FI Morning Grain Comments 11/30/21

PDF attached

 

Good
morning

 

Private
exporters reported sales of 132,000 metric tons of soybeans for delivery to unknown

 

WTI
crude oil and other commodity markets are selling off this morning from ongoing concerns over the omicron after a major drug company told a newspaper that the existing vaccines are less effective against the latest variant. USD was down a large 67 points at
the time this was written. US equities are leaning towards a lower open. US grains and oilseeds are lower following weakness in the outside commodity markets. Japan seeks 51,773 tons of food wheat later this week, all from the US. South Korea seeks 22,000
tons of rice from the US on December 9.  OPEC meets later this week. Note today is the last day for the month of November and some traders are crossing their fingers over a EPA RVO announcement. 

 

 

 

Weather
                                                                                                 

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR NOVEMBER 30, 2021

• Central
  and eastern Argentina are still expecting to be drier biased over the next ten days to two weeks leading to slowly firming topsoil
  
• No
  serious crop stress is expected for a while due to recent rain, but it will need to be watched
• Southern
  Brazil  will also receive restricted rainfall during the next ten days to two weeks leading to a gradual decline in soil moisture and a rising potential for crop stress
• This
  may impact southern rice and corn more than soybeans in Rio Grande do Sul – at least initially
• Eastern
  Australia will be drying down from Wednesday into Saturday, but showers will be returning to Queensland during the  weekend and New South Wales next week
• Crop
  quality concerns will continue for unharvested small grain  and canola in New South Wales and a few Queensland locations
• Summer
  crops will benefit from the moisture in the long haul, but drier weather is  needed to  get crops in the ground and better established at least in some dryland fields
• Western
  Queensland crop areas are not as wet as the  east
• China
  and U.S. weather will be tranquil for a while with restricted precipitation in key winter crop areas
• U.S.
  hard red winter wheat areas will continue in a limited precipitation model for the next ten days
• Similar
  conditions are expected in the  northwestern Plains, the western Midwest, the  interior Pacific Northwest and much of California and the southwestern states
• West
  Texas will remain dry biased and any rain in the southeastern states should be brief and light
• India
  will be facing a tropical cyclone along its upper east coast this weekend and in Bangladesh resulting in strong wind speeds and flooding coastal rainfall
• West-central
  India (Including , western and northern Maharashtra, southeastern Gujarat and northwestern Madhya Pradesh) will get significant rain today into Thursday morning resulting in concern over crop conditions and inducing a short term delay in farming activity.
  
• Europe
  and the western CIS will experience a boost in precipitation during the next ten days benefiting winter crop use in the spring
  
• South
  Africa will see a good mix of rain and sunshine during the next ten days
• Most
  coffee, citrus and sugarcane areas will experience little change relative to recent past days for the coming week

 

Bloomberg
Ag Calendar

Tuesday,
Nov. 30:

• EU
  weekly grain, oilseed import and export data
• Malaysia’s
  November palm oil exports
• U.S.
  agricultural prices paid, received, 3pm
• Australia’s
  quarterly crop report

Wednesday,
Dec. 1:

• EIA
  weekly U.S. ethanol inventories, production
• Gapki’s
  Indonesian Palm Oil Conference, day 1
• Brazil
  Unica sugar output, cane crush data (tentative)
• U.S.
  DDGS production, corn for ethanol, 3pm
• USDA
  soybean crush, 3pm
• Australia
  Commodity Index

Thursday,
Dec. 2:

• FAO
  World Food Price Index
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Gapki’s
  Indonesian Palm Oil Conference, day 2

Friday,
Dec. 3:

• 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
• Canada’s
  Statcan releases wheat, durum, canola, barley, soybean production data
• FranceAgriMer
  weekly update on crop conditions

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
250,651                 versus   175000-400000  range

Corn                     
766,063                 versus   575000-1200000                range

Soybeans           
2,142,844             versus   1000000-2000000             range

 

Commitment
of Traders

Chicago
wheat net long position came in much less long than expected for the week ending November 23. The net long position for soybeans, meal and oil were more long than expected.  We don’t see much in the way of price direction as this report was delayed one day,
but the trade may note the less than expected wheat position. 

 

 

 

 

Macros

Canadian
Annualized GDP (Q/Q) Q3: 5.4% (est 3.0%; prev -1.1%; prevR -3.2%)

–
GDP (M/M) Q3: 0.1% (est 0.0%; prev 0.4%; prevR -0.8%)

–
GDP (Y/Y) Q3: 3.4% (est 3.3%; prev 4.1%)

India’s
GDP has grown at 8.4% in second quarter compared to 7.4% contraction last year

 

Corn

·        
CBOT corn is sharply lower on weakness in the outside commodity and equity markets despite a sharply lower USD.

·        
WTI crude oil and other markets are selling off this morning from ongoing concerns over the omicron after a major drug company told a newspaper that the existing vaccines are less effective against the latest variant.

·        
Note OPEC meets later this week.

