Poultry Industry News, Comments & More

COMMODITY REPORT

11/11/2021

WEEKLY COMMODITY REPORT: November 11th 2021.

  •  Commodity prices and volumes fluctuated widely this past week but two days after release of the November 9th WASDE, settled with the Thursday November 11th CME quotations for corn and soybeans up 1.6 percent and 0.6 percent respectively, compared to Thursday November 4th.

 

  • Factors influencing prices in either direction included:-
  • Release of the November 9th WASDE with 85 percent of the harvest completed. The report raised corn production 0.3 percent and lowered soybean production by 0.5 percent.  The November WASDE retained the projected ending stocks of corn and raised soybean ending stocks by 8.4 percent.  (transitory upward pressure);
  • Restoration of operation of most terminals on the lower Mississippi following Hurricane Ida. Installations have been repaired and are unloading barges and loading bulk carriers. (moderate upward pressure)
  • A pause in the recent upward trend in ethanol production (transitory downward pressure on corn)
  • Lower than anticipated export sales, especially to China (downward pressure);
  • Projections for new-crop soybeans in Brazil indicate a potential record. (moderate downward pressure on soybeans)
  • Central Government of China authorizes buying cycle for soybeans as crush margins improve. (upward pressure on soybeans)

 

 

  • U.S producers are now receiving and conversely livestock producers and ethanol refiners in the Midwest paid above $5.70 per bushel for corn and crushers paid $12.20 per bushel for soybeans plus transport and basis during the second week of November. Corn was up 1.6 percent this past week for December delivery. Soybeans were up 0.6 percent for November delivery. Soybean meal was up 2.3 percent for December delivery compared to last week reflecting domestic demand and the rise in the price of soybeans during past weeks.

 

  • The FAS Export Report released on November 12th for the week ending November 4th reflecting market year 2021-2022, confirmed that outstanding export orders for corn for the new market year amounted to 25.46 million metric tons (1,002 million bushels) with 6.61 million metric tons (260 million bushels) actually shipped. During the past week orders for the 2021-2022 market year amounted to 1.07 million metric tons (42 million bushels) with 0.72 million metric tons (28 million bushels) shipped.  For market year 2022-2023 outstanding sales amounted to 0.34 million metric tons (13 million bushels) with understandably negligible sales recorded this past week.

 

  • The FAS Export Report released on November 12th for the week ending November 4th reflecting market year 2021-2022, recorded outstanding export orders for soybeans amounting to 19.01 million metric tons (698 million bushels) with 14.28 million metric tons (525 million bushels) actually shipped. Weekly soybean orders attained 1.29 million metric tons (47 million bushels) with 3.70 million metric tons (136 million bushels) shipped.

 

  • For the week ending November 4th 278,000 metric tons of soybean meal and cake were ordered for the market year 2021-2022, up 22.7 percent from the previous week. With restoration of operation of most of the lower Mississippi terminals after damage from Hurricane Ida, 166,400 metric tons of meal and cake was shipped, down 21.2 percent from the previous week and representing 15.4 percent of the total 1,079,000 metric tons shipped during the current marketing year to date.

 

  • Projected harvests and ending stocks in the U.S. were incorporated in the November WASDE allowing almost complete clarity on quantities harvested and the effect of trade and domestic consumption on ending stocks.

 

 

 

The following quotations for delivery in the months as indicated were posted by the CME at 14H00 on November 11th 2021, compared with values posted at 14H00 on November 4th 2021  (in parentheses):-

 

 

COMMODITY

 

Corn (cents per bushel)

Dec.    568    (559)      

March ‘22.  577   (568)      

Soybeans (cents per bushel)

Nov. 1,215   (1,208)

March ’22. 1,233 (1,232)

Soybean meal ($ per ton)

Dec.    344     (336)

March  ’22.  339   (333)

 

 

Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-

 

COMMODITY CHANGE FROM PAST WEEK FOR MONTH OF DELIVERY  AS INDICATED

Corn:                  Dec. quotation up 9 cents per bushel                 (+1.6 percent)

Soybeans:         Nov. quotation up 7 cents per bushel                (+0.6 percent)

Soybean Meal: Dec. quotation up $8 per ton                                (+2.3 percent )

The USDA weekly wholesale feedstuffs prices per short ton, posted on November 9th (with previous week in parentheses) were:-

  • Corn: $196 ($203), Chicago
  • Soybean Meal: $350 ($344), Central Illinois
  • Meat and Bone Meal: $340  ($340), Central Midwest
  • DDGS: $180 ($180), Eastern corn belt

 

  • For each $1 per ton (2.8 cents/bushel) change in corn:-

The cost of egg production would change by 0.11 cent per dozen

The cost of broiler production would change by 0.06 cent per pound live weight

 

 

  • For each $10 per ton change in the price of soybean meal:-

The cost of egg production would change by 0.44 cent per dozen

The cost of broiler production would change by 0.25 cent per pound live weight

 

The respective changes in the prices of corn and soybean meal for November 9th compared with October 29th USDA weekly quotations would decrease nest-run production cost for eggs by 0.5 cents per dozen. For broilers cost would be lowered by 0.3 cent per live pound.

