FI Morning Grain Comments 07/26/21

PDF attached

 

Good
morning.

 

Nearby
soybeans, corn wheat prices are near a two week low.  Weather is the driving factor again for the lower trade.  7-day US precipitation map shows additional rain for WI, IA into central IL into southern IN than that of yesterday’s 7-day.  Also, the Rockies/eastern
and central CO appear wetter.  Outside the US flooding remains a concern for China and India.  There were no export major export developments over the weekend. Rains are starting to pick up for Brazil which is needed for the wheat crop and upcoming soybean
planting season. Offshore values currency adjusted favor meal over SBO although palm futures surged 112 points last night to 4,383 MRR/ton and cash was up $20/ton to $1,067.50 basis the October position.  US spring wheat crop tour starts this week, and we
should also see some private groups release August crop production estimates for corn and soybeans.  Outside markets are mixed with the USD 18 lower, WTI is lower and gold up 4.50.  Equities are leaning towards a lower open. 

 

 

 

Weather

 

Tropical
storm In-Fa landed in east central China which may threaten crops with flooding.  Amounts for the week will vary from 6.00 to 15.00 inches in the mouth of the Yangtze River including all of the port and shipping area near Shanghai.  

 

 

Sat
precip

 

US
precipitation 7- day shows more rain for WI, IA into central IL into southern IN than that of yesterday’s 7-day.  Also, the Rockies/eastern and central CO are wetter. 

 

Current
radar

 

Bloomberg
Ag Calendar

Monday,
July 26:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions – corn, cotton, soybeans, wheat, 4pm
• MARS
  monthly EU crop conditions report
• Malaysia
  July 1-25 palm oil export data (tentative)
• UN
  Food Systems Pre-Summit in Rome
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Thailand

Tuesday,
July 27:

• EU
  weekly grain, oilseed import and export data
• UN
  Food Systems Pre-Summit in Rome
• EARNINGS:
  ADM

Wednesday,
July 28:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil
  Unica cane crush, sugar production (tentative)
• UN
  Food Systems Pre-Summit in Rome
• HOLIDAY:
  Thailand
• EARNINGS:
  Bunge, Pilgrim’s Pride

Thursday,
July 29:

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

Friday,
July 30:

• 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
• U.S.
  agricultural prices paid, received

Source:
Bloomberg and FI

 

 

 

 

Commitment
of Traders

 

 

 

 

 

 

Macros

 

Corn

• Corn
  is weaker on improving US weather conditions, at least for MN through WI and Michigan after rains fell across those areas over the last week.  The US weather forecast calls for some rain to develop across the US WCB over the next seven days. 
  
• At
  this stage for the development of the US corn crop, it’s possible to see the ECB, Delta and some parts of the southeast to offset losses for the upper and far northwestern Corn Belt yield losses.  Our thinking is we see at least a 176 plus national US corn
  yield when updated in August.  We are currently at 177.9 for the August yield.  ECB corn conditions are running about 1.8% above a 5-year average while WCB off 2.8%, on our adjusted CP index. 
  
• CZ
  had a 536.00 stop that traded 1000x right at 3:30 am CT.  Major
  support is seen at $5.07. 
• Sunday’s
  nights action was choppy for corn and we expect this to be the theme this week. 
  
• The
  US August weather forecast still calls for a ridge of high pressure over western North America and a northwesterly flow pattern aloft in the east half of the continent, according to World Weather.  Temperatures for the western Corn Belt will be warmer than
  normal while the ECB temperatures near to below normal.  Rainfall will be lighter than usual in the western and northern Midwest. 
  
• A
  Reuters exclusive noted Argentina grain shipping has to be cut by 25 percent due to severely low water levels.  About 80 percent of Argentina’s Parana river carries farm goods.  Water levels are at their lowest level in 77 years. 
  

 

Since
April 20, managed money managers were net sellers of corn 11 out of the last 14 weeks.  Last week they added 14,503 contracts to the long position. 

 

 

Cattle
on Feed

Placements
were less than expected.  Animal units should be monitored later this year as they are already declining.  Fed cattle was a little better than expected.  Cattle on feed was near expectations. 

 

 

Export
developments.

Jordan
seeks 120,000 tons of feed barley on July 28 for Nov/Dec shipment. 

 

Soybeans

• Soybean
  complex is lower on improving US weather and as expected rains over the weekend across the upper Midwest.    
  

• CBOT
  soybean registrations are now zero after 13 were cancelled Friday evening. 
  

• November
  Canadian canola was down 15.50 at $867.90/ton as of 6:06 am CT. 
• Offshore
  values are leading SBO 81 points lower and meal $1.30 higher. 
• Rotterdam
  oils were mixed euros higher and meal 8-13 euros lower. 
• China
  cash crush margins were last negative 2 cents on our analysis, versus negative 9 cents late last week. 
  
• ITS
  reported July 1-25 Malaysian palm exports at 1.137 million tons, down 0.5% from the same period a month earlier.  AmSpec reported a 4% decrease to 1.127 million tons and SGS was not out at the time this was written. 
  
• India
  import margins favor RBD palm oil over crude palm and SBO.  Sunflower oil is also profitable to import. 
  
• Malaysian
  palm oil:  

• China
  

• The
  Rosario Grain Exchange sees Argentina’s soybean area declining 5 percent for 2021-22 (planted in a couple months) to 4.57 million hectares.  AgriCensus noted producers may favor corn over soybeans this year. 
  

 

Export
Developments

• None
  reported

 

Wheat

• US
  wheat is
  sharply lower in all three markets on improving weather. 
• The
  US spring wheat tour will begin this week.  We don’t look for much in the way for positive news.
  
• Canada
  Prairies drought conditions will persist over the next two weeks, but some rain is expected here than there.  
  
• December
  Paris wheat was down 1.75 at 212.50 euros as of 6:30 am CT. 
• Argentina’s
  shipping woes due to low water levels may extend into the fourth quarter (OND) that could disrupt 2021 wheat shipments.  Argentina harvests wheat December through January.  
  
• Russia’s
  southern region of Krasnodar harvested a record grain crop of 12.4 million tons, according to its governor.  Krasnodar is one of the largest wheat producing and exporting areas of the country, according to Reuters. 
  
• Russian
  wheat export prices with 12.5% protein loading from Black Sea were $248 a ton at the end of last week, up $7 from the previous week, according to IKAR. SovEcon reported a $6 rise to $245 per ton.
• USDA
  Attaché: Australia wheat production in the 2021-22 season that starts in October is now seen at 29.5 million tons, above the official USDA estimate of 28.5 million tons.
  

 

Export
Developments. 

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

• Pakistan’s
  TCP seeks 500,000 tons of wheat on July 27.  200,000 tons are for August shipment, and 300,000 tons are for September shipment.

 

Rice/Other

• Mauritius
  seeks 6,000 tons of white rice on July 27 for October through December shipment.