TODAY – EXPORT INSPECTIONS
Wheat prices overnight are down 1 1/2 in SRW, down 1/4 in HRW, down 1 3/4 in HRS; Corn is down 2 3/4; Soybeans down 6; Soymeal down $0.23; Soyoil up 0.02.
Markets finished last week with wheat prices down 20 in SRW, down 33 1/4 in HRW, down 26 1/4 in HRS; Corn is down 1; Soybeans up 19 3/4; Soymeal up $1.21; Soyoil down 1.04. For the month to date wheat prices are up 15 in SRW, up 1 3/4 in HRW, up 9 in HRS; Corn is up 13 3/4; Soybeans up 44; Soymeal up $12.40; Soyoil up 2.03.
Chinese Ag futures (JAN 22) Soybeans down 27 yuan ; Soymeal up 9; Soyoil up 252; Palm oil up 258; Corn down 21 — Malasyian Palm is up 100. Malaysian palm oil prices overnight were up 100 ringgit (+2.15%) at 4750 to cap its biggest jump in more than two weeks, with expectations of a drop in stockpiles in second-biggest grower Malaysia and stronger soybean oil boosting sentiment.
There were changes in registrations (71 SRW Wheat, -11 Oats). Registration total: 1,861 SRW Wheat contracts; 100 Oats; 2 Corn; 277 Soybeans; 233 Soyoil; 1 Soymeal; 108 HRW Wheat.
Preliminary changes in futures Open Interest as of December 3 were: SRW Wheat up 270 contracts, HRW Wheat down 523, Corn up 6,802, Soybeans up 6,856, Soymeal up 1,290, Soyoil down 4,214.
Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Mostly dry through Saturday. Isolated showers Sunday-Monday. Mostly dry Tuesday. Temperatures near to above normal through Tuesday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Tuesday. Temperatures near normal through Tuesday.
Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Scattered showers through Saturday. Mostly dry Sunday-Tuesday. Temperatures near to below normal through Monday, near to above normal Tuesday. La Pampa, Southern Buenos Aires Forecast: Scattered showers through Saturday. Mostly dry Sunday-Tuesday. Temperatures near to below normal through Monday, near to above normal Tuesday.
The player sheet for Dec. 3 had funds: net sellers of 6,500 contracts of SRW wheat, buyers of 4,000 corn, sellers of 11,000 soybeans, buyers of 6,500 soymeal, and buyers of 5,000 soyoil.
TENDERS
- SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 122,000 tonnes of U.S. soybeans to unknown destinations for delivery in the 2021/22 marketing year that began Sept. 1.
- WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought 25,510 tonnes of food-quality wheat from Australia in a regular tender that closed on Friday.
- WHEAT PURCHASE: Saudi Arabia’s main state wheat buying agency the Saudi Grains Organization (SAGO) has purchased an estimated 689,000 tonnes of wheat in an international tender.
PENDING TENDERS
- WHEAT TENDER: An Ethiopian government agency issued an international tender to buy about 400,000 tonnes of milling wheat
- WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
- WHEAT TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley, European traders said on Monday.
Canada 2021 Wheat Crop Est. 21.7M Tons, Canola 12.6M: StatsCan
Wheat production seen 63,000 tons lower than previously expected, according to estimates released Friday by Statistics Canada on its website.
- Durum wheat revised down by 891,000 tons
- Canola revised down by 187,000 tons to 12.595m tons
China’s corn output rises 4.6% in 2021 on year -stats bureau
China’s corn output rose 4.6% in 2021 from the previous year to stand at 272.6 million tonnes, the statistics bureau said on Monday.
The annual official number came as the market closely watched the new corn crop in the world’s second largest consumer of the grain, after the planting acreage rose on soaring prices.
Chinese farmers dumped other crops for corn to cash in on record prices during the planting season, though heavy rains in the north hit the harvest, lowering output and damaging the quality of some of the crop. (Full Story) (Full Story)
China’s 2021 corn planting acreage was up 5% from the previous year at 650 million mu (43.32 million hectares), thanks to the rising prices, the bureau said in a separate statement on its website, citing an official.
Corn yield in 2021 fell 0.4% from a year earlier, as flooding in the Huang-Huai-Hai river area hit crops there, bureau official Wang Minghua said in the statement.
China’s agriculture ministry saw corn output in the new crop year at 270.96 million tonnes, up 4% from 260.67 million the previous year. (Full Story)
Total grain output rose 2% from the previous year to 682.9 million tonnes in 2021, the statistics bureau said.
Wheat output was at 136.9 million tonnes, with acreage and yield both rising from 2020, it added.