 

Year-to-date, the algebraic escalation in the prices of major ingredients has added 4.2* cents per dozen eggs and 2.6* cents per live-weight lb. to broiler production cost

*(rounded to 0.1cent)

!More!

 

According to the November 9th WASDE, corn harvested in calendar 2021 will attain 15,062 million bushels with ending stocks projected at 1,493 million bushels, up 0.3 percent from the 15,019 million bushels projected in the October 2021 WASDE Report. Values will be updated reflecting production, ongoing export volumes and domestic use in the December WASDE report. Close to 85 percent of corn and soybeans were harvested by November 7th. Total corn stocks on September 1st amounted to 1.24 billion bushels down 36 percent from September 1st 2020.

 

Compared with the November 4th value, the CME quotation for corn at 14H00 on November 11th for December 2021 delivery was up 9 cents per bushel to 568 cents reversing the decline from the previous week.

 

The social restrictions imposed in the U.S. as a result of COVID-19, that are now being lifted, reduced ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement, accepting a nominal ten percent addition to gasoline. This past week 83.3 percent of the U.S. ethanol fermentation volume was operational, based on the January U.S. Energy Information Administration (U.S. EIA) capacity data. The outlook for increased production will depend on higher domestic demand in addition to increasing the proportion of production that is exported. According to the U.S. EIA, for the week ending November 5th the industry produced on average 1,039,000 barrels per day, down 6.1 percent from the week ending October 29th 2021, but the fourth consecutive week above one million gallons per day after thirteen successive weeks under this benchmark. On November 9th ethanol stock was unchanged from the previous week at 20.1 million barrels, representing an approximately 20-day reserve but confirming a decrease in demand given lower production.

 

Ethanol was priced at $2.22 per gallon on November 9th unchanged from the previous five weeks and compared with a five-year low of $0.92 per gallon on March 26th 2020 during COVID restrictions. Concurrently RBOB gasoline at $2.37 per gallon (quoted, New York Harbor) was down 5 cents per gallon (2.1 percent) from the previous week, consistent with a 0.2 percent lower WTI crude price of $81.15 per barrel. Damage caused by Hurricane Ida to offshore Gulf operations and refining in Louisiana is mostly repaired. Gasoline is now 15 cents per gallon more expensive than ethanol but with a 63 percent higher BTU rating.

 

With most plants among the 201 that were operational on January 1st 2021 now functioning, DDGS is freely available but commands a higher price than in the first half of 2021. Eastern Corn-belt DDGS was priced at $180 per ton on November 9th 2021, unchanged from the previous week and $3 per ton less expensive than on November 7th 2020. Generally DDGS is currently incorporated at low inclusion levels in egg-production formulas based on high price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuates in price

 

 Soybeans continue to be the beneficiary of export demand by China and other nations in addition to domestic livestock production. The USDA projected a 2021 crop of 4,448 million bushels in the October WASDE. Ending stocks according to the projection will be 320 million bushels, up 72.9 percent from the September WASDE Report. Total soybean stock on September 1st amounted to 256 million bushels down 51 percent from September 1st 2020 indicating the extent of exports during the 2020-2021 market year.

 

The CME soybean price for November delivery at 14H00 on November 11th was higher by 7 cents per bushel to 1,215 cents compared to 1,208 cents per bushel on November 4th.

 

According to a release on October 15th by the National Oilseed Processors Association, 153.8 million bushels of soybeans were crushed in September compared to an expectation of 155.1 million bushels. Previous monthly crush values in 2021 were 165.1 million bushels in August, 172.8 million bushels in July and 161.5 million bushels in September 2020. Lower production in recent months was attributed to extended maintenance in anticipation of the fall harvest.  Soybean meal exports in September fell to 603,545 metric tons (22.2 million bushels), down 29.5 percent from August and 39.1 percent lower than September 2020. Exports for the first week in October increased to 1.1 million metric tons (40.4 million bushels), up 10 percent from the last week in September.                            

 

On November 9th 2021 soybean meal quoted central Illinois was priced at $350 per ton, $6 per ton higher than the previous week and compared to $376 per ton on November 3rd 2020.

 

On November 11th 2021 Meat and Bone meal quoted Central U.S. was $340 per ton, unchanged from the previous week but compared to $308 per ton on October 27th 2020.

 

On November 11th the conversion of CNY 1 to the BRL was 0.8 BRL, up CNY0.04 from the previous week. The conversion of US$1 to the CNY was 6.4, unchanged from the previous week.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

 

For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The USDA-FAS documented sales of U.S. corn to China through late August 2021 comprising the 2020/2021 market year amounting to 73 million metric tons (2,876 million bushels) with 93 percent shipped.

 

COMMENTS

Subscribers are referred to the November 9th 2021 WASDE #618 in this edition and to  the Crop Progress, Grain Stocks and Planned Acreage reports under the STATISTICS Tab.


 
Copyright © 2021 Simon M. Shane