FI Morning Grain Comments 11/15/21

PDF attached

 

Good
morning

 

The
US saw light snow/rain over the weekend across the upper US (bias Dakotas into MI) preventing late harvesting and winter wheat plantings.  Central and southern Great Plains were dry.  The US WCB will see restricted rainfall over the next couple of weeks while
the ECB and Delta will see some waves of precipitation.  Harvesting activity and fieldwork activity looks to be ok through the rest of the month.  Argentina saw rain over the weekend and the outlook calls for a few brief periods of showers during the rest
of the month.  Central Brazil saw rain over the weekend while the southern areas were mostly dry.  Brazil will be active over the next 10 days.  China is seeing winter grain planting delays. 

 

Soybean
meal is seeing follow through buying from short covering.  Soybean oil is lower and that is caused a two-sided trade in soybeans.  Corn is trading lower, in part to lower crude oil.  A lower USD and additional global import tender business is supporting US
wheat, although Paris wheat is selling off and that is limiting upside movement in US wheat.  NOPA and inspections will be out this morning.  CFTC COT will be released after the close. 

 

 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 15, 2021

• Australia
  wheat areas received additional rain in the southeast during the weekend and more rain is expected in South Australia and Victoria frequently in the coming week.
  
• New
  South Wales, Queensland and Western Australia will not see rain frequently enough to threaten winter crops.
• South
  America weather still looks well balanced over the next ten days bringing alternating periods of rain and sunshine to key grain, oilseed, rice, cotton, coffee, citrus and sugarcane areas.
• Harvesting
  in the Northern Hemisphere will continue to advance well enough around periods of rain to make progress and the same is true for winter crop planting.
• Southern
  India may be a little too wet for a while with a new tropical cyclone possible along the central Andhra Pradesh coast late this week or during the weekend.
• China
  weather will be mostly good in its rapeseed and wheat production area and the same is true for Europe.
• Much
  of Russia and Ukraine’s winter crops are turning dormant even though a boost in soil moisture might be welcome.
  
• Snow
  cover will increase in western Russia over the coming week to protect some winter crops.
• Europe
  weather is not expected to be very wet this week
• North
  Africa will be dry except coastal areas of central and eastern Algeria and northern Tunisia where rain is expected.
• South
  Africa still needs greater rain especially in western summer crop areas. 
• Flooding
  rain is still expected this week in central Vietnam’s coastal area
• Flooding
  occurred along the upper Malay Peninsula during the weekend

 

Bloomberg
Ag Calendar

Monday,
Nov. 15:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  corn, soy and cotton harvested; winter wheat planted, 4pm
• U.S.
  Green Coffee Association releases monthly inventory data
• Singapore
  International Agri-Food Week, day 1
• UBS
  Australasia Virtual Conference, day 1
• Ivory
  Coast cocoa arrivals
• Malaysia’s
  Nov. 1-15 palm oil exports
• HOLIDAY:
  Brazil

Tuesday,
Nov. 16:

• EU
  weekly grain, oilseed import and export data
• Singapore
  International Agri-Food Week, day 2
• UBS
  Australasia Virtual Conference, day 2
• Global
  Grain Geneva conference, day 1
• New
  Zealand global dairy trade auction

Wednesday,
Nov. 17:

• EIA
  weekly U.S. ethanol inventories, production
• Singapore
  International Agri-Food Week, day 3
• Global
  Grain Geneva conference, day 2
• Brazil’s
  Unica releases cane crush, sugar production data (tentative)

Thursday,
Nov. 18:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  FAS releases world sugar market balance, trade report, 3pm
• China’s
  trade data, including corn, wheat, sugar and cotton imports
• International
  Grains Council monthly report
• Singapore
  International Agri-Food Week, day 4
• Global
  Grain Geneva conference, day 3
• Bloomberg
  New Economy Forum: session on Feeding the World at 11:20am Singapore
• USDA
  total milk production, 3pm
• Port
  of Rouen data on French grain exports

Friday,
Nov. 19:

• 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
• U.S.
  cattle on feed, 3pm
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  India

Saturday,
Nov. 20:

• China’s
  third batch of October trade data, including soy, corn and pork imports by country

Source:
Bloomberg and FI

 

 

 

 

 

Macros

 

Corn

·        
Corn futures are
lower from weakness in WTI crude oil and light spreading against wheat.  News was quiet. 

