FI Morning Grain Comments 12/14/21

PDF attached

 

Good
morning

 

USD
was 9 points lower and WTI crude $1.15 cents lower. Soybeans staged a comeback late in the electronic session after meal rallied. Earlier January soybeans reached a December 2 low. January soybean meal could see an outside day higher.  Soybean oil remains
under pressure.  US end user buying for soybean meal is strong amid lysine shortages. Grains are lower on follow through selling. South American weather still looks good. EU MARS noted EU crops are in good shape after favorable weather over the past month.
NOPA is due out Wednesday and the trade is looking for a record crush rate, on a daily adjusted basis. US end of Nov soybean oil stocks may rise for the 5^th consecutive month to over 1.9 billion pounds. 
Offshore values are leading soybean oil 37 points lower and meal $0.60 short ton higher. A few more wheat import tenders were floated overnight. Results are awaited on
Algeria seeking at least 50,000 tons of milling and Egypt in for vegetable oils. 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 14, 2021

• Not
  much changed overnight.
• Some
  welcome showers occurred in far southern Brazil, but a ridge of high pressure building up over Argentina later this week will end the precipitation and induce warmer temperatures that will accelerate drying and raise the need for more rain.
  
• Precipitation
  suggested for early next week in southern Brazil and Argentina will be welcome, but a little light leaving an ongoing need for more moisture.
  
• Center
  west and northern parts of center south Brazil will get some heavy rainfall in the next couple of weeks, but no harm to summer crops is expected.
  
• Drier
  weather will be needed in northern Brazil in January to support soybean harvesting.
  
• In
  the U.S., California has received some substantial rain and mountain snowfall and a little moisture will linger today and be followed by more moisture late Wednesday into Thursday.
  
• U.S.
  hard red winter wheat areas will be left dry during the next ten days along with some areas in the western U.S. Corn Belt.
  
• Another
  outbreak of severe weather is possible from the northern Delta into Kentucky Friday into Saturday after unusually warm weather occurs prior to that time and cold air starts moving southeast from Canada.
  
• Russia,
  Ukraine and eastern Europe will see waves of snow and cold during the latter part of this week and next week.
  
• The
  snow will protect winter crops.
• Northwestern
  Africa will continue along with Spain, although some rain might evolve in the second week of the forecast in Morocco.
  
• Portions
  of the Middle East away from Turkey will also be a little too dry for a while. 
  
• Southern
  India is drying out favorably.
• Eastern
  Australia will see some increase in precipitation during the weekend and especially next week to benefit summer crops.
  
• Winter
  crop conditions in Australia should not be harmed by returning rainfall.
• Tropical
  Storm Rai will move across the central Philippines in the second half of this week producing 100 mph wind speeds and flooding rainfall possibly causing some crop and property damage. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
245,090                 versus   150000-400000  range

Corn                     
810,395                 versus   700000-1200000                range

Soybeans           
1,723,970             versus   1900000-2300000             range

 

Macros

Canada
Factory Prices Rose 0.8% M/M In November – StatsCan Flash

US
PPI Final Demand (M/M) Nov: 0.8% (est 0.5%, prev 0.6%)

PPI
Final Demand (Y/Y) Nov: 9.6% (est 9.2%, prev 8.6%)

US
PPI Ex Food And Energy (M/M) Nov: 0.7% (est 0.4%, prev 0.4%)

PPI
Ex Food And Energy (Y/Y) Nov: 7.7% (est 7.2%, prev 6.8%)

US
PPI For Final Demand Advances 0.8% In November; Services Rise 0.7%, Goods Increase 1.2%

 

Corn

·        
CBOT corn is lower on weakness in wheat and outside energy markets.  South American weather still looks good.

·        
USD was 8 points lower and WTI crude $1.17 lower.

·        
Conab reported Brazil corn plantings reached 80.6% complete, a 2.7 percentage points advance from last week and compares to 78.1% year ago.

·        
The Baltic Dry Index fell 8.8% to 2,932 points.

·        
There are no major weather issues with South America and Argentina will see favorable precipitation this week.  Rainfall early to mid-week this week in southern Brazil will vary 0.30 to 1.00 inch and a few 1.00- to 2.00-inch amounts,
according to World Weather, Inc. 

·        
USDA US corn export inspections as of December 09, 2021, were 810,395 tons, within a range of trade expectations, above 774,958 tons previous week and compares to 924,246 tons year ago. Major countries included China for 275,350
tons, Mexico for 256,847 tons, and Japan for 151,077 tons.

 

Export
developments.