Brazil Soybean Exports to China Rose 99% Y/y in November
According to data on the Brazilian Trade Ministry’s website.
- Nov. exports to China rose to 2.23m tons from 1.12m tons a year ago
- Jan.-Nov. exports to China down 4% y/y to 58.4m tons
CORN/CEPEA: Monitoring the weather, sellers leave the spot market, and prices rise
Corn prices continue to rise in the Brazilian market, boosted by the absence of sellers in the market – these agents have been monitoring the dry weather in the regions that produce summer crops. As for purchasers, many of them claim to have inventories for the short term. Among the agents interested in closing deals, there has been a fierce competition regarding prices, which is keeping liquidity low in the national spot market.
CROPS – Some corn crops in Rio Grande do Sul have been damaged by low rainfall. In Santa Catarina and Paraná, rains have been low too, but crops development is considered satisfactory. In São Paulo and Minas Gerais, high temperatures are concerning farmers. It is important to highlight that official data on possible productivity decreases have not been released yet.
PORTS – The US dollar appreciation against the Real and increases in future contracts abroad underpinned corn prices at Brazilian ports in the last days. Still, deals have been occasional, with low volumes exported, but high imports.
Between November 25 and December 2, corn prices rose by a slight 0.05% at the port of Paranaguá (PR), to BRL 85.61/bag on Dec. 2. At the port of Santos (SP), values increased by 0.8%, to BRL 85.41/bag. The US dollar rose by 1.6% in the same period, to BRL 5.652 on Thursday (2).
In November, Brazil exported 2.4 million tons of corn, 41% more than that shipped in October, but 51% down from that in Nov/20, according to Secex. In the current season (Feb. – Nov), Brazil has exported 14.72 million tons of corn, 48% down from that last season.
On the other hand, imports totaled 621 thousand tons, 23% more than that in October and a staggering 197% up from that in Nov/20, according to Secex. In the current season, Brazil has imported 2.42 million tons, much more than the 929 thousand tons in the same period last year.
CROPS – In Rio Grande do Sul, sowing has reached 88% of the state area, according to Emater. In São Paulo, 95% of the area allocated to corn crops had been sown by Nov. 27; in Minas Gerais, 99%; and in Santa Catarina, 96.8%, according to Conab (Brazil’s National Company for Food Supply). In Maranhão and in Bahia, 10% and 56% of the respective areas have been sown. In Goiás, corn sowing is over. In general, according to Conab, 75.3% of the national area allocated to corn crops have been sown.
SOYBEAN/CEPEA: With oil devaluations and price drops abroad, soybean values decrease in BR
The domestic prices for soybean and its by-products, majorly soy oil, have faded in Brazil this week, influenced by devaluations abroad. The current international scenario reflects concerns about the new covid-19 variant, which is making agents cautious, resulting in price drops at CME Group. Oil prices have dropped this week too, increasing pressure on the values of both soy oil and beans.
On the average of the regions surveyed by Cepea, the prices paid to soybean farmers (over-the-counter market) in Brazil faded by 1.3%; in the wholesale market (deals between processors), values decreased by 2%. On the other hand, the US dollar rose by 1.6% between Nov. 25 and Dec. 2, to BRL 5.615 on Thursday (2).
CROPS – Soybean sowing is ending in Brazil – according to Conab (Brazil’s National Company for Food Supply), until Nov. 27, 91.5% of the national area allocated to soybean crops had been sown. Activities have ended in Mato Grosso, Mato Grosso do Sul and São Paulo. In Maranhão, 60% of the state area has been sown; in Paraná, 97%; in Tocantins, 88%; in Santa Catarina, 81.14%; in Bahia, 87%; and in Piauí, 85%.
The weather has been favorable to crop activities in most Brazil, however, in Rio Grande do Sul, Cepea collaborators have been worried about the drought and high temperatures. Still, sowing is ending in RS – according to a report from Emater/RS released on Dec. 2, 80% of the area had been sown in the state by then, much more than the 63% from a year ago.
EXPORTS – In November, Brazil exported 2.587 million tons of soybean, according to Secex, 21.5% down from the volume shipped in Oct/21, but a staggering 80.2% up from that in Nov/20. This year (Jan. – Nov.), Brazilian soybean exports have totaled 84.164 million tons, 0.78% up from that in the same period last year.
Malaysia Dec. 1-5 Palm Oil Exports -2.68% M/m: Intertek
Malaysia’s palm oil exports fell 2.68% m/m during Dec. 1-5, according to Intertek Testing Services.
Palm Oil Reserves in Malaysia Probably Shrank on Weak Output (1)
Palm oil reserves in Malaysia probably contracted in November as shipments from the second-biggest grower rebounded and production declined.
