FI Morning Grain Comments 12/21/21

PDF attached

 

Good
morning

 

USD
is lower. Grains are mixed. Soybeans are mixed in part to a recovery in palm oil overnight which supported soybean oil, and a reversal in WTI crude oil to the upside. Black Sea supplies are growing (wheat and corn). Global wheat demand remains strong.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 21, 2021

• Rumors
  in the marketplace that too much rain might fall in Mato Grosso, Brazil during the harvest may be a little out of line.
  
• The
  wettest areas will be in Tocantins, Bahia, northern Minas Gerais and northern Goias.
  
• Most
  of the early soybean harvest areas are from Mato Grosso into Parana and Sao Paulo and rainfall in those areas will not be nearly as great over the next two weeks as it will be farther to the east.
  
• Concern
  over flooding will rise in Tocantins, Bahia and northern Minas Gerais. 
• Restricted
  rain from southern Brazil into central Argentina will prevail for the next two weeks. Warm temperatures will make it difficult for anticipated showers to prevent net drying from occurring and a rising level of crop stress is expected over time.
  
• Eastern
  Australia is advertised wetter for this weekend into next week impacting sorghum, cotton and other summer crop areas.
  
• Flooding
  will be possible in a part of Queensland and northeastern New South Wales.
  
• Good
  harvest weather will continue in southern wheat and barley areas of Australia.
  
• India’s
  weather is wetter for next week and the moisture will be great for central, eastern and northern winter crops as they approach reproduction.
  
• China
  and western Europe will be tranquil for a while.
• Snow
  is expected to fall in the western CIS and a part of eastern Europe resulting in better winter crop protection against colder temperatures coming soon.
  
• North
  Africa will get some rain, but southwestern Morocco’s drought region will not get much moisture.
  
• Parts
  of the Middle East still need greater rain.
• Flooding
  in Sumatra and Peninsular Malaysia that occurred during the weekend is already abating and should not have a lasting impact on crops or transportation. 
• Dryness
  in U.S. hard red winter wheat production areas is expected to prevail during the next two weeks
• Cold
  air in western Canada and in the extreme northern U.S. Plains will likely move southward into the western and central U.S. during weeks two and three of the forecast
• Waves
  of snow will continue to impact Canada’s Prairies and the northern U.S. Plains
• Good
  amounts of rain and mountain snow will impact the western United States over the next ten days
• Waves
  of rain and snow will continue in parts of the U.S. Midwest and Delta
• Florida’s
  beneficial rain will clear out of the area after today

 

Bloomberg
Ag Calendar

Tuesday,
Dec. 21:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction

Wednesday,
Dec. 22:

• EIA
  weekly U.S. ethanol inventories, production
• U.S.
  cold storage data for poultry, pork and beef; poultry slaughter, 3pm

Thursday,
Dec. 23:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• U.S.
  cattle on feed, 3pm
• USDA
  hogs & pigs inventory and production, red meat output, 3pm

Friday,
Dec. 24:

• No
  Commitment of Traders reports given holidays in U.S. and U.K. CFTC and ICE releases will be out on Monday, Dec. 27

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
211,880                 versus   200000-400000  range

Corn                     
1,001,528             versus   600000-1200000                range

Soybeans           
1,679,430             versus   1500000-2100000             range

 

Macros

Philadelphia
Fed Non-Manufacturing Regional Business Activity Index: 28.3 In Dec VS 46.1 In Nov

US
Current Account Q3: -214.8Bln (est -205Bln, prevR -198.3Bln)

Canada
Retail Sales (M/M) Oct: 1.6%  (est 1%, prev -0.6%)

  
Retail Sales Ex Autos (M/M) Oct: 1.3% (est 1.5%, prev -0.2%)

Canada
Retail Sales Rise 1.2% – StatsCan Flash Estimate

 

 

Corn

·        
CBOT corn is unchanged to mixed following a mix bag in wheat and waning soybeans.

·        
USD was lower by around 14 points.

·        
UkrAgroConsult increased their estimate of the Ukraine 2021 corn crop to 39.2 million tons from 38.5 million tons in November, allowing for a slightly more exportable supply.