·        
None reported

 

 

 

 

Soybeans

·        
Soybeans staged a comeback late in the electronic session after meal rallied. Earlier January soybeans reached a December 2 low. January soybean meal could see an outside day higher.  Soybean oil remains under pressure.  Results
are awaited for Egypt in for vegetable oils.  US end user buying for soybean meal is strong amid lysine shortages.

·        
NOPA is due on Wednesday and the average trade guess for the November crush is 181.64 million bushels, above 181.02 million during November 2020 and down from 184 million crushed during October 2021. If realized, the daily adjusted
crush would be a record, taking out the previous record established November 2020. Soybean oil stocks average 1.903 billion pounds, highest since April 2020, and if realized up for the fifth consecutive month.

·        
Conab reported Brazil soybean plantings reached 96.6% complete as of December 11, compared to 94.2% year ago. 

·        
Offshore values are leading soybean oil 37 points lower and meal $0.60 short ton higher.

·        
Rotterdam meal values were 4-7 euros lower from late last week and Rotterdam oil 15-18 euros lower.

·        
Malaysian palm oil futures traded down 93 ringgit and cash was off $15.00 at $1,172.50/ton.

·        
The Southern Peninsula Palm Oil Millers’ Association (SPPOMA) estimated production during Dec. 1-10 fell 2.8% from the same period in November.(Reuters)

·        
India’s 2021-22 Rapeseed production was estimated between 10 and 11 million tons from 8.5 million tons year ago, according to the Central Organization for Oil Industry and Trade.

·        
Malaysia

·        
China crush margins on our analysis was last $1.97/bu ($1.93 previous) versus $1.95 at the end of last week and compares to $1.23 a year ago.

·        
China futures

·        
USDA US soybean export inspections as of December 09, 2021, were 1,723,970 tons, below a range of trade expectations, below 2,334,121 tons previous week and compares to 2,458,271 tons year ago. Major countries included China for
840,676 tons, Egypt for 225,917 tons, and Italy for 141,329 tons.

 

Export
Developments

·        
Results awaited: Egypt’s GASC seeks roughly 30,000 tons of soybean oil and about 10,000 tons of sunflower oil for February 5-25 arrival. 

• Lowest
  offer for SBO was $1,362/ton. In comparison, they bought international SBO at $1,468/ton on November 23 (30k)
• Lowest
  offer for sunflower oil was $1,402/ton. In comparison they bought 12k international sunflower oil at $1,425/ton on November 16.
  

 

 

China
crush margins are slightly positive

Source:
Reuters and FI

 

 

 

 

Wheat

·        
US wheat is lower on follow through selling but look for losses to be limited after a few more global import tenders were announced.  MN is gaining over Chicago. Traders are awaiting results for the Algerian wheat import tender. 

·        
EU MARS noted EU crops are in good shape after favorable weather over the past month.

·        
Paris wheat is 3.75 euros lower basis March position at 282.50 euros per ton.

·        
USDA US all-wheat export inspections as of December 09, 2021, were 245,090 tons, within a range of trade expectations, below 246,257 tons previous week and compares to 263,440 tons year ago. Major countries included Japan for
63,109 tons, Nigeria for 47,767 tons, and Taiwan for 28,528 tons.

 

Export
Developments.

·        
Results awaited: Algeria seeks at least 50,000 tons of milling wheat on Tuesday, open until Wednesday, for LH Jan through February shipment. 

·        
The Philippines seek 120,000 tons of animal feed wheat on for shipment in 2022 between March and May.  The wheat can be sourced optionally from Australia, the United States, Canada, European Union and Black Sea region.

·        
Another group from the Philippines seeks up to 220,000 tons of animal feed wheat on Dec. 16 for March 15 to May 31, 2022, shipment. Origins include Australia, Europe or the Black Sea region.

·        
Iran’s GTC seeks 180,000 tons of milling wheat on Dec. 15 for shipment in January and February 2022.

·        
Japan’s Ministry of Agriculture, Forestry and Fisheries(MAFF) is seeking to buy a total of 228,783 tons of food-quality wheat from the United States and Canada in regular tenders that will close on Thursday.

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

·        
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 wheat on December 16. 

·        
Turkey seeks about 320,000 tons of 12.5% and 13.5% protein content milling wheat on December 21 for shipment between February 1 and February 28.

 

Rice/Other

·        
Cocoa is at a three-week high.

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

·        
(Reuters) – Vietnam’s coffee exports in November were up 8.3% from October at 107,473 tons, while rice exports for the same period fell 8.4% against the preceding month, government customs data released on Tuesday showed.  For
the first 11 months of 2021, Vietnam exported 1.4 million tons of coffee, down 2.3% from a year earlier, Vietnam Customs said in a statement.

 

Black Sea Wheat

Source: Reuters and FI

 

Australian wheat

Source: Reuters and FI