FI Morning Grain Comments 07/08/21

PDF attached

 

Good
morning.

 

The
soybean complex is lower after a mixed trade overnight.  Corn sold off in part to a bearish Brazil production estimate.  WTI crude was about 10 cents lower and USD 29 points lower.  Bond market rallied and equities are sharply lower. 

 

Conab:
bearish corn and neutral soybeans

 

 

US
weather looks wet and cool through the weekend for majority of the Midwest while record breaking temperatures that occurred late last month across the PNW could be tested this weekend into early next week. A ridge of high pressure is being advertised in the
U.S. Plains during the second week of the two week outlook.  The southern US is expected to dry down during the 6-10 day which will facilitate winter wheat harvesting.  11-15 still calls for drier conditions for the Great Plains and majority of the western
Corn Belt. 

 

Weather

1-7
DAY

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JULY 8, 2021

• A
  ridge of high pressure is being advertised in the U.S. Plains during the second week of the two week outlook today that the market will likely be focused upon.
  
• However,
  before that feature kicks in to reduce rainfall and induce greater heat in the Plains, Canada’s Prairies and the western fringes of the Corn Belt there will be scattered showers and thunderstorms during this first week of the outlook benefiting crops in many
  areas.
• Crop
  conditions in some of the eastern Midwest Corn and Soybean Production areas near and east of the Mississippi from Missouri to Ohio and Michigan look very good
• Tropical
  Storm Elsa produced some heavy rain from northern Florida into Georgia Wednesday and overnight causing local flooding
• The
  storm will advance to the northeast through the Carolinas today and then to southeastern Canada later this week and into the weekend.
  
• South
  America’s second week forecast today was advertised colder on the 06z GFS model run and that cold air was overdone resulting in less of a risk to Brazil crops than what the model implied
• China
  is getting more press about its heavy rain and flooding of late
• Some
  crop damage has occurred, but the situation is probably not as great as that of last year
• The
  wetter bias will continue in the central and north parts of China in the coming ten days while the south dries down for a while.
  
• India
  will still see improved rainfall in the north for a little while this weekend and next week, but the volume of rain may be a little disappointing for some areas
• India’s
  Monsoonal rainfall has been weak and limited recently, but a boost in precipitation is expected from this weekend into next week
• Australia
  needs rain in South Australia, northwestern Victoria and parts of Queensland, although moisture has been sufficient to get winter crops planted and emerged; better stands will come if rainfall is bolstered again soon which does not seem very likely for a while
• Southeastern
  Europe is also getting a little more press over its drier bias, but the situation has not changed much in this past week and there will be “some” scattered showers and thunderstorms in the coming week to offer “partial” relief
• Other
  areas in Europe are in good shape
• Greater
  rain was noted in a part of Thailand, Cambodia and Vietnam Wednesday and additional relief to recent drying is expected
• Myanmar
  also needs a boost in rainfall

Source:
World Weather, Inc.

 

 

Bloomberg
Ag Calendar

Thursday,
July 8:

• Brazil’s
  Conab releases data on yield, area and output of corn and soybeans
• FAO
  World Food Price Index
• EIA
  weekly U.S. ethanol inventories, production
• Brazil
  Coffee Council Conference, Sao Paulo
• Port
  of Rouen data on French grain exports
• EARNINGS:
  Suedzucker, Agrana

Friday,
July 9:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am

• 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

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

Macros

US
Initial Jobless Claims Jul 3: 373K (est 350K; prevR 371K; prev 364K)

US
Continuing Claims Jun 26: 3339K (est 3350K; prevR 3484K; prev 3469K)

 

Corn

• US
  corn futures
  are lower from a bearish Conab report and short term US weather outlook calling for cool and wet conditions for the majority of the Corn Belt before drier weather sinks in later this month. 
  
• Conab
  reported a 3 million ton decrease in the Brazil corn crop to 93.38 million tons, 4 million above a Bloomberg survey.  Production is 9.2 million tons below a year ago. 
  
• A
  Bloomberg USDA survey suggests for a cut in the US corn yield to 178.7 bu/acre vs current USDA outlook of 179.5 bu/acre.  U.S. soybean yields seen mostly unchanged at 50.6 bu/acre. 
  