·        
SovEcon sees the Ukraine corn crop at 29.1 million tons, up 2 million from their prior estimate. 

·        
This afternoon USDA Chicken and Eggs report will be released.

·        
USDA cattle on feed & hogs and pigs are due out on Thursday.

·        
Bloomberg cattle survey: US November placements onto feedlots seen rising y/y to 1.97m head. That would be the second straight y/y increase after rising by 2.4%.

·        
Bloomberg hogs and pigs survey: The U.S. hog herd as of Dec. 1 seen falling 2.8% from a year earlier to 74.65m head, according to the average in a Bloomberg Survey of seven analysts.

·        
USDA US corn export inspections as of December 16, 2021, were 1,001,528 tons, within a range of trade expectations, above 917,100 tons previous week and compares to 770,122 tons year ago. Major countries included Mexico for 354,354
tons, China for 209,442 tons, and Japan for 207,409 tons.

 

Export
developments.

·        
None reported

 

 

Soybeans

·        
Soybeans are mixed in part to a recovery in Malaysian palm oil overnight which supported soybean oil and a reversal in WTI crude oil futures.

·        
Southern Brazil and Argentina will trend drier for the next couple of weeks. Rainfall will be lighter than usual and temperatures slightly above normal.

·        
China crush margins on our analysis was last $2.00/bu ($2.01 previous) versus $1.87 at the end of last week and compares to $1.07 a year ago.

·        
Offshore values are leading soybean oil 163 points higher and meal $3.70 short ton lower.

·        
Rotterdam meal values were unchanged to 6 euros higher from previous and Rotterdam oil 5-25 euros higher.

·        
Malaysia will keep its January crude palm oil export tax duty at 8%.

·        
Malaysian palm oil March futures traded
increased 89 to 4,384 ringgit. Cash palm was up $25.00/ton to $1,110/ton.

·        
China futures were again mixed.

·        
USDA US soybean export inspections as of December 16, 2021, were 1,679,430 tons, within a range of trade expectations, below 1,746,973 tons previous week and compares to 2,857,498 tons year ago. Major countries included China
for 944,776 tons, Egypt for 121,964 tons, and Indonesia for 72,473 tons.

 

Export
Developments

·        
None reported  

 

Wheat

·        
US wheat is mixed with ongoing bullish sentiment in the KC market over US Great Plains production concerns after last Wednesday’s “dust bowl” storm. Results was awaited for Algeria in for wheat. Turkey bought wheat.

·        
Paris March wheat futures was 0.75 euro lower at 279.00/ton.

·        
SovEcon estimated Russia’s 2022 wheat crop at 81.3 million tons from the previous 80.7 million tons.

·        
Egypt said they have enough wheat reserves to last 5.3 months. 

·        
USDA US all-wheat export inspections as of December 16, 2021, were 211,880 tons, within a range of trade expectations, below 268,840 tons previous week and compares to 392,178 tons year ago. Major countries included Mexico for
93,414 tons, Korea Rep for 54,999 tons, and Nigeria for 21,100 tons.

 

Export
Developments.

·        
Results awaited: 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.

·        
Turkey’s state grain board TMO has bought 320,000 tons of milling wheat, much of it from Ukraine. Red milling wheat of 12.5% and 13.5% protein content was sought for arrival between Feb. 1 and Feb. 28. Reuters prices below:

·        
Algeria is back in for wheat this week for shipment in February.

·        
Taiwan Flour Millers’ Association seeks 110,000 tons of grade 1 milling wheat to be sourced from the United States on Dec. 23 for shipment between Feb 1-15 and the second between Feb. 8-22 and second cargo for shipment for some
time in 2022.

·        
Jordan seeks 120,000 tons of feed barley on December 23 for shipment sometime between June 16-30, July 1-15, July 16-31 and Aug. 1-15.

·        
Jordan seeks 120,000 tons of milling wheat on December 29 for shipment sometime between June 16 and 30, July 1 and 15, July 16 and 31 and Aug. 1 and 15.

 

Rice/Other

·        
 Iraq bought 134,122 tons of local rice. 

·        
Bangladesh seeks 50,000 tons of non-basmati parboiled rice on December 30 for delivery 50 days from contract award and letter of credit opening.