FI Morning Grain Comments 01/05/22

PDF attached

 

Good
morning. 

 

Soybeans
and grains are lower on technical selling and some improvement in the SA weather models during the second and third week of the forecast.  Don’t discount a two-sided trade in soybeans and corn. Soybean oil continues to gain on meal.  USD was down 24 points,
WTI crude up748 cents, and equity futures pointing towards a lower open. The morning GFS model calls for meaningful rain for Jan 18-20^th across Argentina, but that is far out from now.  Hot and mostly dry weather will impact Argentina over the next
seven days. In Brazil, both the European and US forecast models have suggested a ridge of high pressure might briefly form over southern Brazil during the second week of the forecast. Net drying for Minas Gerais, Bahia, Tocantins and parts of Goias would be
welcome for soybean maturation and harvesting. A Bloomberg poll calls for weekly ethanol production to be reported at 1.052 million barrels, down 7,000 from the previous week and stocks to increase to 20.856 million from 20.676 million previous week. 

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 5, 2022

• Hot
  and mostly dry weather will impact Argentina over the next seven days and without much precipitation and very poor soil moisture already in place a further decline in crop conditions will result.
  
• Late
  season planting may also be impacted by dryness; however, the second week of the forecast today looks a little wetter especially after Jan. 15. 
  
• In
  Brazil, both the European and US forecast models have suggested a ridge of high pressure might briefly form over southern Brazil during the second week of the forecast and if that occurs rainfall will be suppressed offering a much better early soybean maturation
  and harvest environment and reducing the risk of additional soybean damage in the already wettest areas of Minas Gerais, Bahia, Tocantins and parts of Goias.
  
• This
  change, if it occurs, would be very well received by Brazil’s farmers and would have a positive impact on most of the nation’s agriculture – at least for a little while.
  
• In
  the U.S. snow cover will be present in the heart of hard red winter wheat areas Thursday and Friday mornings to protect winter crops from bitter cold temperatures; however, snow cover will be lacking from Missouri to central Indiana where temperatures could
  come close to the damage threshold.
• World
  Weather, Inc. believes any damage from this week’s cold will be limited.
• A
  weak nor’easter will impact the U.S. northern Atlantic coast Thursday night and Friday, but the impact will be low with light to locally moderate snow.
  
• India
  is still expecting rain over the next week to ten days in many central, eastern and northern winter crop areas and it will benefit all pre-reproductive crops.
  
• Southeastern
  Australia will get rain over the next several days, but Queensland will have need for greater precipitation.
  
• Russia
  will see cooler weather next week and that should help increase snow cover in some areas in the south that are experiencing a little melting now. 
• None
  of the cold would be great enough to threaten winter crops
• Spain
  and Morocco still need greater precipitation
• Some
  increase in precipitation is expected in the Middle East over the next ten days
• South
  Africa crops will continue in good shape, but greater rain may be needed in some western production areas
• China’s
  greatest precipitation is expected in the Yangtze River Basin and there is no threat of damaging cold in that country

Source:
World Weather, inc.

 

Bloomberg
Ag Calendar

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

US
ADP Employment Change Dec: 807K (est 410K; prev 534K)

 

 

Corn

·        
CBOT corn was lower early Wednesday on technical selling.  News has been thin all week and global export developments are slow. 

·        
A Bloomberg poll calls for weekly ethanol production to be reported at 1.052 million barrels, down 7,000 from the previous week and stocks to increase to 20.856 million from 20.676 million previous week. 

·        
IHS Markit will issue its January US and world crop reports Thursday.

 

Export
developments.

·        
None reported

 

Retail
gasoline prices rose across the United States in 2021 as driving increased

https://www.eia.gov/todayinenergy/detail.php?id=50758&src=email

 

 

Soybeans

·        
US soybeans are lower on SA weather maps indicating meaningful rain will occur across Argentina during the 17-20^th January period. Soybean meal eased while soybean oil rallied following higher palm oil prices.  Look
for a two-sided trade in soybeans.

·        
We picked up that AgRural lowered their Brazil bn crop to 133.4MMT, down 11.3 from previous with Parana taking a bit hit of 5.5MMMT. 

·        
Brazil 2021 soybean exports hit a record of 86 million tons with December shipments hitting a large 2.7 million tons, up sharply from the previous year.

·        
Malaysian palm futures were up four consecutive sessions and hit a 6-week high overnight. Flooding is slowing production across the Peninsular Malaysia and Sabah.

·        
A Reuters poll looks for Malaysia’s palm oil inventories at end-December to sink 4.9% from the previous month to 1.73 million tons, lowest in five months.

·        
Malaysian palm futures rallied 122 ringgit to 5,036. Cash CPO was up $30/ton to $1,257.50.

·        
China.

·        
China soybean cash crush values on our analysis were running at 178 cents/bushels (190 previous) versus 193 at the end of last week and 145 year ago. 

·        
Rotterdam soybean oil for the Feb-Apr position was 26 euros higher and Rotterdam rapeseed oil 20 higher. SA soybean meal when imported into Rotterdam was running mostly unchanged to 5 euros higher in the nearby positions. It looks
like there were lack of offers out of Argentina meal.  

·        
Offshore values are leading SBO 52 points lower and meal $0.80 lower.

 

Export
Developments

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

 

Wheat

·        
US wheat traded lower this morning on technical selling and lower trade in soybeans and corn. A lower USD may limit losses. 

·        
EU wheat basis the March position was 1.25 lower at 278.00 euros a ton. 

·        
China plans to sell 500,000 tons of wheat from state reserves on January 12 to flour millers.  Results are awaited on China selling 500,000 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.

·        
Tunisia bought about 125,000 tons of soft wheat, 75,000 tons of durum wheat and 75,000 tons of animal feed barley. The soft wheat was bought in five 25,000 ton consignments, at $365.93, $365.93, $369.18, $367, and $369.95. Shipment
of the soft wheat was requested on various dates between Feb. 1 and March 25. The durum was bought at $693.68, $698.68 and $703.68, with shipment between Jan. 25 and Feb. 25. The barley was bought at $344.46, $345.46 and $346.46, with shipment due between
Feb. 1 and March 5.

·        
Jordan’s state grain buyer bought 60,000 (out of 120,000 tons sought) of milling wheat, optional origin at an estimated $326 a ton c&f for shipment in the first half of August 2022.

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

 

Rice/Other

·        
Sugar prices are at a two-week low.

·        
Bangladesh seeks 50,000 tons of rice on January 16.

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