FI Morning Grain Comments 09/28/21

PDF attached

 

Good
morning.

 

Lower
trade at the electronic close.  USD is up 36 points. 

 

 

 

Weather

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 28, 2021

• Little
  change around the world overnight.
• Australia
  will receive some welcome rain over the coming week improving moisture for reproducing winter crops.
  
• China
  will see a good mix of weather, although parts of the north will stay a little too wet at times.
  
• Typhoon
  Mindulle will pass to the southeast of Honshu Japan late this week producing strong wind, very rough seas and heavy rain; including the Tokyo area, although the storm will remain out to sea.
  
• Europe
  will trend wetter in the west half of the continent.
• Western
  parts of the CIS will continue to experience a restricted amount of moisture and cool weather for several more days and then warming next week will help induce better winter crop establishment.
  
• Rain
  the U.S. Plains will be great for hard red winter wheat areas and some of the moisture will eventually reach the Midwest where some interruption to harvesting may occur for a little while.
  
• Argentina’s
  weather has not changed overnight leaving the west-central and northwest parts of that country in need of significant rain.
  
• Brazil
  will see a good mix of weather with center west and center south crop areas getting rain again next week.
  
• Until
  then, southern Brazil will be wettest. 
• India
  will continue wetter biased, but there will be some net drying in a part of the interior northwest for a while
• A
  more active tropical pattern is expected in the western Pacific Ocean next week with up to three new tropical cyclones possible one of which will impact the Philippines and Vietnam
• Hurricane
  Sam, in the Atlantic, is now advertised to pass to the east of Bermuda and east of Newfoundland Canada over the next week
  

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Tuesday,
Sept. 28:

• EU
  weekly grain, oilseed import and export data

Wednesday,
Sept. 29:

• EIA
  weekly U.S. ethanol inventories, production
• Vietnam’s
  General Statistics Office releases Sept. trade data
• Brazil’s
  Unica releases sugar output and cane crush data (tentative)

Thursday,
Sept. 30:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  quarterly stocks – corn, soy, wheat, barley, oat and sorghum, noon
• U.S.
  wheat production, noon
• U.S.
  agricultural prices paid, received, 3pm
• Ivory
  Coast farmgate cocoa prices to be announced
• Malaysia
  September palm oil exports
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Canada

Friday,
Oct. 1:

• 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
• New
  cocoa season in Ivory Coast starts
• U.S.
  DDGS production, corn for ethanol
• USDA
  soybean crush, 3pm
• Australia
  commodity index
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  China, Hong Kong

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
286,087                 versus   400000-625000  range

Corn                     
517,539                 versus   300000-575000  range

Soybeans           
440,742                 versus   150000-500000  range

 

Macros

Natural
gas is at its highest level since 2014.

US
Wholesale Inventories (M/M) Aug P: 1.2% (est 0.8%; prev 0.6%)

US
Retail Inventories (M/M) Aug: 0.1% (est 0.5%; prev 0.4%)

US
Advance Goods Trade Balance (USD) Aug: -87.6B (est -87.3B; prev -86.4B)

 

Corn

·        
Corn was lower at the pause on good US weather and sharply higher USD.  Another leg up in energy prices could limit losses.  Late yesterday there was speculation China bought US corn and we have to monitor if any 24-hour sales
show up at 8 am CT. 

·        
US crop progress was at or near expectations yesterday with US corn and soybean conditions unchanged.  Corn and soybean harvesting progress are both running 3 points above average. 

·        
The Corn Belt will see favorable harvest weather. 

·        
CNGOIC sees China’s corn prices falling in 2021-22 on large production prospects.  They look for corn prices to hit a bottom between end of December and Chinese Spring Festival.  CNGOIC looks for imports of corn at 20 million
tons, down from 29 million tons in 2020-21.

·        
Brazil corn imports reached 1.2 million tons Jan-Aug according to IMEA.  Nearly 4 million tons could be imported in 2021, which would be a record. 

·        
US corn conditions were unchanged and at trade expectations.  Harvest progress was 18 percent, one point below expectations and 3 points above average.  We left our yield estimate unchanged. 

