FI Morning Grain Comments 07/27/21

PDF attached

 

Good
morning.

 

Corn
and soybeans are higher on a lower than expected decline in US crop ratings and support from outside markets.  SA corn premiums are supportive for corn.  Wheat is higher on renewed global import demand. 

 

 

 

 

Weather

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JULY 27, 2021

• Not
  much has changed around the world overnight.
• Rain
  is expected Friday from South Dakota through eastern Nebraska and southwestern Iowa to Missouri and northeastern Kansas which will be very important for those areas after hot weather today into Thursday.
  
• Extreme
  highs in the northern and central Plains and westernmost Corn Belt will reach 100 to 108 degrees Fahrenheit over the next three days.
  
• Another
  bout of heat is expected early to mid-week next week followed by another bout of cooling into mid-month.
  
• Crop
  moisture stress will remain most serious in Canada’s Prairies (outside of central, northern and far western Alberta), the northern U.S. Plains and a part of the northwestern U.S. Corn and Soybean Belt.
  
• Worry
  over frost and freezes remains for southern Brazil grain, coffee, citrus and sugarcane areas for Friday through the weekend
  
• Argentina
  is already in the midst of a big cool down.
• Central
  Europe will be rainy for a few days slowing small grain harvesting
• Russia’s
  Southern Region into Kazakhstan will remain quite dry.
• China’s
  flooding rain from Tropical Storm In-Fa will continue to shift northeast today and Wednesday
  
• India’s
  greatest rain will concentrate on the central and north parts of the nation while the south remains drier than usual.
  
• Queensland,
  Australia will remain dry for a while along with northern New South Wales while timely rain occurs elsewhere in the nation. 
• Ghana
  and Ivory Coast will remain dry for a while, but some of that is normal for this time of year
• Recent
  rain in Laos, eastern Thailand and western Myanmar as well as a few areas in Cambodia has been welcome, but more rain is needed in western Thailand, Vietnam and parts of Myanmar
• The
  Southern Oscillation Index is peaking around 15.86 after an amazing rise from -3.36 in late June
• La
  Nina forecasts have not changed much, although the NOAA model did reduce some of the aggressiveness of La Nina development with the event now more likely in the fourth quarter as advertised by World Weather, Inc. earlier this year.
  

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Tuesday,
July 27:

• EU
  weekly grain, oilseed import and export data
• UN
  Food Systems Pre-Summit in Rome
• EARNINGS:
  ADM

Wednesday,
July 28:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil
  Unica cane crush, sugar production (tentative)
• UN
  Food Systems Pre-Summit in Rome
• HOLIDAY:
  Thailand
• EARNINGS:
  Bunge, Pilgrim’s Pride

Thursday,
July 29:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports

Friday,
July 30:

• 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.
  agricultural prices paid, received

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
477,964                 versus   300000-600000  range

Corn                     
1,036,910             versus   700000-1200000                range

Soybeans           
241,897                 versus   90000-300000                     range

 

Macros

Archer-Daniels
Midland Q2 EPS $1.33 Beats $0.99 Est., Sales $22.93B Beat $17.88B Est.

 

Corn

• Corn
  is higher on a lower than expected decline in US crop ratings.  SA corn premiums are supportive with Argentina registrations slowing this week due to recent heavy sales of corn to Brazil and logistical issues upriver. 
  
• Private
  group Soybean and Corn Advisory lowered their estimate for the Brazil corn crop to 86 million tons from 88MMT, and increased Argentina by 1MMT to 48 million.
  
• Per
  Fastmarkets, domestic price of Brazilian corn is on the rise in part to a pickup in exports mid-July, with Cepea reporting over 100 real per bag – highest since May.  Fastmarkets calculates a 3.2 million ton Argentina corn export lineup, which is large. 
  
• AgRural
  reported the Brazil center-south second corn harvest progress at 39% complete, well down from 53% year earlier.
  
• US
  corn conditions fell one point to 64 percent good/excellent, one point below a 5-year average.  Traders were looking for US corn conditions to be unchanged from the previous week.  IL was up 3, IN unchanged and IA down 3.  ND was down 8, KS down 5, CO down
  4, and MN fell 4 points.  MI increased 8 points. 
• China
  will auction off 202,264 tons of imported US corn and 49,695 tons of imported Ukrainian corn on July 30. 
  
