FI Morning Grain Comments 01/10/22

PDF attached

 

Good
morning. 

 

CBOT
agriculture prices are mostly lower after a choppy early morning trade in large part to improving South American weather. WTI crude was 26 cents lower, USD 31 points higher and US equities pointing towards a lower open. Soybean oil traded two-sided. Higher
palm oil is helping after MPOB reported bullish Malaysian palm oil stocks data. Soybean meal rebounded from overnight session lows. Cold US temperatures over the weekend likely aided feed demand. Corn and wheat were trading lower. Look for positioning ahead
of the USDA reports due out on Wednesday.

 

US
weather remains favorable for the Midwest but dry for the central and southern Great Plains, raising concerns over soil moisture levels for US winter wheat. For South America it appears the rain in the forecast for the third week of January is still in place
(parts of Argentina and southern Brazil), and another round may occur around the January 23-25 the period. Rain will start to lighten up for northern Brazil, favoring harvest activity. 
Heavy
rains and thunderstorms are expected over parts of Indonesia’s Sumatra and Kalimantan on Monday. Rains in New South Wales and eastern Victoria will slow remaining wheat harvesting.

 

 

 

Weather

 

SA
– week two

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 10, 2022

• Argentina
  crop damage will continue through Saturday due to excessive heat, no rain and dry soil.
  
• Early
  planted crops are reproducing and losing yield in this environment.
• The
  most recently planted crops may wither and die in this environment as well.
  
• Most
  other crops will struggle with varying degrees of stress.
• Argentina
  will get rain of significance next week first in the north and later in the week in the south.
  
• Relief
  will stop the decline in crop conditions and production, but it may not reverse the trend without a wet finish to the growing season.
  
• Another
  ridge of high pressure is possible a little later this month and/or in February, although it might not be as brutal to the nation’s crops.
  
• Brazil
  weather looks good or improving during the next two weeks with less frequent and less significant rain in the north after early this week and southern areas will see a good mix of rain and sun.
  
• Rio
  Grande do Sul and Paraguay will continue to deal with significant dryness and moisture stress, although a little relief is possible next week.
  
• Not
  much change elsewhere in the world.
• South
  Africa and eastern Australia will see scattered showers and thunderstorms, although Queensland, Australia will need more rain over time.
  
• China
  will be wettest in the Yangtze River Basin which is normal for this time of year while the southern coastal provinces do not get much moisture.
  
• India
  is experiencing greater than usual precipitation this month raising the potential for high yielding winter crops in February.
  
• No
  threatening cold is expected in Europe, the CIS or U.S. winter crop areas.
  
• The
  U.S. Plains and western Corn Belt will remain drier biased as well as California and the southwestern states for the next two weeks. 

Source:
World Weather, inc.

 

Eastern
US soil moisture levels are very good, but US winter wheat crop areas out west could use additional precipitation.

 

 

Bloomberg
Ag Calendar

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.

 

 

 

 

 

 

 

 

 

 

CFTC
Commitment of Traders

Largest
discrepancy in the Commitment of Traders reports was that the funds net long position was not as long as expected, by 19,700 contracts.  The funds were also not as long as expected for soybeans, by 8,700.  Both position results may have little impact on prices. 
The net long traditional fund position for corn was down a small amount as of last Tuesday and for soybeans the net long position is highest since July 13, 2021.  Chicago wheat is headed to near a flat position for funds futures only if prices continue to
decline. 

 

 

 

 

Macros

New
Covid variant called ‘Deltacron’ detected in Cyprus; 25 cases so far

https://www.wionews.com/world/new-covid-variant-called-deltacron-detected-in-cyprus-25-cases-so-far-443447

 

 

Corn

·        
CBOT corn traded lower in weakness in wheat and improving South American weather with rains developing across southern Brazil and Argentina later this week. Over the weekend it was hot and dry.

·        
WTI crude oil and equities are lower. 

 

Export
developments.

·        
The Korea Feed Association (KFA) bought around 130,000 tons of optional origin corn in two consignments each of about 65,000 tons, both at an estimated $334.17 a ton c&f. The first consignment was sought for arrival around March
30 and second consignment was sought for arrival around April 20.

