FI Morning Grain Comments 11/16/21

PDF attached

 

Good
morning

 

Eyes
are on the Biden and Xi talks but so far, the White House has downplayed developments on trade relations and other issues.  The US is nearing completion of this year’s corn and soybean harvest season with corn at 91% and soybeans at 92%.  US winter wheat conditions
increased one point and by class improved for all three categories.  This morning we are seeing a reversal in soybean oil. Soybeans are lower and nearby meal higher.  The USD is up 10 points and WTI up 36 cents.  Grains are lower.  There are no major changes
to the US weather forecast.  Argentina will trend drier for the balance of the week.  A few wheat import tenders are set to close over the next couple of days. 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 16, 2021

• South
  America weather continues to look quite favorable with timely rainfall over the next ten days but be cautious. 
  
• Rainfall
  has been notably lighter than usual in southern Brazil in the past two weeks and even though there is timely rainfall in the outlook it would not take much of a break in the pattern and warmer temperatures bring some dryness to the region.
  
• In
  the meantime, today’s outlook around the world offers no change to Australia, India or China, but Europe and the western Commonwealth of Independent States look to be wetter in the second week of the forecast.
  
• South
  Africa will continue to experience a drier bias in the west while the east receives periodic precipitation. 
• Southern
  India will remain wetter than desired by producers and a close watch on the wet pattern is warranted especially since some of the precipitation will be shifting into central India over time possibly disrupting fieldwork
• In
  the United States, today’s outlook has not changed much with dry biased conditions in much of the Plains and western Corn Belt
• Some
  increase in rainfall was suggested for the Delta after Nov. 24 while the southeastern states keep their drier bias
• Southern
  California is advertised to get a few showers next week, according to the 06z GFS model run, but that will not likely verify
• Lower
  eastern parts of the Midwest are still expecting some periodic rain
• Much
  of this U.S. pattern is classic La Nina
• Australia’s
  greatest rain will be in the far south where it is not likely to have a huge threat to immature wheat, barley or canola

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat         
388,743         versus   150000-375000  range

Corn             
855,698         versus   485000-750000  range

Soybeans   
2,073,579     versus   1625000-2500000             range

 

Commitment
of Traders

For
the second week in a row, the funds futures only net corn position was well off from estimates.  They were off 53,000 (more long) than estimated.  Previous week there were more long by 38,000 contracts. 

 

 

 

 

Macros

Canadian
Housing Starts Oct: 236.6K (est 255.0K; prev 251.2K; prevR 249.9K)

US
Retail Sales Advanced (M/M) Oct: 1.7% (est 1.5%; prev 0.7%; prevR 0.8%)

–
Retail Sales Ex-Auto (M/M) Oct: 1.7% (est 1.0%; prev 0.8%; prevR 0.7%)

–
Retail Sales Ex-Auto And Gas Oct: 1.4% (est 0.7%; prev 0.7%; prevR 0.5%)

–
Retail Sales Control Group Oct: 1.6% (est 0.9%; prev 0.8%; prevR 0.5%)

US
Import Price Index (M/M) Oct: 1.2% (est 1.0%; prev 0.4%)

–
Import Price Index Ex-Petroleum (M/M) Oct: 0.5% (est 0.3%; prev 0.1%; prevR 0.2%)

–
Import Price Index (Y/Y) Oct: 10.7% (est 10.3%; prev 9.2%; prevR 9.3%)

–
Export Price Index (M/M) Oct: 1.5% (est 1.0%; prev 0.1%; prevR 0.4%)

–
Export Price Index (Y/Y) Oct: 18.0% (prev 16.3%; prevR 16.5%)

 

Corn

·        
Corn futures are
moderately lower on weakness in wheat and a higher USD.  The US weather forecast is largely unchanged and US corn harvest is nearing completion. 

·        
We are hearing new-crop corn delivered to the PNW is in good shape, similar to a year ago. 

·        
We have not heard of any major developments from the Biden and Xi talks.

·        
USDA US corn export inspections as of November 11, 2021 were 855,698 tons, above a range of trade expectations, above 649,023 tons previous week and compares to 862,235 tons year ago. Major countries included Mexico for 349,063
tons, Colombia for 225,186 tons, and Japan for 128,399 tons.

·        
German reported an outbreak of ASF in east Germany in farm pigs. 

 

Export
developments.

·        
South Korea’s NOFI group bought 68,000 tons of corn at around $318.90/ton c&f for arrival around February 15.  Another news source mentioned SK’s NOFI bought up to 137,000 tons of corn at 277 cents over the March and $319.53/ton. 

