FI Evening Grain Comments 08/03/21

PDF Attached
includes
updated US soybean complex S&D’s

 

 

Lower
trade led by soybeans after US crop conditions improved. It was dry across the WCB overnight and will remain dry over the next few days.  IA, WI, and northern IL have an opportunity for rain later this weekend into early next week, but some models look dry
after that occurrence.  There are no issues with the ECB. 

 

 

Weather

 

WORLD
WEATHER INC.

MOST
IMPORTANT WEATHER OF THE DAY

• Southeastern
  Rajasthan and northern Madhya Pradesh, India will receive excessive rainfall the remainder of this week
  
• A
  part of this region has already received excessive rain with more than 10.00 inches in northern Madhya Pradesh since last Friday
• Additional
  rainfall of more than 10.00 inches is expected which will lead to some crop damaging flood conditions
• The
  area to be impacted by flooding should be small, but some crop loss will be possible
• Other
  areas in India will experience a more varied environment with southern portions of the nation to continue drying out this week
  
• Drying
  is also expected in Gujarat and northwestern Rajasthan where rain will be needed later this month to support normal crop development
• China
  flood water will continue to recede from east-central and northeastern parts of the nation this week
• Crop
  damage assessment should be getting under way after torrential rainfall impacted parts Henan, Hebei, Shandong, Jiangsu, southeastern Anhui and northern Zhejiang over the past couple of weeks
• Production
  cuts are likely to occur because of serious flooding recently
• China’s
  greatest rainfall in this coming week is expected south of the Yangtze River where a tropical disturbance will spread rain frequently through the week
  
• Some
  flooding is expected from coastal Guangdong to coastal Jiangsu
• A
  good mix of rain and sunshine will occur elsewhere in the nation
• Southeastern
  Europe’s dry and warm bias will continue over the next ten days
• The
  impact will be mostly on the Balkan countries where the ground is already dry and recent temperatures have been hot
• Unirrigated
  summer crops are stressed and need significant rain soon to protect production potentials
• Europe
  rainfall will be greatest from France to Poland and farther to the east northeast through Belarus and the Baltic States to northern and western Russia causing some disruption to small grain maturation and harvest progress
• Some
  grain quality concerns are expected as well
• Canada’s
  Prairies will receive some needed rain in the next week to ten days, but amounts will be light in many areas
  
• Rainfall
  will be lightest and most sporadic in the southern Prairies where drought is most serious, but any rain would be welcome
• Central,
  western and northern Alberta will be wettest along with a few areas in northwestern Saskatchewan where rainfall could range from 0.50 to 1.50 inches and locally more over the coming week
• A
  small are in northern and eastern Manitoba may also get some favorable rainfall later this week
• Temperatures
  will remain warmer than usual with some 90-degree Fahrenheit heat expected over the next few days
• Today’s
  U.S. weather is advertised wetter in the upper Midwest from Iowa to eastern Minnesota, Wisconsin and northwestern Illinois.
  
• These
  areas will get some rain this weekend and the GFS model has predicted additional rain in the second week of the outlook.
• Too
  much rain has been advertised for the second week forecast, but the precipitation in both events will help slow the expansion of dryness out of the northwestern Corn Belt
  
• Northern
  U.S. Plains and upper Midwest weather is expected to continue drier than usual over the next ten days to two weeks, despite some shower activity
• Temperatures
  will be warm at times keeping evaporation rates strong
• Southwestern
  U.S. Corn Belt crop areas may experience some of the greatest net drying during the coming ten days
• The
  area includes Kansas and Missouri
• U.S.
  Midwest temperatures will be mild over the next few days reducing evaporation rates with daily highs in the 70s and 80s Fahrenheit and lows in the 50s and 60s
• Some
  warming will occur again this weekend into next week
• The
  second half of August will likely trend drier cooler than usual once again
• Texas
  is advertised drier today in both West Texas and the Blacklands, but after weekend rain fell in these areas the change will be good for crops
• Some
  warming is needed in West Texas and that should evolve for a little while
• Rain
  will return to West Texas later this month
• South
  Texas harvest weather will be mostly good, but some showers are expected in the next few days that could disrupt some of the field progress
• Weather
  disturbances near the lower U.S. east coast through the next week will induce some heavy rainfall from coastal areas of the Carolinas and Virginia back to northern Florida
• Most
  of this significant rain will occur near the coast
• Far
  western U.S. will continue dry for much of the coming ten days and temperatures will be warm biased
• Southern
  and eastern Thailand did not receive much rain during the weekend or Monday and these areas are advertised to receive minimal amounts of rain in the next two weeks
• Western
  Cambodia will be included in this drier bias
• Other
  areas in mainland Southeast Asia will receive a good distribution of rain and sunshine over the same two week period ending Aug. 16.
  
