FI Evening Grain Comments 09/09/21

PDF Attached

 

Speculative
selling sent most agriculture commodity futures lower.  USDA inadvertently released September FSA US prevented planting data yesterday suggesting a large upward revision in US corn acres and to a lesser extent, higher soybean planted area. 

 

 

WASHINGTON,
September 9, 2021—Private exporters reported to the U.S. Department of Agriculture export sales of 132,000 metric tons of soybeans for delivery to China during the 2021/2022 marketing year.

 

Friday
reports include export sales, S&D data, and official FSA prevented planting data. 

 

Conab
lowered their Brazil corn production estimate to 85.75 million tons from 86.65 million and compares to 102.6 million for 2019-20.  Brazil soybean production was estimated at 135.912 million, down slightly from 135.978 million in August and compares to 124.845
million in 2019-20.  Brazil’s wheat crop was seen at 8.156 million tons, down from 8.591 million in August and up from 6.235 million in 2020. 

 

 

Per
newswires data yesterday, FSA data suggests a higher US corn and soybean area for 2021.  A university extension school sees a 1.6 million implied upward revision in corn and 207,000-acre higher soybeans.  We are 1 million higher for corn and 500,000 acres
higher for soybeans. 

 

 

 

Weather

The
US weather forecaster CPC sees a 70-80% chance of La Nina developing for the Northern Hemisphere during the 2021-22 winter period. 

 

Source:
World Weather Inc. 

 

 

 

 

WORLD
WEATHER INC.

MOST
IMPORTANT WEATHER OF THE DAY

• Super
  Typhoon Chanthu’s predicted path shifted greatly overnight after brushing northeastern Luzon Island, Philippines tonight and Friday and then brushing Taiwan Saturday
  
• The
  storm then moves into the East China Sea instead of landfall in southern China as suggested Wednesday
• The
  storm now has potential to impact eastern China, South Korea and Japan
• The
  system stalls for a little while over the East China Sea and it could have influence on any one of these nations
  
• Eventually
  the storm will impact western Japan and southern South Korea, but it could also impact shipping to and from Shanghai, China
• At
  0900 GMT today the storm was 365 miles east of Manila, Philippines at 15.9 north, 126.8 east moving west northwesterly at 11 mph and producing maximum sustained wind speeds of nearly 150 mph
• Tropical
  storm force wind was occurring out 90 miles from the center of the storm while typhoon force wind was occurring out 25 miles
• Chanthu’s
  intensity will diminish over time and it will not be nearly as intense as it is today after reaching the East China Sea
• The
  storm should stay just far enough off the coasts of Luzon Island, Philippines and Taiwan to minimize its impact, although heavy rain, rough seas, flooding and excessive wind will impact both areas
• Tropical
  Storm Conson was located 241 miles west northwest of Manila, Philippines at 16.0 north, 116.6 east moving west northwesterly at 16 mph and producing maximum sustained wind speeds of 58 mph
• Tropical
  storm force wind was occurring out 45 miles from the storm center
• Conson
  will move west northwesterly through the weekend and will pass to the southwest of Hainan and may move inland over northern Vietnam north of Quang Tri this weekend or early next week
• The
  storm will slow its forward speed which will give it time to become a typhoon before getting close Hainan, China, but weakening is expected prior to landfall in Vietnam.
  
• Tropical
  Depression Mindy was moving off the coast of Georgia today and will move away from North America
• The
  storm produced 1.00 to 3.00 inches of rain Wednesday and overnight in northern Florida and southern Georgia, although local totals to 4.00 inches occurred near Tallahassee, Florida and over 6.00 inches occurred near the Port of St. Joe, Florida
• No
  damaging wind accompanied the storm inland.
• Mindy
  may diminish this weekend between the U.S. and Bermuda
• Hurricane
  Larry was passing to the east of Bermuda today and will reach Newfoundland, Canada this weekend
  
• The
  storm will produce some excessive wind, rain and flooding in southeastern Newfoundland where property damage is likely
• Bermuda
  will be impacted by rough seas, strong wind and a few showers and thunderstorms, but no damage is expected
• Tropical
  Storm Olaf was located 185 miles southeast of Cabo San Lucas, Mexico at 20.8 north, 108.1 west this morning
  
• The
  storm was close enough to southern Baja California to produce rain, rough seas and damaging wind later today and tonight. The storm will turn to the west Friday after impacting southern Baja California and weakening is expected
• Damage
  to fruit and vegetable crops will result along with a few tree crops and personal property
  
