FI Evening Grain Comments 08/27/21

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WASHINGTON,
August 27, 2021—Private exporters reported to the U.S. Department of Agriculture the follow activity:

Export
sales of 129,000 metric tons of soybeans for delivery to China during the 2021/2022 marketing year; and

Export
sales of 150,000 metric tons of corn for delivery to Colombia during the 2021/2022 marketing year.

 

September
FND deliveries are Monday.  Spreading was again a feature today.  Meal and soybeans sold off while soybean oil rallied in the back months.  Chicago and KC wheat lost ground on lack of direction while MN wheat traded higher on concerns over global high protein
wheat supplies. 

 

 

 

Weather 

 

 

 

WORLD
WEATHER INC.

MOST
IMPORTANT WEATHER OF THE DAY

• U.S.
  Delta crop damage is expected to be significant from Tropical Storm Ida when it arrives as a major hurricane in the south.
  
• The
  storm will come inland wind speeds to 120mph
• not
  many crops are produced in southeastern Louisiana where the strongest wind, greatest storm surge and heaviest rain is expected
• Sugarcane
  will be most impacted in southeastern Louisiana
• The
  greatest wind speeds will likely drop to 90 mph as the storm moves far enough inland to start impacting more populated areas
• New
  Orleans should be protected from the highest wind speeds and this will not likely be another Katrina for New Orleans unless then storm shifts its path to the right and that still needs to be closely monitored
• Damage
  to crops farther north will be greatest in Mississippi and perhaps a few extreme northeastern Louisiana production areas – based on the current projected path
• Wind
  speeds of 40 to 60 mph will occur in southern Mississippi and 20 to 45 mph and a few stronger gusts in northern Mississippi
• Lighter
  winds will occur in northeastern Louisiana
• Cotton
  lodging is possible in southern most production areas
• Open
  boll cotton could be strung out of bolls, but that should not happen in too many areas since the bolls that are open are not fully open
• The
  potential for boll rot will rise for the cotton that is beginning to open bolls
• Corn
  in the lower Delta has been mostly harvested
• Corn
  in the northeastern part of the Delta could be lodged, but wind speeds should die down enough in that region to restrict damage
• Rice
  damage is possible due to the flooding and heavy rain
• Much
  of the most important rice production areas are in Arkansas where the impact from this storm is expected to be lightest as long as there is no westward shifting of the storm’s path
• Soybeans
  may be damaged in low-lying areas where flood water will be a problem
• Rainfall
  will vary from 8.00 to 12.00 inches and local totals over 15.00 inches with southeastern Louisiana and far southern Mississippi wettest
• Rainfall
  in the heart of Mississippi will range from 3.00 to 9.00 inches
• Rainfall
  in northeastern Louisiana will range from 2.00 to 5.00 inches
• Eastern
  Arkansas rainfall will vary from 1.00 to 3.00 inches and the same will be true for western Tennessee, based on the latest rainfall data this morning
• Remnants
  of Tropical Storm Ida will bring heavy rain to parts of Tennessee, southeastern Kentucky, the southern Appalachian Mountains and a few interior southeastern U.S. locations, but crop damage is not likely in those areas
• Western
  Cuba sugarcane will be damaged by Tropical Storm Ida today
• Central
  Cuba citrus and sugarcane areas will experience windy conditions with very heavy rainfall today and tonight
• Flooding
  may damage personal property, but crop losses are expected to be low
• Some
  citrus fruit droppage is possible in western production areas, but the impact should be low
• Sugarcane
  will be more seriously impacted, although only a small part of the nation’s total crop will be damaged and there will be some potential for recovery
• Recent
  rainfall in Canada’s eastern Prairies, the northeastern U.S. Plains and northern Midwest has improved crop and field conditions
• No
  further expansion of drought is expected
• Late
  season soybeans may benefit from the moisture with some higher yields
• Follow
  up rain is expected over the next ten days in each of these areas maintaining the same trends
• Northwestern
  U.S. Plains and southwestern Canada’s Prairies will continue to be too dry for a while longer, despite a few showers of limited significance
• U.S.
  southwestern Corn and Soybean Belt crop areas will experience at least another week to ten days of net drying
  
