FI Morning Grain Comments 12/31/21

PDF attached

 

Good
morning and
Happy New Year!

 

As
we close out a turbulent year, CBOT prices are mixed. WTI is about $1.40 lower, USD 7 points lower and US equities mostly lower. The morning weather models show improvement from that of yesterday for the US Plains, Midwest and Delta. The models appeared to
have also improved for Brazil’s east central and southwestern areas. Argentina’s forecast is unchanged. Light rain is seen for Cordoba, northern BA, Santa Fe, and Entre Rios through Tuesday.  Overall SA is expected to finally see timely rains that should limit
crop condition losses.

 

Due
to the Federal holiday observed on Friday, December 31, the weekly Commitments of Traders report will be released on Monday, January 03 at 3:30pm.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 31, 2021

• The
  European model run today increased shower activity in Argentina and Rio Grande do Sul, Brazil while reduced rainfall somewhat in southwestern Mato Grosso do Sul and southwestern Parana.
  
• These
  changes are not surprising, but be cautious to recognize that there is no general soaking of rain advertised for Argentina
• Shower
  activity in Argentina and Rio Grande do Sul will help to keep moisture in the air and prevent excessive heat from occurring.
• Improvements
  in soil moisture will be brief and only in the topsoil.
• Restricted
  subsoil moisture will leave the door open for a quick return of crop stress if a high pressure ridge develops and it gets warmer and drier quickly. 
  
• The
  reduction in rainfall in Mato Grosso do Sul and Parana was needed and expected as we have stated previously.
  
• These
  two states will not be left out of the rain, but the amounts will be lighter than some of the model data suggested earlier in the week.
  
• Relief
  is still expected, but a below-average rainfall bias will continue in January. 
  
• That
  does not mean production cuts will continue as great as they have been.
• U.S.
  hard red winter wheat areas will get sufficient snow to protect crops from bitter cold expected Sunday morning.
  
• Colder
  weather will impact the central and eastern U.S. during the first half of January with some moderating temperatures later in the month once again.
  
• Restricted
  rainfall is expected in West and South Texas over the next couple of weeks
• Precipitation
  in the northwestern U.S. Plains and southwestern Canada’s Prairies will remain limited for a while
• India
  is still expected rain during the middle to latter part of next week to further support winter crops as they approach reproduction
• Less
  snow was suggested in the coming ten days for southern Ukraine and southern parts of Russia’s Southern Region relative to forecasts earlier this week, but these areas are not threatened with bitter cold conditions
• Snow
  cover will remain widespread in Russia’s winter crop areas and in many areas in northeastern Europe to protect winter crops
• No
  threatening cold is expected in Russia, Ukraine, Europe or China winter crop areas
• Australia’s
  forecast limits rain through the middle part of next week in summer crop areas
• A
  boost in precipitation is then expected periodically in the following week
• South
  Africa weather will be favorably mixed over the next two weeks with the greatest need for rain in the far western summer crop areas
• Southeast
  Asia precipitation will continue frequent and sometimes abundant from Indonesia and Malaysia into the Philippines

 

Bloomberg
Ag Calendar

Friday

• EIA
  biodiesel feedstock and monthly ethanol production
• Russia’s
  New Year holiday is from Dec. 31 to Jan. 9.

Monday,
Jan. 3:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• CFTC
  and ICE commitments of traders reports (delayed from Dec. 31)
• Honduras
  and Costa Rica coffee exports
• Global
  cotton balance report from the International Cotton Advisory Committee
• USDA
  soybean crush, DDGS production, corn for ethanol, 3pm
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  U.K, New Zealand, Thailand, Russia, Japan, China, Canada, Australia

Tuesday,
Jan. 4:

• EU
  weekly grain, oilseed import and export data
• Australia
  Commodity Index
• Purdue
  Agriculture Sentiment
• HOLIDAY:
  New Zealand, Russia

Wednesday,
Jan. 5:

• EIA
  weekly U.S. ethanol inventories, production
• Malaysia’s
  Jan. 1-5 palm oil exports
• HOLIDAY:
  Russia

Thursday,
Jan. 6:

• FAO
  World Food Price Index
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Russia

Friday,
Jan. 7:

• 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
• HOLIDAY:
  Russia

Source:
Bloomberg and FI

 

 

 

Macros

 

 

Corn

·        
CBOT corn is lower in the front months early this morning on improving SA weather. The nearby rolling corn contract is up more than $1.00/bu after the nearby position hit a 2021 low back in early September. 

·        
China’s reported its sow herd at the end of November was 4.7% higher than the previous year at 42.96 million head, and down 1.2% from the previous month. Abattoirs with annual production capacity at 20,000 heads and above slaughtered
235.89 million pigs in the first 11 months of the year, up 66.1% from a year ago, according to data reported by Reuters. The net profit of raising pigs on large farms was at 293 yuan ($45.97) per head in November, down 187.3% from the previous month. The value
was also down 69% from a year ago, according to the data. (Reuters)

 

 

 

Export
developments.

·        
None reported

 

Soybeans

·        
Higher trade in US soybeans despite lower outside markets and improving SA weather.  Soybean futures could see its best monthly gain of the year.  SBO is gaining on meal, in the back months, in a very light volume trade. Expiring
Jan meal was up $4.40 and March up $0.40.

·        
Deliveries in beans were a little heavier than expected at 234 contracts by Bunge and being stopped by the street. Oil deliveries were lighter than expects at only 36 contracts, mostly all local holdings.

·        
Offshore values are leading soybean oil 80 points higher (28 higher for the week) and meal $3.50/short ton higher ($7.20 higher for the week to date).

·        
Rotterdam meal was unchanged to 15 euros lower and Rotterdam vegetable oils mixed. 

·        
China futures declined 0.9% in soybean meal and were up 0.1% for soybeans, up 0.3% for SBO and 0.4% higher for palm oil.

·        
Cargo surveyor AmSpec reported Malaysian Dec 1-31 palm exports at 1.492 million tons, 5.1% below the same period a month ago of 1.572MMT.

·        
Cargo surveyor ITS reported Malaysian palm exports at 1.581MMT, 5.3 percent below 1.669MMT from the same period a month ago.

·        
Malaysian palm oil futures were up nearly 31 percent in 2021. 

·        
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. Chicago wheat futures are set to end the year on a lower note for the last trading day, but the contract is on track to see its yearly best gain since 2010.

·        
EU wheat basis the March position closed 0.9% lower at 277.50 euros ($314.30) a ton.

·        
For the year EU wheat was up 30 percent. 

·        
Ukraine exported 32.2 million tons of grain in the first half of the 2021-22 July-June season, up 23.5% from a year ago. That included 15.8 million tons of wheat, 5.2 million tons of barley and 10.8 million tons of corn.

·        
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’s state grain buyer seeks 120,000 tons of milling wheat, optional origins, on Jan. 5, for shipment in 2022 between 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

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