FI Morning Grain Comments 02/03/22

PDF attached

 

Good
morning. 

 

Private
exporters reported cancellations of export sales of 380,000 metric tons of corn for delivery to China during the 2021/2022 marketing year.

 

USD
reversed, now down about 31 points. US equities, energies and metals are lower. CBOT agriculture markets are lower in a risk off trade. Grains saw an outside day lower yesterday and technicals would suggest a lower trade today, but if outside markets rebound
look for losses in US ags to be limited.

https://finviz.com/

 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR February 3, 2022

• Not
  much has changed overnight that will seriously impact the marketplace.
• Argentina’s
  high pressure ridge expected Sunday through Thursday breaks down late next week temporarily and allows some rain to move across the nation before the ridge builds up briefly once again near mid-month.
  
• Rain
  is still expected to bring relief to drought in Paraguay, northeastern Argentina and some neighboring areas of Brazil over the next few days with weekend precipitation greatest.
  
• The
  moisture will be welcome for Safrinha crops but will not be great enough to improve many early season crops except perhaps some cotton and citrus.
  
• Northern
  Brazil will continue to experience frequent rain that will inhibit field progress and raise some soybean and other crop condition concerns, but less intensive rain may evolve for a little while in the second week of the outlook. 
  
• In
  the United States, an impressive winter storm will continue to impact areas from the Delta to New England and the lower eastern Midwest today into Friday and then an extended period of tranquil weather is expected.
  
• Moisture
  content in the snow that fell in the west-central and southwestern U.S. high Plains this week was too light to seriously change soil moisture and below average precipitation will prevail.
  
• Not
  much, if any, precipitation will impact the far western United States, including California
  
• Today’s
  bitter cold in the north-central states will be slow to abate.
• Warming
  is expected in the Plains this weekend into early next week.
• No
  changes overseas today.
• Western
  Europe and northwestern Africa will remain drier biased while frequent waves of snow and rain impact eastern Europe, Ukraine and western Russia.
  
• There
  is no threatening cold in Europe, Russia or China come up anytime soon.
• Rain
  will impact far northern and eastern India over the next couple of days,
• Southern
  China will be wet frequently over the next ten days.
• Queensland,
  Australia’s rain event is about over
• South
  Africa will continue to see alternating periods of rain and sunshine
• No
  major issues were noted today for coffee, cocoa, citrus or sugarcane production areas. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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
Export Sales

Marketing
year high was posted for soybean meal, one reason why futures rallied over soybean oil over the past week as SA supplies dried up.  New-crop soybean sales were better than expected and soybean oil sales fell sharply from the previous week. All-wheat sales
were poor while corn was within expectations.  There were no surprises in sorghum and meat sales. 

 

 

 

Macros

 

Corn

·        
Corn is lower after seeing an outside day lower yesterday. News is light and outside markets are influencing a lower trade. The USD is higher.

·        
Weekly US ethanol production increased 6,000 barrels per day to 1.041 million. Traders were looking for a 9,000 barrel decrease. Stocks increased a large 1.378 million barrels to 25.854 million, highest since April 24, 2020. 
Traders were looking for an increase of 232,000 barrels.  US gasoline demand last week slipped 279,000 barrels to 8.226 million, a two-week low. Logistic problems and the recent increase in Covid-19 cases keeping people at home likely contributed to the build
in ethanol stocks.

·        
The USDA Broiler report showed eggs set in the US up 3 percent and chicks placed down slightly from a year ago.  Cumulative placements from the week ending January 8, 2022 through January 29, 2022 for the United States were 740
million. Cumulative placements were down 2 percent from the same period a year earlier.

·        
USDA Attaché on China corn:

-Production
272.6 million tons, up 11.9 MMT from 2020-21

-Imports
of corn projected at 20 MMT, 6 MMT below USDA official

-2021-22
barley and corn imports are expected to be down from 2020-21, while sorghum is expected to increase

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Beijing_China%20-%20People%27s%20Republic%20of_01-20-2022

 

Export
developments.

