FI Morning Grain Comments 08/10/21

PDF attached

 

Good
morning.

 

A
rebound in US energy markets and gold coupled with a higher lead in offshore vegetable oil and meal markets are supporting the soybean complex this morning. Recent demand by China for US soybeans also supportive.  Corn is lower on improving conditions and
wheat mixed in part to improvement in US spring wheat conditions (MN lower), strong world demand and ongoing concerns over the Russian crop.  Conab Brazil supply update was seen as neutral. 

 

Conab

 

US
corn conditions improved 2 points G/E with IL leading the way by improving 11 points.  US soybean conditions were unchanged but the poor/very poor was up 1.  US spring wheat conditions increased one point and harvest progress was up 21 points to 38 (5 points
above a trade guess and compares to 14 year ago and 21 average). 

 

CME
lean hog and pork limits expand. 

https://www.cmegroup.com/trading/price-limits.html#agricultural?redirect=/trading/price-limit-update.html

 

 

 

 

Weather

 

Current
radar by Reuters

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 10, 2021

• Locally
  heavy rain fell in southern Manitoba Monday bolstering topsoil moisture in a few areas.
  
• Other
  opportunities for rain will evolve in Canada’s Prairies next week while the remainder of this week is relatively dry.
  
• The
  same is expected in the northern U.S. Plains and Pacific Northwest.
• U.S.
  rainfall will occur most often this week in the eastern Midwest.
• Today’s
  GFS 06z model run increased rainfall in the western U.S. Corn Belt for late next week, but that seems to have been overdone.
  
• Tropical
  Storm Fred will evolve today as it approaches Puerto Rico and will ultimately impact the Greater Antilles and parts of Florida over the coming week.
  
• Landfall
  is expected in northwestern Florida early next week
• Net
  drying is expected from Ukraine through Russia’s Volga River Basin to Kazakhstan over the coming week to possibly ten days, but rain is expected in northern Russia and in the Krasnodar region in Russia’s Southern Region.
  
• China
  will become wettest in the south over the coming week
• Central
  and southern Pakistan and northwestern India remain dry while rain falls beneficially elsewhere
• Australia
  rainfall will continue more limited over the balance of this week into next week, but winter crops are well established and are poised to perform well in the spring except Queensland and a few northern New South Wales locations that would benefit from greater
  rain
• Europe
  weather is expected to be a little drier and warmer biased for a while and that will be great for winter crop maturation and harvest progress
• Rain
  is still needed in the Balkan Countries where it is still too dry
• Some
  very important rain is expected in Free State, South Africa this weekend that will improve topsoil moisture for dryland winter crops

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Tuesday,
Aug. 10:

• EU
  weekly grain, oilseed import and export data
• Brazil’s
  Conab releases data on yield, area and output of corn and soybeans
• Purdue
  Agriculture Sentiment
• HOLIDAY:
  Malaysia

Wednesday,
Aug. 11:

• EIA
  weekly U.S. ethanol inventories, production
• Malaysian
  Palm Oil Board’s stockpiles, output and production data
• Brazil’s
  Unica publishes data on cane crush and sugar output (tentative)
• Vietnam’s
  customs department releases July trade data
• EARNINGS:
  JBS, Wilmar
• HOLIDAY:
  Indonesia

Thursday,
Aug. 12:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, noon
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• China
  farm ministry’s monthly supply-demand report (CASDE)
• New
  Zealand Food Prices
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Thailand

Friday,
Aug. 13:

• 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
• EARNINGS:
  Olam, Golden Agri

Source:
Bloomberg and FI

 

 

 

 

 

USDA
inspections versus Reuters trade range    

Wheat                 
605,793                 versus   350000-525000  range

Corn                     
667,220                 versus   900000-1250000                range

Soybeans           
114,253                 versus   100000-300000  range

 

Macros

 

Corn

• US
  corn futures are lower after US corn conditions improved 2 points last week.  IL was up 11 points.  IA was down one point and IN was down 2.  Missouri corn improved 6 points.  SD was down 2. 
  
• Conab
  decreased their Brazil 2020-21 corn production by 6.7 million tons to 86.7 million, only 100,000  tons below a Bloomberg trade average and 15.9 million below year ago.  This was neutral in our opinion.  USDA could cut their Brazil corn outlook by more than
  5 million tons when updated Thursday (trade looking for 4.3 MMT decrease to 88.7 MMT from USDA July of 93.0 MMT). 
  
• CBOT
  corn open interest Monday was down 11,547 contracts (Sep fell 32,925 contracts). 
  
• China
  will auction off 36,789 tons of imported Ukrainian corn and 265,667 tons of imported US corn on August 13. 
  
• Brazil’s
  second corn crop across the center south was 58 percent harvested, according to AgRural, up 9 points from the previous week and below 70 percent a year ago. 
  
• USDA
  US corn export inspections as of August 05, 2021 were 667,220 tons, below a range of trade expectations, below 1,397,406 tons previous week and compares to 1,312,530 tons year ago. Major countries included Mexico for 312,253 tons, China for 138,209 tons, and
  Japan for 80,550 tons.

