FI Morning Grain Comments 12/30/21

PDF attached

 

Good
morning

 

USD
is higher, WTI crude down about 27 cents and US equities higher.  USDA export sales mostly fell short of expectations. News this morning is extremely thin. As we close out 2021, some traders are booking long profits. Weather outlooks have not changed that
much. The US situation seems to be improving while Argentina’s weather pattern is still negative with net drying amid above normal temperatures for the balance of this week.  Brazil will see improving rains across the central growing areas and some of the
southern regions. China will auction off 500,000 tons of wheat from auction directed to wheat flour processing companies on Jan 5.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 30, 2021

• Significant
  rain fell in northern Parana and central Mato Grosso do Sul Wednesday and early today, but not in the drought areas of western Parana or southwestern Mato Grosso do Sul.
  
• The
  outlook today has not changed much from that of recent past days.
• The
  best chance for meaningful rain in Brazil’s driest areas will be next week, but both western Rio Grande do Sul and Paraguay are not expected to do very well with getting relief.
  
• Some
  areas in far southwestern Parana and southwestern Mato Grosso do Sul will only get some temporary relief from dryness while most other areas get more meaningful rain for a little while.
  
• Heavy
  rain is still a concern for center west and center south Brazil crop areas in the coming ten days and the situation will be closely monitored for possible impacts on crop conditions and harvest progress.
  
• Argentina,
  in the meantime, is expecting some timely rain in the driest areas during the coming week, but rain amounts will be a little light for a lasting change.
  
• Argentina
  will need well timed rainfall routinely in January to keep crops in good condition. Not much change occurred elsewhere in the world. 
• Snow
  cover will keep eastern Europe and western CIS winter crops protected from cool weather
• Rain
  is still needed in Spain and a moisture boost would also be good for Romania
• North
  Africa will get some needed rain during mid- to late week next week and into the second week of January offering an improved soil moisture profile
• India’s
  weather is mostly good, but additional rain will be needed in January and February to induce the best yielding winter crops
• China’s
  weather remains good with little change likely
• Eastern
  Australia needs rain for unirrigated sorghum and cotton
• Rain
  may fall periodically near the coast, but interior crop areas in Queensland and New South Wales will need rain soon to ensure the best possible summer crop conditions
• South
  Africa crop conditions are mostly good and will continue that way, but greater rain may eventually be needed in western summer crop areas
• U.S.
  hard red winter wheat areas will be favorably protected by snow this weekend from temperatures that will turn bitterly cold
• A
  winter storm will impact areas from the central Plains through the heart of the Midwest Friday into Sunday slowing travel and stressing livestock
• Moisture
  in the west-central U.S. high Plains region are not expected to be great enough to change drought status
• Warming
  in the central U.S. late this weekend and into early next week will be welcome, but more cold is expected late next week through the second week of January
  
• Some
  of the returning cold will impact the Midwest more than this weekend’s cold will
• A
  tropical cyclone forming off the upper east coast of Australia today will move away from the country, but its close proximity to land will help restrict rainfall in key crop areas for several days
  

 

Bloomberg
Ag Calendar

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

 

 

 

 

First
Notice Day Delivery estimates 

Soybeans
zero

Soybean
oil 0-250

Soybean
meal zero

 

USDA
export sales
were below expectations for the soybean complex, above a Reuters trade guess for corn and slightly below a trade range for all-wheat. We see no bullish figures out of this report.  Shipments of soybean products slowed but this is not uncommon for this time
of year.  Sorghum sales were 182,900 tons and pork slowed to 3,200 tons. 

 

 

 

Macros

 

Corn

·        
CBOT corn was lower this morning on weakness in the soybean complex and long liquidation ahead of the end of the year.  CME will be open for trading on Friday. Many traders are still in holiday trading mode. USDA export sales
for the grains were lighter than expected. 

·        
Weekly US ethanol production was up 8,000 barrels to 1.059 million from the previous week and stocks down 29,000 barrels to 20.676 million.

