Rain Days & Tidbits 01/28/2022
Yesterday, urea prices from Russia were up $100+, Egyption urea traded $125 higher and NOLA cash urea traded to $570, up $85 than the previous day as the world's urea suppliers prepared for India's urea urea tender. India imports more urea than any country... about 1.5 million mt per year.
Production estimates are such that the Brazilian bean crop will certainly be less 135 million mt and possibly down to 125 to 130. USDA was at 139 million in its January report. While Brazil will be loading ships as fast as possible in the months during and after harvest, they will run out of beans sooner than normal. That means US soybean exports will be very strong the last four months of 2022 and that is why that elevator in Minnesota has a fall delivery basis of 30 under the November (-30X) instead of the normal -60X to -120X. Be patient on selling a lot of new crop beans at least until we know how poor the SA crop really is.
Kevin Duling is a futures broker and a grain market advisor who specializes in wheat. He has been bullish wheat for three years and has been right the past 2 years. He is looking at $8.50 futures for new crop for soft and hard wheat.
Because soft white wheat is what is grown in the PNW where he lives, he is a good person to talk to about soft white wheat, most of which is exported out of Portland. His contact info is:
541 980 4554
52895 Natural Pasture Rd.
Maupin, OR 97037
Traders of hard red winter wheat said rail performance has improved in recent weeks and were hopeful more equipment would soon be available. Railroad performance was sub-par during the fourth quarter. Union Pacific railroad told the Wall Street Journal it had miscalculated the effects on crews from COVID-19 infections and exposures amid a general US labor shortage. US weekly rail traffic for the week ending January 15th totaled 493,617 carloads and intermodal units, down 7% compared with the same week in 2021.
The week ended January13th, 33 ocean going grain vessels were loaded at the Gulf, down 23% from the same period in 2021. In the 10 days from January 14th, 59 vessels were expected to be loaded, 13% fewer than in the same period of 2021.
The ocean freight rate for shipping a mt of grain from the US Gulf and the PNW to Japan was down 3% from the previous week.
The US average diesel fuel price in the week ended January 17th increased 6.8¢ from the previous week to $3.725 per gallon, which is up $1.03 from the same week last year.
The Commodity Index is up 9.7% and the S&P 500 Stock Index is down 9.2% since the first of the year. That is what happens during periods of extreme inflation. Maybe stocks are over-done to the down side as yesterday’s US GDP for the fourth quarter was much better than expected at an annual growth rate of 6.9%; the market was expecting 5.4%. Everybody who believes the economy is that good, please raise your hand.
The Belorussian Ministry of Defense stated today: Russia will withdraw its troops from Belorussia after February drills.
West Texas Intermediate Crude Oil (WTI) Crude oil is up 31 cents at $86.93 this morning.
The Dollar Index is trading at 97.38, up 0.13 and up 1.70 for the week.
March palm oil is at 5,745 MYR, up 132. A new contract high was made today at 5,765 MYR. Yesterday's action saw a new contract high at 5,562 MYR. Palm oil has 32% and soyoil has 28% share of the world vegetable oil market.
March cotton is down 43 cents per cwt at $121.20. The contract high was made last Wednesday and Thursday at $124.78. Cotton competes with soybeans for acres.
March Natural Gas is up $0.151 at $4.434 per Metric Million Btu. The contract high was made October 6th at $6.132 per MMBtu. Natural gas is the primary input cost of nitrogen fertilizer.
March Oats are down down 3 cents at $6.52. The contract high is $7.78 made November 22nd.
The weekly export sales issued yesterday morning had wheat and corn sales above the top end of the range of expectations. Wheat sales largest of the marketing year at 676,700 mt. Note the wheat marketing year eight months ago. Note also the USA and Canada are the world’s wheat suppliers of last resort because all other exporters wheat is cheaper and closer to the buyers.
The year-to-date tracker shows corn and soy oil export sales pace is a little above the USDA projected pace for the marketing. Note how far behind the sales pace is for soybeans, yet on the January S&D left soybean exports unchanged and reduced corn exports. Again, this is evidence soybean exports late this marketing year are going to be very strong, much, much stronger than normal.
Margin requirements for one 5,000 bushel wheat contract at the CBOT and KCBOT were increased after the close yesterday.
Rondonópolis, Mato Grosso, in the heart of Brazil's most productive soybean area, received three-tenths of an inch of rain yesterday; 1.3 inches a year ago and one-tenth of an inch two years ago (one inch = 24.5 mm). Yesterday's high temperature was 86°F. Day time highs the next ten days will range from 81 to 91°F (100°F = 38°C).
Yesterday, in the dry areas of South America: Santa Maria high temperature 85°F with a tenth of an inch of rain. Cordoba high temperature 75°F with a half inch rain. Salto high temperature 83°F with no rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 1.32 inches 83 to 95°F. Cordoba 1.13 inches 78 to 90°F. Salto 0.56 inches 81 to 94°F.