• China
  pork prices averaged 20.01 yuan (about 3.1 U.S. dollars) per kg in June, down 16.6 percent month on month. The price index dropped 54.1 percent compared with the same period last year.  (Bloomberg)
• USDA
  US corn export inspections as of July 22, 2021 were 1,036,910 tons, within a range of trade expectations, below 1,076,668 tons previous week and compares to 840,796 tons year ago. Major countries included China for 489,820 tons, Japan for 251,546 tons, and
  Mexico for 213,778 tons.
• JBS
  noted they purchased 30 shiploads of corn from Argentina for their Brazil feedlots, about 25% of the corn it is using as feed (surpassing 1 million tons). 
  
• Argentina
  declared a 180-day state of water emergency. 

 

Export
developments.

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

 

 

Soybeans

• Soybean
  complex is higher on a lower than expected decline in US crop ratings and support from outside markets.  Soybean meal is gaining on SBO on product spreading. 
  
• US
  soybean conditions fell an unexpected 2 points to 58 percent, below a 5-year average of 64 percent.  Traders were looking for US soybean conditions to be unchanged.  IL increased 4 points, IM was down 1 and IA declined 5 points.  KS fell 6 and MN dropped 7. 
  MI increased 8 points and Missouri was up 5. 

• CBOT
  soybean complex registrations were unchanged.

• November
  Canadian canola was down 7.70 at $888.70/ton as of 7:26 am CT. 
• Offshore
  values are leading SBO 29 points lower and meal $3.30 higher. 
• Rotterdam
  oils were mixed euros higher and meal 4-9 euros higher. 
• China
  cash crush margins were last negative 2 cents on our analysis (previous negative 2), versus negative 9 cents late last week. 
  
• Indonesia’s
  biodiesel production was 4.56 million kiloliters in January to June (APROBI).  Indonesia Domestic biodiesel consumption in the same period stood at 4.17 million kiloliters and exports were  21,809 kiloliters.
• SGS
  reported Malaysia July 1-25 palm oil exports down 1.5% to 1,150,452 tons (in line with other estimates). 
  
• Malaysian
  palm oil:  

• China
  

• USDA
  US soybean export inspections as of July 22, 2021 were 241,897 tons, within a range of trade expectations, above 143,934 tons previous week and compares to 505,331 tons year ago. Major countries included Mexico for 106,726 tons, Bangladesh for 59,547 tons,
  and Indonesia for 20,177 tons.

 

Export
Developments

• The
  USDA seeks 2,880 tons of packaged oil for use under the PL480 program on August 3 for Sep 1-30 shipment. 
  

 

December
oil share

Source:
Reuters and FI

 

Wheat

• Wheat
  is higher on renewed global import demand. 
• Egypt
  is in for wheat with lowest offer at $244.50/ton for 60,000 tons of Ukrainian wheat. 
  
• The
  US spring wheat tour starts today.
• US
  spring wheat conditions fell two points to nine for the good/excellent categories. Traders were looking for a one point drop in US spring wheat conditions.  Montana was down 8 and Minnesota off 6.  Idaho increased 5 points. 
  
• We
  lowered our spring and durum wheat production estimate but remain close to USDA’s latest estimate. 
  We may adjust lower our spring and durum yield for the purpose of the August USDA
  Crop
  Production
  survey based results of this week’s spring wheat crop tour. 
  
• Winter
  wheat harvest progress was 84 percent complete, as expected.  US spring wheat harvest was 3 percent complete, one point below expectations. 
  
• North
  and western Europe is expected to cooler than normal temperatures over the next two weeks. 
  
• December
  Paris wheat was up 0.25 at 215.25 euros as of 7:15 am CT. 
• USDA
  US all-wheat export inspections as of July 22, 2021 were 477,964 tons, within a range of trade expectations, below 532,898 tons previous week and compares to 544,010 tons year ago. Major countries included Mexico for 91,036 tons, China for 67,634 tons, and
  Philippines for 57,200 tons.

 

Export
Developments. 

• Egypt
  seeks wheat for September 20-30 shipment.  Lowest offer is at $244.50/ton for 60,000 tons of Ukrainian wheat. 
  
• Pakistan
  lowest offer for 110,000 tons of wheat at $304/ton c&f.  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.
  
• Jordan
  saw offers for wheat.
• Turkey’s
  TMO seeks up to around 900,000 tons of 11.5-12.5% milling wheat (395k) and feed barley (515k) for late September 16-30 shipment.  The barley is sought on August 3 and wheat on August 4. Turkey is one of Russia’s best customer. 
  
• Results
  awaited: Ethiopia seeks 400,000 tons of wheat on July 19. 

 

Rice/Other

• Results
  awaited: Mauritius seeks 6,000 tons of white rice on July 27 for October through December shipment.