• Some
  crop stress is expected over time, although the impact on late season production may be low
• Most
  other U.S. Midwest crop areas will see a good mix of rain and sunshine along with seasonable temperatures during the next two weeks maintaining good crop development
• Portions
  of U.S. west-central and southern Plains will experience net drying during the next ten days, despite some isolated to scattered showers and thunderstorms at times
• U.S.
  temperatures will be warmer than usual in much of the west and central parts of the nation during the coming week and possibly for nearly two weeks
• Eastern
  U.S. temperatures will be seasonable in this first week of the outlook and a little cooler biased in the following week
• Southwest
  U.S. monsoon moisture may increase in the Arizona, New Mexico and the southern Rocky Mountain region next week
• The
  monsoon usually begins to withdraw in the second week of September
• Ontario
  and Quebec, Canada soil moisture is decreasing, but summer crop conditions remain very good
• Wheat
  harvesting has and will continue to advance favorably
• These
  trends will continue for the next ten days
• Argentina
  is still expected to see waves of rain next week that will help improve topsoil moisture for southern and eastern winter crop areas
• Showers
  in the west will be welcome, but may be a little too light for a serious improvement to soil moisture especially in Cordoba
• Brazil
  rainfall potentials were reduced again in center west and center south crop areas for the second half of next week and into the following weekend
• The
  reduction in rain was needed
• Most
  of the region is now advertised to be mostly dry after rain was advertised by computer modeling earlier this week for that region – the change will verify
• Coffee,
  citrus and sugarcane areas do not get much moisture and concern over premature coffee flowering has ended
  
• Rain
  is still needed to help freeze damaged crops recover before the growing season begins in late September and October
• Colombia,
  Venezuela, Central America and western and southern parts of Mexico will be plenty wet over the coming week to ten days
• Tropical
  storm Nora has formed off the southwest Mexico coast and will move up the coast this weekend and early next week producing torrential coastal rain and flooding
• Rainfall
  could vary from 10.00 to 20.00 inches in southwestern Mexico coastal states resulting in serious flooding, Mudslides and some potential damage to personal property, infrastructure and some crops.
• Some
  of this moisture will help to enhance southwestern U.S. rainfall and monsoon flow moisture next week
• India’s
  forecast today remains a little wetter for Gujarat and neighboring areas next week and into the following week
• The
  change was needed and if the rain falls as advertised some short term improvements to cotton, groundnut and other crop development potential will result
• Southern
  and eastern Gujarat and southern Rajasthan will benefit most from the rain
• Western
  and northern Rajasthan and Pakistan remain in a dry weather mode with little change likely for the next week to ten days
• Weather
  conditions elsewhere in India are quite favorable and summer crop production is expected to be good
• Australia’s
  winter crops remain favorably rated with little change likely in the next ten days
• The
  only exception is in Queensland and a few neighboring areas where there is need for rain especially with reproduction of wheat and barley coming soon
• Recent
  frost and freezes in Queensland may have impacted some of the region’s production potential, but most crops had not reached the most sensitive stage of reproduction which should minimize the impact.
  
• China
  has been reporting localized pockets of heavy rainfall recently, but no widespread excessive rain event has occurred
• Rainfall
  this month has been greater than desired for many crops in the nation and that could have some impact on production
• Flooding
  has occurred periodically and some of it may have damaged a few crops
• A
  part of northeastern China’s small grain crop is probably too wet and may be suffering a quality decline, but corn, soybeans, rice, sugarbeets and other crops are likely in favorable condition
• China
  needs to dry down, but is unlikely to do so for a while
• Parts
  of Western Europe will be dry through Wednesday
• Some
  showers will evolve briefly in western Europe during the latter part of the week and into the following weekend and then another period of drying is likely
  
