FI Morning Grain Comments 01/28/22

PDF attached

 

Good
morning. 

 

Soybeans
are up for the fourth consecutive day and March soybean oil made another new contract high. Soybean meal is higher led by bull spreading. Corn rebounded but lower wheat trimmed some of the overnight gains. Wheat prices remain volatile.  Focus overnight was
likely on palm oil (futures were higher) and Russia/Ukraine developments. President Biden is expected to speak with Ukrainian President Volodymyr Zelenskyy later today. Today was the last day of trading for many Asian markets ahead of the Lunar New Year/Spring
Festival holiday. China will be off all next week (resumes February 7). Malaysian palm markets will be closed from January 31 through February 2 (trading resumes Feb. 3).  Vietnam’s financial markets will be closed from Monday Jan. 31 to Friday Feb. 4 inclusive
for its Lunar New Year holidays. Other countries will also be on holiday.

 

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR JANUARY 28, 2022

• Florida
  citrus and sugarcane will experience frost and freeze conditions Sunday morning with some lingering frost Monday.
  
• Temperatures
  of 26-31 will occur throughout the region with the northwestern citrus counties coldest. (See our special situation story later this morning for details of this event and its impact). 
  
• Much
  of Argentina (outside of the southwest), Paraguay and far southern Brazil will be dry through the first half of next week while flooding rain impacts Sao Paulo, far northern Parana and northern and eastern Mato Grosso do Sul. 
  
• The
  second week of the forecast offers rain for many other areas in Argentina, Paraguay and far southern Brazil, although confidence in the significance of that rain is still a little low today. 
  
• U.S.
  hard red winter wheat production areas will get some welcome snow and a little rain during the middle to latter part of next week followed by some bitter cold air.
  
• The
  moisture will not break the drought or represent a trend change, but it will certainly be welcome.
  
• California
  and most of the Inter-Mountain west of the U.S. will be dry biased over the next ten days to two weeks.
  
• A
  major winter storm will impact the U.S. Midwest, Delta and Tennessee River Basin late next week.
  
• An
  impressive nor’easter is expected along the upper U.S. coast and southeastern Canada later today and Saturday producing blizzard conditions and impressive snowfall.
  
• Western
  Europe and northwestern Africa may experience some needed rain in the second week of the forecast.
  
• Waves
  of snow and rain will impact eastern Europe and the western CIS during the next ten days.
  
• India
  will be dry except near and north of Nepal
• China
  will see rain and snow from the Yangtze River Basin southward while limited precipitation occurs to the north.
  
• Eastern
  Australia will experience an erratic rainfall distribution.
• South
  Africa will see a good mix of rain and snow.
• A
  tropical cyclone will move toward Reunion and Mauritius Islands in the Indian Ocean next week.
  
• SE
  Asia weather will remain well mixed for coffee, oil palm, citrus, sugarcane, cocoa and other crops. 

Source:
World Weather Inc.

 

Bloomberg
Ag Calendar

Friday,
Jan. 28:

• 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
• U.S.
  cattle on feed, 3pm

Monday,
Jan. 31:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• Malaysia’s
  palm oil exports in January
• U.S.
  agricultural prices paid, received, 3pm
• U.S.
  cattle inventory, 3pm
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  China, South Korea, Vietnam

Tuesday,
Feb. 1:

• International
  Cotton Advisory Committee releases market outlook report
• EU
  weekly grain, oilseed import and export data
• U.S.
  Purdue Agriculture Sentiment
• USDA
  soybean crush, DDGS output, corn for ethanol, 3pm
• Honduras,
  Costa Rica monthly coffee exports
• Australia
  commodity index
• India’s
  federal budget
• New
  Zealand global dairy trade auction
• ProZerno
  holds Mountain Grain Assembly in Sochi, Russia, Feb. 1-4
• HOLIDAY:
  China, Hong Kong, Malaysia, Indonesia, South Korea, Singapore, Vietnam

Wednesday,
Feb. 2:

• EIA
  weekly U.S. ethanol inventories, production
• HOLIDAY:
  China, Hong Kong, Malaysia, South Korea, Singapore, Vietnam

Thursday,
Feb. 3:

• FAO
  World Food Price Index and grains supply/demand outlook
• USDA
  weekly net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• New
  Zealand Commodity Price
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  China, Hong Kong, Vietnam

Friday,
Feb. 4:

• 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
• HOLIDAY:
  China, Vietnam

Source:
Bloomberg and FI

 

 

 

 

 

Macros

Traders
Now Said To See 100 Basis Points Of Fed Rate Increases By September Versus November Previously

NATO’s
Secretary General: Russia Is Deploying Thousands Of Combat-Ready Troops, S-400s Into Belarus

US
Personal Income Dec: 0.3% (est 0.5%; prev 0.4%; prevR 0.5%)

–
US Personal Spending Dec: -0.6% (est -0.6%; prev 0.6%; prevR 0.4%)

–
US Real Personal Spending Dec: -1.0% (est -1.1%; prev 0.0%; prevR -0.2%)

 

Corn

·        
CBOT corn is rebounded this morning led by the March contract. Yesterday we saw bear spreading with new-crop rallying over worries of lack of US fertilizer and the rise of natural gas prices. 

·        
Baltic Dry Index increased 6.1% to 1,381 points.

·        
USDA Attaché: Argentina corn production 51 million tons, 3 million below USDA.
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Buenos%20Aires_Argentina_01-20-2022

·        
Bloomberg: U.S. cattle herd as of Jan. 1 seen falling by over a million head to 92.5m, the lowest level in six years, according to the avg in a Bloomberg survey of four analysts.

