FI Morning Grain Comments 12/22/21

PDF attached

 

Good
morning

 

Corn,
soybeans, soybean meal ,and soybean oil are higher this morning from ongoing South American weather concerns. Yesterday the Local Parana (Brazil) AgMin reported soybean conditions are lower for the third consecutive week.  57% of crops were rated good on Dec.
20, down from 71% a week earlier and 78% a year ago. February Paris rapeseed futures hit a record today of 754.75 euros US wheat is higher on follow through buying and higher EU wheat futures.  Traders are awaiting on results of a few global wheat import tenders.
Iran seeks barley, soybean meal and wheat today and Algeria is in for wheat this week. CBOT corn is higher. The USD was 19 points lower and WTI crude oil turning lower.  A Bloomberg poll looks for weekly US ethanol production to be up 1,000 barrels to 1.086
million (1070-1095 range) from the previous week and stocks up 168,000 barrels to 20.883 million. 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 22, 2021

• Cold
  temperatures occurred this morning in western Russia, but snow was on the ground to protect winter crops from damage. 
  
• An
  expansion in the snowfield to the south is expected over the next few days as the cold air expands as well.
  
• Not
  much change occurred in South America’s forecast for the next ten days to two weeks.
  
• Argentina,
  Uruguay, Paraguay and southern Brazil will all continue to see below average precipitation over an extended period of time.
  
• Temperatures
  will also be warm which will continue to deplete soil moisture resulting in some decline to production potentials.
  
• Northeastern
  Brazil is expecting to see abundant to excessive precipitation resulting in some possible flooding.
  
• Tocantins,
  northern Goias, Bahia and northern Minas Gerais will be most vulnerable to the wettest conditions.
  
• No
  changes were noted for the U.S. weather during the next ten days to two weeks leaving hard red winter wheat areas dry while precipitation occurs in many other areas.
  
• India
  is still expecting rain next week that will bolster soil moisture for improved winter crop production potentials.
  
• China
  will remain dry as will parts of North Africa
• East-central
  Australia will get a boost in precipitation this weekend into next week.
• South
  Africa crop weather should remain well mixed for a while, as well. 

 

Bloomberg
Ag Calendar

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

 

 

 

Macros

US
MBA Mortgage Applications Dec-17: -0.6% (prev -4.0%)

–         
30-Year Mortgage Rate Dec-17: 3.27% (prev 3.30%)

US
GDP Annualized (Q/Q) Q3 T: 2.3% (exp 2.1%; prev 2.1%0 

–         
Core PCE (Q/Q) Q3 T: 4.6% (exp 4.5%; prev 4.5%) 

–         
Personal Consumption Q3 T: 2.0% (exp 1.7%; prev 1.7%) 

–         
GDP Price Index Q3 T: 6.0% (exp 5.9%; prev 5.9%) 

China
has locked down city of Xi’an with strict orders to 13 million residents to stay at home due to covid outbreak – Sources

 

Corn

·        
CBOT corn is higher on unfavorable southern Brazil weather and net drying seen for Argentina. The USD was down 18 points as of 7:44 am CT.  WTI crude oil was near unchanged. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 1,000 barrels to 1.086 million (1070-1095 range) from the previous week and stocks up 168,000 barrels to 20.883 million.

·        
German pig numbers fell to their lowest level in 25 years. The pig crop amounted to 2.45 million in November 2021, down 9.4% from year ago. The number of pig farms has fallen by 39.1% in the past ten years.

·        
USDA Chicken and Eggs report showed United States egg production totaled 9.37 billion during November 2021, up slightly from last year. Total layers in the United States on December 1, 2021, totaled 393 million, up slightly from
last year. Egg-type chicks hatched during November 2021 totaled 45.8 million, down 5 percent from November 2020. Eggs in incubators totaled 48.4 million on December 1, 2021, down 9 percent from a year ago. Broiler-type chicks hatched during November 2021 totaled
799 million, up 2 percent from November 2020. Eggs in incubators totaled 722 million on December 1, 2021, up 2 percent from a year ago.

·        
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.

·        
Reuters estimates for the pig report are below. Side note. all hogs Sept 1 were 2.2% below year earlier. June 1, 2021, was up 0.1% YOY. 