 

US-China
phase one tracker: China’s purchases of US goods

https://www.piie.com/research/piie-charts/us-china-phase-one-tracker-chinas-purchases-us-goods

 

 

IFES
2021: Farm Income Outlook for 2022

Schnitkey,
G., D. Lattz and K. Swanson. “IFES 2021: Farm Income Outlook for 2022.” Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, December 29, 2021.

https://farmdocdaily.illinois.edu/2021/12/ifes-2021-farm-income-outlook-for-2022.html?utm_source=rss&utm_medium=rss&utm_campaign=ifes-2021-farm-income-outlook-for-2022

 

Export
developments.

·        
None reported

 

Soybeans

·        
The CBOT soybean complex extended losses on Thursday with prices making another leg lower after USDA reported lighter than expected US export sales for all three commodities. Brazil’s weather forecast calls for improving rain
for the second week of the outlook. We see longs, mainly funds, exiting the market ahead of year end.

·        
Offshore values are leading soybean oil 59 points lower and meal $1.70/short ton higher.

·        
Rotterdam meal was mixed and Rotterdam vegetable oils unchanged to lower. Quotes were thin.

·        
China futures were little changed.

·        
Malaysian palm futures were down 12 ringgit to 4683 and cash was unchanged at $1,177.50/ton. 

 

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 mixed with KC the leader, Chicago and MN mostly lower. 

·        
China plans to sell 50,000 tons of wheat from state reserves on January 5 to flour millers. The sold an estimated 891,938 tons of wheat from reserves in October.

 

 

Export
Developments.

·        
Jordan cancelled their 120,000 ton import tender for feed barley.  Possible shipments period were July 1-15, July 16-31, Aug. 1-15 and Aug. 16-31.

·        
Yesterday Egypt’s GASC bought 300,000 tons of wheat for shipment Feb. 15 to Mar. 3. That included 60,000 tons of French wheat, 180,000 tons of Ukrainian wheat and 60,000 tons of Romanian wheat.

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

 

Rice/Other

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

 

USDA export sales

 U.S. EXPORT SALES FOR WEEK ENDING  12/23/2021

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	87.3	2,106.4	1,635.2	194.3	4,172.6	5,465.6	0.0	14.0
SRW	29.0	738.5	507.6	17.5	1,572.9	1,062.2	0.0	34.5
HRS	63.1	1,270.4	1,671.3	55.3	2,968.8	4,105.8	0.0	0.0
WHITE	20.1	845.4	2,681.2	67.9	2,026.2	2,843.7	0.0	0.0
DURUM	0.0	36.2	103.8	0.0	97.2	486.5	0.0	33.0
TOTAL	199.5	4,996.8	6,599.2	335.0	10,837.7	13,963.9	0.0	81.5
BARLEY	0.0	19.0	13.7	0.7	11.5	16.9	0.0	0.0
CORN	1,246.5	27,073.1	28,967.0	921.4	13,667.7	14,228.5	60.0	1,512.0
SORGHUM	182.9	3,746.5	3,188.5	174.1	1,538.7	1,899.7	0.0	0.0
SOYBEANS	524.0	12,448.4	17,513.1	1,723.4	28,935.7	37,074.0	75.0	216.0
SOY MEAL	69.5	3,181.3	2,853.3	170.6	2,913.6	2,972.7	0.3	35.9
SOY OIL	9.3	287.5	293.6	11.9	150.3	194.0	0.1	0.2
RICE
L G RGH	1.0	166.7	234.8	1.6	580.7	732.3	0.0	0.0
M S RGH	0.0	6.3	16.4	0.0	2.9	12.5	0.0	0.0
L G BRN	0.4	4.0	9.6	0.2	26.8	22.0	0.0	0.0
M&S BR	0.0	68.4	61.3	0.2	15.2	34.0	0.0	0.0
L G MLD	16.0	94.4	84.5	1.7	344.5	269.7	0.0	0.0
M S MLD	52.1	104.6	182.1	27.6	176.4	190.3	0.0	0.0
TOTAL	69.5	444.3	588.7	31.2	1,146.6	1,260.8	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	192.2	7,518.2	6,131.7	162.2	2,931.9	5,253.4	24.4	1,070.2
PIMA	7.1	234.9	223.7	7.0	137.6	329.9	0.0	4.4

 

 

This
summary is based on reports from exporters for the period December 17-23, 2021.

