FI Morning Grain Comments 12/16/21

PDF attached

 

Good
morning

 

Private
exporters reported sales of 20,000 metric tons of soybean oil for delivery to India during the 2021/2022 marketing year.

 

Higher
trade in the soybean complex and corn. Wheat extended losses.  The USD is sharply lower by 55 points and WTI 75 cents higher. Brazil will start drying down over the next two weeks after seeing rains earlier this week. Weather models this morning are drier
for Argentina. Overnight wheat export developments were again active. USDA export sales were a marketing year high for corn and wheat while soybeans, meal and soybean oil sales slowed from the previous week. Look for a choppy trade.

 

 

Weather

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR DECEMBER 16, 2021

• Argentina
  will dry down and heat up during the coming week with the warmest weather likely this weekend.
  
• Some
  of the heat and warming will also impact southern Brazil, Uruguay and Paraguay, but some cooling is expected in those areas early next week.
  
• Showers
  and thunderstorms will develop briefly in Argentina and southern Brazil late this weekend and early next week followed by several more days of drying.
  
• Concern
  remains over production potentials in South America because of possible moisture stress.
  
• Crop
  stress is already impacting Parana, southern Mato Grosso do Sul and southeastern Paraguay and the region is looking at ten days of dryness.
  
• Some
  timely relief from dryness is supposed to occur from dryness in Rio Grande do Sul, Brazil periodically over the next ten days, but a close watch is warranted.
  
• U.S.
  weather will be a classic for La Nina which means wet weather on the Pacific Coast, drier biased weather in hard red winter wheat areas and periods of rain from the Delta and northeastern Texas to the lower and eastern Midwest while a part of the southeastern
  states dry down.
• Weather
  in Europe will continue dry biased in the west for a while.
• Morocco
  may get some rain in the second week of the forecast
• Widespread
  snow in Russia, Ukraine and eastern Europe will be sufficient to protect winter crops from colder weather.
  
• China’s
  weather will be relatively quiet for a while
• India
  will not see much moisture for a while which is normal
• South
  Africa will continue to see good summer rainfall
• Australia’s
  eastern summer crop areas will get some rain in time while late harvesting of wheat and barley advances well. 
• Typhoon
  Rai will move through the central Philippines today producing torrential rain and strong wind speeds

 

Bloomberg
Ag Calendar

Thursday,
Dec. 16:

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

Friday,
Dec. 17:

• 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
• USDA
  FAS issues world coffee report, with supply-demand data

Saturday,
Dec. 18:

• China’s
  2nd batch of Nov. trade data, including imports of cotton, corn, wheat, and sugar

Source:
Bloomberg and FI

 

 

 

 

USDA
Export sales

All-wheat
export sales were very good at 650,600 tons, a marketing year high, and well above 240,000 tons previous week.  Mexico, SK, Japan, and the Philippines were major buyers. Corn export sales were also a marketing year high at 1.949 million tons for 2021-22 and
were at the high end of expectations. Mexico and Canada were the top buyers. New-crop corn sales of 754,400 tons reflected part of that large sale to Mexico last week.  Sorghum export sales were good at 332,000 tons with China claiming the bulk. Pork sales
were 31,100 tons (Mexico and Canada top buyers). Soybean export sales of 1.309 million tons were good (140,000 tons were posted to new-crop) but down from 1.638 million tons from the previous week.  China was the top buyer for the soybeans at 985,800 tons
but it included 402,000 tons switched from unknown. Soybean meal sales of 95,600 tons were down from 202,500 tons from previous week and shipments slipped to 189,300 tons.  Soybean oil sales were 10,600 tons, double from the previous week and shipments were
also 10,600 tons, down from 31,800 tons week earlier. 

 

 

 

Macros

Bank
Of England Voted 8-1 To Raise Bank Rate To 0.25%

 

Corn

·        
CBOT corn is higher in the nearby contracts following strength in wheat. SK bought a cargo of corn overnight, first known reported tender announcement this week.

·        
Weekly US ethanol production was off 3,000 barrels to 1.087 million, near expectations, and stocks increased for the 4^th consecutive session by 419,000 barrels to 20.883 million (trade was looking for a 115,000-barrel
increase). 

 

EIA
forecasts U.S. natural gas production will establish a new monthly record high in 2022

https://www.eia.gov/todayinenergy/detail.php?id=50678&src=email

 

Export
developments.

·        
South Korea’s FLC bought 60,000 tons of feed wheat at $337.50/ton c&f for arrival around May 15.

