FI Evening Grain Comments 10/08/21

PDF Attached does not include funds.  We will send that out separately in the Commitment of Traders email.  CFTC report is attached, however. 

 

Volatile
trade today with prices settling lower except for the oats market that staged a large rally and front month Minneapolis contracts.  Soybeans, corn, and Chicago wheat found early support from a lower USDA and a rally in soybean oil as related global vegetable
oils appreciated throughout the week.  Profit taking during the last half of the day session eventually weighed on prices. 

 

 

Weather

 

7-day

 

World
Weather Inc.

MOST
IMPORTANT WEATHER FOR THE COMING WEEK

• Northern
  China will experience drier weather over the next couple of weeks

o  
The change is very important since the region from the Yellow River Basin into a part of the northeastern Provinces have been saturated with moisture since mid-August except for a ten-day period in mid-September when adequate
soil moisture was noted

o  
Improved late season crop maturation and harvest progress will result

o  
Winter wheat planting and establishment will improve in the Yellow River Basin

• Southern
  China will experience heavy rain this weekend from coastal Guangdong into southern Guangxi and neighboring areas of northern Vietnam as Tropical Storm Lionrock impacts the region.
  
• Xinjiang,
  China will trend a little warmer over the next ten days, but especially today and Saturday and again toward mid-month

o  
Showers will disrupt farming activity later this weekend into early next week in northeastern parts of the province

• Tropical
  Storm Lionrock was located 310 miles east southeast of Hanoi, Vietnam near 18.7 north latitude, 110.6 east longitude moving northwesterly at 7 mph and producing maximum sustained wind speeds of 40 mph.
  

o  
The storm will intensify briefly today and then begin to weaken

o  
Lionrock will move across Hainan Island later today and tonight and then move into northern Vietnam during the weekend

o  
The storm’s greatest rainfall and convection will occur from Hainan and southwestern Guangdong, China to southern Guangxi and northeastern Vietnam

• Rain
  amounts of 4.00 to 12.00 inches will occur west of Hong Kong in western Guangdong, southern Guangxi and near the Guangxi/Vietnam border
• Rainfall
  farther to the north into Hunan, Guizhou and far southern Sichuan will range from 2.00 to 6.00 inches
  

o  
Flooding is expected in some china rice and sugarcane areas inducing a little minor damage

• A
  new tropical cyclone will form in the eastern Philippines Sea this weekend and move toward Taiwan and southeastern China

o  
The storm could impact Taiwan early next week with torrential rain, flooding, rough seas and some damaging wind

• Damage
  to rice and sugarcane will be possible

o  
The storm should break up over Taiwan and not be much of a threat to southeastern China, but it will need to be closely monitored

• Italy
  and some of the Balkan Countries have received some dryness easing rainfall this week

o  
Additional precipitation  is expected through the weekend and into early next week

• Favorable
  drying conditions will impact western Europe during the next full week and perhaps a little longer

o  
Aggressive summer crop harvesting and winter grain planting should result

• Northeastern
  Europe will receive light rain for a while next week, but drying this weekend will be good for farming activity
• Rain
  will return to western Ukraine, Belarus, the Baltic States and far western Russia next week

o  
Amounts will be light and the moisture will be good for the region’s winter crops

• Restricted
  rain will continue in Russia’s Volga Basin for the coming week, but previous rain has the crop becoming a little better established

o  
Cool temperatures in the past few weeks have limited aggressive establishment, but the crop should end up in fair shape

• Snow
  cover will be needed to protect the crop from any extreme temperatures that evolve during the winter
• Brazil’s
  weather this week has the ground plenty moist from southeastern Paraguay and much of Rio Grande do Sul into southern Minas Gerais

o  
The moisture boost has been most welcome to sugarcane, citrus and coffee

o  
Corn planting and establishment has been slowed along with some soybean planting

• Waves
  of rain will continue in interior southern Brazil over the next ten days maintaining wet field conditions which may slow the planting pace in some areas

o  
Showers will slowly increase in center west and northern parts of center south Brazil during the next two weeks

• The
  greatest rainfall is expected to occur near mid-month
• Argentina
  will receive some periodic showers and thunderstorms during the next week to ten days

o  
The moisture will be welcome wherever if falls, but not all areas will get rain and some of those that do might not get enough to fix areas of dryness

