FI Morning Grain Comments 02/11/22

PDF attached

 

Good
morning. 

 

Private
exporters reported the following activity:

-108,000
metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-128,000
metric tons of corn for delivery to Japan during the 2021/2022 marketing year

-30,000
metric tons of soybean oil for delivery to unknown destinations during the 2022/2023 marketing year

 

The
soybean complex and grains extended gains today on SA crop production concerns. The USD was up about 23 points and WTI crude nearly $1.00 higher at the time this was written. US equities turned higher after trading lower overnight. Today is the final day of
the Goldman roll.

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR February 10, 2022

• A
  little divergence in the forecast models in southern Brazil and Uruguay was noted today with the European model wetter for that region this weekend than the GFS was.
  
• The
  European model has been performing better than the GFS. 
• The
  coming ten days precipitation are still too light for a boost in soil moisture for central and northern Santa Fe, southeastern Santiago del Estero, Chaco, southern Corrientes and parts of Entre Rios in Argentina and the same is true for western Rio Grande
  do Sul and far southern Paraguay.
• Net
  drying is also expected through early next week in Parana and Mato Grosso do Sul, Brazil, but that should be followed by some timely moisture later next week.
  
• Yield
  pressure remains through the week next week for Argentina, far southern Paraguay and western Rio Grande do Sul while most other areas should do alright even if rainfall is limited.
  
• The
  best soil and crop conditions in Argentina will be from Buenos Aires into Cordoba and southern Santa Fe.
  
• Most
  of Brazil’s weather is expected to be favorable outside of western Rio Grande do Sul, although frequent rain in parts of the north will present a little disruption to farming activity.
  
• In
  the U.S., a major winter storm is expected during mid- to late-week next week that could produce impressive snow and rain across the Midwest and eastern hard red winter wheat areas. Flooding and severe thunderstorms will be possible in the southeastern Plains,
  Delta and Tennessee River Basin.
• The
  high Plains of West Texas and areas north into western Kansas and eastern Colorado will get “some” moisture, but not enough to change drought status.
  
• California
  will stay dry biased
• Northwestern
  Africa and Spain are still advertised to receive limited amounts of moisture for the next ten days.
  
• Kazakhstan
  and southern Russia’s New Lands are getting some badly needed snow to bolster topsoil moisture when it melts in March and April.
  
• Southern
  China remains wet and interior eastern Australia will be dry biased for a while. 

Source:
World Weather Inc.

 

 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Friday,
Feb. 11:

• 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
• March
  ICE white sugar contract expiry
• HOLIDAY:
  Japan

Monday,
Feb. 14:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• New
  Zealand Food Prices
• Ivory
  Coast cocoa arrivals

Tuesday,
Feb. 15:

• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  Feb. 1-15 palm oil exports
• Malaysia
  crude palm oil export tax for March (tentative)
• New
  Zealand global dairy trade auction

Wednesday,
Feb. 16:

• EIA
  weekly U.S. ethanol inventories, production
• FranceAgriMer
  report; monthly grains outlook
• HOLIDAY:
  Thailand

Thursday,
Feb. 17:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• International
  Grains Council monthly report

Friday,
Feb. 18:

• 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
• FranceAgriMer
  weekly crop condition report

Source:
Bloomberg and FI

 

 

 

 

 

Macros

 

Corn

·        
March corn is trading higher on ongoing weather issues for Southern Brazil and Argentina. Higher USD trimmed some of the overnight gains.

·        
Final day of the Goldman roll.

·        
Yesterday Argentina’s BA Exchange reduced its corn harvest to 51 million tons from 57 million tons last week.  Drought was cited as the main driver for the reduction. 

·        
China’s hog prices fell sharply by an average 7.3% between Monday and Thursday to 12.7 yuan ($1.95) a kilogram, according to data from Shanghai JC Consulting Co Ltd. per a Reuters article.