·        
USDA
US corn export inspections as of September 23, 2021 were 517,539 tons, within a range of trade expectations, above 403,422 tons previous week and compares to 826,995 tons year ago. Major countries included Mexico for 300,259 tons, China for 110,509 tons, and
Japan for 88,600 tons.

 

Export
developments.

• Taiwan’s
  MFIG bought 65,000 tons of Brazil corn for shipment between Dec. 6 and Dec. 25, 2021, or later if from the PNW, at an estimated premium of 292.00 U.S. cents a bushel c&f over the Chicago March 2022 corn contract. 
  

 

 

Soybeans

·        
Soybeans, meal, and soybean oil are weaker on lack of fresh news, weakness in China soybean and SBO futures.  USD is up sharply. 

·        
Losses might be limited from November EU rapeseed trading 5.75 euros at a record 631.25 euros. 

·        
US soybean conditions were unchanged and at trade expectations.  Harvest progress was 16 percent, one point above expectations and 3 points above average.  We left our yield estimate unchanged. 

 

·        
Offshore values are leading CBOT soybean oil 24 points lower and meal $4.10/short ton lower. 

·        
Cargo surveyor SGS reported month to date September 25 Malaysian palm exports at 1,409,718 tons, 410,050 tons above the same period a month ago or up 41.0%, and 88,769 tons above the same period a year ago or up 6.7%.

·        
Malaysian palm futures increased 53 ringgit and cash was up $7.50/ton to 1,142.50/ton. 

·        
Cargo surveyor SGS reported month to date September 25 Malaysian palm exports at 1,409,718 tons, 410,050 tons above the same period a month ago or up 41.0%, and 88,769 tons above the same period a year ago or up 6.7%. 

·        
China soybean cash crush margins improved from Monday. China soybeans were down 1.2%, meal up 0.1%, and soybean oil fell 1.6 0.3%.  China palm futures were down 1.2%.

·        
China

·        
China cash crush margins were last 175 cents/bu on our analysis (160 previous) versus 159 cents late last week and 90 cents around a year ago. 

·        
Malaysia:

·        
USDA US soybean export inspections as of September 23, 2021 were 440,742 tons, within a range of trade expectations, above 277,297 tons previous week and compares to 1,297,596 tons year ago. Major countries included China for
288,935 tons, Mexico for 23,639 tons, and Taiwan for 21,450 tons.

 

Export
Developments

• Under
  the USDA 24-hour reporting system, private exporters sold 334,000 tons of soybeans to China for 2021-22 delivery. 
  

 

Wheat

·        
Wheat turned lower in the nearby positions just before the electronic close.  There were no new export developments.  Algeria may start buying wheat today.  The central and lower Great Plains will see rain this week. 

·        
Paris December wheat was up 2.25 at 255.50 euros. 

·        
The USD was 33 points higher as of 7:39 am CT.

·        
Ukraine planted 1.95 million hectares of 2022 winter wheat as of Sept 27 or 29% of the expected area of 6.68 million hectares (AgMin).

·        
USDA US all-wheat export inspections as of September 23, 2021 were 286,087 tons, below a range of trade expectations, below 564,608 tons previous week and compares to 589,025 tons year ago. Major countries included Nigeria for
49,962 tons, Thailand for 47,504 tons, and Mexico for 38,021 tons.

·        
The Brazilian Wheat Industry Association (Abitrigo) that represents flour millers are threatening to stop buying wheat from Argentina if Brazil approves GMO wheat imports.  About 60 percent of the wheat consumed in Brazil is imported,
and about 80 percent of that comes from Argentina.  .

 

Export
Developments. 

·        
Algeria seeks 50,000 tons of wheat, optional origin, on September 28, with results likely September 29, for November 1-15 and November 16-30 shipment. 

·        
Jordan seeks 120,000 tons of feed barley on September 30 for Dec-Feb shipment. 

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

·        
Pakistan seeks 640,000 tons of wheat on Sep. 29
for
shipment between January and February 2022. 

·        
Jordan seeks 120,000 tons of wheat on September 29. 

·        
The UN seeks 200,000 tons of milling wheat on October 8 for Ethiopia for delivery 90 days after contract signing.

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on October 4.