FI Morning Grain Comments 11/24/21

PDF attached

 

Good
morning

 

CBOT
agriculture trading will be closed tonight and during the day Thursday for US Thanksgiving holiday. Friday is a hard open and shortened session. Look for positioning today, and volume to be on the lighter side. The is up about 26 points higher and WTI is lower.
US equities are leaning towards a lower open. Soybeans and SBO are higher and meal lower. Corn is strong on corn export business. Wheat prices turned mixed with higher protein KC and MN contracts gaining on Chicago. A Bloomberg poll looks for weekly US ethanol
production to be up 5,000 barrels to 1.065 million (1049-1088 range) from the previous week and stocks up 108,000 barrels to 20.189 million.

 

 

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 24, 2021

• Very
  little change occurred overnight.
• Eastern
  Australia’s wet weather bias will continue for at least the next five to seven days raising concern over the quality of unharvested small grains in New South Wales and a few neighboring areas.
  
• Europe
  and the western Commonwealth of Independent States will experience a boost in precipitation over the next ten days to two weeks bringing some moisture to the dry areas of Ukraine and Russia’s Volga River Basin.
  
• North
  Africa will get some timely rain for its wheat and barley planting season.
  
• China’s
  weather will be tranquil for a while with not much precipitation of significance expected.
  
• Indonesia
  and Malaysia will continue to see frequent rainfall.
• Southern
  India will remain too wet and in need of drying to protect rice, sugarcane, cotton and other crop integrity.
  
• Argentina
  is still expecting two very important waves of rain between now and Monday to ease drying in the topsoil and maintain good crop conditions.
  
• Brazil
  will see a good mix of weather during the next two weeks, although there will be some potential for net drying in the south after rain passes Thursday into Friday.
  
• Colombia
  and Venezuela rainfall should increase in the coming ten days after a period of below average precipitation.
  
• U.S.
  weather will continue quiet with net drying in hard red winter wheat areas, the northwestern Plains, California, the southwestern desert areas and West Texas cotton country.
  
• Showers
  will occur in the Delta, southeastern states and lower and eastern portions of the Midwest, but only infrequently and lightly.
  
• Very
  cold temperatures are expected in the north-central U.S. Today and Thursday before shifting into the lower and eastern Midwest briefly Thursday into the weekend. 
• Coffee,
  citrus and sugarcane areas of Brazil will stay in mostly good condition as they should in southeast Asia
• Sugarcane
  areas of eastern Australia will see improving soil moisture
• Parts
  of Malaysia and Indonesia may get some heavy rainfall

 

Bloomberg
Ag Calendar

Tuesday,
Nov. 23:

• EU
  weekly grain, oilseed import and export data
• Brazil’s
  Conab releases sugar and cane production data (tentative)
• Council
  of Palm Oil Producing Countries online webinar
• U.S.
  poultry slaughter, 3pm
• HOLIDAY:
  Japan

Wednesday,
Nov. 24:

• EIA
  weekly U.S. ethanol inventories, production
• USDA
  red meat production, 3pm

Thursday,
Nov. 25:

• Malaysia’s
  Nov. 1-25 palm oil exports
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  U.S.

Friday,
Nov. 26:

• 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
• USDA
  weekly net- export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

Macros

US
GDP Annualized (Q/Q) Q3 S: 2.1% (est 2.2%; prev 2.0%)

US
Durable Goods Orders Oct P: -0.5% (est 0.2%; prev -0.3%; prevR -0.4%)

–
Durables Ex-Transportation Oct P: 0.5% (est 0.5%; prev 0.5%; prevR 0.7)

US
Initial Jobless Claims Nov 20: 199K (est 260K; prev 268K)

–
Continuing Claims Nov 13: 2049K (est 2033K; prev 2080K)

US
Personal Consumption Q3 S: 1.7% (est 1.6%; prev 1.6%)

–
GDP Price Index Q3 S: 5.9% (est 5.7%; prev 5.7%)

–
Core PCE (Q/Q) Q3 S: 4.5% (est 4.5%; prev 4.5%)

US
Capital Goods Orders Nondef Ex-Air Oct P: 0.6% (est 0.5%; prev 0.8%; prevR 1.3%)

–
Capital Goods Ship Nondef Ex-Air Oct P: 0.3% (est 0.5%; prev 1.4%; prevR 1.3%)

US
Advanced Goods Trade Balance Oct: -$82.9B (est -$95.0B; prev -$96.3B)

US
Wholesale Inventories (M/M) Oct P: 2.2% (est 1.0%; prev 1.4%)

–
Retail Inventories (M/M) Oct: 0.1% (est 0.4%; prev -0.2%)

 

 

Corn

·        
CBOT corn is strong on corn business. Three South Korean groups bought around 256,000 tons of corn. We think it was sourced from South America. Oat futures are higher this morning.

·        
December options expire Friday.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 5,000 barrels to 1.065 million (1049-1088 range) from the previous week and stocks up 108,000 barrels to 20.189 million.

