CROP SURVEY: U.S. Soybean Crush and Corn for Ethanol
Wheat prices overnight are down 1 1/2 in SRW, up 3/4 in HRW, up 5 in HRS; Corn is unchanged; Soybeans up 4 1/2; Soymeal up $0.15; Soyoil up 0.45.
For the week so far wheat prices are down 36 1/2 in SRW, down 48 in HRW, down 36 in HRS; Corn is down 9 3/4; Soybeans up 2 1/4; Soymeal up $0.47; Soyoil up 1.11. For the month to date wheat prices are down 9 in SRW, down 8 3/4 in HRW, down 13 1/2 in HRS; Corn is up 28 1/2; Soybeans up 116 1/2; Soymeal up $64.10; Soyoil up 1.21.
Chinese Ag futures (MAY 22) Soybeans up 6 yuan ; Soymeal down 29; Soyoil up 2; Palm oil up 32; Corn down 8 — Malasyian Palm is up 14. Malaysian palm oil prices overnight were up 14 ringgit (+0.30%) at 4697.
There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 39 Oats; 50 Corn; 244 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.
Preliminary changes in futures Open Interest as of December 30 were: SRW Wheat up 280 contracts, HRW Wheat up 814, Corn down 5,758, Soybeans down 7,323, Soymeal down 2,561, Soyoil down 3,791.
Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated showers through Monday. Temperatures near to above normal through Monday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Monday. Temperatures near normal through Monday.
Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Isolated showers through Monday. Temperatures above normal through Monday. La Pampa, Southern Buenos Aires Forecast: Isolated showers through Monday. Temperatures above normal through Monday.
The player sheet for Dec. 30 had funds: net sellers of 2,500 contracts of SRW wheat, sellers of 10,000 corn, sellers of 11,500 soybeans, sellers of 3,000 soymeal, and sellers of 3,500 soyoil.
TENDERS
- BARLEY TENDER PASSED: Jordan’s state grain buyer made no purchase in an international tender for 120,000 tonnes of animal feed barley which closed on Thursday
PENDING TENDERS
- WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 22,000 tonnes of rice to be sourced from the United States
- RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice with import using land transport by railway
- WHEAT TENDER: Iraq’s state grains buyer issued a tender to buy a nominal 50,000 tonnes of milling wheat with a limited number of trading companies asked to offer
U.S. Sold 599K Tons of Soybeans Last Week; 1.31M of Corn: USDA
USDA releases net export sales report on website for week ending Dec. 23.
- All wheat sales fell to 200k tons vs 458k in previous week
- Corn sales rose to 1,307k tons vs 1,115k in previous week
- Soybean sales fell to 599k tons vs 813k in previous week
CROP SURVEY: U.S. Soybean Crush and Corn for Ethanol
The following is from a Bloomberg survey of six anlaysts.
- Soybean crush seen at 191.8m bu in Nov., a 0.4% rise from a year ago
- Crude and once-refined soybean-oil reserves at end of November seen at 2.402b lbs, up from 2.117b
- Corn used in ethanol production seen up 5% y/y to 453.1m bu
- The USDA is scheduled to release its Nov. Fats and Oils report along with the Grain Crushings report on Jan. 3 at 3pm
Argentine Soy, Corn, Wheat Estimates Dec. 30: Exchange
The Buenos Aires Grain Exchange releases weekly report on website.
- 2021-22 Soybean and corn planting estimates maintained
- Wheat production est. held at 21.5m tons; harvest advances to 89.7% complete
Egypt’s Wheat Purchases Are Running 17% Behind Last Year
Egypt’s state buyer bought 300,000 tons of Ukrainian, Romanian and French wheat in a tender on Wednesday, putting its total purchases for the 2021-22 season about 17% below a similar time last year.
Key highlights of the tender:
- The average price paid in the tender declined for the first time since July, falling to $361.27 a ton
- Romania is still the top supplier so far this season, accounting for about 42% of sales in Egyptian tenders
- Egypt bought French wheat in a tender for the first time for this season
Malaysia’s Dec. 1-31 Palm Oil Exports 1,491,985 Tons: AmSpec
Shipments fall 5.1% m/m from 1,572,312 tons exported during Nov. 1-30, according to AmSpec Agri on Friday.
China’s sow herd at end-Nov rises 4.7% from year earlier -ag ministry
China’s sow herd at the end of November was 4.7% higher than the previous year at 42.96 million heads, the agriculture ministry said late on Thursday.
The size of the herd was down 1.2% from the previous month, according to the latest data released on the website of the Ministry of Agriculture and Rural Affairs.
Abattoirs with annual production capacity at 20,000 heads and above slaughtered 235.89 million pigs in the first 11 months of the year, up 66.1% from a year ago, according to the data jointly released by the agriculture ministry and other ministries including the commerce ministry.
Rising output and oversupply caused pork prices to plunge this year and pushed hog margins to negative territory.
The net profit of raising pigs on large farms was at 293 yuan ($45.97) per head in November, down 187.3% from the previous month. The value was also down 69% from a year ago, according to the data.
