FI Morning Grain Comments 08/25/21

PDF attached

 

Good
morning.

 

The
soybean complex is lower on light profit taking after contracts rallied on Tuesday.  The USD was 18 points higher.  Additional China demand indications for US soybeans could limit losses.  Offshore values are leading soybean oil 116 points lower and meal $4.90
lower. September corn is trending lower.  The Major US growing regions with exception of the southwest will see rain one time or another over the next week.  Chicago wheat futures hit a two-week low, lengthening losses from Tuesday from North American harvest
pressure, lower Paris wheat and profit taking.  A
Bloomberg poll looks for weekly US ethanol production to be up 2,000 barrels (962-986 range) from the previous week and stocks down 39,000 barrels to 21,519 million.

 

 

 

 

 

Weather

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 25, 2021

• A
  new tropical cyclone that will form in the Caribbean Sea late this week is expected to be a threat to the U.S. central Gulf of Mexico Coast early next week.
  
• A
  hurricane is possible with landfall suggested today to be possible in Louisiana.
  
• Rain
  fell in the northern U.S. Midwest Tuesday and more of the same is expected in the north and central parts of the Corn and Soybean Belt into next week while the southwestern Corn Belt is dry.
  
• Hot
  weather continued in the U.S. Central Plains while most of the lower and eastern Midwest was warm and humid.
  
• Today’s
  tropical forecast changes remove Texas cotton areas from possible impact from the new tropical system that will threaten the U.S.
  
• Not
  many other changes occurred elsewhere in the world overnight
• Parts
  of China will remain wet
• Northwestern
  India will be dry
• Australia
  crops will remain mostly very good, but rain is needed in the north
• Argentina
  is expecting rain next week and so are some Brazilian sugarcane, citrus and coffee areas.
  
• Western
  Europe will be dry for a while and eastern Europe and the western CIS will be milder with periods of rain. 

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Wednesday,
Aug. 25:

• EIA
  weekly U.S. ethanol inventories, production
• Malaysia
  Aug. 1-25 palm oil export data
• Unica
  cane crush, sugar production (tentative)

Thursday,
Aug. 26:

• 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,
Aug. 27:

• 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

 

 

 

 

 

U
of I on IL crop returns

Schnitkey,
G., C. Zulauf, K. Swanson and N. Paulson. “Stress Test of 2022 Crop Returns.”
farmdoc daily (11):124,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, August 24, 2021.

https://farmdocdaily.illinois.edu/2021/08/stress-test-of-2022-crop-returns.html?utm_source=rss&utm_medium=rss&utm_campaign=stress-test-of-2022-crop-returns

 

Macros

US
Durable Goods Orders Jul P: -0.1% (est -0.3%; prevR 0.8%; prev 0.9%)

US
Durable Goods Ex-Transportation Jul P: 0.7% (est 0.5%; prevR 0.6%; prev 0.5%)

US
Cap Goods Orders Nondef Ex-Air Jul P: 0.0% (est 0.5%; prevR 1.0%; prev 0.7%)

US
Cap Goods Ship Nondef Ex-Air Jul P: 1.0% (est 0.7%; prev 0.6%)

Canada
July Wholesale Trade Most Likely Fell 2.0% – StatsCan Flash Estimate

 

 

Corn

·        
Corn futures are lower on profit taking, lower USD, and lack of fresh news.  WTI is higher.  There was talk China was inquiring for US corn on Tuesday. 

·        
December corn remains about 8 to 11 cents below a few key MA’s. 

·        
Romania’s corn production was estimated at 13.7 million tons, up from 10.2 million last year. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 2,000 barrels (962-986 range) from the previous week and stocks down 39,000 barrels to 21,519 million.

 

Export
developments.

• None
  reported

 

 

 

Soybeans

·        
The soybean complex is lower on light profit taking after contracts rallied on Tuesday.  The USD was higher.  Additional China demand indications for US soybeans could limit losses.  Yesterday there was talk China bought at least
eight US soybean cargoes this week. 

·        
Germany’s rapeseed crop was estimated at 3.52 million tons, a slight increase from 2020. 

·        
Offshore values are leading soybean oil 116 points lower and meal $4.90 lower.

·        
China soybean futures were up 121 yuan or 2.1%.  China meal was up 0.7% and soybean oil was up 154 or 1.7%.  Palm was 1.6% higher. 

·        
Malaysian palm oil was up 61 to 4,364 ringgit and cash up $15/ton to $1,090. 

·        
ITS reported August 1-25 palm oil exports fell 13.4% to 984,431 tons from 1.137 million shipped during the July 1-25 period.  AmSpec: Malaysia’s Aug 1-25 palm oil exports 988,809 tons, down 12.3% from 988,809 tons previous period
month ago. 

·        
Malaysian palm oil

·        
China cash crush margins were last positive 142 cents on our analysis (128 previous) versus 110 cents late last week and 90 cents around a year ago. 

·        
China

·        
Argentine sold 27.9 million tons of soybeans for the 2020-21 season through Aug. 18, below 29.9 million tons year ago.

 

Export
Developments

·        
None reported

 

Source:
Reuters and FI

 

Wheat

·        
Chicago wheat futures hit a two-week low, lengthening losses from Tuesday from North American harvest pressure, lower Paris wheat and profit taking. 

·        
The USD was 16 points higher as of early this morning. 

·        
Germany’s wheat harvest was estimated at 21.4 million tons, a 3.6% decline from 2020 due to adverse weather. 

·        
Romania collected a record 11.4-million-ton wheat crop after harvesting a very low 6.4 million tons in 2020. 

·        
Ukraine’s wheat harvest advanced to a record 32 million tons, about 5 million tons greater than what was collected at this time last year. 

·        
Ukraine grain exports since July 1 total nearly 6.5 million tons from 6.4 million at this time last year. 

·        
December Paris wheat was down 3.50 euros at 243.00 at the time this was written.  September was 11.50 lower at 261.25. 

 

September/December
Paris milling wheat spread is starting to collapse. 

Source:
Reuters and FI

 

Export
Developments. 

·        
Jordan received 5 participants for 120,000 tons of wheat. 

·        
Morocco saw no offers for 363,000 tons of US durum wheat under a tariff import quota for shipment by December 31. 

·        
Tunisia seeks 100,000 tons of soft wheat and 100,000 tons of animal feed barley on August 26 for late Sep through October shipment.  They last bought wheat on August 6 at $312.89/ton c&f. 

·        
Taiwan weeks 48,875 tons of US wheat on September 3 for October 15-Novmeber 1 shipment.  They last bought US wheat on August 6, various classes at various prices. 

·        
The Philippines on August 26 seek 168,000 tons of feed wheat of EU, Black Sea or Australian origin for Sep 17-Nov 18 shipment.  If shipped from Australia, shipment would be on the back end. 

·        
Japan seeks 81,853 tons of food wheat from the US and Canada. 

·        
Results awaited: Pakistan received offers for 400,000 tons of wheat for Sep/Oct shipment.  Lowest was $355.99/ton. 

·        
Jordan seeks 120,000 tons of feed barley on August 26. 

·        
Bangladesh seeks 50,000 tons wheat on September 1.

·        
Mauritius seeks 47,000 tons of wheat flour, optional origin, on Sept. 21 for various 2022 shipment.

 

Rice/Other

• China’s National Bureau of Statistics (NBS) estimated early rice
  production increasing 2.7 to 28.02 million tons, up 723,000 tons from 2020.
• Egypt seeks 200,000 tons of raw sugar for Oct-Dec shipment on August
  28.