• Indonesia
  and Malaysia rainfall was restricted again Monday as it was during the weekend outside of northern Sumatra
  
• Greater
  rain is desired across parts of Indonesia where erratic rainfall recently has allowed the soil to dry down
  
• Philippines
  rainfall increased greatly last week across western Luzon where flooding was widespread and threatening to rice and a few other crops
• Less
  rain fell in the region Monday, but one location along the central west coast of Luzon reported more than 7.00 inches of additional rain Monday resulting in more serious flooding since that same area has been inundated with excessive rain for an extended period
  of time
• Some
  damage to rice and other crops has already occurred and this additional rainfall did not help the situation
  
• Soil
  conditions in Philippines are now driest in western Mindanao and in some of the southern Visayan Islands
• Europe
  is advertised to trend drier next week, but occasional light rainfall will occur during this week resulting in some harvest delay and concern over unharvested small grain and late winter rapeseed quality
• Next
  week’s drying will be ideal in getting harvest progress back on track and to stop any declining trend in crop conditions
• CIS
  weather over the coming ten days will provide net drying conditions in portions of Russia’s Southern Region and Volga River Basin into the southern Ural Mountains Region and northwestern Kazakhstan
  
• Rain
  will fall in Ukraine, Belarus, the Baltic States, far western Russia and in most of the eastern Russia New Lands
• The
  moisture will be good for late season crops, but dryness in summer corn, sorghum and sunseed areas from southern Russia into Kazakhstan is a concern and greater rainfall needed, but not much more than sporadic showers will occur for at least ten days
• Brazil
  coffee areas are beginning to warm up after last week’s frost and freezes
• A
  lack of rain and warmer temperatures will likely stress crops while trying to recover from the freeze which should lead to some additional concern over 2022 production
  
• Most
  Brazil grain, citrus and sugarcane areas were also free of damaging cold during the weekend and again today
• The
  impact of cold weather last week in citrus areas was minimal, but it may have been a little greater in sugarcane areas, but not as great as that which occurred July 19-21
• Winter
  wheat production may have been negatively impacted by the freezes of July 19-21 and July 29-30.
  
• Brazil
  rainfall will be limited to coastal areas during the next ten days
• The
  nation’s temperatures will be mild to warm in the east with no other threats of frost or freezes
• Warm
  temperatures are expected to evolve in the west and north
• Argentina
  weather will be dry biased for a while this week with temperatures slowly rising
• Soil
  conditions are still dry in the west where wheat and barley may not be as well established as they should be, although most of the crop is in better shape than either of the past two years
• No
  rain is expected this workweek, but some showers will be possible during the weekend and early next week that might prove to be welcome for some of the nation’s winter crops
• Several
  areas of disturbed tropical weather in the western Pacific Ocean may lead to multiple tropical cyclones this week
• One
  system may form nearly the southern Ryukyu Islands of Japan while another forms off the Guangdong, China coast and a third will form out over open water well to the east the Philippines and well south of Japan
• Each
  of these systems are not expected to move over land, but the close proximity to southern China and Taiwan may lead to some heavier rainfall in those areas later this week and into the weekend
• Southeastern
  Canada corn, soybean and wheat production areas continue to experience a favorable mix of weather
• Net
  drying is expected in this first week of the outlook followed by three waves of rain in the following week
• Wheat
  areas will benefit most from this week’s drier bias
• Australia
  weather will be favorably mixed for canola, wheat, and barley
• Crops
  have established well in most of the nation
• Queensland
  and northern New South Wales need more rain
• This
  week’s rainfall will be lighter and less frequent than that of last week
• Ethiopia
  rainfall has been abundant in recent weeks along with that in Kenya, according to the U.S. Climate Prediction Center, but Uganda has been drier than usual
• The
  next two weeks will be wetter than usual in western Ethiopia and mostly near normal in Kenya and Uganda coffee and cocoa production areas
• West-central
  Africa rainfall has diminished seasonably for a while
• Rainfall
  during July was below average in southwestern Nigeria and Cameroon while closer to normal in other coffee, cocoa, sugarcane and coffee areas
• Rainfall
  was above normal last month in Senegal
• Rain
  will be needed in Ghana and Ivory Coast soon, but this is the normal dry season and rain will resume in September
• South
  Africa weather was mostly dry Monday
• Some
  periodic showers will occur in the far southwest of the nation – mostly near the coast during the coming week while other areas will be dry
• Southern
  Oscillation Index has reached +14.09 and it will slowly decline this week
• Mexico
  weather has been improving with increased rainfall in the south and west parts of the nation
• Drought
  conditions are waning and crops are performing better
• Dryness
  remains in eastern Chihuahua and northeastern parts of the nation
• Weather
  over the next ten days will offer some relief, but more rain will be needed in the drier areas
• Central
  America rainfall has been plentiful and will remain that way
• Central
  America rainfall will be near to above average during the next ten days
• New
  Zealand rainfall during the coming week will be near normal and temperatures will be seasonable