• The
  drier weather may stress a few late season crops in France and the U.K., but it will be good for fieldwork and for expediting early season crop maturation
• Relief
  that comes next week will be beneficial
• Eastern
  Europe will experience frequent rainfall and milder than usual temperatures over the next week and then experience a short term bout of drier weather
• Some
  rain will fall in the Balkan Countries where dryness has been a threat to unirrigated summer crop production in recent weeks
• Russia’s
  New Lands and Kazakhstan have been drier biased this month.
• Crop
  conditions have been favorable except in and north of Kazakhstan where too much heat and dryness hurt wheat and sunseed production
  
• Net
  drying will continue for one more week and then some rain will be possible
• Western
  Russia summer crop conditions have been good and little change is expected
• Harvesting
  2021 crops and the planting of 2022 crops is occurring, but a little slower than desired in some of the wetter areas in western and northern Russia and neighboring areas.
  
• Southeast
  Asia crop areas will receive periodic showers and thunderstorms over the next two weeks
• West-central
  Africa rainfall over the next ten days will be sufficient to support most crops
• Coffee,
  cocoa, rice, sugarcane and cotton development has been and will continue to be good this year
• East-central
  Africa showers and thunderstorms have been and will continue to be timely and beneficial resulting in a good outlook for coffee, cocoa, rice, sugarcane and other crops that are produced from Ethiopia into Uganda and southwestern Kenya.
  
• Showers
  in South Africa will be erratic and light over the coming week
• The
  precipitation will benefit many wheat, barley and canola crops
• Southern
  Oscillation Index was +3.27 Sunday, and the index should move in a narrow range over the next week to ten days with some upward movement
  
• New
  Zealand weather will include near to below average rainfall during the next week with greater rain likely in the western parts of South Island in the first week of September
• Temperatures
  will be seasonable

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Sunday,
Aug. 29:

• Vietnam’s
  statistics office publishes August imports and exports of commodities

Monday,
Aug. 30:

• Canada’s
  StatCan releases production data for wheat, durum, canola, barley and soybeans
• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions – corn, cotton, soybeans; spring wheat harvest, 4pm
• Ivory
  Coast cocoa arrivals
• U.K.
  public holiday: agriculture futures contracts closed on ICE Futures Europe

Tuesday,
Aug. 31:

• U.S.
  agricultural prices paid and received
• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  Malaysia

Wednesday,
Sept. 1:

• EIA
  weekly U.S. ethanol inventories, production
• Australia
  Commodity Index
• U.S.
  DDGS production, corn for ethanol, 3pm
• Malaysia
  August palm oil export data (tentative)
• USDA
  soybean crush, 3pm

Thursday,
Sept. 2:

• FAO
  World Food Price Index
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Vietnam

Friday,
Sept. 3:

• 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
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  Vietnam

Source:
Bloomberg and FI

 

 

FND
delivery estimates:

 

StatsCan
is due out with Canadian production on Monday

 

 

 

Commitment
of Traders

 

 

 

 

 

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
190,324     -8,719    409,351     -4,960   -518,262     18,125

Soybeans           
22,251     -9,730    179,967        634   -179,566     16,559

Soyoil             
32,321       -778    118,307       -223   -157,918        571

CBOT
wheat         -19,233    -12,935    140,194        129   -111,530     11,645

KCBT
wheat          21,000       -821     67,405       -391    -90,933        717

=================================================================================

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
270,994     -7,918    228,513      1,298   -486,014     16,844

Soybeans           
83,225    -13,954     96,603      6,863   -154,473     15,748

Soymeal            
20,728     -7,012     86,629        625   -146,555     12,281

Soyoil             
66,987     -2,107    103,113       -543   -170,255      1,741

CBOT
wheat          11,982    -12,202     64,377      5,279    -81,735      7,245

KCBT
wheat          47,391        843     41,073       -362    -84,795      1,054

MGEX
wheat          15,932        904      3,248        134    -31,746       -368

                
———- ———- ———- ———- ———- ———-

Total
wheat         75,305    -10,455    108,698      5,051   -198,276      7,931

Live
cattle         92,649     21,876     84,673        409   -182,164    -20,486

Feeder
cattle       12,539      1,767      4,141       -655     -2,277       -594