·        
None reported

 

Soybeans

·        
Soybeans are trading lower in a risk off session. News is light. CBOT crush is higher as the products recover slightly against soybeans.

·        
Malaysia returned from holiday and palm futures were 79 MYR lower with cash declining $15.00/ton.

·        
SGS, delayed, reported Malaysia exported 1.141 MMT of palm during January, down 27 percent from December.

·        
China will be closed for the remainder of the week.

·        
Rotterdam soybean oil for the Feb-Apr position was 10 euros lower from this time previous session and Rotterdam rapeseed oil about 30 euros lower. SA soybean meal when imported into Rotterdam were mostly mixed.

·        
Offshore values this morning were leading CBOT soybean oil about 180 points lower and meal $0.80 lower. 

·        
Conab is due out February 10 for Brazilian supply and we look for them to be at the top end of a wide range of Brazilian soybean crop estimates.

·        
Reuters noted two more consultants lowered their Brazil soybean production estimates: 

-Cogo
125 million tons, down from a previous forecast of 131 million tons and 14.2% below its initial projection for this season.

-Datagro
130 million tons, versus 142.05 million in its December projection and 144.06 million tons initially forecast.

 

Export
Developments

• Results
  awaited: 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 lower from technical selling, slowing global import demand and favorable global weather for major producing countries.

·        
The higher USD and selling in outside related markets are also weighing on US wheat futures.

·        
Global cash prices for export are starting to ease and that could attract business over the next week.

·        
EU wheat futures are trading around 3.00 euros lower at 261.25 euros per ton, near a 3-week low.

·        
The FAO food price index averaged 135.7 points last month against 134.1 in December.

·        
Ukraine AgMin: 2021-22 grain exports expected at 65.5 MMT, up from 65.2 previously.

 

Export
Developments.

·        
The Philippines seek feed wheat from Australia and soybean meal from Argentina on February 11. Amounts are unknown.

·        
Bangladesh seeks 50,000 tons of wheat set to close February 14.

·        
Jordan seeks 120,000 tons of feed barley on February 8.

• Results
  awaited: 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. 
  

·        
Japan bought 53,957 tons of wheat from Canada and Australia.  Original details as follows: 

 

Rice/Other

·        
None reported

 

USDA
Export Sales

This summary is based on reports from exporters for the period January 21-27, 2022.

Wheat:  Net
sales of 57,500 metric tons (MT) for 2021/2022 were down 92 percent from the previous week and 83 percent from the prior 4-week average.  Increases primarily for Colombia (52,800 MT, including 52,600 MT switched from unknown destinations), Nigeria (52,000
MT), Haiti (27,000 MT switched from unknown destinations), Nicaragua (21,000 MT), and the Dominican Republic (17,900 MT), were offset by reductions for unknown destinations (75,000 MT), the Philippines (46,900 MT), and Mexico (21,000 MT).  Net sales of 103,500
MT for 2022/2023 were reported for the Philippines (50,000 MT), Mexico (38,500 MT), and unknown destinations (15,000 MT).  Exports of 383,600 MT were up 6 percent from the previous week and 26 percent from the prior 4-week average.  The destinations were primarily
to Japan (119,500 MT), Colombia (65,800 MT), Thailand (55,400 MT), Mexico (47,200 MT), and the Philippines (29,700 MT).

Corn:  Net sales of 1,175,200 MT for 2021/2022 were down 16 percent from the previous week, but up 47 percent
from the prior 4-week average.  Increases were primarily for Japan (475,300 MT, including 190,600 MT switched from unknown destinations and decreases of 129,800 MT), Mexico (210,100 MT, including decreases of 2,200 MT), Colombia (136,100 MT, including 50,000
MT switched from unknown destinations and decreases of 35,000 MT), Guatemala (120,700 MT, including decreases of 3,600 MT), and Canada (55,600 MT, including decreases of 400 MT).  Exports of 1,166,600 MT were down 19 percent from the previous week and 1 percent
from the prior 4-week average.  The destinations were primarily to Mexico (346,200 MT), Japan (246,800 MT), China (205,900 MT), Colombia (124,400 MT), and Canada (122,900 MT). 