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Tuesday,
Aug. 3:

• EU
  weekly grain, oilseed import and export data
• Australia
  Commodity Index
• New
  Zealand global dairy trade auction

Wednesday,
Aug. 4:

• EIA
  weekly U.S. ethanol inventories, production
• New
  Zealand Commodity Price
• France
  agriculture ministry updates 2021 crop estimates

Thursday,
Aug. 5:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• China’s
  CNGOIC to publish monthly soy and corn reports
• FAO
  World Food Price Index
• Port
  of Rouen data on French grain exports
• Malaysia
  Aug. 1-5 palm oil export data
• Risi
  pulp conference, Sao Paulo
• BayWa
  earnings

Friday,
Aug. 6:

• 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
• FranceAgriMer
  weekly update on crop conditions

Saturday,
Aug. 7

• China’s
  first batch of July trade data, incl. soybean, edible oil, rubber and meat imports

Source:
Bloomberg and FI

 

Soybean
and Corn Advisory

·        
2020/21 Brazil Corn Estimate Lowered 2.0 mt to 84.0 Million Tons.  (USDA estimates total corn production for marketing year (MY) 2020/21 at 93.0 million)

·        
2021 U.S. Corn Yield Unchanged at 175.5 bu/ac

·        
2021 U.S. Soybean Yield Unchanged at 50.0 bu/ac

·        
2020/21 Argentina Corn Estimate Unchanged at 48.0 Million Tons

 

Macros

Canadian
Markit Manufacturing PMI Jun: 56.2 (prev 56.5)

US
Factory Orders Jun: 1.5% (est 1.0%; prev R 2.4%)

–
Factory Orders Ex-Trans Jun: 1.4% (prev R 1.0%)

–
Durable Goods Orders Jun F: 0.9% (est 0.8%; prev 0.8%)

–
Durables Ex-Transportation: 0.5% (est 0.3%; prev 0.3%)

–
Cap Goods Orders Nondef Ex-Air Jun F: 0.7% (prev 0.5%)

 

 

Corn

• Lower
  trade in corn despite US corn conditions declining 2 points. Futures did trade two-sided during the session but a second wave of fund selling in soybeans pulled corn to close lower.   September corn was off 8.25 cents and December was down 7.50 cents. 
  
• September
  corn ended 8.25 cents lower and December down 7.50 cents. 
• The
  morning weather models were forecasting more rain for IA, WI, and northwestern IL.  Some of the models have rain occurring IA early next week but it looks like it dries down again after that. 
  
• There
  was some chatter Brazil corn production could end up as low as 83 million tons.  USDA is at 93.0 million tons.  FC Stone sees the Brazil 2021-22 (new-crop) soybean crop at 143.3 million tons. 
  
• Parana,
  Brazil is only 10 percent complete for harvesting corn, down from 26% from this time last year. 
  
• A
  Bloomberg poll looks for weekly US ethanol production to be down 7,000 barrels (990-1018 range) from the previous week and stocks down 78,000 barrels to 22.655 million.
  

 

Export
developments.

• China
  plans to auction off 219,218 tons of US imported corn on August 6, and 49,760 tons of Ukraine imported corn. 
  

• Turkey
  may have passed on 515,000 tons or barley sought for FH September shipment. Prices ranged from $275.80 and $286.90/ton. 
  
• Taiwan’s
  MFIG bought about 55,000 tons of corn sourced from South Africa at an estimated 249.38 a bushel c&f over the December contract.  The tender sought shipment between Oct. 6 and Oct. 25 if the corn is sourced from the U.S. Gulf, Brazil, or Argentina, they said.
  If sourced from the U.S. Pacific Northwest coast or South Africa, shipment was sought between Oct. 21 and Nov. 9. (Reuters)
• Jordan
  is in for wheat and barley. The wheat import tender for 100,000 tons is on August 4 and 100,000 tons of barley on August 5. 
  