·        
China’s sow herd fell 2.9% by the end of the fourth quarter of last year from the previous quarter to 43.29 million head, 4% greater than the previous year.  China’s pig herd at the end of December was up 10.5% from the previous
year, at 449.22 million head, and 2.6% higher on the quarter. (Reuters)

·        
China’s AgMin looks for the countries meat production to increase 2.8% annually to 89 million tons by 2025, from 77.5 million tons produced in 2020.  Pork production would remain stable at around 55 million tons.  (Reuters)

 

 

Export
developments.

·        
Private exporters reported the following activity:

               
-128,000 metric tons of corn for delivery to Japan during the 2021/2022 marketing year

 

U
of I: Ethanol Production Profits in 2021: What a Ride!

Irwin,
S. “Ethanol Production Profits in 2021: What a Ride!.” farmdoc daily (12):18, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, February 10, 2022.

https://farmdocdaily.illinois.edu/2022/02/ethanol-production-profits-in-2021-what-a-ride.html

 

 

Soybeans

·        
The US soybean complex extended gains from yesterday’s close from SA production concerns and  rumors China bought additional soybeans. Soybean oil is gaining over meal. Crush is up 6.50 basis March to $1.4075.

·        
Warmer and dry conditions will occur for southern Brazil and Argentina over the next week. 

·        
Parts of Indonesia’s Sumatra and Kalimantan will see heavy rain through the end of today.

·        
Malaysia palm futures were 38 MYR higher and cash up $15/ton at $1415.00/ton. For the week it closed slightly lower. 

·        
Note China soybean meal futures are trading near their highest level since 2012.  China returns on hog production are poor with the high meal and corn prices. 

·        
China ag futures were little changed for soybeans and meal and about 0.5% lower for SBO and 0.6% lower for palm.

·        
Offshore values this morning was leading CBOT soybean oil about 17 points lower (63 higher for the week to date) and meal $1.70 short ton higher ($6.10 higher for the week). 

·        
Rotterdam meal values were about $5-$15/ton higher from this time yesterday morning.

 

Export
Developments

• Iran
  passed on 60,000 tons of soybean meal and 60,000 tons of barley due to high prices. Shipment was sought between Feb. 15 and March 15.
  
• Private
  exporters reported the following activity:

               
-108,000 metric tons of soybeans for delivery to China during the 2022/2023 marketing year

-30,000
metric tons of soybean oil for delivery to unknown destinations during the 2022/2023 marketing year

 

 

Wheat

·        
US wheat futures are higher this morning on strong EU wheat prices.

·        
Next week a major US winter storm is expected during mid to late week that could produce snow and rain across the Midwest and eastern hard red winter wheat areas.

·        
EU wheat futures are trading up 5.75 euros at 267.25 euros per ton at the time this was written.

·        
The increasing tensions between Ukraine and Russia weighed on the market as the military presence in the Black Sea has nearly halted private vessel traffic.  

·        
IKAR estimated Russia’s 2022 grain crop at 127 million tons, including 82.5 million tons of wheat, and grain exports in 2021-22 season at 46 million tons.

·        
Russia’s wheat export duty will fall as of February 16 from $93.20 to $92.80 per ton, fifth weekly decline. Barley will fall from $73.30 to $74.10 per ton, and corn will be unchanged at $52.70 per ton.

·        
Russia plans to buy 1.2 million tons of intervention grain this year.

 

Export
Developments.

·        
Iran passed on 60,000 tons of soybean meal and 60,000 tons of barley due to high prices.
Shipment
was sought between Feb. 15 and March 15.

·        
Results awaited: The Philippines seeks 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.

·        
Syria seeks 200,000 tons of wheat on February 14, open for 15 days.

·        
Japan seeks 80,000 tons of feed wheat and 100,000 tons of barley on Feb 16 for arrival by July 28.

·        
Jordan seeks 120,000 tons of feed barley on February 22 for late July through FH September shipment. 

 

Rice/Other

·        
None reported