FI Morning Grain Comments 09/09/21

PDF attached

 

Good
morning.

 

WASHINGTON,
September 9, 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.

 

Speculative
selling is sending agriculture commodity futures lower this morning ahead of several reports due out on Friday.  USDA inadvertently released September FSA US prevented planting data yesterday suggesting a large upward revision in US corn acres and to a lesser
extent, higher soybean planted area. 

 

Conab
lowered their Brazil corn production estimate to 85.75 million tons from 86.65 million and compares to 102.6 million for 2019-20.  Brazil soybean production was estimated at 135.912 million, down slightly from 135.978 million in August and compares to 124.845
million in 2019-20.  Brazil’s wheat crop was seen at 8.156 million tons, down from 8.591 million in August and up from 6.235 million in 2020. 

 

Friday
reports include export sales, S&D data, and official FSA prevented planting data. 

 

Per
newswires data yesterday, FSA data suggests a higher US corn and soybean area for 2021.  A university extension school sees a 1.6 million implied upward revision in corn and 207,000-acre higher soybeans.  We are 1 million higher for corn and 500,000 acres
higher for soybeans. 

 

 

 

 

 

Weather

The
US weather forecaster CPC sees a 70-80% chance of La Nina developing for the Northern Hemisphere during the 2021-22 winter period. 

 

Source:
World Weather Inc. 

 

 

 

 

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 9, 2021

• Good
  harvest weather is still expected in much of the U.S., Canada, eastern Europe, and southern parts of the CIS.
  
• China
  weather will improve in east-central parts of the nation as well.
• Australia
  will continue drier biased in its northern winter crop areas while showers continue periodically in the south.
  
• India
  is still looking at an active weather pattern for another two weeks with some heavy rain in central and northwestern areas, including Gujarat, northwestern Madhya Pradesh, eastern and northern Maharashtra, and southern Rajasthan.
  
• Limited
  rainfall is still expected in wheat areas of the middle and lower Volga River Basin and Ukraine for at least ten days
  
• drying
  is also expected in much of the U.S. hard red winter wheat production region.
  
• Typhoon
  Chanthu’s forecast path changed greatly overnight and is now expected to brush northeastern Luzon Island in the Philippines and then impact Taiwan before moving into the East China Sea this weekend and next week threatening eastern China, South Korea and/or
  Japan.
• The
  storm will be large-sized and intense enough to warrant a very close watch.
  
• Western
  Europe will trend wetter
• Rain
  is expected in northern Russia; including the New Lands. 
• Tropical
  Depression Mindy will move out to sea from eastern Georgia today without much impact on agriculture
• A
  tropical disturbance in western parts of the Gulf of Mexico this weekend and early next week could bring rain to eastern Mexico, the Texas coast and Louisiana
• Some
  heavy rain will be possible
• Excessive
  heat from the interior western United States will shift into the Plains this weekend and Monday before breaking down temporarily
  
• Another
  heat wave is expected in the interior western states later next week that will shift into the Plains late next week and into the following weekend
• Temperature
  extremes in both events will get into the 90s Fahrenheit with a few extremes near or slightly above 100
• Frost
  and freezes may impact a part of Canada’s Prairies with frost in the northwestern U.S. Plains after mid-month
• Western
  Argentina will continue missing rain events leaving central and northern Cordoba, Santiago del Estero, Chaco, and northwestern Santa Fe quite dry
• Brazil
  rainfall will be most significant in the south over the next ten days, although some showers will eventually pop up over northwestern portions of Mato Grosso as mid-month approaches

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Thursday,
Sept. 9:

• CONAB
• EIA
  weekly U.S. ethanol inventories, production
• Port
  of Rouen data on French grain exports
• UkrAgroConsult
  Black Sea oilseed conference

Friday,
Sept. 10:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am

• USDA’s
  monthly World Agricultural Supply and Demand Estimates (WASDE) report, noon
• China
  farm ministry’s CASDE outlook report
• 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
• Malaysian
  Palm Oil Board data on August stockpiles, output, and exports
• FranceAgriMer
  weekly update on crop conditions
• Malaysia
  Sept. 1-10 palm oil export data
• HOLIDAY:
  India

Source:
Bloomberg and FI

 

 

 

 

US
inventories (Reuters)

 

US
production (Reuters)

 

World
inventories (Reuters)

 

 

Macros

US
Initial Jobless Claims Sep 4: 310K (est 335K; prevR 345K; prev 340K)

US
Continuing Claims Aug 28: 2783K (est 2730K; prevR 2805K; prev 2748K)

 

 

Corn

·        
Corn is lower on expectations for USDA to raise their US corn area and yield in its S&D update on Friday.  We look for about a 1 million acre increase to the US corn area and the US corn yield to increase from 173.6 bu/ac to 174.6,
below a trade guess of 175.8 bu/ac.  Note the 2020 US corn yield was 172.0 bu/ac, yet combined good/excellent corn crop conditions are currently running 2 points below early September 2020. 