• Rain
  is needed in Cordoba, Santa Fe, Santiago del Estero and other areas farther to the north

o  
Winter wheat needs moisture in the west and central crop areas to support the best yield potentials

o  
Early corn and sunseed planting are advancing, but without significant moisture some of the crop is not expected to germination, emerge or establish very well

• U.S.
  southeastern states have been too wet during the past week

o  
Rain totals of 3.00 to more than 8.00 inches have impacted many areas east of the Delta to the Carolina and Georgia

• Some
  pockets of drier biased weather were noted, but some areas received rain nearly every day this week resulting in disrupted fieldwork and raised some concerns over crop condition
• Cotton
  in southwestern Georgia and southeastern Alabama was not impacted as much as other areas in Alabama, central and northern Georgia and the western Carolinas
  
• This
  region will dry down over the coming week to ten days
• U.S.
  Delta weather has been improving after it was impacted by too much rain earlier this month and in late September

o  
The trend will continue, although there will be some additional showers occurring infrequently over the next week to ten days

• South
  Texas may get some beneficial moisture at the end of next week

o  
The moisture would be extremely beneficial for recharging the soil with moisture before La Nina takes control and dries out the region over the winter

• West
  Texas cotton, corn, sorghum and peanut areas will receive very little rainfall for a while and that will support crop maturation and harvesting
• U.S.
  west-central and southwestern high Plains wheat areas will not likely get much precipitation for a while and that could lead to some poor emergence and establishment for unirrigated hard red winter wheat areas

o  
Crop moisture is more favorable farther to the east and establishment should advance a little better there with some timely precipitation

• U.S.
  Northern Plains and upper Midwest and eastern Canada’s Prairies will receive some very important rainfall and a little snow possibly during the coming full week

o  
Rain will impact North Dakota, northern Minnesota and southeastern Manitoba today into Sunday

• Moisture
  totals of 0.30 to 0.90 inch and local totals of 1.00 to 2.00 inches will be possible with eastern North Dakota to southeastern Manitoba wettest

o  
Rain and snow from Nebraska and Wyoming to Minnesota, Wisconsin, western Ontario and Manitoba during the middle part of next week will produce 0.75 to 2.00 inches of rain and locally more

o  
The moisture improvements expected in Manitoba and the Dakotas will be welcome and should help ease drought, although more moisture will be needed

• Montana
  and far northwestern North Dakota as well as the heart of Canada’s Prairies will not get relief from drought during the coming week and may continue to be quite dry going into the following week
• Interior
  parts of the U.S. Pacific Northwest will continue quite dry for the next ten days
• California
  precipitation will be minimal, although a few showers will occur in the Sierra Nevada briefly
• Southwestern
  U.S. crop areas will be dry biased over the next ten days
• Western
  Australia will be dry biased over the next ten days except near the southwest coast.
  
• Eastern
  Australia rainfall this weekend and early next week will be good for reproducing and filling winter crops in New South Wales and for future planting of spring and summer crops in both New South Wales and Queensland

o  
Drier weather for the following week should be sufficient to protect crop quality

• Colombia
  and western Venezuela may receive frequent rainfall in the next ten days impacting coffee, cocoa, sugarcane, rice, corn and many other production areas

o  
Most of the precipitation will not be excessive

• India’s
  monsoon is withdrawing from the north where mostly dry weather is expected over the next couple of weeks

o  
Rain will fall in southern parts of the nation during the next ten days supporting late season crops in the south

• Some
  of the rain will be heavy from Maharashtra to Telangana, Andhra Pradesh and southern Odisha
  

o  
Drying in the north will be good for crop maturation and harvest progress

• Too
  much rain too late in the season this year hurt the quality of early maturing cotton and a few other crops in the north
  
• Punjab,
  Haryana, and a few Rajasthan crops were most impacted by the wetter bias

o  
Drying in Gujarat will be good for crops

• Late
  season rainfall has been ideal for supporting crop production after planting got delayed in early summer by late arriving monsoonal rainfall
• Southeast
  Asia rainfall has been and will continue to be well distributed for rice, sugarcane, oil palm, coffee, cocoa, corn and a huge range of other crops

o  
Rainfall continues a little more erratic than usual in Sumatra and Java where there is need for greater rain, but the situation is not critical

• A
  tropical disturbance is also possible in the Bay of Bengal late next week and a close watch on the system is needed for possible impact on eastern India during the following weekend
• South
  Africa weather will trend drier and warmer over the next ten days

o  
The change will be good for general farming activity and for new season winter crop development

