FI Morning Grain Comments 12/01/21

PDF attached

 

Good
morning

 

Private
exporters reported sales of 150,000 metric tons of corn for delivery to Colombia during the 2021/2022 marketing year.

 

Ags
are rebounding as traders eye outside related commodity markets. The USD was slightly lower earlier this morning. Soybeans are higher from strength in soybean oil and talk China bought at least 5 cargoes of US Gulf and Brazil soybean cargoes. CBOT soybean
registrations dropped 562 to 342. News was light. Tunisia is in for wheat and barley. Offshore values are leading soybean oil 218 points higher and meal $0.90 short ton higher. A Bloomberg poll looks for weekly US ethanol production to be down 4,000 barrels
to 1.075 million (1060-1087 range) from the previous week and stocks up 101,000 barrels to 20.265 million.

 

 

 

Weather

 

Source:
World Weather Inc.

 

Source:
World Weather Inc.

                                                                                                                    

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 1, 2021

• Net
  drying is still expected in Argentina this weekend into next week after a few bouts of rain occur later this week.
  
• Brazil’s
  far south is also expecting net drying for at least ten days.
• Routine
  rainfall is expected in the remainder of Brazil; including its center west, northern parts of center south and northeastern crop areas.
  
• Australia
  will experience several days of improved weather as rain becomes limited in east-central parts of the nation where it has been too wet in recent weeks.
  
• Rain
  will return to eastern Australia next week, although it will not be as wet as it has been.
  
• Southern
  Australia will remain dry favoring good crop  maturation and harvest conditions
• India
  will see some heavy rainfall in northwestern Maharashtra, southeastern Gujarat and northwestern Madhya Pradesh today into Thursday and then a tropical cyclone will impact the upper east coast of the nation and Bangladesh this weekend.
  
• China’s
  weather will be relatively quiet for a while
• A
  stormy weather will impact Europe and the western CIS over the coming week to ten days
• South
  Africa will experience some routinely occurring rainfall alternating with some sunshine
  
• Southeast
  Asia will continue in mostly good shape for this time of year. 
• In
  the U.S. crop weather will  be dry biased in much  of the  Plains, western Corn Belt, interior parts of the Pacific Northwest, the  southwestern desert region and far southeastern states while precipitation continues periodically in the Delta and lower and
  eastern Midwest. 
• No
  serious threats are facing key coffee, citrus, sugarcane or cocoa production areas in the world

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

Macros

US
MBA Mortgage Applications Nov 26: -7.2% (prev 1.8%)

US
Average 30-Year Mortgage Rate Rises 7 Bps To 3.31% In Nov 26 Week, Highest Since April – MBA

US
ADP Employment Change Nov: 534K (est 525K; prev 571K)

Canadian
Building Permits (M/M) Oct: 1.3% (est -0.1%; prev 4.3%)

OPEC
Not Discussing Changes To Output Policy For Now In Closed Door Meeting – RTRS Citing Delegate

 

 

Corn

·        
CBOT corn is higher on following strength in wheat and rebound in some of the outside markets.  Fundamental news is light. 

·        
US September ethanol production came in slightly above expectations. As we mentioned yesterday, weekly ethanol production has been running higher than expected over the last few weeks. We estimate corn for ethanol use at 5.325
billion, 75 million above USDA and above 5.028 used during the 2020-21 marketing year.

·        
A Bloomberg poll looks for weekly US ethanol production to be down 4,000 barrels to 1.075 million (1060-1087 range) from the previous week and stocks up 101,000 barrels to 20.265 million.

 

Nitrogen
Fertilizer Strategies for 2022

Schnitkey,
G., N. Paulson, K. Swanson, C. Zulauf and J. Blatz. “Nitrogen Fertilizer Strategies for 2022.”
farmdoc daily (11):160, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, November 30, 2021.

https://farmdocdaily.illinois.edu/2021/11/nitrogen-fertilizer-strategies-for-2022.html?utm_source=rss&utm_medium=rss&utm_campaign=nitrogen-fertilizer-strategies-for-2022

 

Export
developments.