• Peak
  wind speeds this morning were reaching 70mph
• Strengthening
  is likely with the storm becoming a hurricane as it brushes the south tip of Baja California tonight and early Friday
• The
  storm will move away from North America this weekend while diminishing
• A
  tropical weather disturbance in Central America will likely shift northward over the next few days and will stay mostly over land until the weekend
• The
  system will move over the western Bay of Campeche in the southwestern Gulf of Mexico where it “may” evolve into a tropical depression during the late weekend and early part of next week
• The
  system will bring rain to eastern Mexico, the Texas coast and parts of Louisiana from the weekend into early next week
• No
  damaging wind is currently expected, but some brief periods of heavy rainfall are possible in each of the areas noted  above
• 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 during much of the next two weeks
• Periodic
  frontal systems are expected that will produce “some” rain, but disruptions to fieldwork should be brief
  
• The
  best weather for crop maturation and harvesting will occur through Sunday with little to no rain and mild to warm temperatures
• Rain
  will develop in the northern Plains and upper Midwest Monday at the same time tropical moisture reaches the central Gulf of Mexico coast
• These
  two weather features will merge over the eastern Midwest and Delta resulting in some enhanced rainfall during mid-week next week
  
• The
  precipitation will shift to the southeastern states late next week
• Rainfall
  will be greatest in the lower and eastern Midwest, Delta and a parts of eastern Texas
• Crop
  quality concerns may evolve for open boll cotton in Coastal Bend areas of Texas, but the impact should be low
• In
  the meantime, restricted rain will fall in the Great Plains north of Texas and some temperatures will be hot periodically
  
• Winter
  wheat planting should advance favorably in areas that recently received rain in the central Plains
• West
  Texas rainfall will be minimal for a while favoring crop development
• 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 in the eastern Midwest. Wheat
  planting in the southwestern Plains should advance well with quick emergence for areas that just received rain this weekend.
  

 

• Heavy
  rain will impact Gujarat, India periodically along with many areas in northwestern Madhya Pradesh, southern Rajasthan and parts of Maharashtra 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 southern portions of the North China Plain, Yellow River Valley and areas southward into the Yangtze River Basin
• Northern
  parts of this region 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 some periodic 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
• 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.

 

• Much
  needed rain is expected in southern Alberta and southwestern most Saskatchewan briefly this weekend with 0.20 to 0.80 inch of moisture resulting and locally more
• The
  precipitation will disrupt harvesting, but improve topsoil moisture for any winter wheat planting and establishment that is expected
• Ontario
  and Quebec weather will continue favorably mixed over the next two weeks for late season farming activity and harvesting of summer crops
• 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 over the coming week 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
• 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 will move across the Yucatan Peninsula during the weekend and could become a tropical depression 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 trend drier for a while, but more rain will evolve late in the weekend and early next week in eastern parts of the nation
• 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
• Showers
  will also occur in interior southern Brazil periodically in the coming week benefiting early corn planting and winter wheat
• 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 +7.35 today and the index has been moving in a narrow range this week
• The
  index will drift aimlessly for a 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

Thursday,
Sept. 9:

• CONAB
• EIA
  weekly U.S. ethanol inventories, production
• Port
  of Rouen data on French grain exports
• UkrAgroConsult
  Black Sea oilseed conference

Friday,
Sept. 10:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am

• 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)

 

 

 

Macros

US
Initial Jobless Claims Sep 4: 310K (est 335K; prevR 345K; prev 340K)

US
Continuing Claims Aug 28: 2783K (est 2730K; prevR 2805K; prev 2748K)

 

US
DoE Crude Oil Inventories (W/W) 03-Sep: -1528K (est -4750K; prev -7169K)

–
Distillate Inventories: -3141K (est -3500K; prev -1732K)

–
Cushing OK Crude Inventories: 1918K (prev 836K)

–
Gasoline Inventories: -7215K (est -3300K; prev 1290K)

–
Refinery Utilization: -9.40% (est -5.00%; prev -1.10%)

 

73
Counterparties Take $1107.659Bln At Fed’s Fixed-Rate Reverse Repo (prev $1115.229Bln, 71 Bidders)

 

Corn

·        
Corn ended lower on US harvest pressure and expectations for USDA to raise their US corn area and yield in its S&D update on Friday.  Contracts did stage a rebound led by the December position on lack of producer selling.  December
corn hit a 7-month low.  December corn held above its 200-day moving average of $5.04, adjusted to $504.50 after it closed at $5.10 (down 0.25). 

·        
Funds were even in corn. 

·        
Albion, MI posted corn basis at +190 for spot. Was at +165 earlier this week. 