 

Solar
power will account for nearly half of new U.S. electric generating capacity in 2022

https://www.eia.gov/todayinenergy/detail.php?id=50818&src=email

 

Soybeans

·        
CBOT soybeans are lower on improving South American weather and technical selling after March soybeans rallied and closed above $14/bu on Friday. USD was 30 points higher.  Funds are still holding a large net long positions. As
of last Tuesday, the soybean the net long position was the highest since July 13.

·        
Soybean oil traded two-sided in part to bullish Malaysian palm oil stocks data. Soybean meal rebounded from overnight session lows. Cold US temperatures over the weekend aided feed demand.

·        
March oil share is running at around 40.9%, lower end of a 6-month range.

·        
Over the weekend we heard Brazil crush margins rocketed higher after CBOT soybean meal futures appreciated last week.

·        
Russia’s export duty on sunflower oil exports from February 1 will be $251.4 per ton, compared to $280.8 per ton in January 2022. The duty was calculated on the basis of the indicative price of $1,359.2 per ton.

·        
Heavy rains and thunderstorms are expected over parts of Indonesia’s Sumatra and Kalimantan on Monday.

·        
Cargo surveyor AmSpec reported Malaysian Jan 1-10 palm exports at 318,928 million tons, 41.4% below the same period a month ago of 544,059. Cargo surveyor ITS reported Malaysian palm exports at 334,750 tons, 41.5 percent below
572,689 tons from the same period a month ago.

·        
Malaysian MPOB data was viewed bullish. Malaysian palm stocks at the end of December were much smaller than expected at 1.583 million tons, 145,500 tons below expectations and down 13% from end of November. Stocks are still 25
percent higher than a year earlier. Production fell 11% to 1.451 million tons, 43,000 tons below expectations. Exports were a little better than expected and imposts were slightly higher than trade expectations. 

·        
Malaysian palm futures traded higher by 36 ringgit to 5,029.  Overnight the contract hit an absolute record high of 5,123.

·        
Malaysian cash CPO was up $7.50/ton to $1,250.

·        
China soybean futures traded 0.9% lower, meal up 0.9%, SBO up 0.1% and palm up slightly. 

·        
China soybean cash crush values on our analysis were running at 173 cents/bushels versus 183 at the end of last week and 198 year ago. 

·        
Rotterdam soybean oil for the Feb-Apr position was about unchanged and Rotterdam rapeseed oil 25 euros higher from this time previous session. SA soybean meal when imported into Rotterdam was running mostly 13-21 euros higher.  

·        
Offshore values are leading CBOT soybean oil 79 points higher and meal $1.60 higher.

 

August
– November Canadian canola oil production
is running 14 percent below the same period year earlier.

Source:
TNS, StatsCan, and FI

 

Export
Developments

·        
The USDA bought 12,000 tons of bulk crude degummed soybean oil for export, under the Food for Progress export program, to the Dominican Republic. Price paid was reported at $1,388 per ton, with delivery Feb 5-15. (TNS)

·        
The USDA seeks 7,540 tons of vegetable oil in 4 liter cans for Feb 16-Mar 15 shipment on January 19.

 

Wheat

·        
US wheat is lower on a higher USD and technical selling. Positioning ahead of the USDA reports due out on Wednesday may keep wheat in a two-sided range over the next couple of days.

·        
EU wheat basis the March position was 0.25 lower at 274.25 euros a ton. 

·        
Euronext will launch durum wheat futures on Tuesday. 

·        
Ukraine exported 33.5 million tons of grain so far in the 2021-22 July-June season, up 23.2% from the same stage a season earlier. That included 16.1 million tons of wheat, 5.3 million tons of barley and 11.8 million tons of corn.
Ukraine took in a record 84 million tons of grain in clean weight in 2021, up from 65 million tons in 2020.

 

Export Developments.

·        
Iraq extended their deadline for 50,000 tons of wheat, set to now close on January 13 instead of the 3^rd, from the US, Canada and Australia.

·        
China sold 100% or 506,568 tons of 2014-2020 crop-year wheat on January 5, to local millers at an average price of 2,707 yuan ($424.73) per ton. China sold 891,938 tons of wheat at an auction from state reserves in October.

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

·        
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. 

 

Rice/Other

·        
(Bloomberg) — U.S. 2021-22 cotton ending stocks seen as 3.46m bales, slightly above USDA’s previous est., according to the avg in a Bloomberg survey of seven analysts.  Estimates range from 3.0m to 3.85m bales.  Global ending
stocks seen 125,000 bales lower at 85.61m bales.

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