 

 

Soybeans

·        
Soybeans, mela and oil are all higher in part to a steep decline in the USD and SA weather trending drier over the next two weeks. India bought 20,000 tons of soybean oil per USDA 24-hour sales. Export sales for the three commodities
were below what was reported previous week.  Look for a choppy trade and follow through correction to nearby oil share. 

·        
NOPA’s November crush of 179.5 million bushels came in below expectations and on a daily rate averaged 5.98 million bushes/day, second largest daily rate in recorded history for any month (behind November 2020 of 6.03 mil bu/day
and a hair above October 2020). At 179.5 million bushels for the month, it was the seventh largest crush in our working history and 2.2 million below trade expectations. NOPA reported a much lower than expected US soybean oil yield of 11.76 pounds per bushel,
below 11.89 pounds during October, and that resulted in US soybean oil stocks falling below trade expectations to 1.832 billion pounds, 71 million below trade expectations. 

·        
Offshore values are leading soybean oil 32 points lower and meal $3.70 short ton higher.

·        
Rotterdam meal values were 2-8 euros higher from previous and Rotterdam oil 20-30 euros higher.

·        
Malaysian palm oil futures traded up 133 ringgit and cash was up $2.50 at $1,097.50/ton.

·        
China crush margins on our analysis was last $1.79/bu ($1.84 previous) versus $1.95 at the end of last week and compares to $1.23 a year ago.

·        
China futures

 

Export
Developments

·        
USDA reported private exporters sold 20,000 tons of soybean oil to India for 2021-22 delivery. 

 

 

 

Wheat

·        
US wheat is seeing follow through selling this morning but a sharply lower USD and oversold, short-term, conditions could prompt a two-sided trade today. 

·        
Global export tenders remain active.

·        
Paris March wheat futures was 0.75 euro lower at 275.00/ton. 

 

Export
Developments.

·        
Iran’s GTC bought a more than expected 500,000 tons of milling wheat (180,000 tons originally thought) for shipment in January and February 2022.

·        
The Philippines bought a less than expected 50,000 tons of Australian animal feed wheat for March shipment at $335/ton c&f.

·        
Another group from the Philippines bought 110,000 tons of animal feed wheat, also less than expected, at $335/ton for March 15 to May 31 shipment.

·        
Jordan bought 60,000 tons of wheat at $327.50/ton c&f for second half of July 2022 shipment, half the volume than sought.

·        
Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 228,783 tons of food-quality wheat from the United States and Canada. Original details:

·        
Turkey seeks about 320,000 tons of 12.5% and 13.5% protein content milling wheat on December 21 for shipment between February 1 and February 28.

 

Rice/Other

·        
Results awaited: South Korean Agro-Fisheries & Food Trade Corp. seeks 22,000 tons of rice from the US, set to close Dec 16.

 

USDA
Export sales

 

U.S.
EXPORT SALES FOR WEEK ENDING  12/9/2021

FAX
202-690-3275 

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	326.4	2,194.9	1,644.8	94.6	3,901.2	5,251.3	0.0	14.0
SRW	86.6	685.7	438.3	33.7	1,536.5	1,028.4	0.0	34.5
HRS	130.0	1,183.5	1,595.2	69.9	2,849.8	3,845.6	0.0	0.0
WHITE	107.5	797.4	2,649.2	76.1	1,929.0	2,604.3	0.0	0.0
DURUM	0.0	35.9	158.6	0.0	97.2	433.1	0.0	0.0
TOTAL	650.6	4,897.3	6,486.1	274.4	10,313.6	13,162.7	0.0	48.5
BARLEY	0.0	20.6	16.0	0.9	9.9	14.5	0.0	0.0
CORN	1,948.7	26,866.6	29,526.6	1,093.5	11,644.9	12,053.2	754.4	1,319.5
SORGHUM	331.9	3,631.0	3,372.2	118.2	1,049.2	1,607.4	0.0	0.0
SOYBEANS	1,308.6	14,691.0	21,421.8	1,918.2	25,422.5	32,247.8	140.0	140.0
SOY MEAL	95.6	3,379.9	3,153.1	189.3	2,345.6	2,372.9	0.2	37.5
SOY OIL	10.6	185.3	248.8	10.6	133.7	157.1	0.0	0.1
RICE
L G RGH	31.9	149.3	265.2	53.4	577.0	658.6	0.0	0.0
M S RGH	0.0	6.3	18.3	0.3	2.9	10.6	0.0	0.0
L G BRN	0.4	4.4	4.0	0.6	25.9	19.3	0.0	0.0
M&S BR	0.2	68.6	17.1	0.1	14.9	33.5	0.0	0.0
L G MLD	3.0	59.1	86.8	3.1	325.0	219.1	0.0	0.0
M S MLD	16.2	80.0	208.4	3.2	127.8	150.0	0.0	0.0
TOTAL	51.8	367.6	599.8	60.6	1,073.5	1,091.1	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	286.4	7,375.4	5,983.3	131.5	2,639.0	4,701.6	56.3	996.4
PIMA	0.7	232.8	207.0	8.5	126.1	300.5	0.0	4.0