 

Export
developments.

• Jordan
  issued an import tender for 120,000 tons of feed barley on August 12 for Late October through December shipment. 
  
• Qatar
  seeks about 100,000 tons of barley on August 18 for Sep-Nov delivery. 

 

 

Soybeans

• A
  rebound in US energy markets and gold coupled with a higher lead in offshore vegetable oil and meal markets are supporting the soybean complex this morning. Recent demand by China for US soybeans also supportive.  Yesterday USDA announced two cargoes were
  sold to unknown destinations. 
• US
  soybean conditions were unchanged for the G/E categories last week.  Conditions for Illinois soybeans increased 11 points, IN was down 2 and IA down 1.  KY fell 9 points. 
  
• Conab
  increased their Brazil 2020-21 soybean production by 100,000 tons to 135.6 million, 700,000 below a Bloomberg trade average and 11.1 million above year ago.  This was neutral in our opinion. 
  
• China
  soybean futures were down 56 yuan or 1.0%, meal up 0.6%, SBO up 16 or 0.2% and palm up 8 or 0.1%. 
  
• Malaysia
  is on a one-day holiday Tuesday. 
• Cargo
  surveyor ITS reported Malaysian palm shipments for the Aug 1-10 period at 364,546 tons, a 13% decrease from 418,145 tons during the same period a month ago. 
  
• Keep
  an eye on global soybean meal tender developments.  India’s decision to allow for 1.5 million tons of soybean meal imports for animal feed use may immediately attract some business. 
  
• There
  was one soybean oil delivery posted and 43 soybean oil registrations cancelled out of Emmetsburg, IA.  SBO registrations are now 345 versus 668 at the end of June. 
  
• Offshore
  values are leading soybean oil 157 points higher and meal $2.30 higher. 
• Rotterdam
  oils were 10-15 euros higher.  Rotterdam meal was up 3-10 euros. 
• China
  cash crush margins were last positive 100 cents on our analysis (96 previous) versus 80 cents late last week and 136 cents around a year ago. 
  
• China

• USDA
  US soybean export inspections as of August 05, 2021 were 114,253 tons, within a range of trade expectations, below 184,988 tons previous week and compares to 843,196 tons year ago. Major countries included Mexico for 39,085 tons, Japan for 18,822 tons, and
  Indonesia for 11,604 tons.
• Abiove
  reported Brazil exported 2 million tons of soybean meal in July.  2021 soybean exports were estimated at 86.7 million tons, up from 82.9 million in 2020.  Production as pegged at 137.5 million tons, unchanged from previous, versus 127.9 million tons in 2020. 
  2021 crush was expected to slip to 46.5 million tons from 46.84 million tons. 
  

 

Export
Developments

• South
  Korea’s Agro-Fisheries & Food Trade Corp. seeks 3,700 tons of non-GMO soybeans on August 19 for arrival between Oct. 20 and Nov. 19.
• USDA
  On August 17 seeks 290,000 tons of veg oil for use in export programs. 210 tons in 4 liter cans and 80 tons in 4 liter cans or plastic bottles, for shipment Sep16 to Oct 15 (Oct 1-31 for plants at ports).
  

 

Wheat

• US
  wheat is mostly mixed in part to an improvement in US spring wheat conditions, strong world demand and ongoing concerns over the Russian crop
• Russia’s
  Southern Region and Kazakhstan will experience more dry weather while southeastern Europe will see heat and net drying this week. 
  
• Paris
  December wheat was unchanged as of early this morning at 232.50, near its contract high. 
  
• US
  spring wheat conditions increased one point and harvest progress was up 21 points to 38 (5 points above a trade guess and compares to 14 year ago and 21 average). 
  
• USDA
  US all-wheat export inspections as of August 05, 2021 were 605,793 tons, above a range of trade expectations, above 405,215 tons previous week and compares to 477,188 tons year ago. Major countries included Japan for 129,951 tons, Mexico for 98,866 tons, and
  China for 66,990 tons.

 

Export
Developments. 

• Morocco
  seeks 363,000 tons of US durum wheat under a tariff import quota on August 24 for shipment by December 31. 
  
• Jordan
  is back in for 120,000 tons of wheat on August 11. 
• Japan
  (SBS) seeks 80,000 tons of feed wheat and 100,000 tons of feed barley on August 18 for loading by November 30. 
  
• Bangladesh
  seeks 50,000 tons of wheat on August 18. 
• Pakistan
  seeks 400,000 tons of wheat on August 23 for Sep/Oct shipment. 

 

Rice/Other

• (Bloomberg)
  — U.S. 2021-22 cotton production seen at 18.15m bales, 346,000 bales above USDA’s previous est., according to the avg in a Bloomberg survey of 11 analysts.
  

Estimates
range from 17.6m to 19.4m bales

U.S.
ending stocks seen at 3.5m bales vs 3.3m in July

Global
ending stocks seen 402,000 bales higher at 88.14m bales

• 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.

 

KC versus Paris wheat

Source: Reuters and FI