Lean
hogs           79,207      2,187     59,330       -566   -133,852      1,835

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
67,921     -5,777    -81,412     -4,447  1,985,043     -4,225

Soybeans           
-2,701     -1,195    -22,653     -7,463    899,684     21,530

Soymeal            
17,377       -748     21,821     -5,147    404,589     -3,050

Soyoil             
-7,138        478      7,291        430    495,595     -6,509

CBOT
wheat          14,806     -1,482     -9,430      1,161    498,801      4,392

KCBT
wheat          -6,198     -2,029      2,528        495    259,263      2,334

MGEX
wheat           2,855        145      9,710       -815     80,280     -4,472

                
———- ———- ———- ———- ———- ———-

Total
wheat         11,463     -3,366      2,808        841    838,344      2,254

Live
cattle         26,901        971    -22,059     -2,770    355,004     26,563

Feeder
cattle       -1,111        266    -13,290       -785     59,259      2,662

Lean
hogs           12,652     -1,819    -17,336     -1,637    322,400        500

=================================================================================

 

 

Corn

·        
New-crop corn futures opened lower ahead of the weekend in part from rain prospects across the upper western Corn Belt but rallied to close higher on unwinding of soybean/corn spreads and strong cash prices across the US interior
and additional USDA corn sales.  Corn harvesting is advancing in the south and this could keep FOB export prices in check for the Gulf, but northern feedlots and ethanol plants are still feeling the pain from extremely high spot basis.  Dayton, OH corn basis
was up 20 cents to 200 over the Sep.  Cedar Rapids is 100 over.

·        
Funds bought an estimated net 3,000 corn contracts. 

·        
US weather outlook looks good over the near term with precipitation falling across the northern Midwest Saturday and central and eastern areas Sunday through Monday. North Dakota, Minnesota, Wisconsin, and Iowa over next three
days will see heavy rain. 

·        
China’s Sinograin sold 38,709 tons of imported corn at auction, 37% of the total offered. 

·        
WTI was $1.25 higher and USD 38 lower. 

·        
A USDA Attaché report on China pork outlook for 2022 calls for a 14% decrease in pork production, to 41.5 million tons, due to eroding hog margins and shrinking hog herds. 

 

China
hog feeding margins and hog prices.

Source:
Reuters and FI

 

Export
developments.

• Under
  the USDA 24-hour announcement system, private exporters sold 150,000 tons of corn for delivery to Colombia during the 2021-22 marketing year.
  
• South
  Korea’s KFA seeks up to 138,000 tons of optional origin corn on August 27 for arrival around November 25 and November 30. 
  

 

 

 

Updated
8/20/21

December
corn is seen in a $4.75-$6.00 range

 

Soybeans

·        
This morning the CBOT soybeans complex was under pressure led by soybean oil in part to uncertainty over US biofuel 2021 and 2022 mandates, but soybean oil rebounded in part to a rally in WTI crude oil and RBOB.  Soybeans and
soybean meal ended lower despite strong soybean demand.  USDA announced China bought 129,000 tons of soybeans under the 24-hour system.  China bought around 25 cargoes of soybeans this week from SA and the US. 

·        
Funds sold an estimated net 3,000 soybeans, sold 2,000 soybean meal, and bought 2,000 soybean oil. 

·        
We are hearing grain ships along the Paraguay River had to cut loads by as much as 50 percent due to low water levels. 

·        
Brazil is looking to lower their biodiesel blend rate to only 10 percent for November and December.  Sep/Oct was 12%.  In April (until Aug) they went to B10 from B13 due to price adjustments.  This is bearish as Brazil can export
a little more soybean oil than expected. 

·        
Indonesia set its September CPO reference price at $1185.26/ton, up from $1048.62/ton for August. 

·        
China cash crush margins were last positive 121 cents on our analysis (123 previous) versus 110 cents late last week and 90 cents around a year ago.

·        
Offshore values this morning were leading soybean oil 34 points higher (72 higher for the week to date) and meal $1.00 lower ($0.50 lower for the week).

