FI Morning Grain Comments 02/18/22

PDF attached

 

Good
morning. 

 

Private
exporters reported sales of 198,000 metric tons of soybeans for delivery to unknown destinations. Of the total, 66,000 metric tons is for delivery during the 2021/2022 marketing year and 132,000 metric tons is for delivery during the 2022/2023 marketing year.

 

Soybeans
extended gains on SA dryness concerns. Rains is forecast to show up late this month for Argentina and southern Brazil, but models vary for intensity.  Soybean products are mixed. Grains are lower in a risk off overnight trade. USD is 15 points higher and WTI
down $2.06 at the time this was written.

 

 

 

Weather

Argentina’s
central and southern areas may still see good rain during the 23-25 February period, before getting rain bias north during the 25-26 period.  Southern Brazil will also see rain later this month.  Northern and central Brazil weather will improve with less precipitation
than that of this week. 23-25 period below.

 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR February 18, 2022

• The
  European model run was wetter in Argentina during the second week of the outlook today.
  
• Rain
  is advertised Wednesday, Thursday and again Feb. 27 with sufficient amounts to improve soil moisture in at least a part of the driest region.
  
• Additional
  adjustments to the second week South America outlook are anticipated over the weekend with the bottom line allowing some rain into central and southern Argentina periodically while the north stays dry biased.
  
• Paraguay
  and southwestern Brazil will also receive less than usual rainfall during the coming ten days to two weeks, although some showers will occur periodically.
  
• The
  resulting rain amounts will help slow crop deterioration, but it may not be enough to turn around crop conditions that may still deteriorate for a while especially into early next week.
  
• In
  the U.S., concern is rising over too much moisture in the spring for areas from the lower Ohio River Valley southward to the Tennessee River Basin and northern Delta.
  
• Rain
  in those areas Thursday has the ground saturated and poised for a more significant bout of runoff and flooding as greater rain falls next week from Tuesday night into Friday.
  
• Rainfall
  of 2.00 to 5.00 inches will be sufficient to cause flooding, although it may not be severe quite yet.
  
• There
  will be more rain in March impacting these same areas.
• U.S.
  hard red winter wheat areas will get a little moisture periodically over the next couple of weeks but resulting amounts will still be too light for a serious change in soil moisture throughout the high Plains.
  
• Not
  much changed in the remainder of the world
• There
  is still some interest over west-central Africa rainfall for coffee and cocoa, but World Weather, Inc. believes seasonal rainfall will increase gradually during March and that delayed showers in February will not have much impact on the bottom line.
  
• Most
  of  Europe and Asia will not encounter any threatening cold weather to winter crops over the next ten days
• Eastern
  Australia is still expecting some beneficial rainfall next week
• South
  Africa will dry down next week
• A
  few showers in the Iberian Peninsula and northwestern Africa over the next ten days will have little influence on the status of dryness in the region.

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

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

Monday,
Feb. 21:

• Monthly
  MARS bulletin on crop conditions in Europe
• USDA
  export inspections – corn, soybeans, wheat, 11am
• Malaysia’s
  Feb. 1-20 palm oil export data
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  U.S., Canada

Tuesday,
Feb. 22:

• EU
  weekly grain, oilseed import and export data
• Brazil’s
  Unica may release cane crush and sugar output data during the week (tentative)
• U.S.
  cold storage data for beef, pork and poultry, 3pm
• EARNINGS:
  Wilmar International

Wednesday,
Feb. 23:

• USDA
  total milk production, 3pm
• EARNINGS:
  IOI Corp.
• HOLIDAY:
  Japan, Russia

Thursday,
Feb. 24:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  corn, cotton, soybean and wheat acreage outlook, 8:30am
• EIA
  weekly U.S. ethanol inventories, production, 11am
• U.S.
  red meat production, 3pm

Friday,
Feb. 25:

• 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
• USDA
  corn, cotton, soybean and wheat end-stockpile outlook, 8:30am
• FranceAgriMer
  weekly update on crop conditions
• Malaysia’s
  Feb. 1-25 palm oil exports
• U.S.
  cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

 

Macros

Canadian
Retail Sales (M/M) Dec: -1.8% (est -2.1%; prev 0.7%)

–
Retail Sales Ex Auto (M/M) Dec: -2.5% (est -1.5%; prev 1.1%)

Canadian
Retail Sales – Retail sales fell 1.8% to $57.0 billion in December. Lower sales at clothing and clothing accessories stores (-9.5%) and furniture and home furnishings stores (-11.3%) led the decline, which coincided with concerns over the spread of the COVID-19
Omicron variant in December.

