FI Morning Grain Comments 02/01/22

PDF attached

 

Good
morning. 

 

The
weather outlook did not change much overnight.  Argentina will see a mix of rain and sunshine, but net drying is expected from Sunday through Friday of next week, followed by rain during the second week of the outlook. Scattered rain in Brazil may slow farming
activity bias Minas Gerais, northern Sao Paulo and parts of Goias. Paraguay will get rain late this week. Waves of snow and some rain will impact eastern Europe and the western CIS. Queensland, Australia will get rain today into Thursday.

 

New
month / new money. Soybeans, corn and wheat rallied during the late electronic session. Meal / oil spreading should be noted. Traders are eying downgrades in the SA crops (Soybean and Corn Advisory latest group to cut production).  China and Malaysia are on
holiday. Russia’s sunflower oil tax will decline to $251.40/ton from February 1, according to the AgMin, from $280.80/ton in January. Offshore values this morning were leading CBOT soybean oil about 26 points higher and meal $4.10 lower.  This afternoon NASS
will release its crush report and corn for ethanol use. 

 

 

 

Weather

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR February 1, 2022

• Not
  much change occurred around the world overnight.
• Western
  Europe and northwestern Africa are still advertised to be dry for the next ten days.
  
• There
  is no threatening cold expected in Russia, Ukraine, Europe or China where winter crops will continue in mostly good shape.
  
• Waves
  of snow and some rain will impact eastern Europe and the western CIS.
• India’s
  precipitation in far northern and eastern most parts of the nation late this week will be great for winter wheat and a host of other crops.
  
• China’s
  weather will remain wet from the Yangtze River Basin southward to the coast where waves of rain and some snow are likely. 
  
• Queensland,
  Australia will get rain today into Thursday offering some relief for dryland summer crops.
  
• Argentina
  will see a mix of rain and sunshine, but net drying is expected from Sunday through Friday of next week and then beneficial rain may follow in the second weekend of the outlook.
  
• Paraguay
  and neighboring areas will get rain late this week through the weekend and then see nearly a week of drying and then additional rain.
  
• Frequent
  rain in Brazil may slow farming activity with the greatest concern over too much rain in Minas Gerais, northern Sao Paulo and parts of Goias.
  
• In
  North America, a major winter storm in the U.S. lower and eastern Midwest will produce 6-20 inches of snow and possibly more from Missouri to southeastern Michigan, Ohio, Pennsylvania and farther northeast to the St. Lawrence River Basin of Quebec, Canada
  and the northeastern U.S. 
• Freezing
  rain and sleet will lead to some power outages near the Ohio River and flooding rain may impact the Tennessee River Basin and northern Delta.
  
• U.S.
  hard red winter wheat areas will get 2-6 inches of snow with locally more in the east with moisture totals mostly to 0.35 inch.
  
• Nebraska
  may not get much snow and crops there might be vulnerable to winterkill as bitter cold settles into the northern and central Plains and northern Midwest late this week. 
• Cold
  weather in the second week of the outlook will be mostly in the Plains and western U.S.
• Some
  needed snow may accumulate next week in parts of Canada’s snow free southwestern Prairies as cold temperatures return

 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
361,375                 versus   300000-500000  range

Corn                     
1,035,734             versus   950000-1400000                range

Soybeans           
1,411,411             versus   800000-1450000                range

 

Soybean
and Corn Advisor

2021/22
Brazil Soybean Estimate Lowered 4.0 mt to 130.0 Million

2021/22
Argentina Soybean Estimate Lowered 1.0 mt to 42.0 Million

2021/22
Paraguay Soybean Estimate Unchanged at 6 Million Tons

2021/22
Brazil Corn Estimate Unchanged at 112.0 Million Tons

2021/22
Argentina Corn Estimate Unchanged at 51.0 Million Tons

 

Macros

 

Corn

·        
CBOT corn is higher following soybeans & wheat and lower USD. News for corn is light and export developments were quiet.  

·        
EIA reported November 2021 ethanol production at 31.935 million barrels, larger than expected and above 29.908 million during November 2020.

·        
We estimate US corn for ethanol use at 5.425 billion bushels, 100 million above USDA.  Our estimate is unchanged from late December. 

