FI Morning Grain Comments 10/25/21

PDF attached

 

Good
morning

 

CBOT
soybeans, corn and wheat futures are higher this morning from US harvest delays, higher lead in outside markets, and tight global wheat stocks.  WTI crude oil earlier hit $85/barrel.  There were a lot of soybean EFPs executed on Friday and our thinking is
traders are positioning ahead of FND deliveries.  The ECB will remain very wet this week, bis northern growing areas.  There will be a small window of dry weather, but it will take a few days for fields to dry down.  Argentina and Brazil saw scattered showers
over the weekend, but Argentina needs additional rain and the outlook this week looks fairly dry. 

 

 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 25, 2021

• Excessive
  rain was reported Sunday and early this morning in northern California where flooding has become widespread.
  
• Rainfall
  of 3.00 to 9.00 inches and local totals over 11.00 inches have occurred with more rain expected today.
  
• Central
  Vietnam coastal areas also reported excessive rain again for the second weekend in a row with more than 19.00 inches occurring at Hue.
  
• A
  tropical disturbance in the South China Sea will bring at least one more round of heavy rain to central Vietnam Tuesday into Wednesday. 
  
• Most
  of the U.S. Midwest and parts of the Delta and southeastern states will experience enough rain this week to stall harvest progress, but next week looks drier.
  
• U.S.
  Hard red winter wheat areas will continue dry biased for the next week to ten days as will be Montana and neighboring areas of Alberta and western Saskatchewan, Canada.
  
• Argentina
  is advertised to receive greater rainfall in the coming week than advertised Friday and that should prove beneficial to winter and spring crops and fieldwork.
  
• Brazil
  experienced abundant rain in many areas during the weekend, but the south is expected to trend drier during the next ten days while rain continues in center west and center south production areas.
  
• Australia,
  northern and eastern China, central and northern India, much of Europe and southern parts of the CIS; including Ukraine and the middle and lower Volga River Basin of Russia will experience drier biased weather promoting fieldwork and winter crop development. 
• South
  Africa will receive some beneficial rain for spring and summer crop planting, but winter grain harvesting may be slowed in some areas
• Southern
  India will receive some heavy rain in the coming week, but amounts have been reduced from those advertised Sunday

 

Bloomberg
Ag Calendar

Monday,
Oct. 25:

• Monthly
  MARS bulletin on crop conditions in Europe
• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  poultry slaughter, 3pm
• U.S.
  cotton condition; corn, soy and cotton harvesting; winter wheat planting, 4pm
• Malaysia
  Oct. 1-25 palm oil exports
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  New Zealand

Tuesday,
Oct. 26:

• EU
  weekly grain, oilseed import and export data
• EARNINGS:
  WH Group

Wednesday,
Oct. 27:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Unica releases cane crush, sugar output data (tentative)

Thursday,
Oct. 28:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports

Friday,
Oct. 29:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Vietnam’s
  General Statistics Office releases October trade data
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  agricultural prices paid, received, 3pm

Source:
Bloomberg and FI

 

 

 

 

 

CFTC
Commitment of Traders

 

 

 

Macros

 

Corn

·        
Corn is
higher following wheat and soybeans.  News was very thin for the corn market and many traders are noting US Midwest harvest delays over the weekend into this week. 

·        
China hog futures hit limit higher overnight, in part to expectations for demand to increase ahead of the Lunar New Year holiday season. 

·        
(Bloomberg) — China’s northern regions will probably see sunny weather and normal-to-higher temperatures in the coming days, which should be beneficial for the harvesting and drying of autumn crops, according to the National
Meteorological Center.

·        
(Reuters) – Corn prices in Shandong province were 2,640 yuan per ton, slightly higher than wheat prices in the region at 2,610 yuan per ton as of last Friday.

·        
The USDA Cattle on Feed report was seen slightly bearish corn for feed demand, and positive for back month cattle futures. 