SOYBEAN/CEPEA: Despite record production, high demand may underpin prices
Cepea, December 30 – Players were optimistic in the early 2021/22 season, with estimates of record supply and firm demand in both the domestic and international markets. In Brazil, the concern regarding the demand is related to the soybean oil consumption for the biodiesel production, since ANP (National Agency of Petroleum, Natural Gas and Biofuels) is likely to maintain the biodiesel mix into diesel oil at 10%, against the 13% that had been verified up to September 2021.
At the field, weather conditions favored the beginning of sowing activities and the development of crops in this 2021/22 season in Brazil. In the last two months of 2021, La Niña caused low humidity in the South and increased the volume of rainfall in both North and Northeast.
The soybean production in Brazil is estimated at 142.78 and 144 million tons, respectively, by Conab and USDA – both records. For the time being, Conab indicated production of 38.32 million tons in Mato Grosso, followed by 21.22 million tons in Rio Grande do Sul and 20.72 million tons in Paraná.
Operational costs to purchase inputs (mainly fertilizers) increased for Brazilian producers from 2020/21 to 2021/22 crops. As for the next season (2022/23), impacts may be even higher.
As for values, although 2022 soybean future contracts at CME Group are below levels verified last year, premiums in Brazil may underpin domestic quotes. FOB soybean prices in Paranaguá (PR) are higher in 2022. Price fluctuations will also depend on the exchange rate (dollar x Real). In the first quarter of 2021, dollar quotes averaged 5.47 BRL, below the 5.78 BRL indicated for the first quarter of 2022, according to future dollar quotes at B3.
BYPRODUCTS – The USDA forecasts a 2% increase in the supply of soybean meal and oil in Brazil. As for the soybean meal, both domestic demand and exports are expected to increase 4.5% and 2.4%, respectively, at 20 million tons and 17 million tons. Concerning soybean oil, on the other hand, the consumption is likely to move down 1.3% (to 7.86 million tons), which increases the surplus and may favor exports – they can reach 1.45 million tons (+14.3%), and, if confirmed, the highest volume since 2017/18.
ANP (National Agency of Petroleum, Natural Gas and Biofuels) approved the new biodiesel trading model as a substitute for public auctions, which can start in January 2022. In the new model, distributors can purchase biodiesel directly from producers.
CORN/CEPEA: Production and exports are expected to grow in 2022
Cepea, December 30 – The Brazilian 2021/22 season of corn is expected to begin with domestic prices above the historical average. In the first semester of 2022, low inventories and high demand may limit steeper price drops, while in the second half of the year, values may be pressed down if the estimates for high supply in the second crop is confirmed. So far, official estimates point to record output and exports in Brazil and abroad.
Brazilian first crops were favored by the weather during sowing and the beginning of crops development. However, in southern Brazil, the dry weather concerned agents in the last two months of 2021, leading to lower supply than that initially estimated. As for the second crop, the fast sowing of soybean is expected to favor the harvesting, allowing corn crops to be sown within the ideal period too. If the weather is favorable in early 2022, the productivity of second crops of corn may be satisfactory.
So far, Conab (Brazil’s National Company for Food Supply) estimates the first crop of corn (2021/22) to total 29.06 million tons, 17.6% higher than that in the previous season, reflecting the 3.7% area increase and, majorly, expectations for an increase of 13.4% in productivity. For the second crop, so far, Conab estimates an area increase of 5.7% compared to that in the previous season, a record, due to the high prices in the last months. And for the third crop, area estimates have been kept stable, while the average productivity is forecast to grow by 17%, leading to an output of 1.8 million tons.
If these estimates are confirmed, the corn output in the 2021/22 season is expected to hit 117.18 million tons, also a record and 34% up from that in the 2020/21 season.
Domestic and international demand are expected to continue high. In Brazil, consumption is growing, estimated at 76.8 million tons in 2021/22, 6% higher than that last season and 12% up from the average of the last three seasons. Higher consumption reflects the high interests of both the livestock and the corn ethanol sectors in central-western BR. Exports may be favored by the strong dollar and higher domestic surplus.
The domestic availability of corn in the coming Brazilian season (initial stocks + imports + production) may surpass 126 million tons, 26.4% up from that last season. On the other hand, domestic consumption is not expected to grow as much, leading to a gap of 50.1 million tons between availability and consumption in Brazil, 78.7% wider than that in the previous season and 20% wider than that average of the three last seasons – this volume will be available for exports. So far, Conab estimates 36.7 million tons to be exported between February 2022 and January 2023, which, if confirmed, would be a record.
India’s Winter Crop Area Rises 1.5% to 63.47 Million Hectares
The area under winter-sown crops, such as wheat, rapeseed and pulses, climbed to 63.47 million hectares (157 million acres) as of Dec. 31, from 62.5 million hectares a year earlier, according to the farm ministry.
Wheat area fell about 1% to 32.59 million hectares, while land under rice cultivation dropped 6.6% to 1.41 million hectares from a year earlier, the ministry said in a statement on Friday.
U.S. Barge Shipments of Grain Fell 24% Last Week: USDA
Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending Dec. 25 from the previous week, according to the USDA’s weekly grain transportation report.
- Barge shipments of corn fell 15% from the previous week
- Soybean shipments down 31% w/w
U.S. Grain Movement by Rail Up 16.2% Week Ended Dec. 22: USDA
The number of railcars hauling U.S. grain to Pacific Northwest, Texas Gulf, Mississippi River ports and to Mexico, according to data in the USDA’s weekly transportation report.
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