Wheat:  Net sales of 199,500 metric tons (MT) for 2021/2022 were down 53 percent from the previous week and 43 percent from the prior 4-week average.  Increases
primarily for Taiwan (110,000 MT), Guatemala (35,600 MT, including 31,600 MT switched from unknown destinations), Nicaragua (30,000 MT), Haiti (27,500 MT switched from unknown destinations), and Mexico (19,100 MT, including decreases of 3,000 MT), were offset
by reductions primarily for unknown destinations (70,600 MT).  Exports of 335,000 MT were up 76 percent from the previous week and 28 percent from the prior 4-week average.  The destinations were primarily to Japan (90,300 MT), Colombia (45,200 MT), Mexico
(43,300 MT), South Korea (30,000 MT), and Nigeria (27,500 MT). 

Corn:  Net sales of 1,246,500 MT for 2021/2022 were up 27 percent from the previous week, but down 2 percent from the prior 4-week average.  Increases
were primarily for Japan (385,800 MT, including 160,900 MT switched from unknown destinations and decreases of 2,000 MT), Canada (200,100 MT, including decreases of 200 MT), unknown destinations (163,800 MT), Mexico (149,100 MT, including and decreases of
11,900 MT), and Guatemala (94,600 MT).  Total net sales of 60,000 MT for 2022/2023 were for Japan.  Exports of 921,400 MT were down 16 percent from the previous week and 9 percent from the prior 4-week average.  The destinations were primarily to Mexico (278,300
MT), China (277,000 MT), Japan (189,800 MT), Canada (64,000 MT), and Costa Rica (27,600 MT).

Optional Origin Sales:  For 2021/2022, options were exercised to export to unknown destinations (60,000 MT) from the United States.  The current
outstanding balance of 441,000 MT is for unknown destinations (369,000 MT), Italy (63,000 MT), and Saudi Arabia (9,000 MT).

Barley:  No net sales were reported for the week.  Exports of 700 MT were down 16 percent from the previous week and 10 percent from the prior
4-week average.  The destination was to Japan.

Sorghum:  Net sales of 182,900 MT for 2021/2022 were down 57 percent from the previous week and 46 percent from the prior 4-week average.  Increases
were reported for China (124,900 MT, including decreases of 208,500 MT) and unknown destinations (58,000 MT).  Exports of 174,100 MT were down 45 percent from the previous week and 13 percent from the prior 4-week average.  The destination was primarily to
China (173,900 MT).

Rice:  Net sales of 69,500 MT for 2021/2022 were down 13 percent from the previous week, but up 43 percent from the prior 4-week average.  Increases
were primarily for Japan (28,700 MT), South Korea (22,000 MT), Haiti (15,000 MT), Canada (1,300 MT), and Honduras (1,000 MT).  Exports of 31,200 MT were down 25 percent from the previous week and 50 percent from the prior 4-week average.  The destinations
were primarily to Japan (26,100 MT), Canada (1,900 MT), Mexico (1,800 MT), Costa Rica (300 MT), and Hong Kong (200 MT). 

Exports for Own Account: For 2021/2022, the current exports for own account outstanding balance is 100 MT, all Canada.

Soybeans:  Net sales of 524,000 MT for 2021/2022–a marketing-year low–were down 35 percent from the previous week and 56 percent from the prior
4-week average.  Increases primarily for China (432,800 MT, including 394,000 MT switched from unknown destinations and decreases of 9,300 MT), Turkey (119,500 MT, including 116,000 MT switched from unknown destinations), the Netherlands (83,900 MT, including
80,000 MT switched from unknown destinations and decreases of 2,100 MT), Thailand (77,400 MT, including 66,000 MT switched from unknown destinations), and the United Kingdom (66,000 MT, including 60,000 MT switched from unknown destinations), were offset by
reductions primarily for unknown destinations (494,500 MT).  Net sales of 75,000 MT for 2022/2023 were for unknown destinations (66,000 MT) and Japan (9,000 MT).  Exports of 1,723,400 MT were down 7 percent from the previous week
and 19 percent from the prior 4-week average.  The destinations were primarily to China (944,600 MT), Turkey (119,500 MT), the Netherlands (83,900 MT), Thailand (82,900 MT), and the United Kingdom (66,000 MT).