 

This
summary is based on reports from exporters for the period December 3-9, 2021. 

Wheat:  Net
sales of 650,600 metric tons (MT) for 2021/2022–a marketing-year high–were up noticeably from the previous week and from the prior 4-week average.  Increases primarily for Mexico (170,000 MT, including decreases of 1,000 MT), Japan (162,500 MT), Peru (105,000
MT), South Korea (75,000 MT), and the Philippines (72,100 MT), were offset by reductions for unknown destinations (22,100 MT).  Exports of 274,400 MT were up 29 percent from the previous week, but unchanged from the prior 4-week average.  The destinations
were primarily to Japan (78,500 MT), Mexico (52,800 MT), Nigeria (52,500 MT), Taiwan (28,500 MT), and Venezuela (24,300 MT).  

Corn:  Net
sales of 1,948,700 MT for 2021/2022–a marketing-year high–were up 72 percent from the previous week and 74 percent from the prior 4-week average.  Increases were primarily for Mexico (1,289,100 MT, including decreases of 8,500 MT), Canada (272,600 MT, including
decreases of 500 MT), unknown destinations (141,900 MT), Japan (55,700 MT, including 60,700 MT switched from unknown destinations and decreases of 66,700 MT), and Venezuela (47,300 MT, including 7,300 MT switched from unknown destinations).  Total net sales
of 754,400 MT for 2022/2023 were for Mexico.  Exports of 1,093,500 MT were up 21 percent from the previous week and 11 percent from the prior 4-week average.  The destinations were primarily to Mexico (317,000 MT, including 28,300 MT – late), China (274,800
MT), Japan (192,700 MT), Canada (158,600 MT), and Colombia (131,400 MT). 

Optional
Origin Sales:  For
2021/2022, new optional origin sales of 1,400 MT were reported for Italy.  The current outstanding balance of 500,100 MT is for unknown destinations (429,000 MT), Italy (62,100 MT), and Saudi Arabia (9,000 MT). 

Late
Reporting: For
2021/2022, exports totaling 28,300 MT of corn were reported late to Mexico. 

Barley:  No
net sales were reported for the week. Exports of 900 MT were up 72 percent from the previous week and up noticeably from the prior 4-week average.  The destination was to Japan. 

Sorghum:  Net
sales of 331,900 MT for 2021/2022–a marketing-year high–were up 5 percent from the previous week and 24 percent from the prior 4-week average.   Increases reported for China (385,900 MT, including 117,900 MT switched from unknown destinations), were offset
by reductions for unknown destinations (54,000 MT).  Exports of 118,200 MT were down 33 percent from the previous week and 19 percent from the prior 4-week average.  The destinations were to China (117,900 MT), and Mexico (300 MT). 

Rice:  Net
sales of 51,800 MT for 2021/2022 were up 6 percent from the previous week, but down 13 percent from the prior 4-week average.  Increases were primarily for Mexico (21,400), Japan (13,000 MT), Nicaragua (11,100 MT), Canada (4,200 MT), and Saudi Arabia (900
MT).  Exports of 60,600 MT were down 1 percent from the previous week and 27 percent from the prior 4-week average.  The destinations were primarily to Mexico (25,800 MT), Costa Rica (18,400 MT), Nicaragua (11,100 MT), Canada (2,700 MT), and Saudi Arabia (900
MT). 

Exports
for Own Account:
For 2021/2022, new optional origin sales of 100 MT were reported for Canada.  The current exports for own account outstanding balance is 200 MT, all Canada.  

Export
Adjustments:  Accumulated
exports of medium, short and other classes, milled rice to Israel were adjusted down 18,981 MT for week ending November 25th.  These exports were reported in error. 

