FI Morning Grain Comments 11/17/21

PDF attached

 

Good
morning

 

USDA:
Private exporters reported sales of

132,000
metric tons of soybeans for delivery to China during for 2021-22

30,000
metric tons of soybean oil for delivery to India for 2021-22

 

Strength
in the CBOT ag markets are led by the soybean complex. SBO is up sharply. Egypt is in for wheat. The USD turned higher and US energies are weaker. The US Great Plains will remain mostly dry through the end of the week. The Midwest will see rain across the
northwestern areas today then the central and southern areas through Saturday. Brazil looks good over the next week. 
Argentina will trend drier for the balance of the week. 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 17, 2021

• Argentina
  is expected to trend drier during the next ten days especially in the south. 
  
• Soil
  moisture today is still rated quite favorably.
• Fieldwork
  will advance swiftly during the drier period, but some crop stress will be possible late this month.
  
• In
  Brazil, all crop areas will get rain at one time or another during the next ten days maintaining a mostly good crop environment.
  
• Sao
  Paulo, southern Sul de Minas and northern Parana should get some welcome relief from recent drying while Mato Grosso to Minas Gerais continue wettest.
  
• U.S.
  hard red winter wheat areas will experience net drying conditions for at least another ten days and the same is true for West Texas harvest areas.
  
• The
  U.S. southeastern states will also experience very little rainfall for the next ten days.
  
• The
  U.S. Delta, Tennessee River Basin and lower and eastern Midwest will see rain most often.
  
• The
  remainder of the U.S. Plains into central Canada’s Prairies will stay dry biased.
  
• Spain
  may experience a boost in rainfall Sunday into early next week while the remainder of Europe and the western CIS experience relatively tranquil weather.
  
• Some
  of Spain’s rain will drift into France later next week
• Southern
  India will be too wet during the next week and concern over crop quality may rise.
  
• Some
  rain may also briefly occur in west-central parts of India today into Friday.
  
• No
  changes in China with snow and some rain likely in the far northeast and rain near and south of the Yangtze River.
  
• Australia’s
  harvest weather will improve for much of the coming week to ten days, although rain will fall in South Australia and Victoria.
  
• South
  Africa is still waiting for greater rain in western summer crop areas. 

 

Bloomberg
Ag Calendar

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

US
Housing Starts Oct: 1520K (est 1579K; prev 1555K; prevR 1530k)

–
Building Permits Oct: 1650K (est 1630K; prevR 1586K; prevR 1586k)

–
Housing Starts (M/M) Oct: -0.7% (est 1.5%; prev -1.6%; prevR -2.7%)

–
Building Permits (M/M) Oct: 4.0% (est 2.8%; prevR -7.8%; prevR -7.8%)

Canadian
CPI NSA (M/M) Oct: 0.7% (est 0.7%; prev 0.2%)

–
CPI (Y/Y) Oct: 4.7% (est 4.7%; prev 4.4%)

Canadian
CPI Core- Common (Y/Y) Oct: 1.8% (est 1.9%; prev 1.8%)

–
CPI Core-Median (Y/Y) Oct: 2.9% (est 2.9%; prev 2.8%)

–
CPI Core-Trim (Y/Y) Oct: 3.3% (est 3.4%; prev 3.4%)

 

Corn

·        
CBOT corn futures are higher but lagging the appreciation seen in soybeans due to limited upside in wheat futures. Look for a choppy trade in the grains today.

·        
The USD is turned slightly higher, near its multi month high. US energy markets are lower.

·        
Traders are looking for an improvement in US ethanol data later this morning.  A Bloomberg poll looks for weekly US ethanol production to be up 19,000 barrels to 1.058 million (1030-1100 range) from the previous week and stocks
up 155,000 barrels to 20.441 million.

·        
Note December options expire November 26. 

