FI Evening Grain Comments 09/08/21

PDF Attached

 

Grains and oilseeds in a sideways trade today following yesterday’s macro flush.  Traders are eyeing Friday’s USDA WASDE data as yield expectations vary.

 

WASHINGTON,
September 8, 2021—Private exporters reported to the U.S. Department of Agriculture export sales of 106,000 metric tons of soybeans for delivery to China during the 2021/2022 marketing year.

 

 

 

StatsCan
reported bearish stocks for July 31 Canadian canola and all-wheat.

 

 

 

 

 

Weather

1-7
day QPF total precipitation total

 

WORLD
WEATHER INC.

MOST
IMPORTANT WEATHER OF THE DAY

• Heavy
  rain will begin impacting Gujarat today and many areas from that state into northwestern Madhya Pradesh, southern Rajasthan and parts of Maharashtra are facing frequent rain during the next ten days with some of it to be excessive
  
• Flooding
  is a strong possibility and some damage to a few crops is possible
• Flooding
  rain is also expected this weekend through the first half of next week in southwestern Chhattisgarh, southwestern Odisha, northeastern Andhra Pradesh, northeastern Telangana and parts of eastern Maharashtra as a new monsoon depression evolves and comes inland
  from the Bay of Bengal
• Much
  needed drying is under way in portions of the North China Plain, Yellow River Valley and areas southward to the Yangtze River
• These
  areas have been quite wet recently with serious flooding from northeastern Sichuan and southern Shaanxi to Shandong and northern Jiangsu during the weekend and Monday
• Northeastern
  China will continue to receive frequent rain during the coming week to ten days maintaining wet field conditions in areas where summer crops should be filling, maturing and beginning to be harvested
• Tropical
  Storm Conson was still in the central Philippines today, but will move across southwestern Luzon Island and enter the South China Sea as a small tropical storm
• The
  storm produced another 5.00 inches of rain on southern Luzon Tuesday
• Conson
  will move across the South China Sea for the next few days while intensifying
  
• The
  storm may be a weak typhoon before impacting Hainan, China early next week.
  
• Super
  Typhoon Chanthu turned on a path that will bring the storm closer to the Philippines recently
• The
  center of the storm was 613 miles east northeast of Manila and 563 miles southeast of the northeastern most tip of Luzon Island, Philippines at 15.5 north, 130.8 east moving west southwesterly at 12 mph and producing maximum sustained wind speeds of 161 mph
• Chanthu
  will weaken somewhat, but will remain a major typhoon as it move more westerly later today and Thursday
• The
  storm will turn to the northwest late Thursday and Friday with the storm center passing very near to the northeastern tip of Luzon Island around 0600 GMT Friday.
  
• The
  storm center may be just far enough off the coast of Luzon to minimizing the impact, but damaging wind, flooding rain and rough seas will precede and accompany the storm
• Chanthu
  will then move toward eastern Guangdong and southwestern Fujian, China with landfall early next week as a weak typhoon or strong tropical storm
• Hurricane
  Larry remains a strong hurricane and will pass Bermuda to the east Friday and then impact Newfoundland, Canada during the weekend.
• The
  storm will induce some rough seas, strong wind and heavy rain briefly over Bermuda and more significantly over Newfoundland
• Tropical
  disturbance in the Gulf of Mexico is already spreading rain across the Florida Panhandle and into southwestern Georgia and southeastern Alabama this morning
  
• The
  disturbance may become better organized later today as it moves more significantly into the southeastern U.S.
  
• However,
  the system may not succeed in becoming a tropical depression until after it moves off the lower east coast of the U.S. late Thursday and Friday
• The
  storm will then move away from the U.S. and remain over open water
• Tropical
  wave over Central America this week will possibly emerge over the Bay of Campeche this weekend and spread its rain into northeastern Mexico, Texas and a part of Louisiana during the weekend and early part of next week
• This
  system will need to be monitored for possible development, although conditions do not appear to be very supportive of that – at least not based on the latest data
• U.S.
  weather will be very good for summer crop maturation and harvest progress in the central and northern Plains, Midwest, Delta and interior parts of the southeastern states
• Rain
  will fall in the southeastern states over the next few days due to the tropical disturbance that will move moving through northern Florida and southern Georgia later today into Friday
• Winter
  wheat planting should advance favorably in areas that recently received rain in the central Plains
• West
  Texas rainfall will be minimal until late next week when some rain is possible, but confidence is low
• Temperatures
  will be warm enough to induce better crop maturation conditions late this week and into the weekend when some 90-degree highs are expected
• Drought
  concerns remain in the U.S. Pacific Northwest, California and the interior western states, the northwestern U.S. Plains and southwestern Canada’s Prairies
• No
  change in this status is expected for a while
• U.S.
  temperatures in this coming week will be very warm to hot in the western U.S. from the high Plains region to the Pacific Coast excepting the Columbia River Basin where temperatures will be closer to normal
• Temperatures
  will be closer to normal in the Midwest, Delta and southeastern states with a few areas slightly cooler than usual
• U.S.
  temperatures next week will be warmer than usual in the Plains and interior western U.S. while seasonably warm to the east
• The
  bottom line for much of the U.S. key grain and oilseed production areas during the next two weeks will be favorable for late season crop development, crop maturation and harvesting, despite some greater rain potential next week. Wheat planting in the southwestern
  Plains should advance well with quick emergence for areas that just received rain this weekend.
  
