FI Morning Grain Comments 12/28/21

PDF attached

 

Good
morning

 

US
equities are higher, WTI crude more than $1.10 higher, USD lower and gold higher.  US soybeans, meal and soybean oil are higher on follow through buying amid ongoing SA weather concerns. Corn is higher but gains are limited on lower wheat due to lack of fresh
global grain import developments. USDA’s corn sale to unknown yesterday was refreshing to see but inspections reported later Monday morning did indicate a slowdown in US shipments. US weather maps showed an expansion in precipitation coverage for the heart
of the US growing areas, much needed for some of the dry areas of winter wheat country.  Argentina still looks dry through Thursday with above normal temperatures over the next two weeks. Brazil will see active weather in the northern areas and net drying
in the southern production regions. Australia’s weather looks good. Europe precipitation is expected to occur periodically over the next two weeks but will miss Spain and surrounding areas.  Western CIS winter grain and rapeseed areas will see waves of snow
and rain over the next ten days. Offshore values are leading soybean oil 60 points lower and meal $2.20 short ton higher. Malaysian March futures increased 168 ringgit to 4,772 and cash increased $35/ton to $1,192.50/ton. China soybean complex showed a 1.3%
increase in soybeans and 0.3% to 0.8% increase in the products.

 

 

 

Weather

 

World
Weather Inc.

 

 

Bloomberg
Ag Calendar

Wednesday

• EIA
  weekly ethanol production and stocks

Thursday

• USDA
  export sales

Friday

• EIA
  biodiesel feedstock and month ethanol production
• CFTC
  Commitment of Traders

Russia’s
New Year holiday is from Dec. 31 to Jan. 9.

Source:
Bloomberg and FI

 

 

 

 

CFTC
Commitment of Traders

 

 

 

USDA
inspections versus Reuters trade range                                    

Wheat                 
271,349                 versus   200000-800000

Corn                     
719,031                 versus   875000-1300000

Soybeans           
1,577,417             versus   1000000-1800000

 

Macros

 

Corn

·        
CBOT corn is higher in the nearby months on strength in WTI crude oil and follow though buying in soybeans, but gains are limited from a lower trade in wheat. US ethanol margins slipped over the past couple of weeks, per DTN article.

·        
China approved more genetically modified (GMO) corn varieties produced by domestic companies. Increasing yields is one major step in achieving grain security, IMO. 

·        
USDA US corn export inspections as of December 23, 2021 were 719,031 tons, below a range of trade expectations, below 1,001,528 tons previous week and compares to 1,266,318 tons year ago. Major countries included Mexico for 307,127
tons, Japan for 190,023 tons, and China for 138,119 tons.

 

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT soybean complex is higher on follow through buying. Today we could see more market participation than that of yesterday post Boxing Day holiday. 

·        
Paris February rapeseed is 4.75 euros lower at 775.00, after hitting a record earlier in the session of 791.50 euros.

·        
Offshore values are leading soybean oil 60 points lower and meal $2.20 short ton higher.

·        
Indonesia’s 2022 crude palm oil production was estimated to increase 2.6% to 51.01 million tons from a projected 49.71 million in 2021, according to Estate Crop Fund Eddy Abdurrachman. Export demand was seen at 27.9 million tons
from 27.08 million throughout 2021. Indonesia will consume 9.3 million to 9.4 million kiloliters of biodiesel this year. The Government target is 9.41 million kiloliters for 2021; goal next year is 10.15 million.

·        
Malaysian March futures increased 168 ringgit to 4,772 and cash increased $35/ton to $1,192.50/ton.

·        
Rotterdam vegetable oil values were 10 euros higher in the nearby tradable positions from around this time yesterday morning and Rotterdam meal 7-20 euros higher.

·        
China crush margins on our analysis was last $1.65/bu ($1.59 previous) versus $1.74 at the end of last week and compares to $1.13 a year ago.

·        
China soybean complex showed a 1.3% increase in soybeans and 0.3% to 0.8% increase in the products.

·        
USDA US soybean export inspections as of December 23, 2021 were 1,577,417 tons, within a range of trade expectations, below 1,890,426 tons previous week and compares to 2,273,575 tons year ago. Major countries included China for
750,312 tons, Thailand for 78,597 tons, and Mexico for 70,066 tons.

 

Export
Developments

·        
The CCC seeks 12,000 tons of soybean oil on Jan 5 for Feb 5-15 delivery for the Dominican Republic.

 

Wheat

·        
US wheat is lower on lack of fresh global export developments, favorable Australian weather and technical selling.  Chicago March wheat is trading near a couple key MA’s.  

·        
Paris March wheat was trading 6.25 euros lower at 283.25 euros earlier this morning.

·        
USDA US all-wheat export inspections as of December 23, 2021 were 271,349 tons, within a range of trade expectations, above 226,739 tons previous week and compares to 407,374 tons year ago. Major countries included Japan for 90,284
tons, Colombia for 45,167 tons, and Mexico for 38,160 tons.

 

Export
Developments.

·        
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.

·        
Jordan seeks 120,000 tons of feed barley on December 30.  Possible shipments period included July 1-15, July 16-31, Aug. 1-15 and Aug. 16-31.

·        
Iraq seeks 50,000 tons of wheat on January 3 from the US, Canada and Australia.

 

Rice/Other

·        
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.