/Russia tensions. Over the weekend the US ordered
government families to exit Ukraine for safety.  The equities are lower, USD up 40 points and gold higher.  Look for another volatile week. Option out of the money abandonments included wheat 780 put exercise 541x and soybean oil 63 puts exercise 228x.

 

 

Weather

7-day
US precipitation

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 24, 2022

• Topsoil
  conditions in Argentina are now saturated with moisture except in the far northeast where hot and dry conditions have prevailed and further harmed minor grain, oilseed and cotton crops.
  
• Subsoil
  moisture is still rated low, but it will be increasing this week as the topsoil moisture percolates downward in the soil.
  
• Additional
  showers are expected in Argentina early this week and then about seven days of drying and warming will occur followed by additional precipitation in the first weekend of February.
  
• Southwestern
  Brazil and Paraguay have been baking in a hot and dry weather pattern of lately and that pattern should break down late this week as a brief period of rain evolves; however, follow up rain will be desperately needed and it will not likely occur until late
  in the first week of February.
• A
  good mix of rain and sunshine should occur in the remainder of Brazil for the next couple of weeks.
  
• In
  the U.S., hard red winter wheat areas will get a little snow in the west during mid-week this week, but moisture totals will be limited.
  
• Other
  areas in the Plains, Midwest, Delta and southeastern states will experience restricted precipitation pattern this week and for a little while next week.
  
• A
  trend change during mid- to late-week next week will bring rain and snow back to the western United States and that may eventually bring a new storm system to the northern Plains and upper Midwest late in the week next week or more likely in the following
  weekend.
•  Cool
  weather in the eastern U.S. this week will shift back to western Canada and a few areas in the northern Plains and northwestern states while the east turns warmer.
  
• In
  the rest of the world, Spain, southern France and Portugal will remain dry biased.
  
• A
  few showers will occur in Morocco, but dryness will remain in place throughout northwestern Africa.
  
• Eastern
  Europe and the western CIS will continue to see waves of snow and some rain in the south.
  
• India’s
  weather will trend drier this week
• East-central
  and southeastern China will see waves of rain and a little snow.
• Eastern
  Australia will experience scattered showers and thunderstorms.
• Indonesia
  will be favorably and some net drying will occur in South Africa. 
• A
  tropical cyclone that moved across Madagascar during the weekend will move through Mozambique early this week producing flooding rain and some property and crop damage

Source:
World Weather, inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

CFTC
Commitment of Traders report

A
record net long position was recorded for the index funds combined SRW, HRW, Corn, Soybeans, Soybean Meal, and Soybean Oil net long position. 

No
major surprises were noted other than the net position for traditional funds Chicago wheat were more long than expected. 

 

 

 

 

As
of Friday – estimated

 

 

 

Macros

US
Chicago Fed National Activity Index Dec: -0.15 (Prev 0.37; PrevR 0.44)

 

Corn

·        
CBOT corn is lower from quiet export developments over the weekend, sharply higher USD, lower WTI crude oil and a decline in soybeans.

·        
USDA Cattle on Feed showed January 1 on feed up 0.6% from a year ago, 0.8 percentage point above trade expectations.  Placements were reported well above expectations and marketed slightly lower. The higher than expected on feed
and placements is supportive corn.

 

 

Export
developments.

·        
Under the 24-hour announcement system, private exporters sold 150,800
metric tons of corn to unknown destinations during the 2021-22 marketing year.

 

Soybeans

·        
CBOT soybeans are lower after Argentina saw very good rains over the weekend. The USD is sharply higher. Soybean oil is lower from weakness in palm oil and unwinding of oil/meal spreading. Meal is trending lower. 

·        
Malaysian palm futures traded lower by 48 ringgit to 5,405, after hitting a record high Friday.

·        
Malaysian cash CPO was down $5.00/ton to $1,312.50.

·        
China soybean futures traded 1.0% higher, meal 0.4% higher, SBO up 0.8% and palm 1.1% higher. 

·        
China soybean cash crush values on our analysis were running at 184 cents/bushel versus 184 at the end of last week and 171 year ago. 

·        
Rotterdam soybean oil for the Feb-Apr position was about 6-7 euros lower and Rotterdam rapeseed oil 5-25 euros lower from this time previous session. SA soybean meal when imported into Rotterdam was running mostly 1-7 euros lower.
Argentina meal was unchanged. 

·        
Offshore values this morning were leading CBOT soybean oil about 300 points lower and meal $2.40 lower.

 

Export
Developments

·        
Under the 24-hour announcement system, private exporters sold
132,000
metric tons of soybeans for delivery to China.  Of
the total, 66,000 metric tons is for delivery during the 2021-22 marketing year and 66,000 metric tons is for delivery during the 2022-23 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 futures are higher this morning from ongoing Russia/Ukraine tensions and persistent dryness across the US. Producer selling across the Black Sea has not slowed according to a local source.

·        
EU wheat basis the March position was 3.75 euros higher at 276.25 eros a ton.

·        
The European Union said they are ready to impose “never-seen-before” economic sanctions on Russia if it attacks Ukraine, and EU foreign ministers said they would send a unified warning to Moscow. (Reuters)

·        
Russia wheat exports are running 21 percent below the same season year ago through January 20.

·        
Reuters confirmed that China on January 19 sold 468,738 tons of wheat out of reserves, or 94 percent of what was offered.

 

Export Developments.

·        
The Philippines seeks 36,000 tons of Australian wheat on January 25 for April 1-30 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.