• Qatar
  seeks about 100,000 tons of barley on August 18 for Sep-Nov delivery. 

 

 

Updated
8/3/21

September
corn is seen is a $5.25-$6.00 range.  (down 25 cents for both ends)

December
corn is seen in a $4.25-$6.00 range.

 

Soybeans

• An
  improvement in the US soybean rating weighted on the soybean complex.  November soybeans ended at $13.1975, lowest since July 9^th, and below a 100-day MA of $13.33.  Major support is seen at $13.00.  September soybean meal hit a one week low.  Soybean
  oil saw bear spreading.  Another leg down for September and we could test 59.50. 
  
• September
  soybeans were down 32.50 cents and November down 33.75 cents.  September soybean meal was off $8.90 and December meal down $9.90.  September soybean oil was off 126 points and December down 79 points.  
  
• We
  updated our US soybean balance sheet to reflect June crush and our current 50.8 bu/ac yield.  S&D’s are attached.  September through August crush was taken down 3 million bushels to 5.153 billion and is below 2.170 USDA’s July estimate.  Product crush was
  lowered 2 million to 2.160 billion.  USDA may lower the crush by 10 million bushels next week.  We took soybean oil for biodiesel down 75 million pounds to 9.225 billion, 75 million below USDA. 
  Other
  changes to the US soybean complex were minor. 
• We
  think Brazil is capable to expand the 2021-22 (2022-23 local crop year) soybean planted area by 4 percent to 40.050 million hectares.  Using a 11-year trend yield of 3.57, that puts production at 143.1 million tons.  If realized soybean exports could top 90
  million tons if China demand expands.  Brazil can use a good rain soaking before sowings begin. 
  

 

Export
Developments

• Egypt
  cancelled their vegetable oil import tender for 30,000 tons of soybean oil and 10,000 sunflower oil.  Lowest offer was $1,379 for soybean oil.  They last paid $1,184/ton on June 22 for soybean oil.  Lowest offer for sunflower oil was $1,274/ton, higher than
  what they paid on June 22 of $1,133/ton.  Since June 22, Argentina fob soybean oil is up about $120 and Ukraine sunflower oil appreciated around $130/ton. Egypt did buy 3000 tons of local soybean oil.  
  

 

 

 

Updated
8/3/21

September
soybeans are seen in a $12.50-$14.50 range;
November $11.75-$15.00

September
soybean meal – $335-$370;
December $320-$425

September
soybean oil – 57.50-69.00;
December 48-67 cent range

 

Wheat

• Lower
  trade in US wheat futures from the start on a surprise improvement in US spring wheat ratings, but many contracts rebounded, and KC ended higher.  Chicago and Minneapolis were lower. There were a few import tenders that were announced, a supportive feature. 
  Idaho, MN, and the Dakota’s improved from the previous week.  US spring wheat rating increased one point. 
  
• Parts
  of Russia’s Southern Region into Kazakhstan will continue to see net drying. 
  
• December
  Paris wheat was down 0.75 at 230 euros per ton.

 

Export
Developments. 

• Pakistan
  seeks 400,000 tons of wheat on August 23.
• Algeria
  seeks at least 50,000 tons of wheat for Aug/Sep shipment. 
• The
  Taiwan Flour Millers’ Association seeks 48,000 tons of grade 1 northern spring, hard red winter, and white milling wheat to be sourced from the United States, on Aug. 6 for shipment from the U.S. Pacific Northwest coast between Sept. 24 and Oct. 8.
• Japan
  seeks 119,435 tons of food wheat this week.

• Jordan
  is in for wheat and barley. The wheat import tender for 100,000 tons is on August 4 and 100,000 tons of barley on August 5. 
  

• Turkey’s
  TMO seeks up to around 395,000 tons of 11.5-12.5% milling wheat (395k) for late September 16-30 shipment.  The wheat is sought on August 4.
  

 

Rice/Other

• South
  Korea will release 80,000 tons of rice in August to help cool domestic prices. 
  
• South
  Korea’s Agro-Fisheries & Food Trade Corp. seeks 39,226 tons of rice from the United States for arrival in South Korea on Jan. 31 and March 31, 2022.

 

 

Wheat

Updated 7/29/21

September Chicago wheat is seen in a $6.25‐$7.50 range

September KC wheat is seen in a $5.90‐$7.25

September MN wheat is seen in a $8.50‐$10.00