Soybeans:  Net
sales of 1,308,600 MT for 2021/2022 were down 20 percent from the previous week and 6 percent from the prior 4-week average.  Increases primarily for China (985,800 MT, including 402,000 MT switched from unknown destinations and decreases of 6,000 MT), Spain
(80,000 MT switched from unknown destinations), Mexico (77,700 MT, including decreases of 3,400 MT), Thailand (70,900 MT, including 66,000 MT switched from unknown destinations), and Egypt (67,900 MT, including decreases of 4,200 MT), were offset by reductions
primarily for unknown destinations (387,500 MT).  Total net sales of 140,000 MT for 2022/2023 were for unknown destinations.  Exports of 1,918,200 MT were down 21 percent from the previous week and 17 percent from the prior 4-week average.  The destinations
were primarily to China (1,037,700 MT), Egypt (225,900 MT), Mexico (137,900 MT), Spain (80,000 MT), and Thailand (76,500 MT). 

Export
for Own Account: For
2021/2022, the current exports for own account outstanding balance is 34,600 MT, all Canada. 

Soybean
Cake and Meal:  Net
sales of 95,600 MT for 2021/2022–a marketing-year low–were down 53 percent from the previous week and 43 percent from the prior 4-week average.  Increases primarily for Thailand (50,000 MT switched from unknown destinations), Colombia (39,100 MT), Morocco
(35,000 MT), the Philippines (24,800 MT, including decreases of 1,000 MT), and Mexico (15,400 MT), were offset by reductions primarily for unknown destinations (61,900 MT) and Ecuador (56,000 MT).  Net sales of 200 MT for 2022/2023 resulting in increases for
Japan (300 MT), were offset by reductions for Canada (100 MT).  Exports of 189,300 MT were down 38 percent from the previous week and 30 percent from the prior 4-week average.  The destinations were primarily to the Philippines (51,100 MT), Mexico (39,000
MT), Canada (37,600 MT), Colombia (17,600 MT), and the Dominican Republic (9,600 MT).   

Optional
Origin Sales:  For
2021/2022, the current outstanding balance of 50,000 MT is for Venezuela.   

Late
Reporting: For
2021/2022, net sales totaling 1,400 MT of soybean cake and meal were reported late for Canada. 

Soybean
Oil:  Net
sales of 10,600 MT for 2021/2022 were up 99 percent from the previous week, but down 74 percent from the prior 4-week average.  Increases primarily for Venezuela (3,000 MT), South Korea (3,000 MT), and Colombia (3,000 MT), were offset by reductions for Canada
(1,800 MT).  Exports of 10,600 MT were down 67 percent from the previous week and 56 percent from the prior 4-week average.  The destinations were to the Dominican Republic (4,100 MT), Jamaica (3,500 MT), Mexico (2,500 MT), and Canada
(500 MT). 

Cotton:  Net
sales of 286,400 RB for 2021/2022 were down 25 percent from the previous week, but up 5 percent from the prior 4-week average.  Increases were primarily for China (101,700 RB, including 4,400 RB switched from Vietnam), Pakistan (52,200 RB), Bangladesh (35,900
RB, including decreases of 100 RB), Turkey (22,000 RB, including 4,400 RB switched from Vietnam and decreases of 2,200 RB), and Vietnam (21,700 RB, including 900 RB switched from South Korea).  Net sales of 56,300 RB for 2022/2023 were reported for Bangladesh
(22,000 RB), Turkey (13,200 RB), Pakistan (11,000 RB), China (6,600 RB), and Mexico (3,500 RB).  Exports of 131,500 RB were up 15 percent from the previous week and 46 percent from the prior 4-week average.  The destinations were primarily to China (41,100
RB), Vietnam (22,900 RB), Mexico (20,300 RB), Turkey (14,000 RB), and Pakistan (6,000 RB).  Net sales of Pima totaling 700 RB–a marketing-year low–were down 90 percent from the previous week and 95 percent from the prior 4-week average.  Increases primarily
for Egypt (900 RB), Thailand (400 RB), unknown destinations (400 RB), and Honduras (200 RB), were offset by reductions for Pakistan (1,300 RB).  Exports of 8,500 RB were down 3 percent from the previous week, but up 42 percent from the prior 4-week average.  The
destinations were primarily to Peru (3,500 RB), India (2,200 RB), Turkey (1,100 RB), China (900 RB), and Bahrain (300 RB). 

Optional
Origin Sales:  For
2021/2022, the current outstanding balance of 8,800 RB is for Pakistan.   

Exports
for Own Account:  For
2021/2022, the current exports for own account outstanding balance of 100 RB is for Vietnam.   

