FI Morning Grain Comments 09/21/21

PDF attached

 

Good
morning.

 

WTI
crude oil is $0.61 higher, USD 16 points lower and Dow futures higher. 

 

November
soybeans are higher but still below their 200-day MA of $12.6850.  Soybean oil is rebounding in part to a rally in cash rapeseed oil (up 15 euros) and higher palm oil.  Meal rebounded to close the overnight session higher.  Corn and wheat are lower.  China
will be back from holiday Wednesday.  US corn and soybean conditions improved one point each, and both were one point above trade expectations.  US corn harvest was 10% complete, up from 4% previous week and ahead of the five-year average of 9%. IA was 4%
complete and IL was at 11%.  57% of the US corn crop was mature, 10 points above average.  For soybeans, 6% of the crop had been harvested, in line with average.  58% of the soybean crop is dropping leaves, 10 points above average.  This is concerning for
some analysts as they believe a fast-maturing soybean crop will not be good for test weights as the pods have not developed to their full potential.   

 

 

Weather

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 21

• Dry
  weather in the U.S. Plains and Canada’s Prairies will prevail over the next ten days to nearly two weeks for many areas.
  
• Temperatures
  will also be warmer than usual leading to net drying.
• Soil
  moisture depletion will not be good for wheat planting, emergence or establishment and the situation needs to be closely monitored.
  
• Rain
  in the U.S. Midwest Monday will shift to the east today. The Midwest moisture will be good for future wheat planting, but it will briefly slow summer crop maturation and harvest progress.
  
• A
  full week of dry weather should follow after Wednesday.
• No
  threatening cold is expected in key U.S. crop areas anytime soon
• India’s
  monsoon will not withdraw for another ten days, although rainfall will be erratic in a number of areas.
  
• China
  is still expecting heavy rain in its Yellow River Basin in the coming week
  
• No
  changes of significance were noted of Australia today
• Restricted
  rainfall is expected except in a few coastal areas where rain will fall periodically
• A
  boost in moisture is needed in Queensland, South Australia, northwestern Victoria and northern parts of Western Australia where the ground is drying out, but Queensland is the only agricultural region that remains too dry in unirrigated areas
• No
  changes were noted in South America today.
• Brazil
  will see sporadic showers pop up this weekend and next week in center west and center south, but the precipitation will be poorly distributed and should not change soil moisture enough for widespread early season planting, but the showers are needed to “prime”
  the atmosphere with moisture for future rainfall of greater significance.
• Europe
  will get periodic precipitation, although greater amounts will soon be needed in the drier areas of the south
• Much
  of the Southeast Asian countries will get an abundance of rain during the next couple of weeks

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Tuesday,
Sept. 21:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• HOLIDAY:
  China, Korea

Wednesday,
Sept. 22:

• EIA
  weekly U.S. ethanol inventories, production
• U.S.
  cold storage data – pork, beef, poultry, 3pm
• HOLIDAY:
  Hong Kong, Korea

Thursday,
Sept. 23:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Globoil
  India – international vegetable oil conference, day 1
• The
  UN Food Systems Summit
• USDA
  red meat production, 3pm
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Japan

Friday,
Sept. 24:

• 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
• Globoil
  India – international vegetable oil conference, day 2
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  cattle on feed, hogs and pigs inventory, poultry slaughter, 3pm

Saturday,
Sept. 25:

• Globoil
  India – international vegetable oil conference, day 3

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
563,390                 versus   350000-600000  range

Corn                     
403,104                 versus   150000-450000  range

Soybeans           
275,169                 versus   100000-400000  range

 

Macros

 

Corn

·        
Corn is down for the fourth consecutive day on follow through selling and improvement in US crop conditions.  With slow US corn exports and advancement in harvest progress, cash corn prices could trend lower in coming weeks. 
The managed money funds still hold a large net long position of an estimated 213,000 futures and options contracts. 

·        
US corn and soybean conditions improved one point each, and both were one point above trade expectations.  US corn harvest was 10% complete, up from 4% previous week and ahead of the five-year average of 9%. IA was 4% complete
and IL was at 11%.  57% of the US corn crop was mature, 10 points above average. 

·        
Brazil may soon announce they plan to cut corn import taxes for 90 days.  

·        
Cattle on feed and the hogs & pigs reports will be released after the close on Friday. 

·        
USDA US corn export inspections as of September 16, 2021, were 403,104 tons, within a range of trade expectations, above 159,429 tons previous week and compares to 768,084 tons year ago. Major countries included Mexico for 219,601
tons, China for 140,245 tons, and Japan for 32,273 tons.

 

 

Export
developments.

• None
  reported

 

 

Soybeans

·        
November soybeans are higher but still below their 200-day MA of $12.6850.  Soybean oil is rebounding (bull spreading) in part to a rally in cash rapeseed oil (up 15 euros) and higher palm oil, but prices remain near a late June
level.  Soybean meal was on the defensive earlier this morning but rallied into the electronic close in part to an uptick in soybeans and corn pairing some of its losses. 