 

2022
Grain Farm Income Projections Negatively Impacted by Fertilizer Cost Increases

Schnitkey,
G., C. Zulauf, K. Swanson, N. Paulson and J. Baltz. “2022 Grain Farm Income Projections Negatively Impacted by Fertilizer Cost Increases.”
farmdoc daily (11):156,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, November 16, 2021.

https://farmdocdaily.illinois.edu/2021/11/2022-grain-farm-income-projections-negatively-impacted-by-fertilizer-cost-increases.html?utm_source=rss&utm_medium=rss&utm_campaign=2022-grain-farm-income-projections-negatively-impacted-by-fertilizer-cost-increases

 

Export
developments.

·        
South Korea’s KFA bought about 64,000 tons of corn, optional origin, and $316.95/ton c&f for arrival in South Korea around February 15. They passed on a second cargo.

 

 

Soybeans

·        
Soybeans are higher and the January contract hit buy stops at $12.6150, yesterday’s high. $12.7375 is the October high. Soybean oil and meal are higher despite offshore values leading soybean oil about 49 points lower.  We see
strength in soybean oil keeping a firm undertone in soybeans, at least through the early morning trade.

·        
There is talk the Philippines bought a small amount of soybean meal out of the Gulf.

·        
Rail access to the port oof Vancouver is currently shut down, limiting grain, canola and product exports, after heavy rains across BC caused flooding.  Some oil pipelines are also down.  Reuters also noted the U.S. National Weather
Service on Tuesday issued a flash flood in Mount Vernon, Washington, “due to the potential for a levee failure.”

·        
The trade has not seen the large amount of soybean sales announcements as predicted last week but that is presumably behind us.  However, rumors are circulating China did end up buying at least 30 soybean cargoes from the US and
Brazil last week. 

·        
CBOT January crush is just below $2.00.

·        
China soybean futures were down 0.6%, meal 0.2% lower, SBO down 0.1%, and palm up 0.2%.  Hog futures fell 2.4% in China.    

·        
Malaysian February palm futures were up 111 ringgit and cash was up $25.00/ton to $1,242.50/ton. 

·        
Malaysia

·        
Rotterdam meal values were 2-8 euros lower and vegetable oils mixed. 

·        
Offshore values are leading soybean oil about 49 points lower and meal $1.80 short ton higher. 

·        
China crush margins on our analysis was last $2.48/bu ($2.49 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

 

Export
Developments

• Under
  the 24-hour announcement system, private exporters sold 132,000 tons of soybeans to China and 30,000 tons of soybean oil to India. 
  
• There
  is talk the Philippines bought a small amount of soybean meal out of the Gulf.
  
• South
  Korea is in for 115,000 tons of GMO-free soybeans on November 17 for arrival in South Korea in 2023. 
  

·        
Turkey seeks 6,000 tons of sunflower oil on November 23 for December shipment. 

 

Wheat

·        
US wheat futures higher this morning but gains are limited from lack of fresh news outside additional import tender announcements. 

·        
Algeria ended up buying a more than expected (up to 800,000 tons) amount of wheat but much of it Russian origin. Yet EU December wheat managed to climb 3.00 euros this morning to 292.00 euros.

·        
Due to a large amount of flooding across interior BC, Canada, all rail service to and from the Port of Vancouver was suspended. 

·        
Ukraine is not planning on curbing wheat exports at this time but may do so later this season if the export pace remains robust. By mid-November Ukraine exported 52% of the 25.3MMT annual export volume that was agreed between
exporters and government officials.

·        
Egypt is in for wheat.

 

Export
Developments. 

·        
Algeria ended up buying a more than expected 800,000 tons of wheat but much of it Russian origin.

·        
Egypt is in for wheat for January 1-15 shipment and lowest offer is $346.97/ton for Romanian origin. 

·        
The Philippines bought 220,000 tons of feed wheat for Jan/Apr shipment, at around $340/ton.

·        
Jordan passed on 120,000 tons of barley. 

·        
Turkey seeks 320,000 tons of feed barley on November 23 for January shipment. 

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

• 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