FI Morning Grain Comments 07/28/21

PDF attached

 

Good
morning.

 

Mostly
higher trade today led by the wheat markets as we see another round of hot and dry weather for the US spring wheat and Canadian Prairies.  News is extremely light.  USD is higher and WTI up around 40 cents.  US equities are higher. 

 

 

 

Weather

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JULY 28, 2021

• Remnants
  of Tropical Storm In-Fa have produced copious amounts of rain on northern Zhejiang, southeastern Anhui and parts of Jiangsu China with 12.75 to 22.00 inches common and one location in Anhui getting 36.14 inches since last Friday.
  
• Flooding
  has been worsening in these areas, but the storm will shift to the northeast over the next couple of days.
  
• Flooding
  rain is also expected in northern and eastern India during the coming week
  
• Europe
  will deal with some periodic rainfall slowing some small grain and late winter rapeseed harvesting.
  
• In
  North America, Canada’s Prairies, the northern U.S. Plains and a part of the western Corn Belt will dry down over the next ten days while a favorable mix of weather occurs elsewhere in the Midwest, Delta and southeastern states.
  
• Frost
  and freezes are still expected to shift from Argentina into southern Brazil during the next few days bringing some concern to southern Sul de Minas’ coffee areas because of frost.
  
• Frost
  in citrus and sugarcane areas in Brazil should not be very impactful, but the situation needs to be monitored. 
• Southern
  Australia wheat, barley and canola areas will experience a good mix of weather during the next two weeks
• Queensland
  needs more rain along with a few northern New South Wales’ locations
• Additional
  heavy rain fell in northwestern Luzon Island, Philippines overnight with one location reporting nearly 10.00 inches in the past 24 hours
• Excessive
  heat occurred in the northern U.S. Plains and a part of Canada’s Prairies Tuesday
• Extreme
  highs reached to 111 degrees Fahrenheit in northwestern South Dakota with many areas in western parts of that state getting to between 105 and 110
• Extreme
  highs at Watrous, Saskatchewan reached 104 with middle 90s Fahrenheit occurring deeply into central Saskatchewan
• Canada’s
  Prairies, the northern U.S. Plains and northwestern Corn Belt will continue dry biased during much of the next ten days, despite some cooling
• Today’s
  weather will be hot in South Dakota and southwestern Minnesota

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
Advance Goods Trade Balance (USD) Jun: -91.2B (est -88.0B; prevR -88.2B; prev -88.1B)

US
Retail Inventories (M/M) Jun: 0.3% (est -0.5%; prev -0.8%)

US
Wholesale Inventories (M/M) Jun P: 0.8% (est 1.1%; prev 1.3%)

Canadian
CPI (Y/Y) Jun: 3.1% (est 3.2%; prev 3.6%)

Canadian
CPI NSA (M/M) Jun: 0.3% (est 0.4%; prev 0.5%)

Canadian
CPI Core–Common (Y/Y) Jun: 1.7% (est 1.9%; prev 1.8%)

Canadian
CPI Core-Median (Y/Y) Jun: 2.4% (est 2.3%; prev 2.4%)

Canadian
CPI Core-Trim (Y/Y) Jun: 2.6% (est 2.6%; prev 2.7%)

 

 

Corn

• Corn
  is higher following strength in wheat.  News was light and we look for a two-sided trade if the US weather outlook keeps the rain in the forecast for the WCB for the two-week outlook. 
  
• A
  Bloomberg poll looks for weekly US ethanol production to be up 3,000 barrels (1008-1054 range) from the previous week and stocks up 130,000 barrels to 22.648 million.
  
• CNGOIC
  see China corn import on track to reach the target 28 million tons 2020-21 as they have already imported 20 million tons. 
  
• Chin
  has not tendered for US corn since May and this morning we heard they were inquiring for US corn. 
  

 

Export
developments.

• 7/28…One
  offer: Jordan seeks 120,000 tons of feed barley for Nov/Dec shipment. 
• Qatar
  seeks about 100,000 tons of barley on August 18 for Sep-Nov delivery. 

• China
  will auction off 202,264 tons of imported US corn and 49,695 tons of imported Ukrainian corn on July 30. 
  

 

 

Soybeans

• Soybeans
  and soybean oil are higher (soybeans leader) while meal ended the electronic session near unchanged.  Offshore values are leading both CBOT meal and SBO higher.  News is light.  Traders are waiting for private US crop yield and production estimates.  Thought
  is both corn and soybean US yields are on track to reach trend. 

• CBOT
  soybean complex registrations were unchanged.

• November
  Canadian canola was down 4.20 at $890.20/ton as of 8:05 am CT. 
• Rotterdam
  oils were mixed euros higher and meal higher (Brazil premiums up sharply). 
  
• China
  cash crush margins were last positive 22 cents on our analysis (previous negative 2), versus negative 9 cents late last week. 
  
• Indonesia
  sets its palm oil reference price for August at $1048.62 per ton, down from $1094.15 in July. Export levies remained unchanged from July. 
  
• Offshore
  values are leading SBO 33 points higher and meal $4.00 higher. 
• Malaysian
  palm oil:  

• China
  

• Anec
  sees Brazil’s soybean exports at 8.5 million tons, below their previous forecast of 9.5 million. 
  
• Argentine
  producers sold 25.8 million tons of soybeans through July 21, up 747,600 tons from the previous week, below 27.9 million tons at this time year ago.  BS Grains Exchange is at 43.5 million tons, below 49 million produced in 2019-20.

 

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. 
  

 

Wheat

• US
  wheat is higher on North American supply concerns.  Chicago was down the last four trading sessions so some technical buying could be noted today as that market follows Minneapolis higher. 
  
• Day
  1 US spring wheat crop tour pegged the high protein spring wheat yield at 29.5 bushels per acre, well below a 5-year average of 43.3. 
  
• December
  Paris wheat was up 2.50 at 217.25 euros as of 8:00 am CT. 

 

Export
Developments. 

• Yesterday
  South Korea’s FLC bought 65,000 tons of Black Sea feed wheat at $293.74/ton for Sep 20 through Oct 20 shipment. 
  
• 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

• There
  were 35 rice registration cancelled out of Harrisburg.
• Results
  awaited: Mauritius seeks 6,000 tons of white rice on July 27 for October through December shipment. 
  
• Brazil:
  Major coffee areas in Sao Paulo’s Mogiana, south and southwest of Minas Gerais may face frost on July 30 (Bloomberg)