FI Morning Grain Comments 01/31/22

PDF attached

 

Good
morning. 

 

Private
exporters reported sales of 129,000 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 63,000 metric tons is for delivery during the 2022/2023 marketing year.

 

Higher
trade this morning on follow through buying, strength in energies, 38 point lower USD, and ongoing SA crop production concerns. The Ukraine/Russian tensions will continue to be in focus this week.  Argentina will see erratic rains this week while Brazil will
see rain on and off through mid-February. A snowstorm will hit the central U.S. Plains and Midwest during mid-week this week with 2-6 inches of snow in wheat areas of the Plains and 6 to 15 inches of snow across the lower and eastern Midwest to the northeastern
states. Offshore values this morning were leading CBOT soybean oil about 8 points lower and meal $2.80 higher.  Brazil soybean basis is firmer from this time Friday morning while the products are unchanged to mixed. China will be off this week (resumes February
7). Malaysia Bursa palm market will be closed from February 1 through February 2 (trading resumes Feb. 3).

 

 

Weather

 

 

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 31, 2022

• Frost
  and light freezes occurred again this morning in Florida citrus areas, but the coldest conditions occurred Sunday when lows of 25-32 occurred at ground level and 27-34 at tree level throughout the production region.
  
• Irrigation,
  wind machines, helicopters and portable heaters were used to keep temperatures up high enough to minimize crop damage, although many ground level non-citrus fruits and vegetables may have been damaged.
  
• Some
  sugarcane impact was also suspected.
• Damage
  to sugarcane and citrus was no more than expected and most of it should have been light having a low impact on production with no damage to citrus blossom buds for the new crop.
  
• A
  snowstorm will impact the central U.S. Plains and Midwest during mid-week this week with 2-6 inches of snow in wheat areas of the Plains and 6 to 15 inches of snow across the lower and eastern Midwest to the northeastern states.
  
• Heavy
  rain, freezing rain and sleet will occur immediately south of the snow region impacting the Delta and parts of Kentucky and Tennessee
• Bitter
  cold will come back to the northern U.S. Plains during mid-week this week and it will follow the snowstorm through the Midwest later this week
• West
  Texas and the western high Plains of hard red winter wheat country will get up to 0.30 inch of moisture from the storm with 0.75 to nearly 1.00 inch in central Oklahoma and southeastern Kansas
• California
  and the far western U.S. will be dry during much of the next two weeks
• The
  weekend  blizzard along the upper east U.S. coast and southeastern Canada produced 8 to 20 inches of snow with up to 30 inches in southeastern New England.
  
• Argentina’s
  weather this week will produce an erratic rainfall pattern and that will continue next week as well.
  
• Most
  of Brazil will get rain over the next two weeks with amounts lightest and least frequent in the far south and in Paraguay while greatest in Minas Gerais and Sao Paulo.
  
• Some
  flooding will be possible in low-lying areas.
• Western
  Europe and northwestern Africa are not likely to see much rain for a while.
  
• South
  Africa will be plenty moist as will eastern Europe and the western CIS.
• Southern
  China will see frequent precipitation too.
• Eastern
  Australia will get good mix of weather
• Some
  rain will occur this week in northeastern India. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Monday,
Jan. 31:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Malaysia’s
  palm oil exports in January
• U.S.
  agricultural prices paid, received, 3pm
• U.S.
  cattle inventory, 3pm
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  China, South Korea, Vietnam

Tuesday,
Feb. 1:

• International
  Cotton Advisory Committee releases market outlook report
• EU
  weekly grain, oilseed import and export data
• U.S.
  Purdue Agriculture Sentiment
• USDA
  soybean crush, DDGS output, corn for ethanol, 3pm
• Honduras,
  Costa Rica monthly coffee exports
• Australia
  commodity index
• India’s
  federal budget
• New
  Zealand global dairy trade auction
• ProZerno
  holds Mountain Grain Assembly in Sochi, Russia, Feb. 1-4
• HOLIDAY:
  China, Hong Kong, Malaysia, Indonesia, South Korea, Singapore, Vietnam

Wednesday,
Feb. 2:

• EIA
  weekly U.S. ethanol inventories, production
• HOLIDAY:
  China, Hong Kong, Malaysia, South Korea, Singapore, Vietnam

Thursday,
Feb. 3:

• FAO
  World Food Price Index and grains supply/demand outlook
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• New
  Zealand Commodity Price
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  China, Hong Kong, Vietnam

Friday,
Feb. 4:

• 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
• HOLIDAY:
  China, Vietnam

Source:
Bloomberg and FI

 

 

 

 

 

CFTC
Commitment of Traders

After
a volatile week leading up to January 25, traditional funds were 18,000 contracts more long than expected in corn, and 21,100 contracts less long than expected for Chicago wheat. 