·        
Lowest in seven years…U.S. cattle herd as of Jan. fell 2 percent from a year ago to 91.9 million head (92.5 estimate by Bloomberg).
https://release.nass.usda.gov/reports/catl0122.txt
USDA US corn export inspections as of January 27, 2022 were 1,035,734 tons, within a range of trade expectations, below 1,186,085 tons previous week and compares to 1,116,097 tons year ago. Major countries included Mexico for 342,001 tons, Japan for 246,833
tons, and China for 205,884 tons.

 

Export
developments.

·        
None reported

 

 

 

 

Soybeans

·        
CBOT soybeans rallied late during the electronic session. Some believe its new fund longs with the first day of the month.  China will be on holiday all week.  Soybean and Corn Advisor lowered their estimate of the Brazil soybean
crop by 4 million tons to 130MMT and Argentina by 1 million tons to 42MMT.  USDA official is at 139 and 46.5 million, respectively.

·        
March soybeans rallied above $15/bu. We could see some light profit taking today. 

·        
Soybean meal is seeing strength from the recent increase in global soybean meal demand. Soybean oil is on the defensive from spreading and lower energy prices. 

·        
Russia’s sunflower oil tax will decline to $251.40/ton from February 1, according to the AgMin, from $280.80/ton in January.  The export duty was $276.70 per ton in December 2021, $194.50 per ton in November, $227.20 per ton in
October, and $169.90 per ton in September. The new duty has been calculated based on an indicative price of $1,359.2/ton against $1,401.2/ton in January.

·        
Malaysian Palm Oil Council sees palm oil export demand increasing for the UAE.  In a press statement, they said total trade between the UAE and Malaysia increased by 10.2% between 2020 and 2021.

·        
Rotterdam soybean oil for the Feb-Apr position was 16-17 euros lower from this time previous session and Rotterdam rapeseed oil 18 euros lower. SA soybean meal when imported into Rotterdam were mostly 4-6 euros higher.

·        
Offshore values this morning were leading CBOT soybean oil about 26 points higher and meal $4.10 lower. 

·        
USDA US soybean export inspections as of January 27, 2022 were 1,411,411 tons, within a range of trade expectations, above 1,349,664 tons previous week and compares to 1,908,442 tons year ago. Major countries included China for
728,352 tons, Italy for 112,920 tons, and Mexico for 102,640 tons.

·        
Monthly US biodiesel production showed soybean oil use for biofuel at 818 million pounds, near our expectations. 

·        
We are using 11 billion pounds for SBO for biofuel use, same as USDA. 

 

 

 

Export
Developments

• Iran’s
  SLAL seeks 60,000 tons of soybean meal (combo with barley) on Wednesday for February and March shipment.  They bought meal and barley last week. 
  

 

Wheat

·        
US wheat futures are higher on technical buying and lower USD, despite easing concerns over Black Sea trade disruptions and favorable weather for major global wheat producers. 

·        
EU March wheat was up 5.75 euros at 271.75 euros.

·        
The 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. Precipitation amounts could be very large bias the eastern winter wheat areas. 

·        
USDA US all-wheat export inspections as of January 27, 2022 were 361,375 tons, within a range of trade expectations, below 411,011 tons previous week and compares to 414,248 tons year ago. Major countries included Japan for 119,523
tons, Colombia for 65,839 tons, and Thailand for 55,355 tons.

 

2″+
over the next 72-hours

 

Export
Developments.

·        
Jordan saw three participants for 120,000 tons of wheat for July – August shipment. They bought 60,000 tons of hard milling wheat, optional origin, at an estimated $326.00 a ton c&f for shipment in the second half of August.

·        
Tunisia seeks 75,000 tons of durum wheat, 100,000 tons of soft wheat and 75,000 tons of  feed barley on Feb. 2, for Feb-Apr shipment. 

·        
Japan seeks 53,957 tons of wheat from Canada and Australia later this week.

• Iran’s
  SLAL seeks 60,000 tons of barley (combo with soybean meal) on Wednesday for February and March shipment.  They bought meal and barley last week. 
  

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

 

Rice/Other

·        
(Bloomberg) — Cotton futures touched a fresh decade high Monday, with a global deficit of the fiber squeezing mills holding huge short positions. The March contract climbed as much as 3.2% to $1.2771 a pound in New York, the
highest for a most-active contract since June 2011. Its rare premium over May futures has risen 58% this year and is 275 times more than a year ago.