• The
  strong warming will accelerate drying and raise the need for more moisture over time
• Central
  Africa rainfall will continue periodic and timely for coffee, cocoa, sugarcane, cotton and rice through the next two weeks
• North
  Africa showers will be limited to Tunisia and far northeastern Algeria late this weekend into early next week with rainfall of 0.05 to 0.35 inch resulting
  

o  
Dry weather will continue farther to the west

• Mexico
  weather will include erratic rainfall during the next week with some potential for tropical cyclone to impact west-central parts of the nation next week, although confidence is low
• Central
  America weather will see an erratic rainfall distribution for a while with most areas getting at least some rain periodically

o  
Rain amounts will be lighter than usual except in Costa Rica and Panama where near normal amounts are expected

• New
  Zealand weather is expected to be well mixed over the next ten days with seasonable temperatures and precipitation
• Southern
  Oscillation Index was +11.04 this morning and the index will move erratically higher over the coming week

 

Bloomberg
Ag Calendar

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,
Oct. 11:

• Malaysian
  Palm Oil Board data for September stockpiles, production and exports, 12:30pm Kuala Lumpur time
• Malaysia
  Oct. 1-10 palm oil exports
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Argentina, Canada

Tuesday,
Oct. 12:

• USDA’s
  monthly World Agricultural Supply and Demand Estimates (WASDE) report, noon
• USDA
  export inspections – corn, soybeans, wheat, 11am
• China
  farm ministry’s CASDE outlook report
• U.S.
  crop conditions – corn, cotton, soybeans; winter wheat planted, 4pm
• AHDB
  grain market outlook conference
• French
  agriculture ministry’s crop production estimate
• EU
  weekly grain, oilseed import and export data
• Vietnam
  customs to release September commodity trade data
• HOLIDAY:
  Brazil

Wednesday,
Oct. 13:

• China’s
  first batch of September trade data, including imports of soybeans, meat and edible oils
• New
  Zealand food prices
• France
  AgriMer monthly grains report
• European
  cocoa grindings
• Brazil
  Unica cane crush, sugar output data (tentative)
• HOLIDAY:
  Thailand

Thursday,
Oct. 14:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• EIA
  weekly U.S. ethanol inventories, production
• Port
  of Rouen data on French grain exports
• North
  America cocoa grindings
• Suedzucker
  half-year earnings
• Agrana
  half-year earnings
• HOLIDAY:
  Hong Kong

Friday,
Oct. 15:

• 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
• U.S.
  monthly data on green coffee stockpiles
• Malaysia
  Oct. 1-15 palm oil exports
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  India

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

Commitment
of traders

 

 

 

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
170,955        830    384,251      3,776   -496,346    -11,228

Soybeans         
    -258     -9,438    179,201      6,073   -144,955     11,687

Soyoil             
50,315     23,918    118,523      2,847   -178,568    -30,741

CBOT
wheat         -24,782     12,287    133,440     -4,085    -98,174     -4,840

KCBT
wheat          27,336      4,946     57,376         93    -85,731     -7,375

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

 

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn              
250,596      5,854    217,515    -10,062   -469,682    -10,194

Soybeans           
49,453     -9,858    104,770      4,472   -120,937     10,506

Soymeal           
-32,064    -17,100     85,351      2,847    -95,223     11,799

Soyoil             
75,178     27,689     98,072       -748   -185,128    -31,099

CBOT
wheat           5,212     15,027     83,343     -7,790    -76,031      1,498

KCBT
wheat          49,946      3,819     33,489        238    -78,648     -7,248

MGEX
wheat          15,337        549      1,509        -98    -29,305        370

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

Total
wheat         70,495     19,395    118,341     -7,650   -183,984     -5,380

 

 

Live
cattle         25,157     -3,613     85,660     -1,266   -123,476      4,609

Feeder
cattle       -4,264     -1,894      3,880        240      2,425        660

Lean
hogs           75,146      9,513     57,264      1,385   -127,743     -6,481

 

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn               
60,431      7,780    -58,859      6,621  1,826,338      1,566

Soybeans              
701      3,202    -33,989     -8,322    908,200     36,858

Soymeal            
19,167       -893     22,769      3,347    444,953     47,757

Soyoil              
2,147        184      9,731      3,976    448,531     10,339

