FI Morning Grain Comments 12/03/21

PDF attached

 

Good
morning

 

Under
the 24-hour announcement system USDA reported private exporters sold 122,000 tons of soybeans to unknown. Today we see follow though buying in soybeans & corn, and positioning in wheat.  Some traders might be getting ahead of the potential EPA RVO announcement.
StatsCan reported a smaller than estimated Canada canola crop, higher than expected wheat, and larger than expected soybean crop.

 

Weather

                                                                                                                    

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 3, 2021

• Western
  Argentina’s forecast is wetter today relative to that of Wednesday and Thursday shrinking down the area of expected dryness and making is mostly an eastern Argentina concern – which is classic La Nina
• Interior
  Southern Brazil is advertised wetter in the second week of the forecast today allowing needed rain to fall in Mato Grosso do Sul, Parana and Sao Paulo after previous model runs had those areas dry for two weeks
  
• this
  change was needed and should verify
• Rain
  in southwestern Argentina Thursday and early today was significant with 0.30 to 1.77 inches noted over a large part of western Buenos Aires and La Pampa
• Australia’s
  forecast is mostly unchanged with showers returning sporadically in Queensland and New South Wales Sunday through next week, but resulting rainfall should not be as widespread, frequent or heavy as that of past weeks
• Europe’s
  wet biased weather is becoming more confined to western countries
• Eastern
  Europe and the western CIS will see periodic waves of snow and rain during the next two weeks
• Southwestern
  Morocco remains in a drought with little to relief expected
• India’s
  upper east coast and southern Bangladesh will be impacted by Tropical Cyclone 05B in the Bay of Bengal Saturday through Monday, but no serious crop impact is expected
• China’s
  weather will be relatively tranquil for a while
• U.S.
  Plains will continue dry during much of the next ten days except for a snow event from southern Alberta and Montana into northern Minnesota this weekend when 2 to 8 inches of snow and locally more accumulate with up to 0.75 inch of moisture
• U.S.
  Pacific Northwest rain and mountain snow will continue from the Cascade Mountains to the coast and in the northern Rocky Mountains leaving some of the valleys with only light precipitation
• U.S.
  lower and eastern Midwest, Tennessee River Basin and Delta will be wettest in the next ten days
• No
  seriously cold air will drop very far south in the Northern Hemisphere to threaten winter crops in the next two weeks
• Coffee,
  citrus and sugarcane areas in the world not see much change
• Interior
  southern India will dry down
• Indonesia,
  Philippines and Malaysia will remain seasonably wet
• West
  Africa is drying down
• mainland
  areas of Southeast Asia will receive infrequent rain of limited significance 
• Brazil
  crop areas will see routine rainfall
• Colombia,
  Peru and Venezuela weather will continue favorably wet

 

Bloomberg
Ag Calendar

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

Monday,
Dec. 6:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• CNGOIC
  monthly report on Chinese grains and oilseeds
• Ivory
  Coast cocoa arrivals
• New
  Zealand Commodity Price
• U.S.
  Purdue Agriculture Sentiment, 9:30am
• Sucden
  coffee briefing
• HOLIDAY:
  Thailand

Tuesday,
Dec. 7:

• China’s
  first batch of November trade data, including soybean, edible oil and meat imports
• Abares’
  quarterly agricultural commodities report
• French
  agriculture ministry’s monthly crop production estimate
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data

Wednesday,
Dec. 8:

• EIA
  weekly U.S. ethanol inventories, production
• Fitch
  ESG Outlook Conference Asia Pacific, day 1
• FranceAgriMer’s
  monthly grains report

Thursday,
Dec. 9:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, noon
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• China
  farm ministry’s monthly crop supply-demand report (CASDE)
• Brazil’s
  Conab report on yield, area and output of corn and soybeans
• Fitch
  ESG Outlook Conference Asia Pacific, day 2
• Port
  of Rouen data on French grain exports

Friday,
Dec. 10:

• 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
• Malaysian
  Palm Oil Board’s data on November palm oil reserves, output and exports
• Malaysia’s
  Dec. 1-10 palm oil exports
• HOLIDAY:
  Thailand

Source:
Bloomberg and FI

 

 

 

 

Statistics
Canada

 

November
estimates of production of principal field crops

 