·        
None reported.

 

 

 

Soybeans

·        
Soybean
complex is higher following a rebound in outside related markets and talk China bought at least 5 cargoes of US Gulf and Brazil soybeans. CBOT soybean registrations dropped 562 to 342.

·        
Offshore values are leading the CBOT products higher. Palm future closed moderately higher.

·        
Soybean oil is higher but well off overnight highs. Yesterday January soybean oil traded through its 200-day MA and also below our 55.50 support level. Soybean meal was mostly higher in the non-expiring months with emphasis on
bull spreading.

·        
Rain fell across a large portion of northern Brazil while most central and southern areas were dry.

·        
ICE canola futures were 0.9-3.70 lower just before the CBOT electronic pause.

·        
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.  Bloomberg estimates below. 

·        
Indonesia’s target of 40% biodiesel blend target by the end of 2021 was put on hold earlier this year and overnight a senior official warned the country needs to step up blending to be able to reach its revised 2024 target of
40%.  They currently have a mandate of 30 percent. 

·        
Offshore values are leading soybean oil 218 points higher and meal $0.90 short ton higher. 

·        
Rotterdam meal values were unchanged to 5 euros higher and vegetable oils 10 to 25 euros lower from yesterday morning. 

·        
Malaysian February palm futures were up 12 ringgit at 4,684.  Cash palm was up $5/ton to $1192.50/ton.

·        
Cargo surveyor SGS reported November Malaysian palm exports at 1,681,059 tons, 204,414 tons above the same period a month ago or up 13.8%, and 290,374 tons above the same period a year ago or up 20.9%.

·        
China crush margins on our analysis was last $2.266/bu ($2.17 previous), 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 1.0% lower, SBO off 1.9%, and palm down 1.5%.

·        
EIA September soybean oil for biofuel use of 756 million pounds was down from 815 million during August, below our expectations and well below USDA’s implied expectation of 967 million pounds.  This puts Oct-Sep crop-year SBO
for biofuel use at 8.639 billion pounds, 211 million below USDA’s November estimate of 8.850 billion. 

·        
Abiove is disappointed the Brazil government will leave their biodiesel blend rate at 10% versus a previous target of 13-14%, especially to crushers that invested in production. 

 

Export
Developments

·        
None reported

 

 

Wheat

·        
US wheat is higher led by Chicago and MN markets on technical buying and 11 point lower USD (at the time this was written).

·        
CBOT Chicago wheat deliveries were heavy again, at 997 (2,051 total).

·        
Ukraine exported 5.817 million tons of grain in November. Season to date (July 1) totals 25.3 million tons, including 14.523 million tons of wheat, 5.5 million tons of corn and 4.9 million tons of barley.

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

·        
There is still concern over the Australia wheat crop, in terms of growing supplies of feed wheat. Rain will return to eastern Australia next week.  Reuters: ASW was quoted this week at $318 a ton, free on board, Western Australia,
compared with APW that sold for $365 a ton.

·        
March Matif Paris wheat was 2.00 euros higher at 287.50 as of 7:30 am CT.

 

Export
Developments.

·        
Jordan bought 60,000 tons of barley at an estimated $307 a ton (c&f) for shipment in the second half of June 2022.  They were in for 120,000 tons. 

·        
Tunisia issued an import tender set to close this Thursday for up to 175,000 tons of soft wheat for Jan-Mar 25 shipment and up to 92,000 tons of durum for Jan 1-25 shipment.

·        
Tunisia also seeks 100,000 tons of feed barley on Thursday for shipment between Jan. 1 and Feb. 15.

·        
Ethiopia cancelled another ageing wheat import tender.

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

·        
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.

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

 

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.

·        
(Reuters) – China’s cotton reserves management company said on Wednesday it will suspend its sales from Dec. 1 based on the current market situation.  Cotton prices have dropped recently after Beijing launched a new round of daily
auctions to boost supply of the fibre to the market.

 

Cocoa
– oversold on chart/RSI and double bottom