 

 

 

Export
developments.

·        
Iran’s SLAL seeks up to 60,000 tons of animal feed barley, 60,000 tons of feed corn and 60,000 tons of soybean meal on Wednesday, Dec. 22 for shipment between January and February 2022.

 

 

2022
Break-Even Prices for Corn and Soybeans

Schnitkey,
G., C. Zulauf, N. Paulson and K. Swanson. “2022 Break-Even Prices for Corn and Soybeans.”
farmdoc daily (11):168,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, December 21, 2021. 
https://farmdocdaily.illinois.edu/2021/12/2022-break-even-prices-for-corn-and-soybeans.html?utm_source=rss&utm_medium=rss&utm_campaign=2022-break-even-prices-for-corn-and-soybeans

 

Soybeans

·        
Soybeans, soybean meal ,and soybean oil are higher this morning from ongoing South American weather concerns.

·        
The Local Parana (Brazil) AgMin reported soybean conditions are lower for the third consecutive week.  57% of crops were rated good on Dec. 20, down from 71% a week earlier and 78% a year ago. At the beginning of December, 91%
of crops were good.  30% was rated regular as of Monday, up from 23% last week and 13% of crops was rated poor vs 6% in the previous report. Bloomberg also noted 71% of Parana’s soy are flowering or at grain filling stages, during which it is more susceptible
to drought losses. (Bloomberg)

·        
February Paris rapeseed futures hit a record today of 754.75 euros and is currently 14.25 euros higher at the time this was written.

·        
Germany’s national statistics agency reported German winter rapeseed plantings for the 2022 harvest have expanded by 8.7% from 2021 to around 1.08 million hectares.  Germany’s winter wheat planted area for the 2022 crop has increased
by a moderate 0.4% on the year to about 2.87 million hectares.

·        
China crush margins on our analysis was last $1.79/bu ($2.00 previous) versus $1.87 at the end of last week and compares to $1.07 a year ago.

·        
Offshore values are leading soybean oil 2 points lower and meal $0.30 short ton lower.

·        
Rotterdam meal values were 4-15 euros higher from around this time previous day and Rotterdam oil 6-25 euros higher.

·        
Cargo surveyor SGS reported month to date December 20 Malaysian palm exports at 1,099,775 tons, 49,706 tons below the same period a month ago or down 4.3%, and 89,122 tons above the same period a year ago or up 8.8%.

·        
Malaysian palm oil March futures traded
increased 64 to 4,448 ringgit. Cash palm was up $10.00/ton to $1,120/ton. Palm oil production during Dec. 1-20 is expected to fall compared with the same period last month due to floods in Peninsular Malaysia (Reuters).

·        
China futures were down 0.6% for soybeans, up 0.7% for meal and up 2.1% & 2.0%, respectively for soybean oil and palm oil. 

 

Export
Developments

·        
Iran’s SLAL seeks up to 60,000 tons of animal feed barley, 60,000 tons of feed corn and 60,000 tons of soybean meal on Wednesday, Dec. 22 for shipment between January and February 2022.

 

Wheat

·        
US wheat is higher on follow through buying and higher EU wheat futures.  Traders are awaiting on results of a few global wheat import tenders.

·        
Paris March wheat futures was 3.75 euros  higher, at 288.75/ton. The contract reached its highest level since December 8. 

·        
Ukraine exported 30.1 million tons of grain so far in the 2021-22 July-June season, up 21.6% from the same period year earlier. That included 15.6 million tons of wheat, 5.1 million tons of barley and 9 million tons of corn. AgMin
estimates for the entire crop year:

• Wheat
  24.5 vs. 16.6 year earlier
• Corn
  30.9 vs. 23.1
• Barley
  5.2 vs. 4.2

 

Export
Developments.

·        
Iran’s GTC seeks 108,000 tons of wheat on December 22 for an unknow shipment period.

·        
In a separate deal, Iran’s SLAL seeks up to 60,000 tons of animal feed barley on Wednesday for shipment between January and February 2022.

·        
Algeria is back in for wheat this week for shipment in February. They also seek durum wheat. 

·        
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.