• Good
  harvest weather is expected in Canada’s Prairies for a while with only a few brief bouts of rain expected in a part of the region that would disrupt fieldwork for any significant period of time.
• Ontario
  and Quebec weather will continue favorably mixed over the next two weeks for late season farming activity and harvesting of summer crops
• Australia
  experienced more frost and light freezes this morning in southeastern Queensland and northeastern New South Wales
  
• The
  cool conditions recently may have had some negative impact on production potentials
• Dryness
  is also a concern in Queensland where winter crops should be reproducing
• Australia
  needs greater rain in northern New South Wales, Queensland and northern parts of Western Australia to improve reproductive conditions for wheat and barley
• Southern
  Australia soil moisture is still rated favorably with little change likely
  
• Eastern
  Europe weather will be very good for harvest and early season winter crop planting over the next ten days
• Some
  winter crop areas in the Balkan Countries will continue in need of greater soil moisture, despite some dryness relief in the past week or two
  
• Western
  Europe will get some beneficial rain soon easing recent drying that has firmed up the ground in France
• Rain
  will be good for future winter crop planting, but it will disrupt farming activity including the maturation and harvest of summer crops
• Some
  southern CIS winter crop areas will need significant rain soon to support wheat, rye and barley germination, emergence and establishment
• The
  dry weather will be good for summer crop maturation and harvesting
• Very
  little rain is expected from Ukraine into the middle and lower Volga River Basin or Kazakhstan over the next ten days
• Waves
  of rain will impact northern Russia during the next ten days with the greater amounts expected in the New Lands
• Some
  delay in harvest progress is possible and there may be a little concern over small grain and sunseed crop quality if the rain prevails too long
• Recent
  cool weather in northern Russia did not have much impact on crops
• Additional
  cool weather is expected for a while which may induce more frost and freezes
• Frost
  and freezes will impact Russia’s eastern New Lands and a part of northern Kazakhstan early next week that will end the growing season, but have little impact on crops
• U.S.
  rainfall Tuesday was most significant in the eastern Midwest with a few totals over 1.00 inch in southeastern Illinois, west-central Indiana and parts of Michigan
• Not
  much other rain occurred in key crop areas, although erratic rainfall occurred in the southeastern states
• Heavy
  rain fell in northern Georgia and in east-central Florida where more than 3.00 and 2.00 inches occurred respectively
• Central
  America and southern and eastern Mexico will remain wet biased during the next ten days with near to above normal rainfall
• A
  tropical disturbance in the western Caribbean Sea late this week may move across the Yucatan Peninsula during the weekend and could become a tropical cyclone in the western Bay of Campeche during the weekend before impacting northeastern Mexico and southern
  Texas later next week
• Confidence
  is very low
• Argentina
  will get some lingering rain in the southeast and then trend drier for a while
• Recent
  moisture was good for wheat and for future planting of early corn and sunseed
• Rain
  will still be needed in Cordoba, parts of Santa Fe and Santiago del Estero where dryness will remain significant
• Brazil
  rainfall will be greatest again Monday into Tuesday in Rio Grande do Sul where some flooding will be possible in some of its rice and corn production region areas
• Rainfall
  elsewhere in Brazil will be more restricted; however, Northern Mato Grosso may experience some periodic showers over the next ten days
• Initial
  rainfall in Mato Grosso will be too light for early autumn soybean planting, but the environment may improve next week and later this month
• Coffee,
  citrus and sugarcane areas will stay mostly dry for another week to ten days, although some showers will occur in Sul de Minas Friday and Saturday
• Southeast
  Asia rainfall will remain sufficient to carry on favorable crop development from the mainland areas into the Philippines and Indonesia and Malaysia during the next ten days
• There
  is some potential for excessive rain and flooding in a part of mainland Southeast Asia
• Northeastern
  Luzon Island could experience flooding rain from Typhoon Chanthu later this week
• Rainfall
  will be lightest in parts of Sumatra and Peninsular Malaysia where some net drying is possible and the region will need to be closely monitored
• Temperatures
  will be a little cooler than usual
• New
  Zealand will be extra wet this week while temperature are little cooler than usual
• The
  entire nation will be wetter than usual especially in South Island
• Frost
  and freezes were noted during the weekend, but there should not have been any negative impact on crops
• Southern
  Oscillation Index was +7.68 today and the index has been steady rising over the past week.
  