·        
We heard on one farm in Dallas county IA, 224 acres was estimated at 300 bpa, a record.  The county is just west of Des Moines.  Corn yields around the Memphis area are reported to be in great shape and harvesting has been rapid
this week. 

·        
For USDA, we look for about a 1 million acre increase to the US corn area and the US corn yield to increase from 173.6 bu/ac to 174.6, below a trade guess of 175.8 bu/ac.  Note the 2020 US corn yield was 172.0 bu/ac, yet combined
good/excellent corn crop conditions are currently running 2 points below early September 2020. 

·        
WTI was under pressure as China releases crude oil reserves for the first time ever. 

·        
The Rosario Grains Exchange estimated Argentina’s corn crop at between 55 and 56 million tons versus previous 55 million.

 

Weekly
US ethanol production
was up 18,000 barrels (trade +4,000) from the previous week, snapping an 8-week downtrend, to 923,000 barrels.  Ethanol stocks were down 720,000 barrels to 20,390 million (trade +2,000), lowest level since June 4. 

 

 

 

 

Export
developments.

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

 

Rolling
corn contract

Source:
Reuters and FI

 

Updated
8/20/21

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

 

Soybeans

·        
US soybeans and soybean oil ended lower on follow through selling from expectations the US soybean crop will be upward revised by USDA on Friday. Soybean oil followed energies lower.  WTI crude oil was sharply lower (down 1.41
early afternoon).  Soybean harvest started in the far southern US.  Meal ended mixed on product spreading and higher lead indicated by offshore values.  

·        
Funds sold an estimated net 5,000 soybeans, were even in meal and sold 3,000 soybean oil. 

·        
The Rosario Grains Exchange estimated Argentina harvested 48.8 million tons of soybeans in 2021-22, down from a previous estimate of 49 million.

·        
Brazil truckers are blocking highways in several states related to “social and political events”.  Abiove think it will not have an impact on business.

·        
Abiove sees the 2021 Brazil soybean export campaign at 86 million tons from 86.7 million previously.  They see imports at 900,000 tons from 400,000 previous. 

·        
Indonesia palm oil exports in January-July increased  3% compared to last year.  Palm oil exports were 23.67 million tons in January-July, compared to 22.97 million tons in 2020.

·        
India’s Solvent Extractors’ Association of India (SEA) projected imports of edible oil could fall to their lowest in six years in 2020/21 to 13.1 million tons, from 13.2 million year earlier.

·        
Malaysian palm ended a 5-day winning streak by closing down 86 points and cash was off $12.50/ton.  MPOB Malaysian S&D August data due out Friday is expected to show a rise in palm oil inventories to highest level in over a year. 
September 1-10 palm export data will also be released.  China soybean futures were up 0.9%, meal down 0.9% and SBO down 0.1%.  Offshore values are leading SBO 6 points higher and meal $1.70 higher. 

 

 

Export
Developments

• Under
  the USDA 24-hour announcement system, private exporters export sales of 132,000 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

·        
Wheat ended lower despite another round of import tender announcements and a lower USD.  Technical selling and favorable global weather for winter grain planting progress pressured prices. 

·        
Funds sold an estimated net 9,000 soft wheat contracts. 

·        
December Paris wheat settled 2.50 euros, or 1.0%, lower at 239.50 euros ($283.35) a ton.  Paris wheat is at a one month low. 

·        
The US weather forecaster CPC sees a 70-80% chance of La Nina developing for the Northern Hemisphere during the 2021-22 winter period. 

 

Export
Developments. 

·        
Algeria bought at least 60,000 tons of barley for October shipment at $308-$309/ton c&f. 

·        
The Philippines bought 112,000 tons of feed wheat.  56,000 tons for shipment in September was expected to be sourced from India. 56,000 tons for shipment in October was expected to be sourced from Australia.

·        
Morocco seeks 363,000 tons of US wheat on September 21 for arrival by the end of the year. 

·        
Saudi Arabia seeks 360,000 tons of wheat on Friday for arrival in November. 

·        
Tunisia seeks 100,000 tons of soft wheat and 100,000 tons of barley on Friday for October through November shipment. 

·        
Jordan passed on feed barley and issued a new import tender for wheat. 

·        
Jordan seeks 120,000 tons of wheat on September 15 for last half December through first half February shipment. 

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

·        
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.

·        
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
9/9/21

December
Chicago wheat is seen in a $6.50‐$7.80 range (down 30, down 20)

December
KC wheat is seen in a $6.40‐$8.00 (down 40, down 15)

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