FI Morning Grain Comments 03/01/22

PDF attached

 

Good
morning.

 

Private
exporters reported sales of 264,000 metric tons of soybeans for delivery to China during the 2022/2023 marketing year.

 

Another
strong day on follow through buying as tensions increase for Ukraine/Russia. Corn touched limit higher. Front month soybean oil is again gaining on back months.  WTI crude oil is up more than $100/barrel.  With no end in sight for this invasion traders are
worried it may take longer than originally thought to open Black Sea shipping terminals.  No expanded limits in CBOT contracts
https://www.cmegroup.com/trading/price-limits.html

 

 

 

Weather
– rain to develop back end of 7-day outlook

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR MARCH 1, 2022

• Unusually
  warm to hot temperatures will impact U.S. hard red winter wheat areas and the southern U.S. Plains through Thursday before slowly breaking down from northwest to southeast Friday and Saturday.
  
• The
  heat will reduce winter hardiness, stress some livestock and raise evaporation.
  
• Rain
  will be needed soon to support crops as they break dormancy, but producers would prefer that temperatures cool down for a while to prevent the crop from advancing too quickly this year before the frost and freeze season has ended.
  
• Excessive
  heat and dry weather is also expected in the southeastern corner of the U.S. where accelerated drying and concern over spring planting moisture is expected.
  
• A
  storm system this weekend into early next week will not bring any moisture to central or southwestern hard red winter wheat areas, but some moisture is expected in the northwest and southeast parts of the region.
  
• The
  same storm will produce more snow in the northern Plains and upper Midwest.
  
• Canada’s
  Southwestern Prairies and the northwestern U.S. Plains may get some snow late this week, but no drought busting conditions are likely because of frost in the ground preventing any moisture penetration.
  
• No
  changes were noted in South America overnight.
• All
  of Argentina will get rain at one time or another in the next ten days and the same is true for southern Brazil, Paraguay and Uruguay.
  
• Restricted
  rain in Minas Gerais and Sao Paulo will be good for citrus, coffee and sugarcane for a while, but rain may eventually be needed. 
  
• Mato
  Grosso will continue to receive timely rainfall.
• There
  is still no threatening weather in Europe or Russia and additional moisture is still slated for North Africa and a part of Spain for a little while.
  
• More
  rain will reach eastern Australia cotton and sorghum areas later this week and into next week that might have some impact on open boll cotton quality. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Tuesday,
March 1:

• EU
  weekly grain, oilseed import and export data
• USDA
  soybean crush, corn for ethanol, DDGS output, 3pm
• U.S.
  Purdue Agriculture Sentiment
• Australia
  Commodity Index
• New
  Zealand dairy trade auction
• EARNINGS:
  Golden Agri Resources
• HOLIDAY:
  Brazil, Argentina, India, South Korea

Wednesday,
March 2:

• EIA
  weekly U.S. ethanol inventories, production, 11am
• Winter
  Grain conference in Siberia

Thursday,
March 3:

• FAO
  Food Price Index
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• New
  Zealand Commodity Price
• HOLIDAY:
  Indonesia

Friday,
March 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
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

Macros

 

Corn

·        
CBOT corn futures
traded limit up this morning on follow through buying, but the back months were unable to sustain the higher move in turn weakening the front months. 

·        
WTI and Brent crude futures are over $100/barrel.  Equities hit a low for the session around 9 am CT.

·        
US December ethanol production came in near our expectations.

 

Export
developments.

• Taiwan
  seeks 65,000 tons of corn, optional origin, on Thursday, for shipment around May.
  

 

 

 

 

 

Soybeans

·        
CBOT May soybeans are
higher in part to new highs in the May soybean oil market (palm was sharply higher Tuesday).  Spreads are further widening in SBO.  EIA SBO for biofuel data for month of December was very good. 

·        
Rain is still needed in northern Argentina and relief will occur this week. Brazil rainfall will be restricted this week in center south and northeastern parts of the nation of 0.20 to 0.75 inch. Brazil rain is expected in far
southern parts of the nation this week with 1.50 to more than 4.00 inches by Saturday.

·        
USDA NASS will release US January crush later today. A Reuters poll looks for 193.7 million bushels (193.0-194.3 range), down from 198.2 for December and 196.5 million January 2021. End of January stocks are projected at 2.459
billion pounds (2.425-2.498 billion range), down from 2.466 billion at the end of December and up from 2.306 billion at the end of January 2021. 

·        
(Interfax) – The Russian government has increased the export duty on sunflower oil to $260.1 per ton as of March 1 from $251.4 per ton in February, the Agriculture Ministry said in a statement.  The export duty was $280.8 per
ton in January 2022, $276.7 per ton in December 2021, $194.5 per ton in November, $227.2 per ton in October, and $169.9 per ton in September.  The new duty has been calculated based on an indicative price of $1,371 per ton in March against $1,359.2 per ton
in February, $1,401.2 per ton in January, $1,395.4 per ton in December, $1,277.9 per ton in November, $1,324.7 per ton in October, and $1,242.8 per ton in September.

·        
May Malaysian palm oil settled up 463 ringgit to 6,762 ringgit.  Cash palm was up $120/ton to $1.725/ton.

·        
From this time yesterday morning Rotterdam meal was mostly 5 euros higher and vegetable oils 45-70 euros higher.

·        
China May soybeans were up 1.2%, meal up 1.6%, soybean oil up 3.9% and palm 4.7% higher. 

·        
Offshore values are leading SBO 39 points lower and meal $0.80 short ton higher.

·        
EIA reported an exceptionally large soybean oil for biofuel use for the month of December of 937 million pounds, well up from 818 million during November and 744 million December 2020.  Corn oil and grease use was also high during
December (tables below).

·        
We raised our soybean oil for US biofuel use from 11.000 billion pounds to 11.025 billion for 2021-22.

 

Export
Developments

• Private
  exporters reported the following activity:

sales
of 264,000 metric tons of soybeans for delivery to China

 

 

 

 

 

 

Wheat

·        
US wheat futures are higher on fund buying and concerns that the Black Sea wheat shipping ports will not open up anytime soon. 

·        
Chicago SRW wheat is back near a 14-year high. 

·        
Gapping higher, May EU wheat futures were up 21.00 euros at 336.50 euros at the time this was written.

·        
EU soft wheat imports reached 17.9 MMT this season, below 18.2 million for the same period year earlier. 

·        
US hard red winter wheat areas will turn warmer this week. Little precipitation will occur over the next week in the central or southwestern Plains. 

·        
(Reuters) – Russian Union of Grain Exporters has proposed to the government small changes to the formulas which Russia uses to calculate its grain export taxes, the Interfax news agency reported on Tuesday.   The Union proposes
setting the wheat export tax at $90 per ton if the indicative price is above $250 per ton, Interfax said, citing the union’s letter to the government. Russia’s wheat export tax is set at $88.2 per ton for March 2-8 with the indicative price of $326.1.

 

Export
Developments.

·        
Jordan passed on 120,000 tons of feed barley.

·        
Tunisia seeks 75,000 tons of durum wheat today for April and/or March shipment. 

·        
Japan seeks 83,136 tons of food wheat from the US this week for loading between April 21 and May 20, 2022.

·        
Algeria seeks 50,000 tons of durum wheat on Wednesday, open until Thursday, for April shipment. 

·        
Turkey seeks 435,000 tons of milling wheat on March 2 for March-April shipment. 

·        
Jordan seeks 120,000 tons of wheat on March 2.

 

Rice/Other

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