CBOT
wheat          -2,038     -5,372    -10,485     -3,362    459,518     29,427

KCBT
wheat          -5,807        854      1,019      2,336    256,057     11,531

MGEX
wheat           6,318       -413      6,141       -409     80,853      1,471

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

Total
wheat         -1,527     -4,931     -3,325     -1,435    796,428     42,429

 

 

Live
cattle         21,158     -1,491     -8,499      1,761    334,237    -16,447

Feeder
cattle          558        306     -2,600        688     47,981       -126

Lean
hogs           13,570     -1,233    -18,237     -3,183    324,041     19,164

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

Source:
CFTC, Reuters and FI

 

Macros

WTI
Crude Hits $80 a Barrel for First Time Since 2014

 

US
Change In Nonfarm Payrolls Sep: 194K (est 500K; prevR 366K; prev 235K)

US
Unemployment Rate Sep: 4.8% (est 5.1%; prev 5.2%)

US
Average Hourly Earnings (M/M) Sep: 0.6% (est 0.4%; prevR 0.4%; prev 0.6%)

US
Average Hourly Earnings (Y/Y) Sep: 4.6% (est 4.6%; prevR 4.0%; prev 4.3%)

US
Change In Private Payrolls Sep: 317K (est 450K; prevR 332K; prev 243K)

US
Change In Manufacturing Payrolls Sep: 26K (est 25K; prevR 31K; prev 37K)

US
Average Weekly Hours All Employees Sep: 34.8 (est 34.7; prev 34.7)

US
Labour Force Participation Rate Sep: 61.6% (est 61.8%; prev 61.7%)

US
Underemployment Rate Sep: 8.5% (prev 8.8%)

 

Canadian
Net Change In Employment Sep: 157.1K (est 60.0K; prev 90.2K)

Canadian
Full Time Employment Change Sep: 193.6K (prev 68.5K)

Canadian
Part Time Employment Change Sep: -36.5K (prev 21.7K)

Canadian
Unemployment Rate Sep: 6.9% (est 6.9%; prev 7.1%)

Canadian
Hourly Wages Rate Permanent Employees (Y/Y) Sep: 1.7% (est 1.8%; prev 1.2%)

Canadian
Participation Rate Sep: 65.5% (est 65.2%; prev 65.1%)

 

US
Wholesale Trade Sales (M/M) Aug: -1.1% (est 0.9%; prev 2.0%; prevR 2.1%) ***

 

Corn

·        
Higher trade to start in corn but futures fell towards late session trading on profit taking.  Higher energy prices and a lower USD supported corn early but prices caved on talk of US harvesting pressure and some long lifting
profits off the table ahead of the weekend.  Parts of the upper Great Plains and western Corn Belt will see rain this weekend that will slow harvesting, but in our opinion, producers are focused on getting soybeans out of the ground before corn anyway.  Parts
of northern China saw and will continue to receive too much rain, but we still expect a bumper crop this year. 

·        
WTI crude oil today hit $80/barrel, highest level since 2014. 

·        
Oats made a fresh new lifetime high overnight.  What is impressive today was the 32.25 cent increase in the December contract to 6.55/bu while corn fell 4.00 cents to 5.30/bu. 

·        
The Bloomberg fertilizer index hit a record today and some traders are concerned US 2022 US corn plantings could be slightly hindered this spring. 

·        
Mexican safety regulators rejected a new variety of GMO corn for the first time, signaling a move that they are trying to phase out domestic GMO corn use. 

·        
FranceAgriMer estimated 7% of French corn crop had been harvested by Oct. 4, up from 2% a week earlier and well below 47% progress a year ago. 

·        
China harvesting across the northern corn production areas have seen heavy rains delaying harvesting progress.  China still looks for a large corn crop.  The rains were so heavy that some producers in Shanxi province were pumping
water out of flooded fields. 

·        
US RINs have been firming recently.

 

Export
developments.

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

 

Updated
10/4/21

December
corn is seen in a $4.85-$5.65 range

March
corn is seen in a $5.00-$5.80 range.

December
oats could trade as high as $7.00/bu if this rally continues. 

