FI Morning Grain Comments 12/10/21

PDF attached

 

Good
morning

 

US
CPI inflation came in near expectations. Mixed trade in the CBOT markets this morning post USDA report day.  CBOT soybeans and meal are higher.
Soybean oil is lower and that is putting additional pressure on oils share. Corn turning higher on higher outside markets and strength in wheat amid oversold conditions and higher Matif wheat.
Reuters noted China this week booked at least several hundred thousand tons of French wheat and barley, several thousand tons of Australian wheat, and also purchased Ukrainian corn and barley.
This is supporting March Paris wheat.  Malaysian palm oil futures traded up 22 ringgit. MPOB Malaysian palm data was not very supportive as end of November stocks came in 47,200 tons above expectations and exports fell short by 119,500 tons. However, production
was less than expected and imports far exceeded the average trade guess, leaving some to figure domestic use was near expectations.

 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 10, 2021

• The
  only rain event slated for eastern Argentina, Uruguay, southern Paraguay and far southern Brazil is expected late this weekend into Tuesday.
  
• The
  precipitation will not be heavy, but it will occur a short-term bout of relief from recent drying.
  
• Concern
  is rising over a developing weak ridge of high pressure aloft over Argentina during mid- to late-week next week.
  
• The
  ridge will bring warmer temperatures to Argentina and block precipitation from far southern Brazil for a little while. This will increase the potential for crop stress especially in those areas that do not get good rain Sunday into Tuesday. 
  
• Rain
  will fall frequently in center west, northern center south and northeastern Brazil.
  
• Showers
  in western Argentina will be good for crops there as well.
• In
  the U.S., a snowstorm today and early Saturday from southern South Dakota and northern Nebraska to Upper Michigan will produce 3 to 8 inches of snow in the west and 6-14 inches to the east part of the precipitation event.
  
• California
  and western Washington and western Oregon will get heavy rain and mountain snowfall this weekend into the middle part of next week helping to bolster soil moisture and mountain snowpack for water supply in the spring.
  
• Unseasonably
  warm temperatures are still expected in the central and eastern U.S. during the next full week to nearly 10 days.
  
• Not
  much change today in the rest of the world.
• China
  weather will be tranquil for a while, southern India will continue to dry down, eastern and southern Australia weather will be good for winter crop harvesting and improved summer crop conditions.
  
• Northwestern
  Africa will stay quite dry for a while, especially Morocco and northwestern Algeria.
  
• Parts
  of the Middle East are too dry as well while Europe and the western CIS see a good mix of weather. South Africa will remain favorably moist for its summer crops. 
• Heavier
  rain fell Thursday and early today in parts of Sumatra, Indonesia possibly resulting in a little flooding
• A
  tropical cyclone will form this weekend south of Guam that may threaten the Philippines with heavy rain, flooding and strong wind speeds during mid- to late-week next week

 

Bloomberg
Ag Calendar

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

Monday,
Dec. 13:

• Monthly
  MARS bulletin on crop conditions in Europe
• USDA
  export inspections – corn, soybeans, wheat, 11am
• Ivory
  Coast cocoa arrivals

Tuesday,
Dec. 14:

• Australia
  ​Agricultural Commodity Statistics 2021
• ​Vietnam’s
  customs dept to release November commodity trade data
• EU
  weekly grain, oilseed import and export data
• New
  Zealand Food Prices

Wednesday,
Dec. 15:

• EIA
  weekly U.S. ethanol inventories, production
• U.S.
  Green Coffee Association releases monthly inventory data, 3pm
• Brazil’s
  Unica publishes cane crush, sugar output data (tentative)
• Malaysia’s
  Dec. 1-15 palm oil exports

Thursday,
Dec. 16:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Bangladesh

Friday,
Dec. 17:

• 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
  FAS issues world coffee report, with supply-demand data

Saturday,
Dec. 18:

• China’s
  2nd batch of Nov. trade data, including imports of cotton, corn, wheat and sugar

Source:
Bloomberg and FI

 

 

 

 

 

Macros

US
CPI (M/M) Nov: 0.8% (est 0.7%; prev 0.9%)

CPI
(Y/Y) Nov: 6.8% (est 6.8%; prev 6.2%) CPI Ex Food And Energy (M/M) Nov: 0.5% (est 0.5%; prev 0.6%) CPI Ex Food And Energy (Y/Y) Nov: 4.9% (est 4.9%; prev 4.6%)

Canadian
Capacity Utilization Rate Q3: 81.4% (est 83.0%; prev 82.0%)

 

Corn

·        
CBOT corn is lower on wheat/corn spreading and China buying Ukrainian corn this week over US origin. 