Hides
and Skins:  Net
sales of 264,300 pieces for 2021 were down 6 percent from the previous week and 33 percent from the prior 4-week average.  Increases primarily for China (146,600 whole cattle hides, including decreases of 24,100 pieces), South Korea (53,200 whole cattle hides,
including decreases of 1,100 pieces), Thailand (29,800 whole cattle hides, including decreases of 1,100 pieces), Mexico (24,700 whole cattle hides, including decreases of 600 pieces), and Taiwan (5,000 whole cattle hides, including decreases of 100 pieces),
were offset by reductions for Brazil (200 pieces), Italy (100 pieces), and Spain (100 pieces).  Net sales of 47,700 pieces for 2022 were primarily for Mexico (25,200 whole cattle hides) and China (20,600 whole cattle hides).  In addition, total net sales of
8,400 calf skins were reported from Belgium.  Exports of 377,100 pieces were up 1 percent from the previous week, but unchanged from the prior 4-week average.  Whole cattle hide exports were primarily to China (255,500 pieces), South Korea (46,900 pieces),
Mexico (34,800 pieces), Thailand (13,500 pieces), and Brazil (6,400 pieces).  

Net
sales of 97,000 wet blues for 2021 were up noticeably from the previous week and up 5 percent from the prior 4-week average.  Increases primarily for Italy (43,000 grain splits, 24,300 unsplit, decreases of 400 unsplit and 200 grain splits), Thailand (23,000
unsplit, including decreases of 100 unsplit), China (19,000 unsplit), Taiwan (7,500 unsplit), and Japan (7,200 grain splits), were offset by reductions for Vietnam (36,800 unsplit) and India (2,400 grain splits).  Net sales of 58,000 wet blues for 2022 primarily
for Vietnam (51,200 unsplit), Hong Kong (9,000 unsplit), China (4,500 unsplit), India (2,400 grain splits), and Haiti (800 unsplit), were offset by reductions for Italy (8,100 unsplit) and Taiwan (2,400 unsplit).  Exports of 139,300 wet blues were up 34 percent
from the previous week and 15 percent from the prior 4-week average.  The destinations were primarily to Italy (36,800 unsplit and 9,400 grain splits), China (43,000 unsplit), Vietnam (25,000 unsplit), Thailand (16,600 unsplit), and Mexico (4,000 grain splits
and 900 unsplit).  Net sales of 144,100 splits resulting in increases for China (164,000 splits), were offset by reductions for Vietnam (19,900 unsplit).  Total net sales of 249,300 splits for 2022 were for China.  Exports of 434,000 pounds were to Vietnam
(391,000 pounds) and China (43,000 pounds).  

Beef:  Net
sales of 17,100 MT for 2021 were up noticeably from the previous week, but down 3 percent from the prior 4-week average.  Increases primarily for Japan (4,700 MT, including decreases of 300 MT), South Korea (4,500 MT, including decreases of 600 MT), China
(3,700 MT, including decreases of 100 MT), Canada (1,400 MT, including decreases of 100 MT), and Taiwan (800 MT, including decreases of 300 MT), were offset by reductions for Vietnam (200 MT).  Net sales of 5,700 MT for 2022 were primarily for China (1,500
MT), South Korea (1,400 MT), Japan (1,000 MT), and Mexico (900 MT).  Exports of 18,500 MT were up 11 percent from the previous week and 6 percent from the prior 4-week average.  The destinations were primarily to South Korea (5,200 MT), Japan (4,400 MT), China
(3,000 MT), Canada (1,700 MT), and Taiwan (1,600 MT).   

Pork:  Net
sales of 31,100 MT for 2021 were up 58 percent from the previous week and 20 percent from the prior 4-week average.  Increases primarily for Mexico (22,700 MT, including decreases of 600 MT), Canada (2,700 MT, including decreases of 400 MT), Japan (2,100 MT,
including decreases of 500 MT), South Korea (1,800 MT, including decreases of 1,100 MT), and Colombia (1,300 MT, including decreases of 400 MT), were offset by reductions for China (700 MT), Australia (600 MT), and Nicaragua (200 MT).  Net sales of 5,800 MT
for 2022 were primarily for Mexico (2,500 MT), Japan (800 MT), China (700 MT), Australia (500 MT), and Colombia (500 MT).  Exports of 30,100 MT were down 10 percent from the previous week and from the prior 4-week average.  The destinations were primarily
to Mexico (14,500 MT), China (4,200 MT), Japan (3,200 MT), South Korea (2,800 MT), and Canada (1,700 MT).