·        
We are unsure India will import the full 1.2 million tons of GMO soybean meal the government recently approved as new-crop should be online by November.  India’s soybean crush is projected by the USDA to increase next crop year. 
India bought around 100,000 tons of Argentine soybean meal this week. 

·        
India’s issue with a shortfall in feed and vegetable oils is not a function of the size of last year’s soybean crop.  Instead, we may have to dig a little deeper into total oilseed production, crush, and imports.  Oilseed plantings
have expended slowly over the past several years.  Feed demand is likely growing at a faster rate than oilseed production.  We know Covid slowed vegetable oil imports and created logistical problems, but 1.2 million tons is a good size of soybean meal for
them to import before new-crop products come online.  Problem is the GMO soybean meal can only come into the country at two ports, and one of those ports cannot handle large ships, so India may partially have to bring the meal in via containers. 

 

 

Export
Developments

• Under
  the USDA 24-hour announcement system, private exporters sold 129,000 tons of soybeans for delivery to China during the 2021-22 marketing year. 
  

 

 

 

 

Updated
8/27/21

Soybeans
– November $11.75-$15.00

Soybean
meal – December $320-$425

Soybean
oil – December 52-67 cent range
(up 400, unchanged for the top end of range)

 

Wheat

·        
Wheat opened mixed on lack of direction.  MN grinded higher on concerns over global high protein wheat supplies.  The USD was 38 points lower, but this did little to support KC and Chicago wheat, which settled lower.  Funds sold
an estimated net 3,000 wheat contracts. 

·        
December Paris wheat was down 0.50 euros at 246.75. 

·        
France soft wheat harvest progress advanced 5 percent points to 96 percent complete as of August 23, less than what we expected, and is about two weeks behind normal. 

·        
SovEcon sees Russia’s wheat exports lowest in 5 years at 33.9 million tons, a 3.2-million-ton reduction from previous forecast.  Reuters last noted they are around 76.2 million tons for 2021 production, down from 85.9 million
from last year, but that figure may have been lowered for them to make such a large downward adjustment to exports.   

·        
Russia adjusted their wheat export tax by increasing it to $39.40/ton for next week from the current $31.70/ton.

·        
Ukraine exported 7 million tons of grain since July 1, up 10% from 6.4 million tons during the same period last season, including 3.4 million tons of wheat and 1.18 million tons of corn.  2.4 million tons of barley also had been
exported. 

 

US
Wheat Associates:

“The
HRW harvest has officially wrapped up as samples continue to be analyzed in the lab. SW harvest is progressing under dry conditions and data continue to reflect a stressed crop. HRS harvest is nearly 90% complete and this year’s crop currently grades at U.S.
No. 1 Dark Northern Spring. The first northern durum samples are in with the current grade a U.S. No. 2 Hard Amber Durum.”

 

 

Export
Developments. 

·        
Egypt seeks wheat for October 15 through October 25 shipment. 

·        
The Philippines seek 60,000 tons of feed wheat on August 27 for Sep/Oct shipment. 

·        
Pakistan seeks 550,000 tons of wheat on September 7 for October through November shipment. 

·        
Jordan seeks 120,000 tons of wheat on September 1. 

·        
Bangladesh seeks 50,000 tons wheat on September 1.

·        
Turkey seeks 300,000 tons of milling wheat on September 2 for September 10 through October 10 shipment.  They last bought 11.5% and 12.5% wheat on August 4 at $297.40-$308.90/ton c&f. 

·        
Taiwan weeks 48,875 tons of US wheat on September 3 for October 15-Novmeber 1 shipment.  They last bought US wheat on August 6, various classes at various prices. 

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

 

Rice/Other

• South
  Korea seeks 42,200 tons of rice for arrival in South Korea between February 28 and April 2022.  20,000 tons of that is of US origin, rest optional .
  
• Egypt
  seeks 200,000 tons of raw sugar for Oct-Dec shipment on August 28. 

 

Updated 8/17/21

December Chicago wheat is seen in a $6.80‐$8.25
range

December KC wheat is seen in a $6.60‐$8.00

December MN wheat is seen in a $8.45‐$9.80