• A
  Bloomberg poll looks for weekly US ethanol production to be down 3,000 barrels (1045-1065 range) from the previous week and stocks up 115,000 barrels to 21.687 million.
  

 

China
September corn nearing recent lows

 

Export
developments.

• China
  plans to auction more than 130,000 tons of imported corn from the United States and Ukraine on July 9 (Sinograin).  123,954 US & 6,340 Ukraine. 
  
• Turkey
  seeks 440,000 tons of feed barley on July 12 for shipment between July 29 and August 16. 
  

 

 

Soybeans

• The
  US soybean complex is lower after soybeans sold off late in the electronic session.  Soybean oil is leading the products lower.  Conab reported a neutral Brazil soybean production estimate. 
  
• We
  may see some commodity money outflow over the short-term if US equities see a good amount of selling. 
  
• Conab
  reported a 100,000 ton increase in the Brazil soybean production to from the previous month to 135.91 million tons, 900,000 tons below a Bloomberg survey. 
  Production
  is up 11.1 million tons from a year ago. 
• Argentina’s
  pork worker strike may soon unravel.  Government officials from the Santa Fe province ordered the strikes to be lifted.  Strikes continued in other northern Rosario provinces. 
  
• India’s
  oil secretary announced they plan to introduce 20% ethanol blend by 2023.  It stands at 9.3% and expected to rise to 10% next year. 
  
• Malaysian
  palm oil fell for the third consecutive day with September down 26MYR to 3771.  Cash was up $2.50/ton to $982.50/ton. 
  
• China
  soybeans were moderately higher and products nearly unchanged basis September positions. 
  
• Offshore
  values are leading SBO 112 points lower and meal $5.80 lower. 
• Rotterdam
  rapeseed and soybean oil prices were unchanged to lower and meal mixed.
• China:
  

• Malaysian
  palm oil:  

• Abiove
  estimated 2021 Brazil soybean exports at 86.7 million tons, up from 85.7 million previously.  Stocks were lowered 1 million to 4.16 million and crush unchanged at 46.5 million tons.  The group warned a 10 percent biodiesel mix could result in producers planting
  less soybeans next season.  They like to see it at 13%. 

 

 

Soybeans
vs. Canada canola and EU Canola

 

Export
Developments

• None
  reported

 

Wheat

• US
  wheat is
  mixed with Chicago and Minneapolis turning lower late in the electronic session.  KC is catching a bid on US weather, although the 6-10 day does suggest drier forecast for the central Great Plains that should result in an increase in winter wheat harvesting
  progress. 
• FOA
  world food prices fell during the month of June from May, first time in a year led by a decline in vegetable oil (down 9.8%), cereal, and dairy prices.  June price index averaged 124.6 points versus a revised 127.8 in May. 
  
• September
  Paris wheat was down 0.25 euro at 199.75/ton. 
• The
  Euro is rebounding from a 3-month low hit earlier this week against the USD earlier.
  

 

Export
Developments. 

• Results
  awaited: Algeria seeks 50,000 tons of milling wheat on July 8 for July shipment, valid until July 9.
  
• The
  Philippines seek up to 200,000 tons of feed wheat and milling wheat on Thursday, July 8. It includes 150,000 tons of feed wheat and 50,000 tons of milling wheat, all optional origin, for September, October and November shipment.
  
• Japan’s
  AgMin bought 108,175 tons of food-quality wheat from the United States, Canada and Australia in a regular tender.

• Saudi
  Arabia’s SAGO seeks 360,000 tons of wheat on July 12, split between hard wheat 12.5 percent protein and soft wheat 11% protein, for October shipment.
  
• Yesterday
  Thailand saw offers for 230,700 tons of animal feed wheat ($285-$287) for Aug-Sep shipment.
  
• Japan
  seeks 80,000 tons of feed wheat and 100,000 tons of barley on July 14. 
• Bangladesh’s
  seeks 50,000 tons of milling wheat on July 15.
• Bangladesh’s
  seeks 50,000 tons of milling wheat on July 18.

• Ethiopia
  seeks 400,000 tons of wheat on July 19. 

 

Rice/Other

• South Korea seeks 91,216 tons of rice from China, the United States and Vietnam for arrival in South
  Korea between Oct. 31, 2021, and April 30, 2022. 
• Bangladesh seeks 50,000 tons of rice on July 18, not on the July.  They delayed it.