Optional Origin Sales:  For 2021/2022, decreases totaling 1,500 MT were for Italy.  The
current outstanding balance of 340,800 MT is for unknown destinations (235,000 MT), South Korea (65,000 MT), Italy (31,800 MT), and Saudi Arabia (9,000 MT).  For 2022/2023, new optional origin sales of 1,500 MT were for Italy.  The current outstanding balance
of 1,500 MT is for Italy.

Barley:  No net sales were reported for the week.  Exports of 900 MT were unchanged from the previous week,
but up noticeably from the prior 4-week average.  The destination was to Japan.

 Sorghum:  Net
sales of 81,100 MT for 2021/2022 resulting in increases for China (141,100 MT, including 123,000 MT switched from unknown destinations and decreases of 64,900 MT), were offset by reductions for unknown destinations (60,000 MT).  Exports of 123,200 MT were
up 67 percent from the previous week and 16 percent from the prior 4-week average.  The destination was primarily to China (122,600 MT).

Rice:  Net sales of 157,200 MT for 2021/2022–a marketing-year high–were up noticeably from the previous
week and from the prior 4-week average.  Increases were primarily for Japan (49,000 MT), Mexico (45,000 MT), Nicaragua (30,000 MT), South Korea (18,100 MT), and the United Kingdom (10,000 MT).  Exports of 67,700 MT were up 8 percent from the previous week
and 74 percent from the prior 4-week average.  The destinations were primarily to Mexico (35,100 MT), Haiti (15,300 MT), Japan (13,400 MT), Canada (2,600 MT), and Jordan (200 MT).  

Exports for Own Account: For 2021/2022, the current exports for own account outstanding balance is 100 MT,
all Canada.

Soybeans:  Net sales of 1,095,500 MT for 2021/2022 were up 7 percent from the previous week and 56 percent
from the prior 4-week average.  Increases primarily for Mexico (356,600 MT, including decreases of 44,500 MT), Egypt (135,000 MT), the Netherlands (132,000 MT, including 120,000 MT switched from unknown destinations), unknown destinations (90,600 MT), and
Japan (88,000 MT, including 10,000 MT switched from unknown destinations and decreases of 2,400 MT), were offset by reductions for Singapore (66,000 MT) and China (28,600 MT).  Net sales of 881,800 MT for 2022/2023 were reported for China (660,000 MT), unknown
destinations (132,000 MT), Bangladesh (55,000 MT), Mexico (34,000 MT), and Canada (800 MT).  Exports of 1,328,900 MT were down 17 percent from the previous week and 14 percent from the prior 4-week average.  The destinations were primarily to China (723,400
MT), the Netherlands (132,000 MT), Taiwan (91,300 MT), Indonesia (82,100 MT), and Mexico (79,000 MT). 

Export for Own Account: For 2021/2022, the current exports for own account outstanding balance is 3,000
MT, all Canada.

Soybean Cake and Meal:  Net sales of 605,500 MT for 2021/2022–a marketing-year high–were up 83 percent
from the previous week and up noticeably from the prior 4-week average.  Increases primarily for Colombia (174,400 MT, including decreases of 400 MT), the Philippines (138,700 MT), Ireland (80,400 MT, including 24,000 MT switched from unknown destinations),
Guatemala (58,100 MT), and Mexico (36,300 MT, including decreases of 7,200 MT), were offset by reductions primarily for unknown destinations (39,700 MT).  Net sales reductions of 1,300 MT for 2022/2023 were reported for Canada (700 MT) and  Japan (600 MT).  Exports
of 280,200 MT were down 14 percent from the previous week, but up 10 percent from the prior 4-week average.  The destinations were primarily to the Philippines (115,100 MT), Mexico (50,000 MT), Ireland (27,800 MT), Colombia (16,500 MT), and Canada (16,300
MT). 