 

Average
U.S. gasoline prices are higher this Thanksgiving than any since 2012 – EIA

https://www.eia.gov/todayinenergy/detail.php?id=50457&src=email

 

Export
developments.

·        
South Korea’s NOFI group bought about 138,000 tons of corn, optional origin. The first consignment was bought at an estimated $317.99 a ton arrival in South Korea around March 5, 2022. The second consignment was bought at an estimated
219.82 cents over the March corn contract and $317.90 a ton c&f.

·        
South Korea’s Feed Leaders Committee (FLC) bought 50,000 to 65,000 tons of corn at an estimated $319.76 a ton c&f. Some 5,000 tons was bought at a premium of 224 cents over the March corn contract. The corn was sought for arrival
in South Korea around March 1 if sourced from South America or March 5 if from other destinations.

·        
South Korea’s Major Feedmill Group (MFG) bought an estimated 68,000 tons of corn at an estimated $317.90 a ton c&f. The corn was sought for arrival in South Korea around March 10 if sourced from South America or South Africa.

 

 

Soybeans

·        
Soybeans & SBO prices are higher and soybean meal lower. Offshore values are leading soybean oil higher and meal lower. We are expecting a US RVO biofuel mandate any day now, and some traders could be getting ahead by buying soybean
oil.

·        
There were no changes in CBOT ag registrations.

·        
The global weather forecast was largely unchanged. Argentina is projected to see 0.5-2.0″ Wednesday into Thursday from Cordoba and Santiago del Estero to Corrientes, Entre Rios, and central Buenos Aires. Then another round of
rain will occur Friday into Saturday of 0.25-1.0″. Central and southern Brazil has a chance for rain Thursday into Friday bias RGDS (0.50-2.0), and again December 3-5. Much of the northern growing areas will be active over the next two weeks.

·        
China soybean futures were down 0.8%, meal 0.4% higher, SBO down 1.2%, and palm down 2.0%.

·        
Malaysian February palm futures were up 64 ringgit and cash was up $7.50 at $1,250.50/ton.

·        
Rotterdam meal values were 7-15 euros lower and vegetable oils are up sharply from this time yesterday morning led by rapeseed oil.

·        
Offshore values are leading soybean oil 29 points higher and meal $1.90 short ton lower. 

·        
China crush margins on our analysis was last $2.25/bu ($2.20 previous), compared to $2.30 at the end of last week and compares to $0.75 a year ago.

·        
China

·        
European Union soybean imports through November 21 total 4.79 million tons by Nov. 21, below 5.64 million tons by the same week year ago. Rapeseed imports total 1.71 million tons, compared with 2.74 million tons a year earlier.
Soybean meal imports are 5.48 million tons against 7.33 million a year ago. The Commission said that the data for France in the report was still only complete until July 2021.

 

Export
Developments

·        
Egypt’s GASC seeks vegetable oils on Thursday for January 15-31 arrival. It’s for payment at sight and/or 180-day letters of credit.

·        
South Korea’s MFG bought 16,000 tons of soybean meal at an estimated $452.00/ton c&f for arrival around April 25.

·        
Turkey bought 6,000 tons of sunflower oil at an estimated $1,471/ton c&f for Dec 1-20 shipment. 

 

Wheat

·        
Fresh contract highs were hit overnight for Chicago, KC, and Paris wheat. Wheat prices turned mixed late in the electronic session after the USD rallied. Higher protein KC and MN contracts are gaining on Chicago. We see the March
KC/Chicago wheat spread continue to widen from the current 16.50 cent level. KC/W Dec spread is at 23 cents. The USD is 26 points higher and WTI lower.

·        
NOFI rejected a cargo of feed wheat. The Philippines bought 100,000 tons of feed wheat and Jordan bought 120,000 tons of barley.

·        
Russia will increase its wheat export duty for the November 24-30 period to $78.30/ton from $77.10/ton. The duty on barley will fall to $65.3 from $66 per ton, while the corn duty fell to $53.6 from $62.9/ton.

·        
Russia’s grain harvest to date was 125.5 MMT before drying, down from 137.2 MMT year ago.

·        
March Matif Paris wheat was 2.50 euros higher at 311 as of 7.05 am CT. 

·        
EU soft wheat exports since July 1 reached 10.3 million tons through November 21, above 9.88 million tons year earlier.

 

Export
Developments.

·        
The Philippines bought about 100,000 tons of feed wheat from Australia. They are in two consignments of about 50,000 tons around $340/ton and other around $350/ton.

·        
South Korea’s NOFI group passed on 65,000 tons of feed wheat. Lowest offer was $357.86/ton c&f. The feed wheat had been sought for arrival around Jan. 25, 2022.

·        
Jordan bought 120,000 tons of feed barley.

·        
Jordan seeks 120,000 tons of wheat on November 25 for shipment between March 16-31, April 1-15, April 16-30 and May 1-15.

·        
Turkey seeks 385,000 tons of wheat on November 25.

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

·        
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

·        
None reported