 

 

EIA
forecasts U.S. winter natural gas bills will be 30% higher than last winter

https://www.eia.gov/todayinenergy/detail.php?id=50076&src=email

 

Export
developments.

• None
  reported

 

Soybeans

·        
CBOT soybeans, meal and oil are higher from US harvest delays and higher outside related markets. 

·        
WTI is up $1.09.  USD is 27 points higher. 

·        
Late last week the CFTC showed funds for soybeans not as long as expected (as of Tuesday) and open interest on Friday dropped 57,730 contracts for soybeans (Nov down 68,839 lots).  There were a lot of EFPs executed on Friday and
our thinking is traders are positioning ahead of FND deliveries that are due out at the end of this week. 

·        
One of the main reasons CBOT ags are higher today are US harvest delays across the Corn Belt.  The ECB will remain very wet this week, bis northern growing areas.  There will be a small window of dry weather, but it will take
a few days for fields to dry down. 

·        
Argentina and Brazil saw scattered showers over the weekend, but Argentina is in need of additional rain and the outlook this week looks fairly dry. 

·        
Safras & Mercado: 35.8% of soybeans had been planted in Brazil, well up form this time year ago (slow arrival of rains in 2020) and compares to 37% average.  AgRural estimated plantings at 38%. 

·        
China cash crush margins on our analyses were 263 cents/bu versus 247 cents late last week and 95 cents around a year ago. 

·        
AmSpec reported Malaysian palm 1-25 shipments at 1.201 million tons, down from a revised 1.313 million tons during the same period a month earlier. 

·        
ITS reported a 12.1% decrease in palm shipments to 1.209 million tons from 1.375 million during the September 1-25 period. 

·        
Malaysian palm futures were up 45 ringgit overnight to 4,969.  Cash palm was up $2.50/ton to $1,270/ton. 

·        
Malaysian palm oil futures:

·        
Rotterdam meal values were mixed and vegetable oils unchanged to mostly higher. 

·        
Offshore values are leading soybean oil 62 points higher and meal $0.80 short ton lower. 

·        
China

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat futures prices are higher from ongoing concerns over tight global stocks.  Chicago is at a 2-month high.  Some noted recent bullish developments including rising Russian export taxes, increase in US wheat demand and EU
wheat quality downgrades.  Kansas hard red winter wheat futures are near a 2014 high and Minneapolis spring wheat futures at highest level since 2012.

·        
There was one import tender announcement over the weekend.  Pakistan’s lowest offer for 90,000 tons of wheat was $394.38 a ton c&f.  No purchase has been reported.

·        
IKAR reported Russian 12.5% protein wheat from Black Sea ports, for first half of November was $312 a ton free on board at the end of last week, up $2 from the previous week.  SovEcon reported a $3/ton increase to $316 a ton. 

·        
Russia’s Federal Center of Quality and Safety Assurance for Grain and Grain Products reported a 12% decline in wheat shipments for the 2021-22 season to 14.7 million tons as of Oct. 21. 

·        
China sold 88.5% of the amount available or 891,938 tons of wheat out of auction at an average price of 2,366 yuan per ton or $371/ton. 

·        
Matif and Minneapolis wheat hit fresh contract highs.

·        
Paris December wheat was up 2.75 euros by around 8:00 am CT at 279.25. 

 

FI’s
2022 initial winter wheat projections (late October/early November)

G/E
estimated by FI at 56 percent versus 41 percent year ago and 52 for the 5-year average. 

 

 

Export
Developments. 

·        
Pakistan’s lowest offer for 90,000 tons of wheat was $394.38 a ton c&f.  No purchase has been reported.

·        
Turkey seeks 235,000 tons of feed barley on October 26. 

·        
Ethiopia seeks 300,000 tons of milling wheat on November 9.

·        
Ethiopia seeks 400,000 tons of wheat on November 30. 

 

Rice/Other

·        
Maldives seeks 25,000 tons of parboiled rice with offers due by October 28. 

·        
Mauritius seeks 6,000 tons of white rice on October 26 for January 1-March 31 shipment.