FI Morning Grain Comments 07/07/21

PDF attached

 

Good
morning.

 

This
morning the CBOT ag markets were mostly higher overnight led by soybeans on a more than expected drop in US soybean, winter wheat and spring wheat conditions, and technical rebound.  But corn and soybean oil turned lower after energy markets sold off.  Morning
weather models were mostly unchanged with some areas showing a slight improvement.  The evening model did indicate a little less rain for the far northern Great Plains and parts of Canada. 1-7 day looks like rains were shifted south for the upper central US. 
The US Midwest will trend drier during last half July.  Not that it will matter today but CBOT limits expand for the soybean complex and corn.  Margins for soybeans increased 2 percent.
https://www.cmegroup.com/trading/price-limits.html 

 

 

 

Crop
Conditions

 

Weather

1-7
DAY

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JULY 7, 2021

• Not
  many changes around the world today.
• U.S.
  crop weather still looks favorable for the next couple of weeks in the central and eastern Midwest, but a return of drier weather is not far off in the northern Plains, upper Midwest and southeastern Canada’s Prairies.
  
• Northern
  India’s rain potential remains good for this weekend and next week, although some of the predicted intensity has been reduced today over that of Tuesday.
  
• China
  is still plenty wet – if not a little too wet, but the outlook is favorable for the key coarse grain and oilseed production areas.
  
• Concern
  over dryness in parts of mainland Southeast Asia remains today
• The
  outlooks for Australia, Europe and the Commonwealth of Independent States has not changed overnight.
  
• Net
  drying is expected in parts of western Russia
• Russia’s
  eastern New Lands will get some rain and experience milder temperatures for the next week
• South
  America’s outlook is also unchanged with little threatening weather anticipated for a while. 

Source:
World Weather, Inc.

 

Bloomberg
Ag Calendar

Wednesday,
July 7:

• No
  major event scheduled

Thursday,
July 8:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Brazil’s
  Conab releases data on yield, area and output of corn and soybeans
• FAO
  World Food Price Index
• EIA
  weekly U.S. ethanol inventories, production
• Brazil
  Coffee Council Conference, Sao Paulo
• Port
  of Rouen data on French grain exports
• EARNINGS:
  Suedzucker, Agrana

Friday,
July 9:

• 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

Source:
Bloomberg and FI

 

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
258,438                 versus                   275000-500000  range

Corn                     
1,235,931             versus                   1000000-1500000             range

Soybeans           
206,152                 versus                   90000-300000                     range

 

 

Macros

 

Corn

• US
  corn futures
  are lower in the non-expiring months in part from soybean/corn spreading.  South Korea passed on corn.  Some analysts think China peaked on buying corn from the US and Ukraine.  US national corn condition was unchanged yesterday, as expected. 
  
• The
  latest crop ratings did prompt us to slightly lower our US spring, durum, corn and soybean crop yields.  For the next report, USDA will release initial surveyed spring and durum production.  August is the first survey for soybeans and corn, so we don’t see
  USDA adjusting soy & corn yields in the July report, but adjust production based on the new harvested area. 
  
• DTN: 
  Philippine pork imports rose six times from a year ago in April and May after the government cut import tariffs and increased allowed overseas purchases to stabilize supply and prices. 
  
• USDA
  US corn export inspections as of July 01, 2021 were 1,235,931 tons, within a range of trade expectations, above 1,033,703 tons previous week and compares to 1,034,629 tons year ago. Major countries included China for 405,166 tons, Mexico for 307,018 tons,
  and Japan for 294,513 tons.

 

Export
developments.

• South
  Korea’s NOFI passed on 138,000 tons of corn and bought 65,000 tons of feed wheat at $286.39/ton c&f for arrival in November. 
  
• Turkey
  seeks 440,000 tons of feed barley on July 12 for shipment between July 29 and August 16. 
  
• China
  plans to auction more than 130,000 tons of imported corn from the United States and Ukraine on July 9 (Sinograin).  123,954 US & 6,340 Ukraine. 
  