·        
Canadian corn imports have surged in the western part of the country due to high wheat feed wheat prices.

·        
Argentina plans to loosen restrictions on beef exports.

 

Export
developments.

·        
China bought a large amount of Ukrainian corn this week. 

 

EIA:
The Brent crude oil price decline on November 26 was among the largest in years

https://www.eia.gov/todayinenergy/detail.php?id=50618&src=email

 

Soybeans

·        
Soybeans and meal made a leg up after the US CPI report indicated November inflation increased near what the trade expected. Soybean oil paired some losses shortly before the electronic close.  With meal gaining on soybean oil
again, January oil share is lower, around 43 percent, lowest since June. 

·        
Malaysian palm oil futures traded up 22 ringgit and cash was unchanged at $1,192.50/ton. The contract is up 3% for the week.

·        
AmSpec reported December 1-10 Malaysian palm shipments at 544,059 tons, up slightly from 543,944 tons November 1-10.  ITS reported a 0.2% increase to 572,689 tons from the comparable period month ago.

·        
MPOB Malaysian palm data was not very supportive as end of November stocks came in 47,200 tons above expectations and exports fell short by 119,500 tons. However, production was less than expected and imports far exceeded the
average trade guess, leaving some to figure domestic use was near expectations.

November
MPOB versus Reuters estimates

·        
Japan said there is a 60 percent chance of La Nina lasting through the winter (NH).

·        
Offshore values are leading soybean oil 46 points higher (202 points higher for the week to date) and meal $1.40 short ton higher ($1.20 higher for the week).

·        
Rotterdam meal values were 2-7 euros higher from yesterday morning and Rotterdam oil mixed (SBO lower and RSO higher).

·        
Malaysian palm oil futures traded up 22 ringgit and cash was unchanged at $1,192.50/ton.

·        
Malaysia

·        
China crush margins on our analysis was last $1.95 ($2.02 previous) versus $2.22 at the end of last week and compares to $0.93 a year ago.

·        
China futures

 

Export
Developments

·        
None reported 

 

 

Wheat

·        
US wheat is higher on oversold conditions and higher Matif wheat.

·        
Reuters noted China this week booked at least several hundred thousand tons of French wheat and barley, several thousand tons of Australian wheat, and also purchased Ukrainian corn and barley. This is supporting March Paris wheat,
up 3.25 euros at 285.75/ton.

·        
Egypt said they have enough wheat reserves to cover 5.1 months of consumption. 

·        
Russia’s export duty on wheat will increase to $91 per ton from $84.90 per ton as of December 15. Barley will rise to $78.70 per ton from $75.10 per ton, and on corn to $54.40 per ton from $54.30 per ton. The new duty rates will
be valid until December 21.

·        
Iraq plans to import 500,000 tons of wheat in January after securing funds from the Economic Ministerial Council.

·        
Central and western Ukraine are expected to see showers this week, improving soil moisture for wheat, according to Maxar.  (Bloomberg)

·        
Australia weather looks good through the next week.

·        
The BA Grains Exchange estimated the Argentina wheat crop at 21 million tons, up from 20.3 million previously.  USDA left their production unchanged at 20 million tons in their December update.  Rosario grains exchange is at 22.1
million tons. Note Argentina’s previous record for their wheat crop was 19 million tons during the 2018-19 growing season. 

 

Export
Developments.

·        
The Philippines passed on 300,000 tons of wheat 9 for Feb-Jun arrival. Results are awaited on 125,000 tons of feed barley. Prices for the wheat were too high.

·        
South Korea’s MFG bought 60,000 tons of Indian feed wheat at $351/ton c&f for Jan 20-Feb 15 shipment.

·        
Japan bought 260,312 tons of food wheat from the US and Canada. Original tender details:

·        
Japan in a SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of barley on December 15 for arrival by March 10.

·        
Jordan seeks 120,000 tons of feed barley on December 15.

 

Rice/Other

·        
South Korean Agro-Fisheries & Food Trade Corp. seeks another 22,000 tons of rice from the US, set to close Dec 16.

·        
Results awaited but no purchase was believed: 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.