FI Morning Grain Comments 07/16/21

PDF attached

 

Good
morning.

 

WASHINGTON,
July 16, 2021–Private exporters reported to the U.S. Department of Agriculture export sales of 134,000 metric tons of soft red winter wheat for delivery to China during the 2021/2022 marketing year.

 

USD
was up slightly and WTI moderately higher.  All three major US ag markets are higher this morning on positioning ahead of the weekend and weather concerns.  Wheat and soybeans are leading the charge.  Soybean oil rallied during the late 6 am CT hour to trade
over 50 points and is now up 6 consecutive days.  Malaysian palm futures were 43 higher and closed out the week up 6%.  Corn is higher following soybeans and wheat.  Concerns are rising over the Russian wheat crop size (heat wave across the Black Sea) and
adverse European weather (floods).  The theme for the US calling for restricted rain and hot temperatures for the WCB and upper Great Plains has not changed.  Past week rainfall should have benefitted crops.  On Monday we look for a 1-2 point improvement in
US corn conditions, up 1 in soybeans and spring wheat unchanged. 

 

 

Weather

Past
7 days

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JULY 16, 2021

• Today’s
  06z GFS model run brought heavy rain to southeastern Minnesota, northeastern Iowa and western Wisconsin during the second weekend of the forecast.
  
• That
  event is overdone and not likely to verify, although a few showers might occur.
  
• The
  general theme of weather has not changed overnight for North America.
• Canada’s
  Central and southern Prairies, the northwestern Corn Belt and northern U.S. Plains will have a tough time getting enough rain to make any difference in soil moisture event though some scattered storms are expected tonight and Saturday night in the Dakotas.
  
• Excessive
  heat is expected in some of these production areas next week and into the following weekend
• Showers
  are still advertised to ease dryness in Russia over the coming week to ten days
• Dryness
  will remain a concern for southern portions of Russia’s Southern Region and Kazakhstan during the next ten days
• Rain
  in southeastern Europe will help heal crop stress and dryness in the Balkan Countries.
  
• Less
  rain is expected in central Europe reducing concerns over small grain quality in France and Germany this weekend and next week
• China
  will be bracing for a tropical cyclone during mid-week next week
• Otherwise,
  scattered showers will continue to intermix with periods of rain
• Recent
  flooding in China damaged some crops and the drier outlook is very important
• India’s
  rainfall should improve in the coming week to ten days.
• Northwestern
  crop areas should finally get at least some rain
• Ghana
  and Ivory Coast will continue to dry down
• Coolness
  in Brazil will be mostly an issue for some of its wheat crop due to frost and freezes Tuesday and Wednesday
• No
  permanent crop damage is expected, but some of the crop may be burned back by the cold
• Corn
  is mature enough to withstand and frost or light freezes
• Coffee,
  citrus and sugarcane areas are not likely to encounter much potential for damaging cold, although a few patches of soft frost might occur Thursday and Friday
• Australia
  weather will remain favorably mixed
• Southeast
  Asia crop weather will continue either good or improving
• Argentina
  winter crops would benefit from some rain

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Friday,
July 16:

• 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
• Cocoa
  Association of Asia releases 2Q cocoa grinding data

Sunday,
July 18:

• China
  customs to publish trade data, including imports of corn, wheat, sugar and pork

Monday,
July 19:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions – corn, cotton, soybeans, wheat, 4pm
• Ivory
  Coast cocoa arrivals

Tuesday,
July 20:

• China
  customs to publish by-country breakdown for imports of farm goods including soy
• New
  Zealand global dairy trade auction
• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  Malaysia, Indonesia, Singapore

Wednesday,
July 21:

• EIA
  weekly U.S. ethanol inventories, production
• Malaysia
  July 1-20 palm oil export data
• HOLIDAY:
  India

Thursday,
July 22:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• USDA
  to release world supply-demand outlook for orange and its juice
• Port
  of Rouen data on French grain exports
• USDA
  total milk, red meat production
• U.S.
  cold storage data – pork, beef, poultry
• HOLIDAY:
  Japan

Friday,
July 23:

• 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
• U.S.
  cattle on feed, poultry slaughter, cattle inventory
• HOLIDAY:
  Japan

Source:
Bloomberg and FI

 

 

 

 

 

Macros

US
Retail Sales Advance (M/M) Jun: 0.6% (est -0.3%; prevR -1.7%; prev -1.3%)

US
Retail Sales Ex-Auto (M/M) Jun: 1.3% (est 0.4%; prevR -0.9%; prev -0.7%)

US
Retail Sales Ex-Auto, Gas (M/M) Jun: 1.1% (est 0.5%; prevR -1.0%; prev -0.8%)

US
Retail Sales Control Group Jun: 1.1% (est 0.4%; prevR -1.4%; prev -0.7%)

Canadian
Housing Starts Jun: 282.1K (est 270K; prevR 286.3K; prev 275.9K)

Canadian
International Securities Transactions May: 20.79B (prevR 9.90B; prev 9.95B)

Canadian
Wholesale Trade Sales (M/M) May: 0.5% (est 1.1%; prevR 0.6%; prev 0.4%)

 

 

Corn

• Corn
  is following soybeans and wheat higher.  Traders will be focused on US weather for the balance of July and early August as much of the US corn crop moves into the critical pollination phase. 
  
• Note
  corn will be ready to be cut in the far southern Delta in about 7-9 days. 
  