·        
Traders will be monitoring news over US/China talks set to begin today. 

·        
We are hearing ethanol swaps were near a new high around $3.21/gallon and spot swap prices are around 32 cents above RBOB, a signal we may see the US ethanol blend rate slightly decline, and maybe weekly US production trend lower. 

·        
Covid-19 concerns could be back on the table this week as selected countries are seeing a spike in cases and/or partial lockdowns. 

·        
Bird Flu continues to spread across Europe with Norway the latest country to report an outbreak.  South Korea and Japan have also reported outbreaks this year, but it seems the problem is within Europe at the moment. 

 

Export
developments.

• Turkey
  bought 325,000 tons of corn at $310.45-$322.90/ton for shipment sought between Dec. 20 and Jan. 20.

 

Soybeans

·        
CBOT soybean
complex is mixed with follow through buying in soybean meal and lower soybean oil weighing on soybeans.  Resistance for December meal is seen at 366, Friday’s high and its current 200-day MA. 
Note
EU meal values are sharply higher but are not keeping up with the CBOT rally we saw on Friday. 

·        
Brazil is on holiday. 

·        
NOPA is due out this morning and a Reuters survey is predicting US soybean crush at 182 million for October and SBO stocks at 1.724 billion pounds, both up from September.  The NOPA monthly report will no longer include soymeal
exports due to inadvertent underreporting.

·        
China is proposing to ease rules on GMO seeds. 

·        
China soybean futures were down 0.2%, meal 0.1% higher, SBO up 0.4%, and palm up 0.6%.   China hog futures rallied 3.5%. 

·        
Malaysian palm futures were up 31 ringgit and cash was down $2.50/ton to $1,260. 

·        
Cargo surveyor SGS reported month to date November 15 Malaysian palm exports at 911,875 tons, 207,412 tons above the same period a month ago or up 29.4%, and 249,499 tons above the same period a year ago or up 37.7%.  AmSpec reported
November 1-15 Malaysian palm oil exports at 798,399 tons, up from a revised 723,561 tons during the same period in October.  ITS reported a 26.6% increase to 882,385 tons. 

·        
Malaysia

·        
Rotterdam meal values were 8-17 euros higher and vegetable oils 8-12 euros lower. 

·        
Offshore values are leading soybean oil about 10 points higher and meal $7.70 short ton lower. 

·        
China crush margins on our analysis was last $2.47/bu, compared to $2.66 at the end of last week and compares to $0.89 a year ago.

·        
China

 

 

Export
Developments

• Egypt’s
  GASC on November 16 (Tuesday) seeks at least 30,000 tons of soybean oil and 10,000 tons of sunflower oil for arrival from Jan.10-30 and it will pay under a 180-day deferred payment system , or at sight.  Egypt is also in for local vegetable oils. 
  

• 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 to higher on a lower USD and additional global import tender announcements. 

·        
The upper Great Plains and Midwest saw winter grain planting delays over the weekend and central and southern Great Plains were dry. 

·        
December Paris wheat was down 3.25 euros by around 6:45 am CT at 294/ton. 

·        
Russia’s wheat exports as of November 11 reached 700,000 tons despite higher export taxes, a 14 percent increase from the previous week.  Season to date is 16.6 million tons, 16% below the same pace year ago. 

 

Export
Developments. 

• Taiwan
  seeks 48,000 tons US wheat on November 18 for shipment in 2022 from the U.S. Pacific Northwest coast between Jan. 9 and Jan. 23.

·        
Iraq seeks 500,000 tons of wheat starting in December for an unknown shipment period. 

·        
Algeria seeks 50,000 tons of milling wheat on November 15, valid until the 16^th.  Reuters noted shipment is for three periods from the main supply regions including Europe: in 2021 between Dec. 16-31, and in 2022 between
Jan. 1-15 and Jan. 16-31. If sourced from South America or Australia, the shipment is one month earlier.  They increased the insect-damage limit to 1 percent from 0.5 percent. 

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

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

·        
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. 

 

Rice/Other

·        
South Korea sees their rice production rising for the first time in 6 years, to 3.88 million tons for 2021, up 10.7 percent from 2020.