FI Morning Grain Comments 08/11/21

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Good
morning.

 

WASHINGTON,
August 11, 2021–Private exporters reported to the U.S. Department of Agriculture export sales of 132,000 metric tons of soybeans for delivery to China during the 2021/2022 marketing year.

 

MPOB
Malaysian palm oil S&D data was bullish and this is supporting CBOT soybean oil and soybeans.  Meal is on the defensive.  Rotterdam cash vegetable oil prices are sharply higher and meal mixed.  CBOT corn is higher following soybeans.  We expect wheat to possibly
trade higher from current values on supply concerns amid poor EU weather. 
Thursday
USDA will update their S&D’s.  We may also see a China CASDE update on Thursday. 

 

 

Weather

Aug
11, 2021, map

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 11, 2021

• A
  good setup for significant rain to fall in the drought-stricken areas of the northern U.S. Plains and a part of Canada’s Prairies is beginning to evolve with cooler air pooling in the northwestern part of the U.S. and far western Canada this weekend and early
  next week.
• A
  deepening low-pressure center in the northwestern Plains will also help draw Gulf of Mexico moisture northward into the region to mix with the cooler air as a slow-moving frontal system moves west to east across the nation next week.
  
• A
  close watch on the situation is warranted for the potential of generalized rain of significance.
  
• Tropical
  Storm Fred will be the center of attention as the storm moves from Dominican Republic to Florida over the next five to six days.
  
• The
  storm will produce heavy rain and strong wind speeds in Dominican Republic today before impacting Cuba Thursday and Friday
• Western
  Florida and the Florida Keys will also be impacted Friday into the weekend with rainfall of 4.00 to 8.00 inches and wind speeds possibly in the range of 40-60 mph impacting the region
  
• Landfall
  will ultimately occur near Apalachicola, Florida late Sunday or Monday
• Weather
  in the rest of the World will not be changing much
• Abundant
  rain will fall in southern China during the next ten days
• Dryness
  will continue in northwestern India and Pakistan
• Improved
  conditions for fieldwork across Europe are expected with less rain and warm temperatures
• Dryness
  will continue a concern in the Balkan Countries where it is already too dry for some late season unirrigated crops
• A
  drying trend will continue for Ukraine and Kazakhstan as well as parts of the Volga River Basin.
• Australia
  will receive limited amounts of rain over the next ten days, but crop conditions are rated well for the start of spring growth except in Queensland where rain is still needed
• Argentina
  dryness is also still a concern for winter crops in the west, although most of the crops are semi-dormant now
• Brazil
  coffee, citrus and sugarcane areas will continue dry through the weekend, but a few sporadic showers will occur next week without much benefit to damaged crops
  
• Ivory
  Coast coffee, cocoa and sugarcane areas received some welcome moisture Tuesday
  
• Ghana
  and southern parts of Ivory Coast are still seasonably dry

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
CPI (M/M) Jul: 0.5% (est 0.5%; prev 0.9%)

US
CPI Ex Food, Energy (Y/Y) Jul: 4.3% (est 4.3%; prev 4.5%)

US
CPI Ex Food, Energy (M/M) Jul: 0.3% (est 0.4%; prev 0.9%)

US
Real Avg Weekly Earnings (Y/Y) Jul: -0.7% (prevR -1.0%; prev -1.4%)

US
Real Avg Hourly Earnings (Y/Y) Jul: -1.2% (prevR -1.6%; prev -1.7%)

 

Corn

• US
  corn futures are lower after US corn conditions improved 2 points last week. 
  
• Note
  the Pro Farmer crop tour starts Tuesday, Aug 17, lasting until Friday the 20th. 
  
• Thursday
  USDA will update their S&D’s.  We may also see a China CASDE update. 
• A
  Bloomberg poll looks for weekly US ethanol production to be down 3,000 barrels (995-1022 range) from the previous week and stocks down 32,000 barrels to 22,617 million.
  
• The
  European Union granted imports licenses for 133,000 tons of corn imports, bringing cumulative 2020-21 imports to 1.231 million tons, 21 percent below same period year ago.
  

 

Export
developments.

• South
  Korea’s MFG seeks 120,000 tons of corn on August 11. 
• Jordan
  seeks 120,000 tons of feed barley on August 12 for Late October through December shipment. 
  