 

 

Soybeans

• The
  US soybean complex was higher overnight on technical buying, talk of drier weather for the Corn Belt last half July, and spreading against corn/wheat.  Soybean oil ended the overnight session mixed, selling off after energy prices eased a touch. 
  
• Malaysian
  Palm Oil Association’s (MPOA’s) projected a 1.6% monthly rise in June palm production. This compares to a Reuters survey looking for a 7% increase, a supportive feature. 
  
• China’s
  soybean complex traded lower but are leading CBOT higher, currency adjusted. 
  
• Offshore
  values are leading soybean oil 253 points higher and soybean meal $12.30/short ton higher. 
  
• Rotterdam
  rapeseed and soybean oil prices were mixed, and meal mostly 15-18 euros lower. 
  
• China:
  

• Malaysian
  palm oil:  

• Brazil
  June soybean exports fell to 11.112 million tons from 12.741 tons year earlier, and down about 26 percent from May, as China slows imports.  Normally nearly three fourths of Brazil’s June soybean exports head to China, but last month they accounted to 64 percent. 
  
• USDA
  US soybean export inspections as of July 01, 2021 were 206,152 tons, within a range of trade expectations, above 110,515 tons previous week and compares to 561,635 tons year ago. Major countries included Mexico for 91,287 tons, Japan for 42,267 tons, and Colombia
  for 19,005 tons.

 

 

Export
Developments

• Jordan
  saw offers for 120,000 tons of feed barley for Nov/Dec 2021 shipment. 

• Turkey’s
  TMO seeks 440,000 tons of animal feed barley on July 12 for July and August shipment.

 

Wheat

• US
  wheat was higher after US spring and winter wheat conditions, and an evening weather model forecast reducing rainfall prospects across the northern part of the Northern Plains near the Canada Border Monday into next Tuesday.  However, week two indicated an
  increase in precip.  KC ended the overnight session mixed. 
• North
  Dakota wheat association mentioned some of the spring wheat crop could be abandoned and/or cut for hay.  Yesterday’s crop conditions declined for the Dakota’s last week (2-3 points). 
  
• Montana
  spring crop conditions fell 14 points.  USDA declared another 10 Montana counties under drought emergency, bringing the total to 26 out of the 56 in all. 
  
• Agritel
  sees the Russia wheat crop at 82.3 million tons, down 3 percent from last year, and up from their previous forecast of 78.1 million tons. 
  
• The
  association of German farmers reported Germany will harvest about 22.82 million tons of winter wheat in 2021, up 5% on the year.  Rapeseed was expected to increase 6 percent to around 3.71 million tons. 
  
• September
  Paris wheat was up 1.75 euro at 200/ton.
• USDA
  US all-wheat export inspections as of July 01, 2021 were 258,438 tons, below a range of trade expectations, below 288,548 tons previous week and compares to 413,895 tons year ago. Major countries included Mexico for 85,937 tons, Taiwan for 50,897 tons, and
  Nigeria for 46,400 tons.

 

Export
Developments. 

• Algeria
  seeks 50,000 tons of milling wheat on July 8 for July shipment, valid until July 9.
  
• Thailand
  saw offers for 230,700 tons of animal feed wheat ($285-$287) for Aug-Sep shipment.
  
• South
  Korea’s MFG bought 65,000 tons of feed wheat at $286.86/ton for Sep 20-Oct 10 shipment. 
  
• Japan
  seeks 80,000 tons of feed wheat and 100,000 tons of barley on July 14. 
• Japan’s
  AgMin seeks 108,175 tons of food-quality wheat from the United States, Canada and Australia in a regular tender.

• Bangladesh’s
  seeks 50,000 tons of milling wheat on July 15.
• Bangladesh’s
  seeks 50,000 tons of milling wheat on July 18.

• Ethiopia
  seeks 400,000 tons of wheat on July 19. 

 

Rice/Other

• Bangladesh
  seeks 50,000 tons of rice from India.
  Separately…

• Bangladesh seeks 50,000 tons of rice on July 12.