 

 

 

 

 

Macros

 

Corn

·        
CBOT corn is higher (7-month high) from dry Argentina weather, downgrade in the Brazilian crop by a private outfit, lower USD, and higher outside related markets.  

·        
Agresource sees the Brazil corn crop at only 106.82 million tons.  USDA official is at 115 versus 87 MMT year earlier.

·        
The Philippines lifted their suspension on Canadian been imports.

·        
Bloomberg: U.S. cattle herd as of Jan. 1 seen falling by over a million head to 92.5m, the lowest level in six years, according to the avg in a Bloomberg survey of four analysts.

·        
Nepal reported a H5N1 bird flu outbreak at a poultry farm. 

 

Export
developments.

·        
None reported

 

 

 

 

Soybeans

·        
CBOT soybeans (7-month high), meal and oil are all higher on follow through bullish sentiment. Bull spreading is seen in soybean oil. March crush margins are slightly lower.

·        
We could see some positioning during the day session as it’s the end of the month.

·        
AgRural estimated the Brazil soybean crop at 128.5 million tons, down from 133.4 million estimated January 6.  They started out the season at 144.7 million tons.  They pegged harvesting at 10 percent. 

·        
Agresource also downgraded their estimate to 125 million tons from 131 previously. 

·        
USDA official is at 139 MMT versus 138 year earlier.

·        
Brazil’s Safras reported 2021-22 soybean harvest progress at 11.3% by January 28, well above a year ago when only 1.4% of the 2020-21 crop was collected.  Last week they estimated Brazil soybean exports at a low 85.5 million tons
for 2022 (USDA @ 90 for the Feb-Jan crop year, up from 88.9MMT for 2020-21). 

·        
Separately Brazil’s Mato Grosso state agency (IMEA) estimated 32 percent of the soybean crop had been harvested, well up from 5% year ago and above a 5-year average of 21 percent. 

·        
AmSpec January Malaysian palm oil exports were reported at 1.105 million tons. ITS had 1.176 MMT, down 25.6% from 1.581 million during December. 

·        
Third month Malaysian palm oil futures traded 36 MYR lower to 5592 in a shortened session. Malaysia will be on holiday over the next couple of days. 

·        
Rotterdam soybean oil for the Feb-Apr position was 18 euros higher from this time previous session and Rotterdam rapeseed oil 30 euros higher. SA soybean meal when imported into Rotterdam was 8-16 euros higher.

·        
Offshore values this morning were leading CBOT soybean oil about 8 points lower and meal $2.80 higher. 

·        
Strategie Grains increased its estimate for the European Union rapeseed crop to 18.2 million tons from 18.0 million previously. 2021 was pegged at 16.95 MMT. 

·        
Low water levels are hampering shipping along the Rhine River in Germany. 

 

Export
Developments

• Private
  exporters reported sales of 129,000 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 63,000 metric tons is for delivery during the 2022/2023 marketing year.

 

 

 

Wheat

·        
US wheat futures are higher on follow through buying, Egypt stockpiling, and a lower USD. 

·        
Late on Friday Egypt bought 420,000 tons of wheat and did not include French origin. 

·        
EU wheat basis the March position was down 1.25 euros at 277.50 euros.

·        
SovEcon estimated the Russian 2021-22 wheat export projection at 34.3 million tons, up 200,000 tons from previous.

·        
U.S. hard red winter wheat production areas will get some welcome snow and a little rain during the middle to latter part of this week.

 

Export
Developments.

• Late
  on Friday Egypt’s GASC bought 420,000 tons of wheat for March 5-15 and March 16-26 shipment. There was no French wheat origin. The purchase comprised 60,000 tons of Ukrainian wheat, 60,000 tons of Russian wheat, and 60,000 tons of Romanian wheat for shipment
  March 5-15, and 120,000 tons of Ukrainian wheat, 60,000 tons of Romanian wheat and 60,000 tons of Russian wheat for shipment March 16-26.  Reuters provided the following:
  

Shipment
between March 5-15:

-Ukrainian
$326.00 FOB plus $20.89 = $346.89 c&f

-Russian
$329.65 FOB plus $20.35 = $350 c&f

-Romanian
$329.65 FOB plus $19.75 = $349.40

Shipment
between March 16-26:

-Ukrainian
$326.00 FOB plus $20.89 = $346.89 c&f

-Romanian
$329.65 FOB plus $19.75 = $349.40 c&f

-Ukrainian
$328.77 FOB plus $21.23 = $350 c&f

-Russian
$329.20 FOB plus $20.35 = $349.55 c&f

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

• Jordan
  seeks 120,000 tons of feed barley on February 2.

 

Rice/Other

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