• The
  theme for the US calling for restricted rain and hot temperatures for the WCB and upper Great Plains has not changed.  Rain next week will be greatest across parts of the ECB and southeast.  Past week rainfall should have benefitted crops. On Monday we look
  for a 1-2 point improvement in US corn G/E ratings. 
• Brazilian
  companies started washing out some corn export contracts due to the unfavorable weather for the second corn crop.  Some of that corn maybe redirected to the domestic market.  Brazil purchases of Argentina corn topped a half a million tons this week. 
  
• A
  few cases of ASF were discovered in Germany, 2 at small farms. 
• China
  sold only 12,441 tons of imported US corn at an auction on Friday, 7% of the total offered. 
  
• Ukraine’s
  grain exports rose to 926,000 tons in the first half of July, up 206,000 tons from a year earlier (AgMin).
• The
  EPA reported US fuel blending credits rose in June than in May.  1.27 billion ethanol (D6) blending credits were generated in June, up from 1.26 billion in May.  For D4 biodiesel, 428 million blending credits were generated last month, up from 397 million
  the month prior.

 

Export
developments.

• Jordan
  seeks 120,000 tons of feed barley on July 28 for Nov/Dec shipment. 

 

Soybeans

• Soybeans
  are seeing a higher trade as parts of the US Corn Belt will see restricted rain over the next week.  Soybean oil rallied during the late 6 am CT hour to trade over 50 points and is now up 6 consecutive days.  Malaysian palm futures were 43 higher and closed
  out the week up 6%. 
• November
  Canadian canola rallied 7.40 before the CBOT day session open. 
• China
  cash crush margins continue to improve and are nearly flat on our analysis looking at new-crop positions. 
  
• JCI
  noted China is in need for soybeans for September coverage.  There were no USDA 24-hour soybean sales announcements. 
  
• Offshore
  values are leading SBO 77 points lower (227 lower for the week) and meal $4.50 higher ($1.60 higher for the week). 
  
• Rotterdam
  rapeseed and soybean oil prices were up about 15 to 20 euros and meal mostly 1-4 euros lower.
  
• Malaysian
  palm oil:  

• China
  

• NOPA
  released a bearish US crush figure for the month of June, but implied domestic soybean oil use and soybean meal exports were good.  The slowdown in crush was more obvious for the eastern regions of the US where soybeans are harder to source.  Others noted
  much needed downtime for plants.  We look for USDA to lower current crop year crush by at least 5 million bushels from 2.170 billion.  We were currently at 2.165 billion and may lower that projection to 2.160 billion.  The
  NOPA US soybean crush fell to a two-year low in June and was reported 7.1 million below expectations.  SBO stocks of 1.537 billion are lowest in eight months, off from 1.671 billion at the end of May and 1.778 billion at the end of June last year.  June soybean
  meal exports were 714,729 short tons, versus 714,377 short tons in May and 835,403 short tons in June 2020.

 

Export
Developments

• South
  Korea’s Agro-Fisheries & Food Trade Corp. seeks around 7,600 tons of GMO-free soybeans on July 21 for arrival in South Korea between Aug. 20 and Oct. 20.

 

Wheat

• Wheat
  is higher on global supply concerns and ongoing concerns over the state of the Northern Hemisphere spring wheat crop.  MN was up more than 20 cents this morning while Chicago rose more than 14 cents. 
  
• Under
  the 24-hour USDA announcement system, exporters sold 134,000 tons of soft red winter wheat to China. 
  
• U.S.
  northern Plains and Canada’s Prairies will see excessive heat developing this weekend through at least 7 days.  Extreme highs of 100 to 110 will be common. 
  
• There
  is a chance South Dakota will see some rain Sunday through Monday.

 

• US
  Wheat Associates: “Despite delays due to rain and humidity, HRW harvest is 38% complete in sampled states with 266 samples in the lab for testing. The SRW harvest is 90% complete and sample collection has ended. The PNW continues to trend hot and dry as harvest
  picks up pace; the first SW samples are being delivered to the lab this week. The HRS crop continues to mature at a faster than normal pace as the region struggles with prolonged drought. The northern durum growing region also needs rain.”
• Concerns
  are rising over the Russian wheat crop size (heat wave across the Black Sea) and adverse European weather (floods).  Extent of crop damage and transportation problems from the floods is not known at this time.  We are saddened to hear about the loss of life
  and property damage. 
• French
  soft wheat crop ratings declined by 3 points to 76% for the week ending July 12, well above 55% year ago. 
  

• September
  Paris wheat was up 3.75 at 212.50 euros. 

 

Export
Developments. 

• Under
  the 24-hour USDA announcement system, exporters sold 134,000 tons of soft red winter wheat to China. 
  
• Taiwan
  Flour Millers’ Association bought 50,000 tons of million wheat from the United States on July 16 for shipment from the U.S. Pacific Northwest coast between Aug. 31 and Sept. 14.
  
• Results
  awaited: Bangladesh’s seeks 50,000 tons of milling wheat on July 15.
• Results
  awaited:  Iran’s GTC seeks 60,000 tons of milling wheat for August and September shipment on Wednesday, July 14.
• Bangladesh’s
  seeks 50,000 tons of milling wheat on July 18.

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

• Pakistan’s
  TCP seeks 500,000 tons of wheat on July 27.  200,000 tons are for August shipment, and 300,000 tons are for September shipment.

 

Rice/Other

• South Korea seeks
  91,216 tons of rice from China, the United States and Vietnam for arrival in South Korea between Oct. 31, 2021, and April 30, 2022. 
  
• Bangladesh seeks
  50,000 tons of rice on July 18.  
• Mauritius seeks 6,000 tons of white rice on July 27 for October
  through December shipment.