FI Morning Grain Comments 10/06/21

PDF attached

 

Good
morning.

 

Higher
trade in the soybean complex, corn, and wheat despite a 34-point higher trade in the USD and lower energy prices.  Malaysian palm and Paris rapeseed prices are at contract highs.  Results for Egypt’s wheat import tender should be out soon. China is back from
holiday Thursday evening (Friday trade).  Weekly US ethanol production and stocks are due out later this morning.  Trade estimates for the USDA S&D report may roll out as early as this evening. 

 

 

 

Weather

7-day

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 6, 2021

• Parts
  of Argentina will continue to struggle for significant rain in the coming week.
  
• Brazil’s
  southern crop areas will see frequent waves of rain resulting in a wetter than usual October from southeastern Paraguay and northern Rio Grande do Sul to southern Minas Gerais and Rio de Janeiro.
  
• Rainfall
  farther to the north in Brazil will be more sporadic and light in the next seven days with slowly increasing shower activity in the following week.
  
• U.S.
  weather has not changed much from that advertised Tuesday
• The
  most watched weather events will be those expected this weekend and next week in north-central parts of the U.S. and across eastern Canada’s Prairies where significant rain and some snow may fall.
  
• West
  Texas and the lower Delta weather will remain favorable while improving conditions occur in the northern U.S. Delta after too much rain fell last month and earlier this month.
  
• Too
  much rain will continue in the southeastern United States for a few more days, but improving conditions are expected this weekend into next week.
  
• Northern
  India will be drying down seasonably
• Northern
  China will remain too wet for many of its crops
• Western
  Russia will be mild to cool with limited precipitation for a while longer
• Relief
  from dryness is occurring from Italy into the lower Danube River Basin in southeastern Europe.
  
• Eastern
  Australia will get some rain over the next few days and the precipitation will be most welcome to future spring and summer crop planting. 
• South
  Africa winter crops are in good condition
• Southeast
  Asia rainfall has been favorable in recent weeks, but a little more rain may be needed in Sumatra and Java, Indonesia
• Southern
  Mexico and Central America will remain wet
• Colombia,
  Venezuela, Ecuador and Peru will see above average rainfall in the next couple of weeks
• A
  tropical cyclone is evolving in the South China Sea that will threaten Vietnam and southern China with heavy rain in the coming week
• Another
  tropical cyclone will form in the Philippines Sea during the next few days and it could become a very large storm with movement toward Taiwan, southeastern China and perhaps the Korean Peninsula and western Japan during the next ten days

 

Bloomberg
Ag Calendar

Wednesday,
Oct. 6:

• EIA
  weekly U.S. ethanol inventories, production
• Agricultural
  Technology and Food Salon, a virtual event organized by IFIC (Oct. 6-7)
• HOLIDAY:
  China

Thursday,
Oct. 7:

• FAO
  Food Price Index & cereals supply/demand brief
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, and beef, 8:30am
• Brazil’s
  Conab report on yield, area and output of corn and soybeans
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  China

Friday,
Oct. 8:

• Labor
  Department’s September jobs 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
• China’s
  CNGOIC to publish supply-demand reports on corn, soybeans, and other commodities
• FranceAgriMer
  weekly update on crop conditions

Monday

• U.S.
  crop conditions – corn, cotton, soybeans; winter wheat planted, 4pm

Tuesday

• USDA
  S&D’s, Crop production

Source:
Bloomberg and FI

 

 

 

 

Macros

 

US
ADP Employment Change Sep: 568K (est 430K; prev 374K)

 

Corn

·        
Corn is
higher following a mostly higher trade in wheat.  US harvesting pressure and a higher USD could limit gains. 

·        
The USDA Attaché updated their China corn balance and they show corn imports for this crop year at 20 million tons from 30 million tons for 2020-21.  Corn production for 2021-22 is forecast at 272 MMT, 1 MMT lower than USDA’s
official projection.  https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Beijing_China%20-%20People%27s%20Republic%20of_09-27-2021

·        
A Bloomberg poll looks for weekly US ethanol production to be up 10,000 barrels (900-945 range) from the previous week and stocks up 26,000 barrels to 20.246 million.

 

Export
developments.

• Turkey
  seeks 325,000 tons of feed corn on October 14 for November 14 through December 6 shipment. 
  

 

 

Soybeans

·        
Higher trade in the soybean complex. Today’s focus might be on soybean oil, in our opinion, as many related oilseed and vegetable oil markets continues to rally.  Malaysian palm futures settled at a record high. 

·        
European cash vegetable oils were also up sharply from this time yesterday morning. 

·        
November Paris rapeseed futures set another contract high at 678.75 euros a ton, currently up 14.75 at 676.75 euros. 

·        
China is back from holiday on Friday and it will be interesting how the markets react. 

·        
Malaysian palm futures rallied 134 MYR and cash was up a large $30.00/ton to $1,247.50/ton.

 

·        
November Paris rapeseed futures set another contract high at 678.25 euros a ton, currently up 15.50 at 677.50 euros. 

·        
The US midwestern central and eastern crop areas should see favorable rain through Thursday. 

·        
Argentina producers committed nearly 31 million tons of 2020-21 soybeans after seeing an increase of 464,200 tons for the week ending September 29.  BA Grains Exchange estimated 2020-21 production at 43.1 million tons. 

 

Export
Developments

• None
  reported

 

November
Paris rapeseed is at a contract high

Source:
Reuters and FI

 

Wheat

·        
Higher trade in wheat despite a 31-point higher trade in the USD and lower energy prices.

·        
Egypt seeks wheat for November 11-20 and/or November r21-30 shipment. 

·        
Some of the US HRW wheat areas are still in need of rain, specifically southern and far western Great Plains (eastern Colorado, western Oklahoma, and northern Texas). 

·        
Ukraine’s AgMin lowered their projection for the Ukraine grain production to 80.25 million tons from 80.63 million previous, but increased exports to 24.51 million tons from 23.8 million previously. 

 

Export
Developments. 

·        
Egypt seeks wheat for November 11-20 and/or November 21-30 shipment.  Lowest offer was $319.97 for November 11-30 shipment and lowest offer was $321.35/ton for November 21-30 shipment.

·        
Tunisia seeks 100,000 tons of durum wheat on October 7 for November 1-December 20 shipment. 

·        
Pakistan seeks 90,000 tons of optional origin wheat on October 13.  They already bought 550k and 575k since September 23. 

·        
Japan’s AgMin in a SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of feed barley on October 13 for arrival by February 24.

·        
Jordan passed on 120,000 tons of wheat. 

·        
Ethiopia seeks 300,000 tons of milling wheat on November 9.

·        
Japan seeks 130,963 tons of food wheat from the US, Canada, and Australia for December loading. 

·        
Taiwan seeks 48,000 tons of wheat on October 7 for November 25 and December 9 shipment. 

·        
Jordan seeks 120,000 tons of feed barley on October 7. 

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

·        
Turkey seeks 310,000 tons of feed barley, on Oct. 8. 

 

Rice/Other

·        
Mauritius seeks 6,000 tons of white rice on October 26 for January 1-March 31 shipment.