Export for Own Account: For 2021/2022, the current exports for own account outstanding balance is 34,600 MT, all Canada.

Export Adjustments:  Accumulated exports of soybeans to the Netherlands were adjusted down 64,931 MT for week ending December 2, 2021.  The correct
destination for this shipment is Germany.

Soybean Cake and Meal:  Net sales of 69,500 MT for 2021/2022–a marketing-year low–were down 77 percent from the previous week and 63 percent
from the prior 4-week average.  Increases primarily for El Salvador (25,500 MT, including decreases of 200 MT), Mexico (23,900 MT, including decreases of 300 MT), Honduras (13,700 MT), Costa Rica (5,000 MT), and Japan (5,000 MT), were offset by reductions
primarily for Canada (16,300 MT) and the Philippines (2,100 MT).  Net sales of 300 MT for 2022/2023 resulting in increases for the Netherlands (800 MT), were offset by reductions for Japan (500 MT).  Exports of 170,600 MT were down 57 percent from the previous
week and 41 percent from the prior 4-week average.  The destinations were primarily to the Philippines (47,300 MT), Mexico (45,300 MT), Canada (11,500 MT), Panama (10,000 MT), and the Dominican Republic (9,000 MT).  

Optional Origin Sales:  For 2021/2022, the current outstanding balance of 50,000 MT is for Venezuela. 

Soybean Oil:  Net sales of 9,300 MT for 2021/2022 were down 92 percent from the previous week and 79 percent from the prior 4-week average.  Increases
were primarily for Mexico (5,300 MT), Canada (2,000 MT), Nicaragua (1,200 MT), the Dominican Republic (400 MT), and Guatemala (300 MT, including decreases of 6,000 MT).  Total net sales of 100 MT for 2022/2023 were for Canada.  Exports
of 11,900 MT were up noticeably from the previous week, but down 48 percent from the prior 4-week average.  The destinations were to Guatemala (7,800 MT), Mexico (2,700 MT), and Honduras (900 MT).

Cotton:  Net sales of 192,200 RB for 2021/2022 were down 21 percent
from the previous week and 40 percent from the prior 4-week average.  Increases were primarily for China (69,300 RB), Turkey (38,000 RB, including decreases of 2,700 RB), Indonesia (30,000 RB, including 2,700 RB switched from Japan), Pakistan (18,100 RB),
and Vietnam (15,200 RB, including 200 RB switched from Japan), were offset by reductions for Japan (2,300 RB).  Net sales of 24,400 RB for 2022/2023 reported for Pakistan (25,100 RB), were offset by reductions for China (700 RB).  Exports of 162,200 RB were
up 24 percent from the previous week and 45 percent from the prior 4-week average.  The destinations were primarily to China (45,600 RB), Vietnam (42,200 RB), Pakistan (15,600 RB), Turkey (15,300 RB), and Mexico (6,500 RB).  Net sales of Pima totaling 7,100
RB were up 9 percent from the previous week and 37 percent from the prior 4-week average.  Increases were primarily for China (4,300 RB), India (1,500 RB), Thailand (900 RB), and South Korea (300 RB).  Exports of 7,000 RB were up 55 percent from the previous
week and 16 percent from the prior 4-week average.  The destinations were primarily to China (2,200 RB), Honduras (1,700 RB), India (1,300 RB), and Peru (1,000 RB).

 Optional Origin Sales:  For 2021/2022, the current outstanding balance of 8,800 RB is for Pakistan. 

 Exports for Own Account:  For 2021/2022, the current
exports for own account outstanding balance is 100 RB, all Vietnam.

 Export Adjustments:  Accumulated exports of upland cotton to Indonesia were adjusted down 352 RB for week ending December 16, 2021.  This export was reported in error.

