FI Morning Grain Comments 01/07/22

PDF attached

 

Good
morning. 

 

USDA:
Private exporters reported the following activity:

-176,784
metric tons of corn for delivery to Mexico during the 2021/2022 marketing year

-120,000
metric tons of soybeans for delivery to unknown destinations during the 2022/2023 marketing year

 

GFS
models are hinting towards a wetter outlook for Brazil during the 16-21^st period. Argentina appears to be unchanged during that timeframe.  Jan 21 timeframe below.

 

 

CBOT
agriculture prices Friday morning are following their directional pattern from yesterday, with weakness in soybeans, meal, corn and wheat. Soybean oil is higher from a higher close in palm oil and gains in WTI crude oil futures.  The recent slide in soybean
prices may have attracted some new-crop export pricing. Other news is light. MPOB is due out with Malaysian S&D data Monday, first of many reports released next week.  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. Conab will update Brazil supply on Tuesday. China and US will release reports on Wednesday. 

 

 

 

Weather

 

 

 

World
Weather Inc.

Early
overnight precipitation maps via World Weather Inc.

 

 

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 7, 2022

• Not
  much change overnight.
• Argentina
  will experience ten days of dry weather further stressing crops throughout the nation.
  
• Temperatures
  will be very warm to hot from the latter part of the weekend through most of next week.
  
• There
  is opportunity for rain after Jan. 16, but quite a bit of damage will occur by then to the early crops which are reproducing and to recently planted crops with under-developed root systems.
  
• Brazil’s
  weather will be favorably mixed except in Rio Grande do Sul where a steady rate of drying and rising crop moisture stress is expected.
  
• The
  north may stay too dry for another week, but improvement is expected after that.
  
• In
  the U.S., temperatures in the single digits Fahrenheit from the central Plains into the lower Midwest this morning are raising a little concern over possible winter crop damage in snow free areas, but many of the temperatures were just not quite cold enough
  to induce permanent damage.
• Impressive
  low temperatures in Minnesota this morning included -32 to -37 degree readings in central parts of the state, but no wheat is grown there, and snow is on the ground.
  
• U.S.
  central and southwestern Plains will continue seeing limited precipitation for a while
• Much
  of California is done with precipitation for the next couple of weeks
• There
  is some potential for a little rain in Texas briefly during the second half of next week.
  
• West
  and South Texas dryness is not likely to change much, though.
• There
  is still no threatening cold slated for Russia or Europe
• India
  is still looking at a favorable distribution of rain to support its winter crops.
  
• No
  threatening weather is seen in China
• Eastern
  Australia rain will be welcome over the next ten days, although Queensland will need more than what is expected.
  
• South
  Africa crops will remain in mostly good shape
• The
  Middle East is seeing improved precipitation easing long term dryness and improving winter crop establishment and general conditions
• Spain
  and parts of Morocco will remain too dry
• Southeast
  Asia weather will remain mostly good

Source:
World Weather, inc.

 

Bloomberg
Ag Calendar

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

Monday,
Jan. 10:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Malaysian
  Palm Oil Board’s data for December output, exports and stockpiles
• Malaysia’s
  Jan. 1-10 palm oil exports
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Japan

Tuesday,
Jan. 11:

• EU
  weekly grain, oilseed import and export data
• Brazil’s
  Conab releases data on area, yield and output of corn and soybeans

Wednesday,
Jan. 12:

• China
  farm ministry’s CASDE outlook report
• USDA’s
  monthly World Agricultural Supply and Demand Estimates (WASDE) report, noon
• USDA’s
  NASS 2021 summary of crop acreages and yields, noon
• USDA’s
  quarterly stockpiles data for commodities, including wheat, barley, corn, soybeans and sorghum, noon
• EIA
  weekly U.S. ethanol inventories, production
• USDA’s
  Farm Service Agency issues 2021 crop size data gathered from producers, 1pm
• New
  Zealand Commodity Price

Thursday,
Jan. 13:

• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Suedzucker
  quarterly earnings
• Agrana
  nine- month earnings
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports

Friday,
Jan. 14:

• China’s
  December trade data
• ICE
  Futures Europe weekly commitments of traders report, ~1:30pm
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm

Source:
Bloomberg and FI

 

 

 

 

Bloomberg
Trade Estimates for the January USDA crop/stocks reports.