Optional Origin Sales:  For 2021/2022, the current outstanding balance of 50,000 MT is for Venezuela.  

Soybean Oil:  Net sales of 4,100 MT for 2021/2022 were down 66 percent from the previous week and 61 percent
from the prior 4-week average.  Increases reported for Canada (3,700 MT) and the Dominican Republic (400 MT), were offset by reductions for Colombia (100 MT).  Exports of 1,800 MT were down 96 percent from the previous week and 95 percent from the prior 4-week
average.  The destinations were to Mexico (1,200 MT) and Canada (600 MT).

Cotton:  Net sales of 332,100
RB for 2021/2022 were down 15 percent from the previous week, but up 10 percent from the prior 4-week average.  Increases primarily for China (90,200 RB, including decreases of 9,100 RB), Vietnam (58,700 RB, including 400 RB switched from Japan and decreases
of 700 RB), India (44,100 RB, including 5,200 RB switched from Turkey), Mexico (34,900 RB), and Pakistan (34,900 RB, including 2,800 RB switched from Turkey), were offset by reductions for Japan (700 RB).  Net sales of 315,100 RB for 2022/2023, primarily for
Bangladesh (105,600 RB), China (61,600 RB), Mexico (52,000 RB), Indonesia (37,000 RB), and Pakistan (24,200 RB), were offset by reductions for Honduras (1,100 RB).  Exports of 302,100 RB–a marketing-year high–were up 53 percent from the previous week and
81 percent from the prior 4-week average.  The destinations were primarily to China (132,000 RB), Pakistan (44,000 RB), Vietnam (30,600 RB), Turkey (29,300 RB), and Mexico (15,600 RB).  Net sales of Pima totaling 7,900 RB were up noticeably from the previous
week and from the prior 4-week average.  Increases primarily for China (2,500 RB), Vietnam (1,800 RB), India (1,700 RB), Greece (1,300 RB), and Turkey (600 RB), were offset by reductions for Italy (700 RB).  Net sales of 3,200 RB for 2022/2023 were reported
for Egypt (2,200 RB) and Italy (1,000 RB).  Exports of 14,000 RB–a marketing-year high–were up noticeably from the previous week and up 98 percent from the prior 4-week average.  The destinations were primarily to India (4,500 RB), Vietnam (3,300 RB), China
(3,100 RB), Egypt (1,300 RB), and Pakistan (900 RB). 

Optional Origin Sales:  For 2021/2022, the current outstanding balance of 61,600 RB is for Vietnam (52,800
RB) and Pakistan (8,800 RB). 

Exports for Own Account:  For 2021/2022, the current exports for own account outstanding balance is 100
RB, all Vietnam.

Hides and Skins:  Net
sales of 556,600 pieces for 2022 were primarily for China (338,000 whole cattle hides, including decreases of 8,400 pieces), Thailand (67,800 whole cattle hides, including decreases of 1,400 pieces), South Korea (56,900 whole cattle hides, including decreases
of 2,200 pieces), Mexico (54,500 whole cattle hides, including decreases of 1,000 pieces), and Taiwan (12,600 whole cattle hides, including decreases of 1,100 pieces).  In addition, total net sales of 2,600 kip skins were reported for China.  Exports of 357,100
pieces were primarily to China (239,800 pieces), South Korea (32,300 pieces), Mexico (31,600 pieces), Thailand (28,300 pieces), and Taiwan (13,800 pieces).   

Net sales of 98,800 wet blues for 2022, primarily for Vietnam (42,200 unsplit and 1,300 grain splits, including decreases of 100 unsplit), China (28,000 unsplit), Italy
(9,300 grain splits and 2,300 unsplit, including decreases of 100 unsplit and 100 grain splits), Thailand (7,500 unsplit, including decreases of 500 unsplit), and Portugal (6,400 grain splits), were offset by reductions for Hong Kong (200 unsplit).  Exports
of 171,000 wet blues were primarily to China (58,400 unsplit), Italy 36,100 unsplit and 12,700 grain splits), Vietnam (42,600 unsplit), Thailand (10,700 unsplit), and Mexico (3,900 grain splits and 900 unsplit).  Net sales of 716,900 splits for 2022, reported
for Vietnam (728,500 pounds), South Korea (5,700 pounds, including decreases of 4,200 pounds), and Mexico (4,500 pounds), were offset by reductions for China (21,800 pounds).  Exports of 936,300 pounds were to Vietnam (457,900 pounds), China (391,900 pounds),
and Mexico (86,500 pounds).