• China
  will auction off 36,789 tons of imported Ukrainian corn and 265,667 tons of imported US corn on August 13. 
  

• Qatar
  seeks about 100,000 tons of barley on August 18 for Sep-Nov delivery. 

 

 

Soybeans

• MPOB
  Malaysian palm oil data was bullish and this is supporting CBOT soybean oil and soybeans.  Soybean meal is on the defensive despite higher corn. 
  
• There
  is a plant fire in Europe that is increasing the prices of biofuel.  “Rapeoil is up 30€ and sunoil up 25$”
• There
  was one soybean oil delivery posted and 10 soybean oil registrations cancelled out of Volga.  SBO registrations are now 335 versus 668 at the end of June. 
  
• ICE
  Chat: Biden Admin. Weighs 2050 Target For Airlines To Run On 100% Jet Fuel From Renewable Resources – RTRS Sources
• Note
  the Pro Farmer crop tour starts Tuesday, Aug 17, lasting until Friday the 20th. 
  
• Offshore
  values are leading soybean oil 139 points higher and meal $0.30 higher. 
• Rotterdam
  oils were 10-25 euros higher.  Rotterdam meal was mixed. 
• China
  cash crush margins were last positive 100 cents on our analysis (unchanged from previous) versus 80 cents late last week and 136 cents around a year ago. 
  
• AmSpec
  reported July 1-10 palm oil exports at 368,763 tons, down from 410,915 tons for the same period in July, and 10.3 percent decrease. 
  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. 
  
• MPOB
  Malaysian palm oil data was bullish and this is supporting CBOT soybean oil and soybeans.  Malaysia is back from a one-day holiday and the palm oil futures contract rallied 7.4% or 311 ringgit to 4,511 after MPOB reported July palm production declining 5.2%
  to 1.52 million tons, lowest since April, and 19,000 tons below a Reuters trade guess.  Stocks were reported at a 4-month low of 1.5 million tons, down 7% from June, and 143,500 tons below trade average.  Exports were 1.4 million tons, 50,000 above trade expectations. 
  Imports of 92,000 tons were less than expected.  With production coming in well below expectations, some groups are already trimming 2021 production below 18.5 million tons (MPOA earlier was just over 19 MMT).  Cash RBD palm was up $87.50/ton at $1,135/ton
  from Monday (Tuesday holiday). 

• China

• The
  European Union reported soybean import licenses since July 1 at 1.274 million tons, below 1.792 million tons a year ago. European Union soybean meal import licenses are running at 1.213 million tons so far for 2020-21, below 2.013 million tons a year ago.
  EU palm oil import licenses are running at 377,000 tons for 2020-21, below 724,000 tons a year ago, or down 48 percent.

 

Export
Developments

• Under
  the 24-hour USDA announcement system, private exporters sold 132,000 tons of soybean to China for 2021-22 delivery. 
  
• 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).
  
• 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.

 

 

 

Wheat

• US
  wheat is mixed and we think prices could be higher on supply concerns.   
  
• IKAR
  lowered their Russian wheat production estimate by 1.5 million tons to 77 million tons.  USDA is at 85 million tons.  SovEcon noted on social media they cut their estimate but did not provide details. They were previously at 76.4 million tons for Russia. 
  
• Paris
  December wheat was up 2.00 as of early this morning at 239.75, near its contract high. 
  
• France
  remains too wet.  Russia’s Southern Region and Kazakhstan will experience more dry weather while southeastern Europe will see heat and net drying this week. 
  
• The
  European Union granted export licenses for 255,000 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 1.795 million tons, up from 1.737 million tons committed at this time last year, a 3 percent increase.  Imports are
  down 32% from year ago at 140,000 tons.
• Japan
  sees a 60 percent chance of normal conditions (no ENSO event) through early winter, down from 70% previous forecast through fall. 
  

 

Export
Developments. 

• The
  Philippines passed on 120,000 tons of animal feed wheat and 120,000 tons of feed barley for shipment in October and November.  Prices were regarded as too high. 
  
• Jordan
  passed on 120,000 tons of milling wheat (2 offers were presented). 
• Thailand
  seeks 139,500 tons of feed wheat on August 11 for OND shipment.
• Morocco
  seeks 363,000 tons of US durum wheat under a tariff import quota on August 24 for shipment by December 31. 
  
• 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.