Inventories retreated 2.7% from October to 1.78 million tons, according to the median of 13 estimates in a Bloomberg survey of analysts, traders and plantation executives. Crude palm oil production fell 1.2% to 1.71 million tons.
Prices of the world’s most-consumed edible oil soared to a record in October amid a supply crunch in global vegetable oil markets, especially in Malaysia where a chronic plantation labor shortage has slashed production.
Malaysia’s output this year will be 18 million tons “at best,” or the lowest in five years, veteran trader Dorab Mistry, director at Godrej International Ltd., said at a conference on Thursday. Prices are likely to jump to a record 5,400 ringgit ($1,279) a ton early next year, due to acute supply tightness, he said.
Palm oil futures in Kuala Lumpur jumped as much as 3.9% on Monday to 4,830 ringgit a ton, the biggest intraday advance in two months, before trading at 4,770 ringgit by the midday break.
Labor Crunch
Further ahead, inventories in Malaysia may remain tight in the next three to four months as production stays lean through February, according to Nagaraj Meda, managing director of Hyderabad-based TransGraph Consulting Pvt. A major improvement in production is unlikely until the second quarter of 2022 due to underlying labor issues and seasonal factors, he said.
Malaysia’s exports are forecast to rebound 10% to 1.56 million tons, according to the survey, after slumping 12% in October. Cargo surveyor data showed that demand from top buyers, such as India, China and Europe, jumped last month.
Investors are also keeping a close watch on the impact of the new omicron variant on edible oil demand, as well as whether measures to control the spread, including any potential travel ban, may further constrain production.
Russian Wheat-Export Decline Steepens, Down 18% Y/y: Agency
Wheat shipments for the 2021-22 season amounted to 18.8m tons as of Dec. 2, down 18% from a year earlier, the Federal Center of Quality and Safety Assurance for Grain and Grain Products said on its website, citing inspections before exports.
- That means wheat exports totaled about 800k tons in the week to Dec. 2, the same as a week earlier
- Exports of all grains are at 25.5m tons so far this season
- Barley exports declined 34% y/y
- Corn exports rose 12%
- NOTE: Last week the center said that wheat exports were down 17% y/y
- NOTE: Data are preliminary and include exports to the Eurasian Economic Union, which is a customs union of countries that includes Russia
Russia Mulls Setting Wheat Export Quota at 9 Million Tons
Russia is discussing setting its wheat-export quota that runs from mid-February through June at 9 million tons, according to people familiar with the matter.
The figure was proposed by the agriculture ministry, which also suggested a total grains quota of 14 million tons for the period, said the people, who asked not to be identified discussing private information.
Next year’s quota will be decided by the government based on a recommendation by the tariffs commission, a spokesman for the agriculture ministry said, without commenting on the figures.
The press service for the economy ministry, which is in charge of the commission, said it plans to discuss the specific dates and volumes of the quota for 2022 together with the ministry of agriculture “in the near future.”
Russia imposed a grains export quota of 17.5 million tons from Feb. 15 through June 30 this year. It didn’t have a breakdown for specific grains within the total.
U.S. Beef Production Up 19.6% This Week, Pork Rises: USDA
U.S. federally inspected beef production rises to 563m pounds for the week ending Dec. 4 from 471m in the previous week, according to USDA estimates published on the agency’s website.
- Cattle slaughter up 19.4% from a week ago to 676m head
- Pork production up 18.2% from a week ago, hog slaughter rises 18%
- For the year, beef production is 2.5% above last year’s level at this time, while pork is 2.3% below
LATAM CROP WEATHER: Drought Stress Seen Rising on La Nina
Rains will be focused on north and central Brazil in the coming weeks in “a typical La Nina pattern” that should aid soybean crops in those regions, Climatempo meteorologist Celso Oliveira says in phone interview.
- Below-average precipitation is expected in Brazil’s south this month, deteriorating moisture conditions and raising risks for soy, corn crops amid high temperatures
- Soil moisture is already low in parts of Rio Grande do Sul, Parana, Mato Grosso do Sul and Sao Paulo states
- Farms in Rio Grande do Sul, far south Brazil, should only get ample rains in the first week of January
- “We are at the beginning of an issue that should be deteriorating in the coming weeks”
ARGENTINA SOY, CORN
- Much of Argentina will remain warmer and drier than normal this month, Aaron Carmichael, a senior meteorologist at Maxar, says in an email
- “While recent rains have improved moisture a bit in southern Argentina, the dry forecast through the end of the month across most of the country as well as southern Brazil will certainly increase drought concerns”
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