FI Morning Grain Comments 08/27/21

PDF attached

 

Good
morning.

 

Soybean
complex is under pressure led by soybean oil in part to uncertainty over US biofuel 2021 and 2022 mandates. New-crop corn is under pressure from a weather forecast calling for rain across the upper western Corn Belt. September FND deliveries are Monday and
today we are seeing some short squeezing.  Wheat is mixed on lack of direction.  WTI is higher USD weaker, gold higher and US equities higher. 

 

 

 

 

Weather
(7-day below)

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR FRIDAY, AUGUST 27, 2021

• Rain
  the past two days in a part of the upper U.S. Midwest and northwestern U.S. Corn and Soybean Belt has proven beneficial to late summer crops and additional rain is expected periodically over the next ten days.
  
• Tropical
  Storm Ida will move across western Cuba today and then enter the Gulf of Mexico this weekend.
  
• The
  tropical storm will become a major hurricane before moving into southeastern Louisiana Sunday afternoon into Monday. (see our special Tropical Storm Ida) audio update released this morning as well). 
  
• Southwestern
  parts of the U.S. Corn Belt will be dry biased for the coming week to ten days.
  
• South
  America weather still offers some showers in Argentina during the coming week, but center west and center south Brazil is drier in today’s outlook.
  
• Frost
  and freezes occurred again this morning in southeastern Queensland, Australia
  
• Damage
  should have been low, but over the past two days a few crops in the region may have been negatively impacted by the cold
• Wheat
  and barley reproduction usually occurs in the first couple of weeks of September
• The
  outlook for relief to dryness in southeastern Europe is still good for the coming week.
  
• Northwestern
  Europe will be dry biased during the coming week, but may get a few showers briefly late next week
• Southern
  France will get more rain than the north
• Portions
  of Russia’s Southern Region, Volga River Basin and Ural Mountains region along with northwestern Kazakhstan will continue drying out for about five more days before showers evolve. 
• China
  will continue to receive pockets of heavy rainfall and the nation still needs to dry down after another wet summer
• Northwestern
  India will get some rain late next week and into the following weekend
• This
  will benefit Gujarat and southern Rajasthan most significantly

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

Sunday,
Aug. 29:

• Vietnam’s
  statistics office publishes August imports and exports of commodities

Monday,
Aug. 30:

• Canada’s
  StatCan releases production data for wheat, durum, canola, barley and soybeans
• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions – corn, cotton, soybeans; spring wheat harvest, 4pm
• Ivory
  Coast cocoa arrivals
• U.K.
  public holiday: agriculture futures contracts closed on ICE Futures Europe

Tuesday,
Aug. 31:

• U.S.
  agricultural prices paid and received
• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  Malaysia

Wednesday,
Sept. 1:

• EIA
  weekly U.S. ethanol inventories, production
• Australia
  Commodity Index
• U.S.
  DDGS production, corn for ethanol, 3pm
• Malaysia
  August palm oil export data (tentative)
• USDA
  soybean crush, 3pm

Thursday,
Sept. 2:

• FAO
  World Food Price Index
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Vietnam

Friday,
Sept. 3:

• 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
• HOLIDAY:
  Vietnam

Source:
Bloomberg and FI

 

 

FND
delivery estimates:

 

 

 

StatsCan
is due out with Canadian production on Monday

 

 

Macros

 

Corn

·        
New-crop corn futures are lower ahead of the weekend in part from rain prospects across the upper western Corn Belt. 

·        
September FND deliveries are Monday and today we are seeing some short squeezing. 

·        
US weather outlook looks good over the near term with precipitation falling across the north central and eastern areas through today, then the northern Midwest Saturday and central and eastern areas Sunday through Monday. North
Dakota, Minnesota, Wisconsin, and Iowa over next three days will see heavy rain. 

·        
China’s Sinograin sold 38,709 tons of imported corn at auction, 37% of the total offered. 

·        
WTI is higher and USD lower. 

 

Export
developments.

·        
South Korea’s KFA seeks up to 138,000 tons of optional origin corn on August 27 for arrival around November 25 and November 30. 

 

 

 

Soybeans

·        
The CBOT soybeans complex was under pressure led by soybean oil in part to uncertainty over US biofuel 2021 and 2022 mandates.  This comes after reports China bought around 25 cargoes of soybeans this week from SA and the US. 

·        
Brazil is looking to lower their biodiesel blend rate to only 10 percent for November and December.  Sep/Oct was 12%.  In April (until Aug) they went to B10 from B13 due to price adjustments.  This is bearish as Brazil can export
a little more soybean oil than expected. 

·        
Indonesia set its September CPO reference price at $1185.26/ton, up from $1048.62/ton for August. 

·        
Offshore values are leading soybean oil 34 points higher (72 higher for the week to date) and meal $1.00 lower ($0.50 lower for the week).

·        
China soybean futures were up 2 yuan or 0.1%.  China meal was down 0.1% and soybean oil was down 70 or 0.8%.  Palm was 1.0% lower. 

·        
Malaysian palm oil was down 59 to 4,333 ringgit and cash unch at $1,105. 

·        
Malaysian palm oil

·        
China cash crush margins were last positive 121 cents on our analysis (123 previous) versus 110 cents late last week and 90 cents around a year ago. 

·        
China

 

Export
Developments

• None
  reported

 

 

 

Wheat

·        
Wheat is mixed on lack of direction. 

·        
France soft wheat harvest progress advanced 5 percent points to 96 percent complete as of August 23, less than what we expected, and is about two weeks behind normal. 

·        
The USD was 6 points lower as of early this morning. 

·        
December Paris wheat was down 0.25 euros at 247.25. 

·        
Russia adjusted their wheat export tax by increasing it to $39.40/ton for next week from the current $31.70/ton.

·        
Ukraine exported 7 million tons of grain since July 1, up 10% from 6.4 million tons during the same period last season, including 3.4 million tons of wheat and 1.18 million tons of corn.  2.4 million tons of barley also had been
exported. 

 

Export
Developments. 

·        
The Philippines seek 60,000 tons of feed wheat on August 27 for Sep/Oct shipment. 

·        
Pakistan Seeks 550,000 tons of wheat for October through November shipment. 

·        
Jordan seeks 120,000 tons of wheat on September 1. 

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

·        
Turkey seeks 300,000 tons of milling wheat on September 2 for September 10 through October 10 shipment.  They last bought 11.5% and 12.5% wheat on August 4 at $297.40-$308.90/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. 

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

 

Rice/Other

• South
  Korea seeks 42,200 tons of rice for arrival in South Korea between February 28 and April 2022.  20,000 tons of that is of US origin, rest optional .
  
• Egypt
  seeks 200,000 tons of raw sugar for Oct-Dec shipment on August 28.