 

 

 

 

 

 

Macros

US
Change In Nonfarm Payrolls Dec: 199K (est 450K; prev 210K; prevR 249K)

–
Unemployment Rate Dec: 3.9% (est 4.1%; prev 4.2%)

–
Avg. Hourly Earnings (M/M) Dec: 0.6% (est 0.4%; prev 0.3%; prevR 0.4%)

–
Avg. Hourly Earnings (Y/Y) Dec: 4.7% (est 4.2%; prev 4.8%; 5.1%)

US
Private Payrolls Dec: 211K (est 365K; prev 235K; prevR 270K)

–
Manufacturing Payrolls Dec: 26K (est 35K; prev 31K; prevR 35K)

–
Government Payrolls Dec: K (prev -25K)

Canadian
Net Change In Employment Dec: 54.7K (est 25K; prev 153.7K)

–
Unemployment Rate Dec: 5.9% (est 6.0%; prev 6.0%)

–
Full Time Employment Change Dec: 122.5K (est 5.3K; prev 79.9K)

–
Part Time Employment Change Dec: -67.7K (est 10K; prev 73.8K)

 

 

Corn

·        
CBOT corn was lower this morning but don’t discount a two-sided trade. WTI crude is higher, USD lower and spreading against wheat may underpin prices.

·        
US employment increased less than expected in December.

·        
Other news is light. The funds since New Years have added net 14,000 corn contracts.

·        
The Buenos Aires Grain Exchange reported the Argentine corn crop rated 40% good & excellent compared to 58% week earlier.

 

Export
developments.

·        
USDA this morning reported private exporters sold 176,784 tons of 2021-22 corn to Mexico. 

 

Wholesale
electricity prices trended higher in 2021 due to increasing natural gas prices

https://www.eia.gov/todayinenergy/detail.php?id=50798&src=email

 

Soybeans

·        
CBOT agriculture prices Friday morning are following their directional pattern from yesterday, with weakness in soybeans and soybean meal. Soybean oil is higher from a higher close in palm oil and gains in WTI crude oil futures. 

·        
The funds since New Years have added net 24,000 soybeans and 11,000 soybean oil and are near flat for soybean meal.  The estimated current net long soybean meal position is 55,000 net long contracts, slightly above the fund position
for soybean oil.

·        
The recent slide in soybean prices may have attracted some new-crop export pricing. We are hearing China may have bought 3 USG cargos for October shipment at around +114 over the November and 5-6 PNW cargoes also of  October at
+190 over the November. The CBOT soybean March contract earlier this week traded around 90 cents premium over the November 2022 before narrowing to around 78.5 cents this morning.

·        
Malaysian palm futures traded higher by 8 ringgit to 4,993.  The March position is up three consecutive weeks and for this week gained 6.5%.

·        
Malaysian cash CPO was down $10/ton to $1,242.50.

·        
China soybean futures traded 0.2% lower, meal down 0.7%, SBO up 0.3% and palm up 0.3%.

·        
China soybean cash crush values on our analysis were running at 183 cents/bushels (167 previous) versus 193 at the end of last week and 145 year ago. 

·        
Rotterdam soybean oil for the Feb-Apr position was 1-2 euros higher and Rotterdam rapeseed oil 10 euros higher. SA soybean meal when imported into Rotterdam was running mostly 0.50-4.00 euros higher.  

·        
Offshore values are leading CBOT soybean oil 61 points higher (27 lower week to date) and meal $2.60 higher ($3.40 lower for the week to date).

·        
AgResource: Brazil soybeans – 131 million tons versus 141 million previous

·        
CNGOIC reported the China crush as of January 2 declined 200.000 tons to nearly 1.6 million, slightly below a year ago level. Soybean stocks are 3.1 million tons, lowest since mid-April, according to AgriCensus.

 

Export
Developments

·        
We are hearing China is pricing new-crop US soybeans.

·        
Under the 24-hour announcement system, private exporters sold 120,000 tons of new-crop (2022-23) soybeans to unknown.

 

MPOB
is
due out Monday, first of many reports released next week.  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.

 

 

Wheat

·        
US wheat is lower again on technical selling and lack of US export developments. 

·        
The funds since New Years have sold an estimated net 13,000 wheat. 

·        
The BA Grains Exchange estimated Argentina’s 2021-22 wheat harvest at 21.8 million tons versus 21.5 million tons previously, mainly on higher-than-expected yields. This is the fourth increase in more than one month.

·        
EU wheat basis the March position was 0.50 lower at 272.50 euros a ton. 

·        
Russia is on holiday.

·        
Yesterday IKAR reported Russian wheat with 12.5% protein content loading from Black Sea ports for supply in January stood at $330 a ton free on board (FOB), unchanged from late 2021.

 

Export
Developments.

·        
Jordan seeks 120,000 tons of wheat on January 18.  Possible shipment combinations are in 2022 between July 1-15, July 16-31, Aug. 1-15 and Aug. 16-31. 

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

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

 

Rice/Other

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