• This
  week’s index will likely move a little more erratically and may drift lower for a little while
• South
  Africa rainfall should be mostly confined to the southeast early to mid-week this week with Natal most favored.
  
• West-Central
  Africa will get sufficient rainfall during the next ten days to support its coffee, cocoa, rice sugarcane and other crops
• Cotton
  in west-central Africa is rated favorable and has likely yielded well this year

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Wednesday,
Sept. 8:

• Meat
  Atlas 2021 – facts and figures about the animals people eat
• Canada’s
  StatsCan releases data on wheat, barley, canola and durum stockpiles

Thursday,
Sept. 9:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Conab report on yield, area and output of corn and soybeans
• Port
  of Rouen data on French grain exports
• UkrAgroConsult
  Black Sea oilseed conference

Friday,
Sept. 10:

• USDA’s
  monthly World Agricultural Supply and Demand Estimates (WASDE) report, noon
• China
  farm ministry’s CASDE outlook 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
• Malaysian
  Palm Oil Board data on August stockpiles, output and exports
• FranceAgriMer
  weekly update on crop conditions
• Malaysia
  Sept. 1-10 palm oil export data
• HOLIDAY:
  India

Source:
Bloomberg and FI

 

US
inventories (Reuters)

 

US
production (Reuters)

 

World
inventories (Reuters)

 

 

 

 

 

FSA
data for September was released after the bell following an inadvertent earlier release.

·        
Farmers enrolled 91.218 million acres corn in US crop subsidy programs including failed acres for 2021 as of September 1

·        
Farmers enrolled 49.323 million acres wheat in US crop subsidy programs including failed acres for 2021 as of September 1

·        
Farmers enrolled 86.184 million acres soybeans in US crop subsidy programs including failed acres for 2021 as of September 1

·        
US farmers report prevented plantings of 637,805 acres corn for 2021 as of September 1

·        
US farmers report prevented plantings of 336,563 acres soybeans for 2021 as of September 1

·        
US farmers report prevented plantings of 291,881 acres wheat for 2021 as of September 1

·        
 

The
following are comparisons of farmer-reported plantings in September 2021, August 2021 and September 2020, based on a survey of farms (all figures in thousands of acres):

U.S. grain and soy plantings
Prevented plantings (thousands of acres)
Crop	Sept. 1, 2021	Aug. 2, 2021	Sept. 1, 2020
Corn	638	620	6,078
Soybeans	337	316	1,451
Wheat	292	292	1,268
U.S. plantings including failed acres
Crop	Sept. 1, 2021	Aug. 2, 2021	Sept. 1, 2020
Corn	91,218	90,309	87,560
Soybeans	86,184	85,287	81,455
Wheat	49,323	48,808	45,947

Source:
USDA, Reuters and FI

 

Corn

·        
Corn reached the lowest level in two months this morning and managed to settle up a half-cent as traders weigh Friday’s USDA WASDE data. 

·        
Traders are looking for higher corn harvested area to be reported by USDA on Friday which pressed on the corn market today while yesterday’s worse-than-expected corn conditions underpinned the market. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 4,000 barrels (856-950 range) from the previous week and stocks up 2,000 barrels to 21.112 million.

 

Export
developments.

·        
South Korea’s NOFI rejected up to 69,000 tons of corn, 65,000 tons of feed wheat and 15,000 tons feed barley, due to high prices.  The corn and wheat was for arrival in South Korea in December 2021, and the barley in January 2022.
Lowest price for the corn was $317.95 a ton. 

·        
China plans to sell 133,753 tons of US corn on September 10 and 8,277 tons from Ukraine. 

