Global Grain Highlights – December 6th

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Oilseeds Highlights

  • Oilseeds mixed to begin the week.
    • Canola up $20 per tonne for the week.  Futures have been following some extremely volatile trading action in recent weeks. Canola is up around $55 per tonne from its late November lows.
    • Soybean oil picked up some small gains on Monday and into the overnight session but remains bruised and beaten from its spectacular crash late last week.
    • Soybean oil hovering near 1 month lows and still holding on tight to the ugly 14% drop through last weeks session.
    • Palm oil also facing a tough week of trade. Down 8% for the week.
  • Veg Oil’s, particularly soy oil main issue for the week was the US EPA posted its intentions for biofuel blending mandates going forwards.  Markets were hoping to see more commitment on the biofuel side of things and were not satisfied with the preliminary figures.
    • These figures are just preliminary and need to be reworked in the coming months.
  • Bright side for canola is that the US EPA is proposing the allowance of the use of the crop in blends going forwards
  • Markets really trying to pick a path here amidst a flurry of news
    • Argentina remains hot and dry early on in their soy growing season. It is becoming to the point where yields are being cut already and the crop is very young.
    • Brazil is alright for crop climate but needs the weekly rains to keep progress moving forwards.  The planting campaign is wrapping up and moisture is not in excess but not suffering for the most part.
      • Brazil does have the planted acreage to put out a mega 150+ mmt soybean crop if things go well.
  • Soybean oil feeling the most pain, down 14% in a weeks time.
    • Soybean oil set a 1 month low on December 5th
  • Argentina announces a restart of its Soy Dollar program to help incentivise selling soybeans amidst high inflation.
    • The exchange program gives a preferential exchange rate to US dollars to help lighten the blow of inflation losses in domestic currency.
  • Massive protests in China appear to be easing.
    • China is rumored to be lowering the COVID restrictions slightly in the coming days.
    • Markets celebrated this News in the worlds second largest economy.  Chinese economy was facing the brunt of it as COVID Zero policies damaged supply chains.
  • China purchased 130,000 tonnes of US soybeans Monday morning
  • USDA out with the next WASDE report on Friday at noon eastern time.
    • December WASDE generally uneventful, no update to US crop production in this estimate
    • Could be some changes to export projections although
  • Almost half of Ukrainian power infrastructure is disabled as winter takes hold of the nation
  • Australian ABARES (Their version of STATS CAN was out Monday)
    • Looking at 2nd largest winter crop on record
    • Quality seems to be a concern in many flooded regions.
    • Canola production is expected to hit 7.3 million metric tonnes.  This is a 4% increase over last years record setting crop as well.
  • US rail system looking like it is averting a strike for the time being with a return to work type of agreement put in place by railways, unions and US federal government.
  • China so far has been the export destination for 75% of US soybeans
    • Markets watching Chinese demand very closely and news from the nation can have a major influence on the commodity market.
    • Perceived weakening demand has held a weight on veg oil markets globally for the past few months.
  • US soy priced higher than global counterparts.
  • Markets turning focus onto Brazil and Argentinian soy crops and the weather ahead.
  • Russia, Ukraine and The United Nations agree mid November to extend the Grain Corridor for another 120 days.
    • This means the export corridor is expected to remain open until mid March 2022.
    • Russia and Ukraine generally have most of their grains exported by this time of the year.
    • It is in Russia and Ukraine’s best interest to keep the corridor open, especially Russia as they have a record wheat crop to move out of the nation.
  • Markets very concerned about the Chinese economy and their ability to continue purchasing higher value crops for their massive population that represents around 18% of all humans on earth.
  • USDA WASDE Report out December 9th
  • Statistics Canada out December 2nd
    • Canola production came in about 1mmt less than average estimates heading into report day.
    • This provided canola a bit of a saving grace when soybean oil was having its rough time late last week.
    • The news helped out the futures and we closed out the trade on Friday with Canola up $34 per tonne or (4.23%) on the January contract
      • Soybean oil was down 2.16 cents or 3.21% for the January
    • See chart’s below. Canola figures for 2021 and some years prior were adjusted recently as well, moving last years production from 12.9 mmt to 13.8 mmt.