 

 

Corn

·        
CBOT corn is unchanged to moderately lower on lack of fresh news and uncertainty over the Ukraine/Russia situation.  Ukraine is a big exporter of corn, and a disruption could affect global trade flows.

·        
March options expire today. 

·        
The US generated 1.21 billion ethanol D6 blending credits in January, down from 1.30 billion during December.  Year earlier 1.077 billion were generated. 

 

Export
developments.

• Iran’s
  SLAL bought about 120,000 tons of feed barley, 120,000 tons of feed corn and 180,000 tons of soybean meal. Prices were not available.  Shipment for all the grains and soymeal was sought in February and March.  On Feb. 11 they passed on 60,000 tons of feed
  barley and 60,000 tons of soymeal.

 

Soybeans

·        
Soybeans are moderately higher on ongoing SA weather concerns. End of week profit taking, and lower soybean oil is capping gains. WTI is again sharply lower and weighing on SBO. Meal is mixed.

·        
Reuters noted overnight that India contracted to import a record 100,000 tons of soyoil from the United States.  Nearly 100,000 tons has been recorded for accumulated exports, not including unknown, per USDA export sales.

·        
No soybean oil was reported under the 24-hour reporting system for Friday.  198,000 tons of soybeans were sold to unknown, spit crop years. 

·        
March options expire today. 

·        
The US generated 355 million biodiesel D4 blending credits in January, down from 584 million during December.  For January 2021, EIA reported 300.2 million RINs were generated.  January 2022 is on the low side, in our opinion. 
We will have to wait a couple months to verify and see if renewable biodiesel contributed to an increase in production from January 2021. 

·        
Rotterdam meal was mixed and vegetable oils unchanged to 25 euros lower from this time yesterday.

·        
May Malaysian palm futures were up 32 MYR overnight to 5,539 and cash up $12.50 to $1,405.00/ton. Futures still ended lower for the third consecutive week.

·        
China soybeans were down 0.4%, meal up 1.7% and vegetable oils up 1.0-2.1%. 

·        
Offshore values are leading SBO 14 points higher (103 lower for the week to date) and meal $2.50 short ton higher ($3.10 higher for the week).

 

Export
Developments

• Private
  exporters reported sales of 198,000 metric tons of soybeans for delivery to unknown destinations. Of the total, 66,000 metric tons is for delivery during the 2021/2022 marketing year and 132,000 metric tons is for delivery during the 2022/2023 marketing year.
• Iran’s
  SLAL bought about 120,000 tons of feed barley, 120,000 tons of feed corn and 180,000 tons of soybean meal. Prices were not available.  Shipment for all the grains and soymeal was sought in February and March.  On Feb. 11 they passed on 60,000 tons of feed
  barley and 60,000 tons of soymeal.
• Turkey
  seeks 6,000 tons of sunflower oil on February 23 for shipment between March 2 and March 25.
  

 

 

India
Ministry of Agriculture and Farmers Welfare – 2021-22 oilseeds

 

Wheat

·        
US wheat is higher on Black Sea shipping concerns as Ukraine/Russian tensions continue to spook traders.

·        
May EU wheat futures that were trading up 2.25 euros at 371 euros per ton at the time this was written.

 

Export
Developments.

·        
Taiwan bought 54,920 tons of US wheat for April 4-18 shipment if off the PNW.

• 32,360
  tons of U.S. dark northern spring wheat of 14.5% protein content bought at $409.69 a ton FOB
  
• 15,115
  tons of hard red winter wheat of 12.5% protein was bought at $396.37 a ton FO
• 7,445
  tons of soft white wheat of 10.5% protein was bought at $406.29 a ton FOB.
  
• freight
  $52.79 per ton

·        
Yesterday Egypt bought 180,000 tons of Romanian wheat at $318/ton fob ($338.55 CIF) for shipment April 1–10. 

·        
Yesterday Algeria bought 700,000 tons of wheat at $346.50-$345.50/ton. They were in for optional origin for April shipment. They last bought wheat on Jan 26, paying around $375/ton.

·        
Turkey seeks 255,000 tons of feed barley on February 22. Shipment is sought for March 1-31.

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

·        
Jordan’s state grain buyer seeks 120,000 tons of milling wheat, optional origins, on Feb. 23, with shipment in 60,000 ton consignments, for July 16-31, Aug. 1-15, Aug. 16-31 and Sept. 1-15. They also seek 120,000 tons of feed
barley on Feb. 22.

 

Rice/Other

·        
South Korea seeks 72,200 tons rice from U.S. and Vietnam on Feb. 25.