FI Morning Grain Comments 11/11/21

PDF attached

 

Good
morning

 

Today
is a US holiday so export sales are delayed until Friday. USD is up 16 points and WTI crude 57 cents lower.  Other outside commodity markets are mixed after most appreciated yesterday on inflation fears.  US equities are pointing towards a higher open.  Soybean
complex is mixed with soybean oil lower. Corn and Chicago wheat are seeing a light reversal.  The second month rolling Paris wheat futures (March) price hit a fresh 13-year high.  We see no major weather issues over the short term for the US and SA although
some rain will fall across the Midwest crop areas that are expected to delay harvesting today through Sunday. 

 

Conab
updated their Brazil supply estimates and soybean and corn production came in 2.1 and 2.6 million tons below expectations, at 142 and 116.7 million tons, respectively.  Brazil corn production is still seen 30 million tons above last year and soybeans up nearly
5 million tons to a record.  Conab tends to be conservative on yield changes near the beginning of the crop season.  Most of the trade sees the Conab numbers too low.  Soybeans should end up near 145MMT in the end. 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 11, 2021

•  A
  flare up in rainfall occurred in Brazil’s center south crop region overnight producing some heavy rainfall and local flooding.
  
• Rain
  in southern parts of the nation, however, was more restricted and net drying resulted.
  
• Argentina
  experienced a little rain in Cordoba while other areas were dry.
• Timely
  rain is still advertised for much of South America during the next two weeks but be cautious there is a fair chance that southern Brazil and immediate neighboring areas will come up with limited rainfall that may eventually lead to some moisture shortages
  and crop stress a little later this summer.
• No
  changes were noted in the U.S. outlook overnight leaving hard red winter wheat areas dry or mostly dry for ten days and allowing precipitation to fall infrequently across the Midwest, Delta and southeastern states disrupting late season farming activity for
  brief periods of time. 
• Eastern
  Australia is still expected to dry out after Friday which will help save and protect the quality of unharvested wheat, barley and canola.
  
• Southern
  India is expecting more rain today and Friday as Tropical Cyclone 04B comes inland tonight.
  
• Europe
  weather will remain relatively tranquil and waves of snow will bury some of the winter crops in northern and central Russia during the next week to ten days.
  
• Some
  snow and rain could reach southern parts of Russia and Ukraine during mid- to late-week next week.
  
• Central
  Vietnam coastal areas are still expecting excessive rain from Friday through Tuesday resulting in serious flooding. 
• Overall,
  there is not much change overnight that will have a big influence on market mentality for grains, oilseeds, cotton, rice, sugarcane, coffee or cocoa crops.
  

 

Bloomberg
Ag Calendar

Thursday,
Nov. 11:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Brazil’s
  Conab releases data on yield, area and output of corn and soybeans (tentative)
• New
  Zealand Food Prices
• HOLIDAY:
  France

Friday,
Nov. 12:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• 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

·        
Corn futures are
reversing this morning in part to ta higher USD.  SK bought more corn but unlikely it originated from the US. 

• India
  aims to blend 20% ethanol by April 2023 with petrol and 20% ethanol with gasoline by 2025, ahead of their previous target. 
  

·        
US weekly ethanol dropped by 68,000 barrels per day to 1.039 million, lowest in a month, and steepest drop since 2/19/21.  This was unexpected as the trade looked for a 10,000-barrel decrease.  Midwest PADD2 production fell 69,000
barrels.  We did hear there was some power issued for at least one plant located in Illinois, but for US production to be down 68,000 for week ending 11/5 is unusual. Ethanol stocks increased 157,000 barrels to 20.286 million and stocks are now highest since
early September. 

 

Export
developments.

• South
  Korea’s FLC bought 65,000 tons of corn from South America or South Africa at an estimated $318.40 a ton c&f for arrival in South Korea around Feb. 20, 2022. Yesterday MFG bought 137,000 tons at $317.00 and $317.15 a ton. 
  
• Turkey
  seeks 325,000 tons of corn on November 15 for shipment sought between Dec. 20 and Jan. 20.

 

Soybeans

·        
CBOT soybean
complex is mixed with soybean oil trading lower.  Soybeans and meal are higher.  WTI crude is lower and USD is higher.  Traders are watching to see if USDA confirms the rumors China bought US soybeans on Wednesday. 

·        
Malaysian palm was down 39 ringgit and cash palm decreased $10/ton to $1247.50/ton. 

·        
China soybean futures were up 0.5%, meal 1.0% higher, SBO up 2.7%, and palm up 3.2%.

·        
Indonesia September palm oil exports reached 2.89 million tons (GAPKI), 4.7% higher than year ago and down from 4.62 million tons in August.  Indonesia produced 4.57 million tons of palm oil in September (4.62MMT August) and stocks
at the end of September were 3.65 million tons, up 6.4% from August. 

·        
Cargo surveyor SGS reported month to date November 10 Malaysian palm exports at 563,093 tons, 66,397 tons above the same period a month ago or up 13.4%, and 116,463 tons above the same period a year ago or up 26.1%. 

·        
Malaysia

·        
Rotterdam meal values were mixed and vegetable oils 4-20 euros higher. 

·        
Offshore values are leading soybean oil about 30 points lower and meal $1.00 short ton higher. 

·        
China crush margins on our analysis was last $2.58/bu (2.51 previous), compared to $2.30 at the end of last week and compares to $0.85 a year ago.

·        
China

 

Export
Developments

• South
  Korea is in for 115,000 tons of GMO-free soybeans on November 17 for arrival in South Korea in 2023. 
  

 

Wheat

·        
US wheat futures are mixed. MN is higher after Paris wheat rallied overnight.  December Paris wheat was up 2.75 euros by around 7:30 am CT at 297.50/ton, a new contract high. 

·        
News was light.  Look for the higher USD to limit gains. 

·        
Russia’s customs reported wheat exports total 23.9 million tons in the first nine months of 2021 from 24.7 million tons a year ago.

 

Export
Developments. 

·        
Bangladesh’s state grains buyer seeks 50,000 tons of milling wheat on November 22. 

·        
Jordan seeks 120,000 tons of feed barley on November 17. 

·        
Japan bought 157,987 tons of food wheat this week from the US, Canada, and Australia.  Original tender details below. Possible shipment combinations in 2022 are March 1-15, March 16-31, April 1-15 and April 16-30. 

·        
Japan’s AgMin in a SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival by February 24. 

·        
Results awaited: The UN is in for 110,000 tons of milling wheat for Ethiopia.  40,000 tons was for delivery between Dec. 20, 2021, and Jan. 5 2022, another 20,000 tons for delivery between Jan. 5–20, 2022, and 50,000 tons also
for delivery between Jan. 5–20, 2022. 

·        
Results awaited: Separate import tender.  Ethiopia seeks 300,000 tons of milling wheat on November 9.

·        
Ethiopia seeks 400,000 tons of wheat on November 30. 

 

Rice/Other

·        
None reported