·        
Taiwan has been by a shortage of eggs due to high feed prices and colder than normal temperatures. 

 

Export
developments.

·        
None reported

 

Soybeans

·        
CBOT soybeans, meal and oil are al higher on follow through buying. March soybeans hit an absolute contract high of $14.6250. We would not rule out $15.00/bu sometime next month if commodities in general continue to rally and
soybean demand shifts from South America to the US.  South Korea bought another 60,000 tons of soybean meal overnight and that might be supporting CBOT meal futures. CBOT soybean oil is higher on the rise in global vegetable oil prices.

·        
H/K soybean oil spread is flat with both contracts at 65.39 cents.

·        
Palm futures went out on a strong note before their holiday. April Malaysian palm futures traded higher by 184 ringgit to 5,528, a new record, and the futures market was up 6 consecutive weeks. Malaysian cash CPO was up $38.50/ton
to $1,400.00.

·        
Much of the rally in palm oil late this week was related to higher Black Sea sunflower oil cash prices, slow global crush rates despite amble supply of oilseeds, and Indonesia curbing palm exports over the medium term.  This has
also supported CBOT soybean oil.  

·        
Indonesia was in the news again overnight with a focus on policy changes announced this month for commodities. The latest included that all cooking oil producers will be required to sell 20% of their planned export to the domestic
market. This comes after they banned coal exports and were looking into an export tax on nickel pig iron. Indonesia’s GAPKI sees palm oil exports during 2022 down 3 percent to 33.21 million tons from 34.23 million tons for 2021, even though they look for 2022
production to expand 4.5% to 49 million tons for CPO (palm kernel seen at 4.8MMT) from 46.89 million tons. Remember 2021 both Indonesia and Malaysia saw production problems. For the month of February, Indonesia will leave its export tax and levy for CPO unchanged
at the highest brackets of $200 per ton and $175 per ton, respectively. The CPO reference price for February is at $1,314.78 per ton, up from January’s 1,307.76 per ton.

·        
Buenos Aires grains exchange lowered their estimate of the Argentina soybean planted area by 100,000 hectares to 16.3 million. They are currently at 44 million tons for soybean production. USDA official is at 49.5MMT and USDA
Attaché at 46.5MMT. 

·        
Third month palm oil futures…

·        
China soybean futures traded 0.9% higher, meal 1.2% higher, SBO up 1.9% and palm 1.6% higher. 

·        
Rotterdam soybean oil for the Feb-Apr position was 13 euros higher from this time previous session and Rotterdam rapeseed oil 10 euros higher. SA soybean meal when imported into Rotterdam was 3-9 euros higher.

·        
Offshore values this morning were leading CBOT soybean oil about 59 points higher (266 lower for the week to date) and meal $2.20 higher ($0.20 lower for the week. 

·        
USDA Attaché: Argentina soybean production 46.5 million tons, 3 million below USDA.
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Buenos%20Aires_Argentina_01-04-2022

·        
CNGOIC reported soybean crush last week increased about 250,000 tons to 2.2 million, and stocks fell 300,000 tons to 3.6 million tons.  China soybean meal stocks are very tight at less than 300,000 tons.

 

Export
Developments

• South
  Korea’s FLC and FBG bought a combined 60,000 tons of soybean meal from South America at an estimated $544.99 a ton c&f for arrival in South Korea around May 17.  Yesterday NOFI bought 60,000 tons of soybean meal.
  
• Iran’s
  SLAL bought 60,000 tons of feed barley and 60,000 tons of soybean meal for Feb-Mar shipment.  It’s not known if they bought 60,000 tons of corn. The feed barley was expected to be sourced from Germany.
  
• Turkey’s
  state grain board TMO bought about 6,000 tons of crude sunflower oil at an estimated $1,410.90 a ton c&f. Shipment was sought between Feb. 8 and Feb. 25.
  

 

 

 

Wheat

·        
US wheat futures traded two-sided this morning and was higher at the electronic close on lack of direction. Ukraine/Russia tensions remain in focus. Results are awaited for Egypt in for wheat.

·        
U.S. hard red winter wheat production areas will get some welcome snow and a little rain during the middle to latter part of next week.

·        
Russia set their February wheat export tax to $93.90/ton for the February 2-8 period, down from $95.80/ton from the January 26-February 1 period. Barley increases to $74.60/ton from $74.40/ton and corn decreases to $49.20/ton
from $50.60/ton

·        
EU wheat basis the March position was down 0.25 euro at 277.00 euros.

·        
The European Commission its soft wheat production estimate to 130.5 million tons from 130.6 million and left unchanged EU wheat exports at 32.0 million tons.

 

Export
Developments.

• Egypt’s
  GASC seeks wheat for March 5-15 and March 16-26 shipment and lowest offer was $325.86/ton FOB French origin.
  
• Japan’s
  AgMin bought 22,410 tons of food wheat from Australia. Yesterday they
  bought 25,431 tons.  Original details as follows.

• The
  Philippines bought around 50,000 tons of feed wheat from Australia at about $338 to $340 a ton c&f for June shipment.

• Three
  groups from the Philippines are seeking feed wheat for April-May, April-October and/or May-July shipment.
  

·        
Results awaited: Iran’s SLAL seeks 60,000 tons of barley, 60,000 tons of corn and 60,000 tons of soybean meal for Feb/Mar shipment.

·        
Jordan seeks 120,000 tons of wheat on February 1 for July – August shipment.

• Jordan
  seeks 120,000 tons of feed barley on February 2.

 

Rice/Other

·        
Results awaited: South Korea seeks 46,344 tons of rice from (mainly) China on Jan 27.