Global Vegetable Oil Pricing

USDA WASDE DATA – November 2022

Special Crops

    • Indian rabi crop plantings below seasonal pace
    • Chinese pea imports came in at 230,000 tonnes for October, below average for the month
    • European Union Durum exports higher than normal.  Import pace lowest in a decade.
    • Heavy rainfall in eastern Australia has downgraded the Barley crop.  Upwards of 60% of the Australian barley crop is grown in the region.
      • Still looking for a big barley crop. 4th largest on record and 13.4 mmt of it, just the quality is being sacrificed.
      • Most of the crop is finding its way into middle eastern markets for the time being as having been shut out of Chinese market and finding new homes in alternative destination
    • Flax exports from Russia hit a record 975,000 tonnes in 2021/22
      • Russia has been flooding several markets with Flax this year so far as well and it is hurting North American export prospects.
    • Brazilian Sugarcane crop expected to be the smallest since 2011, resulting in a lower supply available for the nations ethanol market.
    • European Durum crop is expected to fall to 6.9 mmt, 800,000 tonnes lower than last years production.
    • Canadian Durum crop expected to be of high quality, over half as a #1.
    • Canadian flax exports are slower, larger than expected ending stocks come in. Most since 2017/18
    • India has announced Lentils will remain exempt from levy of 10% until March 31st

South American SOil Moisture



  • All Wheat futures down for the past five day trading week
    • Minneapolis wheat down $0.31 per bushel
    • Chicago down $0.41
    • Kansas City down $0.46
  • Wheat was not friendly to large production numbers out of the Australian ABARES report. 36.6 million tonnes of wheat is expected to be harvested of varying qualities.
    • This is a record sized production and 1% larger than last years figures.
    • 2019/20 production came in at 15.9 mmt although drought year.
  • Chicago wheat shorts are greatest since pre covid, markets highly anticipating the upcoming WASDE report to see latest Supply and Demand estimates.
    • Black Sea issues remain but the impact on the market appears to be weakening for time being.  Ukraine major logistical issues inland. Russia has massive wheat crop to move.
  • Ukrainian grain shipments facing delays at ports, accusing Russia of playing games with regulatory approvals through the grain corridor.
  • Statistics Canada published some big wheat numbers in its Friday report.
    • Big 25.7 mmt of spring wheat production, 4th largest in past decade.
    • 2013 still takes the cake for largest spring wheat crop at a whopping 27.6 mmt
  • Argentinian production of wheat coming in at around 10mmt per local sources (USDA 15mmt). Typically they produce a 19 to 20mmt crop.  The nation will be quite short on exportable crop given that they keep just over 6mmt domestically.
    • Brazil is typically a major importer of 5 to 6 mmt of Argentinian wheat.
    • Brazilian production has been increasing in years. Expected at 9.4 mmt vs 7.7 mmt last year and 6.2 mmt year prior.
  • US winter wheat issues persist. The crop is heading into dormancy in some of the worst shape it has ever been in since record keeping began in mid 1980’s
    • US winter wheat acreage is critical to the overall US wheat crop. Over 70% of US wheat production falls into the winter wheat category, 30% falls into spring wheat and durum (mostly spring wheat)
  • US Wheat expensive to other global ports of origin. US wheat over $100 per tonne more expensive than worlds cheapest wheat.
  • Australian wheat suffering from heavy rains during harvest, leading to grade issues. Expected that around half of Australian wheat could face grade issues.
  • Ukrainian barley exports have been very slow, helping support Canadian and other exporters prices.
  • Ukrainian grain exports down 32% year over year, despite shipping corridor.
  • Ukraine facing a 30% to 40% drop in its winter wheat acres planted.
    • Input Financing, logistical issues and the fact the nation is at war sum up most of the cause for the drop in acres.
  • US transportation hurting inland basis levels.
    • US barge system facing restrictive water levels in the Mississippi River. Barges are moving through, just not in ideal conditions. Large backlogs exist, dredging underway.
    • Add rail issues on top of this if strike proceeds.
  •  Russian crop size is quite large, pushing over the mega 100mmt mark. This is easily be 10mmt to 15mmt over a previous record crop size.
    • Winter wheat plantings in the Black Sea lower.
  • Europe’s 2022 corn crop is expected to be the smallest in 15 years.
  • Ukrainian wheat production seen falling to 17.4 mmt by private analysts. This is down from roughly 33mmt in the year prior.
  • Watch USDA WASDE shift supply and demand estimates on Friday.
  • For Canadian readers, Bank of Canada interest rate announcement tomorrow morning.  December 7th.


Weather – Brazil past 7 day rainfall (mm)

Chinese Soybean and Corn Highlight