 

 

 

Updated
8/20/21

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

 

 

 

 

Soybeans

·        
US soybeans closed higher on technical buying export demand.  Traders noted position squaring ahead of Friday’s WASDE report.

·        
Soymeal ended unchanged while soyoil traded lower on the session. 

·        
StatsCanada reported a bearish July 31 Canadian canola stocks of 1.767 million tons, 567,000 tons above trade expectations, but this seems to have little influence on US soybeans and ICE canola futures (November canola 9.10 @
7:50 am CT). 

 

 

USDA Attaché on China soybeans

China soybean imports are forecast at 101 million metric tons (MMT) in marketing year (MY) 21/22, up 3 MMT from the previous year. 

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Beijing_China%20-%20People%27s%20Republic%20of_09-01-2021

 

 

 

 

 

 

Export Developments

• Under the 24-hour announcement system, private exporters reported 106,000 tons of soybeans for delivery
  to China during the 2021-22 marketing year.

 

 

 

Updated 8/31/21

Soybeans – November $11.75-$14.50 range

Soybean meal – December $320-$395

Soybean oil – December 52-65 cent range

 

Wheat

·        
US Wheat finished lower on the firmer USD hurting export demand.  Harvest pressure for spring wheat and larger winter wheat sowings also weighed on the market. Global import demand is strong with Egypt, Algeria, and Pakistan in
for wheat but the US remains uncompetitive to cheaper EU and FSU wheat.  

·        
StatsCan reported a bearish July 31 all-wheat stocks of 5.705 million tons, 905,000 tons above an average trade guess and above 2020. 

·        
Ukraine exported 9.53 million tons of grain so far in the 2021-22 July-June season versus 8.86 million at the same point a year earlier.  That included 5.33 million tons of wheat, 2.88 million tons of barley and 1.28 million tons
of corn.

·        
India raised their purchase price for wheat they buy from farmers but there is backlash as it may not be enough of an increase to cover the cost of cultivation.  New-crop wheat was seen increasing by 2% to 2,015 rupees ($27.39)
per 100 kg.

·        
December Paris wheat settled down 0.25 at 242.00 euros. 

 

Export
Developments. 

·        
Egypt purchased 300,000 tons of Ukrainian and Russian wheat for October 25 through November 3 shipment.  The payment was said to be done using 180-day LC’s.  Details are below.

–
60,000 tons Ukrainian at $310.25 plus $32.90 freight totaling $343.15/ton c&f

–
60,000 tons Russian at $316.50 plus $27.30 freight totaling $343.80/ton c&f

–
60,000 tons Ukrainian at $312.90 plus $32.90 freight totaling $345.80/ton c&f

–
60,000 tons Ukrainian at $312.90 plus $32.90 freight totaling $345.80/ton c&f

–
60,000 tons Ukrainian at $312.90 plus $33.65 freight totaling $346.55/ton c&f

·        
Jordan passed on 120,000 tons of wheat for late December through February 14 shipment. 

·        
South Korea’s NOFI rejected up to 69,000 tons of corn, 65,000 tons of feed wheat and 15,000 tons feed barley, due to high prices.  The corn and wheat was for arrival in South Korea in December 2021, and the barley in January 2022. 
Lowest price for the feed wheat was $347.70 a ton c&f. 

·        
Algeria seeks at least 50,000 tons of barley for October shipment. 

·        
Japan’s Ministry in their regular SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival in Japan by Feb. 24, 2022, set to close on Sept. 15.

·        
Pakistan is tendering for 550,000 tons of wheat. On Tuesday they were seeing offers at around $369.50/ton and $386.60/ton. 

·        
The Philippines seek 112,000 tons of animal feed wheat on Sept. 9 for shipment in September and October in two 56,000 tons consignments.

·        
Jordan’s seeks 120,000 tons of animal feed barley on September 9 for Dec-Feb shipment. 

·        
Bangladesh’s state grains buyer seeks another 50,000 tons of milling wheat on September 16. 

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

 

Rice/Other

• (Bloomberg)
  — U.S. 2021-22 cotton production seen at 17.69m bales, 428,000 bales above USDA’s previous est., according to the avg in a Bloomberg survey of nine analysts.
  

Estimates
range from 17m to 18.45m bales

U.S.
ending stocks seen increasing by the same amount

Global
ending stocks seen 438,000 bales higher at 87.67m bales

 

 

Updated 9/7/21

December Chicago wheat is seen in a $6.80‐$8.00 range

December KC wheat is seen in a $6.80‐$8.15

December MN wheat is seen in a $8.45‐$9.50