·        
Malaysian palm oil futures rebounded from a 2-week low, settling at 4,192 ringgit, up 19.  Cash palm fell $2.50/ton to $1,090.00/ton.

·        
US soybean conditions improved one point and was one point above trade expectations. 

·        
US soybeans are 6% harvested, in line with average.  58% of the soybean crop is dropping leaves, 10 points above average.  This is concerning for some analysts as they believe a fast-maturing soybean crop will not be good for
test weights as the pods have not developed to their full potential.  Yields could be good but look for scattered reports of low-test weights this fall. 

·        
Weather over the next week will be mostly dry for the US Midwest.  Note the fall season (US) official starts on Wednesday, September 22, 2021, at 3:21 p.m. EDT. 

·        
Southern Peninsula Palm Oil Millers’ Association estimated Malaysia’s palm oil production during Sept. 1-20 declined 4.5% from the same period during August. 

·        
Cargo surveyor SGS reported month to date September 20 Malaysian palm exports at 1,070,096 tons, 287,069 tons above the same period a month ago or up 36.7%, and 22,827 tons above the same period a year ago or up 2.2%.

·        
Offshore values are leading soybean oil 152 points higher and meal $2.60/short ton lower. 

·        
China is on holiday through Tuesday, returning Wednesday. 

·        
China cash crush margins were last positive 162 cents on our analysis versus 162 cents late last week and 92 cents around a year ago. 

·        
Malaysia:

·        
Egypt is in for vegetable oils on Wednesday. 

·        
USDA US soybean export inspections as of September 16, 2021, were 275,169 tons, within a range of trade expectations, above 193,429 tons previous week and compares to 1,390,521 tons year ago. Major countries included Mexico for
88,583 tons, Japan for 70,767 tons, and China for 67,798 tons.

 

 

IL
crop ratings have been all over the place this crop season. 

 

 

Export
Developments

• Egypt’s
  GASC seeks 30,000 tons of soyoil and 10,000 tons of sunflower oil on Wednesday for arrival Nov. 15-30 and/or Dec. 1-15. 
  

 

Wheat

·        
Wheat is mostly weaker but a lower USD could limit losses.  Global tender announcements are slowing, a signal high Black Sea prices, currently over $300/ton, might be keeping importers away over the short term. 

·        
Platts Black Sea Dec wheat futures

·        
December Paris wheat was down 0.25 at 245 euros. 

·        
The USD was 17 points lower as of 7:50 am CT.

·        
Argentina saw good rain across their wheat belt over the past week and the crop is thought to be in good shape. 

·        
Ukraine winter grain plantings reached 17 percent complete. 

·        
Kazakhstan estimated their 2021 grain production at 16 million tons, up from 15.3 million tons last month.  Kazakhstan lowered their grain export projection for 2021-22 to 6.0-6.5 million tons from 6.0-6.7 million previous. 

·        
US winter wheat plantings reached 21%, slightly below the average analyst estimate of 22%, but ahead of the five-year average of 18%. 

·        
We lowered our US all-wheat production estimate to 1.682 billion from 1.706 billion, based on minor adjustments to the spring wheat planted area and upward revisions to abandonment for the other spring and durum area.  We took
down other spring wheat harvested area to 10.462 million acres from 11.215 million, and durum to 1.376 million from 1.444 million. Our spring wheat production is 322 million, down from 345 million previous and durum at 32 million from 34 million previous. 
USDA is using 1.697 billion for all wheat, 343 million for spring and 35 million for durum. 

·        
The central US Great Plains will see favorable temperatures and dry conditions for hard red winter wheat planting progress this week. 

·        
USDA US all-wheat export inspections as of September 16, 2021, were 563,390 tons, within a range of trade expectations, below 567,438 tons previous week and compares to 503,034 tons year ago. Major countries included Mexico for
109,122 tons, Philippines for 86,606 tons, and Japan for 86,392 tons.

 

Argentina’s
wheat crop is in good shape

 

Export
Developments. 

·        
Japan seeks 113,067 tons of food wheat from the US and Canada, this week for October 21-November 20 loading. 

·        
Turkey bought 260,000 tons of feed barley for October 8-October 31 shipment at prices between $297.00-$312.90/ton. 

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

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

·        
Pakistan’s lowest offer for 500,000 tons of wheat was $383.50/ton c&f. 

·        
Algeria seeks 50,000 tons of durum wheat on September 22 for November shipment. 

• Jordan
  seeks 120,000 tons of wheat on September 22 for LH December through FH February shipment. 
  

·        
Jordan seeks 120,000 tons of feed barley on September 23 for Dec. 16-31, Jan. 1-15, Jan. 16-31, and Feb. 1-14.

• Taiwan
  seeks 49,580 tons of US wheat on September 23 between November 6 and November 20. 
  

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on September 23.