FI Morning Grain Comments 09/29/21

PDF attached

 

Good
morning.

 

Despite
a lower trade in energies and higher USD (up about 20 points and highest level since November 2020), major CBOT agriculture markets are higher. 
US equities are seeing a reversal.  EU markets are lending support to CBOT soybeans and wheat.  Look for positioning today.  Grain Stocks and Small Grains Annual Summary reports are due out at 11 am CT on Thursday.  Algeria bought wheat
and Pakistan are in for wheat.  A Bloomberg poll looks for weekly US ethanol production to be up 13,000 barrels (920-953 range) from the previous week and stocks up 84,000 barrels to 20.195 million.

 

 

Weather

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 29, 2021

• U.S.
  hard red winter wheat areas will get rain over the next few days improving wheat planting and emergence conditions, but follow up rain will be needed
• West
  Texas cotton areas will get rain over the next few days, but the impact will be short-lived and any slowdown in crop maturation will be temporary 
• U.S.
  western Corn and Soybean Belt will trend a little wetter over the next few days with the east trending the same late this week and into the weekend
  
• a
  slowdown in crop maturation and harvesting will occur, but a full week of drying may follow
• U.S.
  Northwestern Plains, Canada’s Prairies and much of the far western U.S. will be dry For an extended period with more heat next week in the northwestern Plains and Canada’s Prairies
• Southeastern
  U.S. will see a good mix of weather over the next two weeks
• U.S.
  Delta will get rain a little more frequently than desired for a while slowing fieldwork and raising a little concern over cotton conditions
• Southern
  and eastern Argentina will get some rain over the next couple of days, but west-central and northwestern areas will remain dry biased for an extended period of time
• Brazil
  rain will be greatest in the interior south through the weekend, but showers in center west and center south will increase next week
  
• the
  precipitation will still be erratic with some areas getting more rain than others and the need for additional moisture will be high
• India’s
  monsoon will finally begin to withdraw this weekend and especially next week
• Rain
  in southern Pakistan today will raise a little concern over cotton fiber quality, but the rain will only last a couple of days
• Gujarat,
  India should not have been harmed by recent rain because of crop development being later than usual
• Punjab
  and Haryana cotton quality was compromised this month by periods of heavy rainfall 
• China
  is still expecting another round of heavy rain north of the Yellow River and in a part of the northeastern Provinces
  
• Much
  of the north has been too west recently and needs to dry out for summer crop harvesting and winter crop planting
• Russia
  and Ukraine winter crop areas along with eastern Europe will experience a week of dry weather 
  
• Planting,
  emergence and establishment of winter crops will improve during this period 
• Dryness
  is still a concern for the lower Danube River Basin, southern Italy and parts of Spain
• South
  Africa will get some beneficial rainfall in the coming week supporting wheat as it approaches and enters reproduction
• Eastern
  Australia received some welcome rain Tuesday and early today with Queensland and New South Wales reaping most of the benefits
  
• More
  rain will fall into Thursday
• The
  moisture will be good for reproducing winter crops
• The
  moisture will also improve topsoil moisture for future cotton and sorghum planting in Queensland, although much more will still be needed

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

Macros

Canadian
Industrial Product Price (M/M) Aug: -0.3% (est -0.3%; prev -0.4%)

Canadian
Raw Material Price Index (M/M) Aug: -2.4% (est -1.5%; prev 2.2%)

 

Corn

·        
Corn is higher on technical buying.  Some traders are eyeing dry conditions for the South American crops that are currently getting planted.  Argentina will see light rain this week and producers in central Brazil are still waiting
for the start of the rain season.  Look for positioning ahead of the Thursday USDA reports. 

·        
The Corn Belt will see favorable harvest weather this week. 

·        
South Africa’s CEC slightly lowered their corn production to 16.211 million tons, 6% more than the 2020-21 season, including 8.609 million tons of white and 7.602 million tons of yellow.

·        
Argentina will resume beef exports to China after the government restricted exports to around 50% typical volumes.  Argentina capped volumes to fight inflation.  About 75% of Argentina’s beef exports went to China in 2020. 

·        
Argentina corn sales for 2020-21 reached 40.9 million tons as of the third week of September, up 3.7 million tons from this time last year.  Argentina produced about 50.7 million tons of corn in 2020-21. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 13,000 barrels (920-953 range) from the previous week and stocks up 84,000 barrels to 20.195 million.

 

Export
developments.

• None
  reported

 

 

Soybeans

·        
Soybeans are seeing support in part from November EU rapeseed trading 5.00 euros higher at a record 638.25 euros. 

·        
Brazil soybean basis is weaker this morning by 1-8 cents. 

·        
The ECB will see rain later this week that may lightly disrupt harvest progress. 

·        
CHS’s Myrtle Grove, LA, grain export terminal resumed operations. 

·        
Note Canada is on holiday Thursday.

·        
Argentine producers sold 30.5 million tons of soybeans from the 2020-21 crop, after adding nearly 500,000 for the week ending September 22, according to the AgMin.  Last season they were at 32.2 million tons.  About 43 million
tons of soybeans were produced in 2020-21. 

·        
Cash Rotterdam rapeseed oil prices are up 25-45 euros from early yesterday afternoon. 

·        
Offshore values are leading CBOT soybean oil 99 points higher and meal $2.40/short ton lower. 

·        
Malaysian palm futures increased 8 ringgit and cash was up $2.50/ton to 1,150/ton. 

·        
China soybean futures were up 0.5%, SBM down 1.1%, SBO up 1.0%, and meal 0.5%. 

·        
China cash crush margins were last 169 cents/bu on our analysis (175 previous) versus 159 cents late last week and 90 cents around a year ago. 

·        
Malaysia:

 

Export
Developments

• None
  reported

 

Wheat

·        
Wheat is higher on good import demand and higher EU wheat.  Algeria bought about 500,000 tons of wheat and Pakistan is seeing offers for 640,000 tons of wheat. 

·        
Paris December wheat was up 3.00 at 257.00 euros. 

·        
The USD was 20 points higher as of 7:47 am CT.

·        
US wheat production when updated on Thursday could end up at a 19-year low. 

·        
Russia’s AgMin reported wheat harvest at 74.2 million tons as of late September, down from 85.2 million tons same time last year. 

·        
Bangladesh plans to buy 100,000 tons of wheat from Russia in a government-to-government tender. 

 

Export
Developments. 

·        
Algeria bought about 500,000 tons of wheat, optional origin, at prices around $364/ton c&f for November 1-15 and November 16-30 shipment.  They last paid about $353 to $356.60/ton back in late August. 

·        
Pakistan’s lowest offer for 640,000 tons of wheat was $377.00/ton
for
shipment between January and February 2022. 

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

·        
Yesterday AgriCensus mentioned Japan bought 231,838 tons of food wheat, consisting of 114,502 tons US, 87,196 Canadian and 30,140 tons Australian. 

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

·        
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.