·        
December corn hit a 7-month low. 

·        
WTI is under pressure as China releases crude oil reserves for the first time ever. 

·        
The Rosario Grains Exchange estimated Argentina’s corn crop at between 55 and 56 million tons versus previous 55 million.

·        
The USDA Broiler Report showed eggs set in the US up 2 percent and chicks placed down 1 percent.  Cumulative placements from the week ending January 9, 2021, through September 4, 2021, for the United States were 6.54 billion.
Cumulative placements were up slightly from the same period a year earlier.

·        
A Bloomberg poll looks for weekly US ethanol production to be up 4,000 barrels (856-950 range) from the previous week and stocks up 2,000 barrels to 21.112 million.

 

Export
developments.

·        
China plans to sell 133,753 tons of US corn on September 10 and 8,277 tons from Ukraine. 

 

Rolling
corn contract

 

 

Soybeans

·        
US soybeans and soybean oil are lower on follow through selling from expectations the US soybean crop will be upward revised by USDA on Friday.  WTI crude oil is lower and USD near unchanged.  Meal is moderately lower on product
spreading and higher lead indicated by offshore values.

·        
The Rosario Grains Exchange estimated Argentina harvested 48.8 million tons of soybeans in 2021-22, down from a previous estimate of 49 million.

·        
Brazil truckers are blocking highways in several states related to “social and political events”. 

·        
Indonesia palm oil exports in January-July increased  3% compared to last year.  Palm oil exports were 23.67 million tons in January-July, compared to 22.97 million tons in 2020.

·        
Malaysian palm ended a 5-day winning streak by closing down 86 points and cash was off $12.50/ton.  MPOB Malaysian S&D August data due out Friday is expected to show a rise in palm oil inventories to highest level in over a year. 
September 1-10 palm export data will also be released.  China soybean futures were up 0.9%, meal down 0.9% and SBO down 0.1%.  Offshore values are leading SBO 6 points higher and meal $1.70 higher. 

·        
Offshore values this morning were leading soybean oil 7 points higher and meal $1.70 higher.

·        
Malaysian palm oil

·        
China cash crush margins were last positive 133 cents on our analysis (139 previous) versus 115 cents late last week and 84 cents around a year ago. 

·        
China

 

 

Export
Developments

• Under
  the USDA 24-hour announcement system, private exporters export sales of 132,000 tons of soybeans for delivery to China during the 2021-22 marketing year.

 

Wheat

·        
Wheat is lower despite another round of import tender announcements. 

·        
December Paris wheat was down 3.00 at 238.00 euros. 

·        
The US weather forecaster CPC sees a 70-80% chance of La Nina developing for the Northern Hemisphere during the 2021-22 winter period. 

 

Export
Developments. 

·        
The Philippines bought 112,000 tons of feed wheat.  56,000 tons for shipment in September was expected to be sourced from India. 56,000 tons for shipment in October was expected to be sourced from Australia.

·        
Morocco seeks 363,000 tons of US wheat on September 21 for arrival by the end of the year. 

·        
Saudi Arabia seeks 360,000 tons of wheat on Friday for arrival in November. 

·        
Tunisia seeks 100,000 tons of soft wheat and 100,000 tons of barley on Friday for October through November shipment. 

·        
Jordan passed on feed barley and issued a new import tender for wheat. 

·        
Jordan seeks 120,000 tons of wheat on September 15 for last half December through first half February shipment. 

·        
Algeria seeks at least 50,000 tons of barley for October shipment. 

·        
Pakistan is tendering for 550,000 tons of wheat. On Tuesday they were seeing offers at around $369.50/ton and $386.60/ton. 

·        
Japan’s Ministry in their regular SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival in Japan by Feb. 24, 2022, set to close on Sept. 15.

·        
Bangladesh’s state grains buyer seeks another 50,000 tons of milling wheat on September 16. 

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

 

Rice/Other

• (Bloomberg) — U.S. 2021-22 cotton production seen at 17.69m bales, 428,000 bales above USDA’s previous
  est., according to the avg in a Bloomberg survey of nine analysts.

Estimates range from 17m to 18.45m bales

U.S. ending stocks seen increasing by the same amount

Global ending stocks seen 438,000 bales higher at 87.67m bales