Hides and Skins:  Net
sales of 52,100 pieces for 2021 were down 79 percent from the previous week and 82 percent from the prior 4-week average.  Increases primarily for China (47,900 whole cattle hides, including decreases of 22,300 pieces), South Korea (8,100 whole cattle hides,
including decreases of 9,000 pieces), Mexico (2,200 whole cattle hides, including decreases of 1,000 pieces), Vietnam (1,800 whole cattle hides), and Canada 700 whole cattle hides, including decreases of 700 pieces), were offset by reductions primarily for
Taiwan (4,700 pieces) and Thailand (3,400 pieces).  Net sales of 258,200 pieces for 2022 were primarily for China (146,800 whole cattle hides), South Korea (30,200 whole cattle hides), Brazil (27,700 whole cattle hides), and Thailand (18,400 whole cattle hides).  In
addition, total net sales of 1,800 calf skins were reported for Italy.  Exports of 319,100 pieces were down 27 percent from the previous week and 18 percent from the prior 4-week average.  Whole cattle hide exports were primarily to China (218,300 pieces),
South Korea (33,500 pieces), Thailand (28,800 pieces), and Taiwan (17,500 pieces).

Net sales reductions of 45,300 wet blues for 2021 were down noticeably from the previous week and from the prior 4-week average.  Decreases were primarily for Vietnam
(21,400 unsplit), Italy (6,900 unsplit and 6,700 grain splits), China (8,600 unsplit), and Hong Kong (1,000 unsplit).  Net sales of 310,300 wet blues for 2022 resulting in increases for Hong Kong (108,000 unsplit), China (87,100 unsplit), Italy (45,400 unsplit
and 6,500 grain splits), Vietnam (40,000 unsplit), and Thailand (22,400 unsplit), were offset by reductions for India (2,400 grain splits).  Exports of 75,500 wet blues were down 45 percent from the previous week and 41 percent from the prior 4-week average.  The
destinations were primarily to Italy (24,400 unsplit and 13,500 grain splits), Vietnam (16,800 unsplit), China (10,200 unsplit), Thailand (5,200 unsplit), and Taiwan (2,400 unsplit).  Net sales reductions of 104,800 splits resulting in increases for Vietnam
(13,500 pounds), were more than offset by reductions for China (118,300 splits).  Net sales of 117,400 splits for 2022 resulting in increases for China (120,400 pounds) and Vietnam (3,000 pounds), were offset by reductions for South Korea (6,100 pounds).  Exports
of 647,800 pounds were primarily to Vietnam (437,600 pounds).

Beef:  Net sales of 6,300 MT for 2021 were down 48 percent from the
previous week and 55 percent from the prior 4-week average.  Increases primarily for Japan (2,600 MT, including decreases of 300 MT), South Korea (1,800 MT, including decreases 500 MT), China (1,000 MT, including decreases of 300 MT), Mexico (300 MT), and
Indonesia (200 MT), were offset by reductions for Taiwan (300 MT) and Canada (100 MT).  Net sales of 6,000 MT for 2022 were primarily for Japan (2,400 MT), South Korea (1,300 MT), Taiwan (900 MT), Hong Kong (400 MT), and China (300 MT).  Exports of 17,000
MT were down 5 percent from the previous week and 2 percent from the prior 4-week average.  The destinations were primarily to South Korea (5,200 MT), Japan (3,500 MT), China (2,800 MT), Taiwan (1,700 MT), and Mexico (1,400 MT). 

Pork:  Net sales of 3,200 MT for 2021 were down 89 percent from the previous week and 90 percent from the prior 4-week average.  Increases primarily
for Mexico (14,700 MT, including decreases of 500 MT), Japan (2,500 MT, including decreases of 1,100 MT), Nicaragua (100 MT, including decreases of 100 MT), the Dominican Republic (100 MT), and the Netherlands (100 MT), were offset by reductions primarily
for China (9,500 MT), Australia (2,500 MT), and Colombia (1,000 MT).  Net sales of 35,900 MT for 2022 primarily for China (18,600 MT), Mexico (5,000 MT), South Korea (3,600 MT), Australia (2,500 MT), and Colombia (1,900 MT), were offset by reductions for Nicaragua
(100 MT).  Exports of 30,900 MT were down 3 percent from the previous week and 6 percent from the prior 4-week average.  The destinations were primarily to Mexico (15,900 MT), Japan (4,200 MT), China (3,100 MT), South Korea (2,300 MT), and Canada (1,700 MT).