·        
CBOT corn deliveries were 2.

·        
Domestic Brazil cash corn prices have been on the rise in part to weakness in the real over the past couple of months. 

·        
German reported a case of bird flu H5N1 in northern Germany on a farm with about 33,000 poultry.

·        
USDA US corn export inspections as of November 25, 2021 were 766,063 tons, within a range of trade expectations, below 825,650 tons previous week and compares to 1,045,800 tons year ago. Major countries included Mexico for 327,440
tons, Japan for 118,406 tons, and Colombia for 95,349 tons.

 

Export
developments.

·        
None reported.

 

 

 

 

Soybeans

·        
Soybean
complex is trading lower this morning on widespread commodity spreading. Selected global vegetable oil markets sold off overnight. January soybean oil tested and traded through its 200-day MA. Oil share is sliding as meal is seeing limited losses. ICE canola
futures were down about $20 earlier.

·        
January crush collapsed over the past two weeks, currently around 63 cents off from its absolute high. It gapped lower overnight. 

·        
US soybean export developments remain slow to China.

·        
There were 106 SBO deliveries, one meal and zero oil.

·        
A Reuters trade guess calls for the October US crush to be reported at 195.6 million bushes (194.5-196.3 range), up from 164.1 million bushels previous month, and soybean oil stocks at 2.340 billion (2.310-2.375 range), up from
2.177 at the end of September. 

·        
Offshore values are leading soybean oil 94 points lower and meal $0.70 short ton higher. 

·        
Rotterdam meal values were 6-13 euros lower and vegetable oils 7-75 euros lower from early Monday morning.  Rapeseed oil fell 75 euros for the Feb/Apr position. 

·        
Malaysia palm hit an 8-week low. Malaysian February palm futures were down 185 ringgit at 4672.  Cash palm was down $35/ton to $1187.50/ton.

·        
This comes even though AmSpec reported November palm oil shipments from Malaysia up 8.2% at 1.572 million tons from 1.453 MMT previous month.  ITS reported a 13.6 percent increase to 1.669 million tons. 

·        
China crush margins on our analysis was last $2.17/bu, versus $2.17 at the end of last week (unchanged) and compares to $0.81 a year ago.

·        
China soybean futures were down 0.3%, meal 0.5% lower, SBO off 2.1%, and palm down 1.9%.

·        
USDA US soybean export inspections as of November 25, 2021 were 2,142,844 tons, above a range of trade expectations, below 2,431,895 tons previous week and compares to 2,424,357 tons year ago. Major countries included China for
1,385,016 tons, Egypt for 275,447 tons, and Mexico for 104,418 tons.

 

Export
Developments

·        
None reported

 

 

 

Wheat

·        
US wheat is selling off with KC type wheat (back months) leading the other US wheat markets lower. Chicago wheat prices are losing ground against Minneapolis type wheat. USDA reported an unchanged good/excellent winter wheat condition
on Monday, but by class winter white type wheat is down sharply from its respected 5-year average.

·        
USD was down a large 66 points at the time this was written.

·        
Chicago wheat deliveries were a large 1,054 contracts.

·        
US winter wheat conditions were unchanged at 44 percent and 2 points below year ago.  Wheat emerged was 92 percent, up from 91 year ago. 

·        
The US Great Plains will remain mostly dry over the next week.

·        
March Matif Paris wheat was 6.25 euros lower at 291.25 as of 7:40 am CT.

·        
Egypt said they have enough wheat to last 5.1 months.  They also said sugar supplies are large enough for 3.5 months and vegetable oil reserves for 5.4 months. 

·        
USDA US all-wheat export inspections as of November 25, 2021 were 250,651 tons, within a range of trade expectations, above 192,822 tons previous week and compares to 534,534 tons year ago. Major countries included Philippines
for 115,970 tons, Mexico for 57,879 tons, and Colombia for 30,700 tons.

 

Export
Developments.

·        
Japan seeks 51,773 tons of food wheat later this week, all from the US.

·        
Yesterday Egypt’s GASC bought 600,000 tons of wheat for Jan 9-20 shipment at $375.90-$379.10/ton . It included 240,000 tons of Romanian wheat, 240,000 tons of Russian wheat and 120,000 tons of Ukrainian wheat. Earlier the lowest
offer was $350.85 per ton fob for 60,000 tons of Romanian origin, and looks like they got 60,000 tons at that price, plus freight.  They last paid $371.97/ton, including freight, on November 17.

·        
Jordan seeks 120,000 tons of wheat on December 2. Possible shipment combinations are in 2022 between May 1-15, May 16-31, June 1-15 and June 16-30.

·        
Jordan seeks 120,000 tons of barley on December 1 for shipment between May 1-15, May 16-31, June 1-15 and June 16-30.

·        
Bangladesh seeks 50,000 tons of milling wheat on Dec. 8. 

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

 

Rice/Other

·        
South Korea seeks 22,000 tons of rice from the US on December 9 for arrival in South Korea from May 2022 and from August 2022.