Beef:  Net sales of 20,100 MT for 2022, primarily for Japan (11,800 MT, including decreases of 600 MT),
South Korea (3,500 MT, including decreases of 800 MT), Taiwan (1,600 MT, including decreases of 100 MT), China (900 MT, including decreases of 200 MT), and Mexico (800 MT), were offset by reductions for Italy (100 MT) and Bahamas (100 MT).  Exports of 16,900
MT were primarily to South Korea (5,900 MT), Japan (4,700 MT), China (1,900 MT), Taiwan (1,200 MT), and Mexico (1,100 MT). 

Pork:  Net sales of 30,400 MT for 2022, primarily for Mexico (20,700 MT, including decreases of 300 MT),
Japan (6,000 MT, including decreases of 700 MT), Canada (1,500 MT, including decreases of 400 MT), Colombia (900 MT, including decreases of 100 MT), and Honduras (400 MT, including 100 MT switched from Guatemala), were offset by reductions for China (500 MT).  Exports
of 32,400 MT were primarily to Mexico (16,000 MT), Japan (6,300 MT), China (3,100 MT), South Korea (2,600 MT), and Canada (1,800 MT).

 

U.S. EXPORT SALES FOR WEEK ENDING  1/27/2022

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	71.7	2,036.6	1,358.1	200.9	4,815.0	6,186.8	0.0	39.5
SRW	-17.1	710.6	445.2	16.2	1,848.1	1,207.6	38.5	109.0
HRS	5.5	1,266.7	2,019.1	100.5	3,366.3	4,638.9	25.0	56.0
WHITE	-2.7	751.0	2,415.2	65.9	2,300.2	3,485.1	25.0	67.0
DURUM	0.0	54.6	167.2	0.0	113.1	490.6	15.0	48.0
TOTAL	57.5	4,819.5	6,404.7	383.6	12,442.8	16,008.9	103.5	319.5
BARLEY	0.0	17.1	11.8	0.9	13.4	18.7	0.0	0.0
CORN	1,175.2	25,557.6	36,089.8	1,166.6	19,565.7	20,016.7	0.0	1,452.0
SORGHUM	81.1	4,130.0	3,112.6	123.2	2,086.0	2,708.4	0.0	53.0
SOYBEANS	1,095.5	8,868.1	11,131.8	1,328.9	36,361.4	47,391.2	881.8	2,078.7
SOY MEAL	605.5	3,263.6	2,947.6	280.2	4,217.5	4,251.7	-1.3	136.9
SOY OIL	4.1	178.5	243.2	1.8	306.3	340.9	0.0	0.2
RICE
L G RGH	76.9	215.4	315.5	33.7	671.5	841.6	0.0	0.0
M S RGH	0.0	9.9	12.3	0.5	3.8	16.7	0.0	0.0
L G BRN	10.2	20.0	11.4	0.4	28.4	23.3	0.0	0.0
M&S BR	0.1	68.3	53.1	0.1	17.0	53.2	0.0	0.0
L G MLD	1.3	76.9	87.7	17.4	435.4	331.9	0.0	0.0
M S MLD	68.7	155.1	204.7	15.6	213.6	261.8	0.0	0.0
TOTAL	157.2	545.6	684.6	67.7	1,369.8	1,528.5	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	332.1	8,087.6	6,051.4	302.1	3,903.1	6,714.6	315.1	1,713.7
PIMA	7.9	214.8	270.6	14.0	179.8	393.9	3.2	8.5