                  
2019    2020    2021      2019-2020  2020-2021

                   
thousands of tonnes            % change

Total
wheat      32670   35183   21652         7.7         -38.5

Durum
wheat       5017    6571    2654        31.0         -59.6

Spring
wheat     25952   25842   16009        -0.4         -38.0

Winter
wheat      1701    2770    2989        62.9           7.9

Barley          
10383   10741    6948         3.4         -35.3

Canary
seed        175     178     109         1.8         -38.7

Canola        
  19912   19485   12595        -2.1         -35.4

Chick
peas         252     214      76       -14.8         -64.5

Corn
for grain   13404   13563   13984         1.2           3.1

Dry
beans          317     490     386        54.5         -21.2

Dry
field peas    4237    4594    2258         8.4         -50.9

Fall
Rye           326     475     466        45.9          -1.9

Flaxseed          
486     578     346        18.9         -40.2

Lentils          
2382    2868    1606        20.4         -44.0

Mustard
seed       135      99      50       -26.6         -49.4

Oats             
4227    4576    2606         8.2         -43.0

Soybeans         
6145    6359    6272         3.5          -1.4

Sunflower
seed      63     101      82        61.0         -19.3

 

 

Macros

US
Non-Farm Payrolls Nov: 210K (est 550K; prev 531K)

US
Unemployment Rate Nov: 4.2% (est 4.5%; prev 4.6%)

–
Avg Hourly Earnings (M/M) Nov: 0.3% (est 0.4%; prev 0.4%)

–
Avg Hourly Earnings (Y/Y) Nov: 4.8% (est 5.0%; prev 4.9%)

US
Private Payrolls Nov: 235K (est 536K; prev 604K)

–
Manufacturing Payrolls Nov: 31K (est 45K; prev 60K)

–
Avg Weekly Hours Nov: 34.8 (est 34.7; prev 34.7)

–
Labour Force Participation Rate Nov: 61.8% (est 61.6%; prev 61.6%)

Canadian
Net Change in Employment Nov: 153K (est 37.5K; prev 31.2K)

–
Unemployment Rate Nov: 6.0% (est 6.6%; prev 6.7%)

–
Full Time Employment Change Nov: 79.9K (prev 36.4K)

–
Part Time Employment Change Nov: 73.8K (prev -5.2K)

Canadian
Hourly Wages Rate Perm. Employees Nov: 3.0% (prev 2.1%)

–
Participation Rate Nov: 65.3% (est 65.4%; prev 65.3%)

Canadian
Labour Productivity (Q/Q) Q3: -1.5% (est -0.6%; prev 0.6%)

 

Corn

·        
Higher trade in corn in large part to the additional upswing in WTI crude oil and easing fears over potential global shutdowns. 

·        
March corn appears to remain in a sideways trading range and a resistance is seen at $5.9675, its November 24 absolute session high. 

·        
Bulgaria reported an outbreak of bird flu affecting 80,000 chickens in the southern village of Tsalapitsa.

·        
Yesterday the Argentina Buenos Aires grains exchange estimate the corn area at 7.3 million hectares, up from a previous 7.1 million. Argentina production was left unchanged at 55 million tons. One third of the Argentina corn crop
had been planted.

 

Export
developments.

·        
None reported

 

Soybeans

·        
Soybeans,
meal, and oil are all higher despite a lower USD and lower equities.  USDA announced another 122,000 tons to unknown, providing some support.  Some bull traders might be getting ahead of a potential RVO announcement. 

·        
Yesterday a Reuters news article mentioned the EPA is expected to announce a US RVO mandate decision in coming days. We will be monitoring it. earlier this year Reuters picked up that the EPA was planning on reducing
blending
mandates for 2020 and 2021 to about 17.1 billion gallons and 18.6 billion gallons, respectively, compared to the 20.1 billion gallons finalized for 2020 before the pandemic.

·        
Russian plans to increase the sunflower oil export tax to $280.80/ton in January from $276.70/ton currently. 

·        
Offshore values are leading soybean oil 59 points lower and meal $2.80 short ton higher.

·        
Rotterdam meal values were mixed and vegetable oils 10-30 euros higher from yesterday morning.

·        
Malaysia

Holiday

·        
China crush margins on our analysis was last $2.22, versus $2.17 at the end of last week (unchanged) and compares to $0.81 a year ago.

·        
China

·        
The Argentina Buenos Aires grains exchange estimate the soybean crop at 44 million tons.

·        
Argentina may soon roll out a producer friendly 2022-23 farm plan, focusing on corn, wheat and beef.

 

Export
Developments

·        
Private exporters reported the following:

-122,000
metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year

 

 

Wheat

·        
US wheat is mostly higher. Chicago and KC are gaining on a weaker MN market in part to positioning ahead of the weekend and lack of fresh global export developments although we are awaiting on Saudi Arabia’s import tender. 

·        
December wheat deliveries are starting to wind down.

·        
March Matif Paris wheat was 0.50 euros lower at 295.50. The contract has not filled the gap made earlier this week of 297.00, but we are thinking it eventually will. 

·        
Russia may soon impose a wheat export quota. We look for quotas to be set in place sometime during the January or February period.

 

Export
Developments.

·        
Japan bought 25,510 tons of Australian Standard wheat.

·        
Saudi Arabia seeks 535,000 tons of wheat today for arrival between May and July 2022.

·        
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.