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

 

 

Soybeans

·        
CBOT soybeans
are lower, meal higher in the front months, and soybean oil reversing to trade sharply higher.  Some of the weakness in soybeans is from lack of developments from the US/China talks.  Last week there was speculation China would secure large amounts of US soybeans
ahead or during the meetings. 

·        
Lower soybeans, higher meal and higher soybean oil pulled the January crush above $2.00/bu. 

·        
The US is nearing completion of this year’s corn and soybean harvest season with corn at 91% and soybeans at 92%.  There are no major changes to the US weather forecast. 

·        
Argentina will trend drier for the balance of the week. 

·        
Argentina’s opposition group won the mid-term election and they now have majority control of the senate.  Some believe export taxes on agriculture goods will not increase going forward, but more importantly traders will need to
monitor how the government will deal with the IMF.  Either Argentina agrees with the IMF or choose to go to default.  Argentina will likely renegotiate with the IMF, so keep an eye on developments .  This might become a hot topic through at least the end of
the year. 

·        
Brazil is back from holiday. 

·        
German oilseeds industry association UFOP estimated Germany’s winter rapeseed planted area at around 1.03 to 1.08 million hectares versus 991,000 hectares sowed in 2021. 

·        
Sea reported India’s palm oil imports in 2020-21 increased 15.2% from a year ago to 8.32 million tons.  Soybean oil imports fell 15% to 2.87 million tons.  India all vegetable oil imports were 13.53 million tons, slightly above
13.52 million tons a year ago.  Although import volume was near unchanged, they paid a record $15.7 billion, up 63% from 2020-21. 

·        
China soybean futures were down 0.9%, meal 0.9% higher, SBO near unchanged, and palm up 0.8%.  

·        
Malaysian February palm futures were up 20 ringgit and cash was up $5.00/ton to $1,217.50/ton. 

·        
Malaysia

·        
Rotterdam meal values were 8-11 euros higher and vegetable oils 5-25 euros lower. 

·        
Offshore values are leading soybean oil about 21 points higher and meal $2.90 short ton lower. 

·        
China crush margins on our analysis was last $2.49/bu ($2.47 previous), compared to $2.66 at the end of last week and compares to $0.89 a year ago.  On a nearby contract rolling basis, last time crush reached $2.00 was July 2018. 

·        
China

·        
AgRural noted Brazil was 78 percent planted for soybeans as of late last week, 8 points above last year. 

·        
USDA US soybean export inspections as of November 11, 2021 were 2,073,579 tons, within a range of trade expectations, below 2,910,100 tons previous week and compares to 2,530,722 tons year ago. Major countries included China for
1,317,821 tons, Mexico for 142,498 tons, and Thailand for 78,306 tons.

·        
NOPA reported the October crush at 184 million bushels, 2 million above trade expectations and third largest in history, but below 185.2 million a year ago.  NOPA’s soybean oil stocks at the end of October of 1.834 billion pounds
were 110 million above trade expectations, above 1.684 billion at the end of September and above 1.487 billion year ago.  Soybean oil stocks are up four consecutive months and highest since May 2020. 

 

Export
Developments

• Egypt’s
  GASC received several offers for vegetable oils.  Lowest offer was $1,439 per ton c&f for 30,000 tons of soyoil and $1,425 per ton c&f for 12,000 tons for sunflower oil.  The vegetable oils are 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 lower from a higher USD, light fund selling and SK passing on feed wheat. 

·        
US winter wheat conditions increased one point and by class improved for all three categories. 

·        
December Paris wheat was down 0.25 euro by around 7:20 am CT at 294.50/ton. 

·        
(Bloomberg) — Ukraine’s wheat crop may decline to 27.1m tons in 2022 from 31.9m tons this year due to challenging weather, consultant SovEcon said in an emailed note. 

·        
USDA US all-wheat export inspections as of November 11, 2021 were 388,743 tons, above a range of trade expectations, above 251,452 tons previous week and compares to 333,917 tons year ago. Major countries included Nigeria for
130,468 tons, Mexico for 41,144 tons, and Japan for 27,373 tons.

 

Export
Developments. 

·        
SK’s NOFI passed on 2 cargoes of feed wheat. 

·        
Japan seeks 121,805 tons of food wheat this week. 

·        
The Philippines seek four cargoes of feed wheat for late Jan through early April shipment on November 17. 

·        
Algeria suspended negotiations in buying at least 50,000 tons of milling wheat until today.  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. 

• 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.

·        
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. 

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

 

Rice/Other

·        
None reported