 

 

Soybeans

·        
Overnight CBOT soybeans rallied after China trading resumed after a one-week holiday, and another leg up in global vegetable oil prices.  China soybeans rallied 3.4%.  We also heard there was Chinese interest in soybeans, bit
there were no 24-hour announcements.  But as day trading went along, soybean oil started to lose steam, perhaps from profit taking (Dec oil share was at a contract high that held that level as settlement) that eventually triggered sell stops.  December soybean
oil traded in a wide range, an indication like other cash and future global oil prices swings this week, the trade is looking for direction.  Our general feeling is that if energy prices rally, look for general appreciation in soybean oil. Sunday evening’s
open may depend on where WTI and Brent crude oil opens, as oil prices may have a good influence not only on soybean oil, but palm oil as well.   Soybean meal ended lower despite unwinding of oil/meal spreading. 

·        
December SBO oil share

·        
November Paris rapeseed futures hit another contract high but fell 10.25 to 667.50 euros. 

·        
On Friday Malaysian palm futures settled at 4,966 ringgit; 117 points higher for the day. The December palm contract was up 10 percent this week. Cash palm was up $25/ton. 

·        
GAPKI reported Indonesia August palm oil exports, including refined products, were up 59% year on year to 4.27 million tons. India and China demand is very good.  Indonesia crude palm production was 4.56 million tons in August
and stocks were 3.43 million tons.

·        
Rotterdam cash rapeseed oil hit new highs this week.  Oil World noted the nearby positions rocketed to around $182-$1850/ton.  

·        
Reuters on Friday in article noted Brazil’s Paranagua port exported 419,314 tons of soymeal last month, a 35% rise from August and almost 33% higher from September 2020.  This comes after Argentina shipping woes slowed exports. 
But official country statistics suggest all of Brazil exported 1.31 million tons of soybeans meal during September, down from 1.57 million tons a year earlier and 1.54 million tons during August 2021.  In comparison, Argentina shipped about 2.7 million tons
of soybean meal versus 2.36 million a year ago and 2.67 million tons during August 2020. 

·        
Argentina’s markets were closed Friday and will be closed Monday for local holidays. 

·        
China cash crush margins were last 187 cents/bu on our analysis versus 176 cents late last week and 88 cents around a year ago. 

 

Export
Developments

• None
  reported

 

 

Updated
10/05/21

Soybeans
– November $12.00-$13.50 range, March $12.00-$14.00

Soybean
meal – December $305-$360, March $300-$3.80

Soybean
oil – December 60-67 cent range, March 58-67.50

 

Wheat

·        
Wheat started higher on a lower USD and strength in outside related commodity markets but ended lower in Chicago and KC on fund selling after soybeans turned lower.  Minneapolis caught a bid on persistent dryness across parts
of Canada and Russia.  Ukraine is expected to trend dryer over the short term.  In addition, global supplies for high protein wheat are shrinking from good global demand.   

·        
December Paris wheat established a new contract high but settled 0.50 euro lower at 269 euros. 

·        
Russia plans to raise the export taxes on all grains for the October 13-19 period.  Wheat will be raised $0.90 cents to $58.70/ton.  Barley increases by $6.30/ton to $49.30/mt.  Corn will go up $2/ton to $47.20. 

·        
Ukraine’s 2021 grain harvest was 70 percent complete, or 49.4 million tons, including 32.3 million tons of wheat, 9.6 million barley and 4.2 million tons of corn.

·        
The US Great Plains will be mostly dry through Sunday then rain develops across OK, KS, and northern TX on Monday. 

 

Export
Developments. 

·        
The Philippines bought at least 56,000 tons (224k sought) of feed wheat at $365/ton
for
shipment between December 2021 and March 2022. 

·        
Turkey bought 310,000 tons of feed barley for November shipment at between $310 and $319.90/ton. 

·        
Japan bought 130,963 tons of food wheat.  Original details below. 

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

·        
Jordan issued a new import tender for 120,000 tons of wheat set to close October 13. 

·        
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.

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

 

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

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

 

Rice/Other

·        
(Bloomberg) — U.S. 2021-22 cotton ending stocks seen at 3.44m bales, 264,000 bales below USDA’s previous est., according to the avg in a Bloomberg survey of 11 analysts.

Estimates
range from 3.16m to 3.75m bales

Global
ending stocks seen 181,000 bales lower at 86.5m bales

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

 

Updated
9/30/21

December
Chicago wheat is seen in a $7.00‐$7.75 range, March $6.50-$7.75

December
KC wheat is seen in a $6.95‐$7.80, March $6.75-$8.00

December
MN wheat is seen in a $8.65‐$9.75, March $8.50-$9.75