FI Morning Grain Comments 08/02/21

PDF attached

 

Good
morning.

 

Weekend
rains across many parts of the dry areas of the US are pressuring corn and soybeans while wheat is higher from good global high protein import demand (Egypt and Algeria) along with a rally in EU wheat futures.  The US will trend drier this week than that of
last week but the improvement in soil moisture for the WCB should stabilize crop conditions. 

 

Romanian
wheat was the lowest offer for Egypt’s import tender at $261.49/ton.  Algeria seeks at least 50,000 tons of wheat for Sep-Aug shipment. Lower than expected palm oil export data for the month of July and increasing global Covid-19 cases rolled palm oil futures
over overnight.  Malaysian pam October futures were down 249 points and cash off $50.00/ton to $1,030.00/ton.  Offshore values are leading SBO 41 points higher and meal $0.40 higher.  Look for private US production estimates to be released early this week. 
One survey should be out shortly after the close.  There were 95 meal deliveries (table below).

 

 

 

 

Weather

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 2, 2021

• Rain
  prospects are a little better for Canada’s Prairies later this week into next week.
  
• Only
  a few showers from Canada will reach into the northern U.S. Plains and temperatures will remain warm in both areas, although not as hot as it has been.
  
• Most
  of the U.S. Midwest will have opportunity for a few showers and thunderstorms, but there will be some areas of net drying.
  
• Weather
  in China will improve this week with less rain and receding flood water.
• India
  will experience flooding in northern Madhya Pradesh, southeastern Rajasthan and neighboring areas of Haryana and Uttar Pradesh.
  
• Parts
  of eastern and southern Thailand will dry down this week and an erratic rainfall pattern in Indonesia will slowly break down.
  
• Brazil
  weather will be less threatening to coffee, citrus, sugarcane, wheat and corn than that of the past two weeks
  
• Argentina
  may get some rain late in the weekend into next week.
• Europe
  and western parts of Russia will get some periodic rain while net drying occurs from eastern parts of Russia’s Southern Region into Kazakhstan.
  
• Australia
  weather will remain fine, but rain is needed in Queensland. 

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Monday,
Aug. 2:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions – corn, cotton, soybeans, wheat, 4pm
• U.S.
  corn for ethanol, soybean crush, DDGS production, 3pm
• Ivory
  Coast cocoa arrivals

Tuesday,
Aug. 3:

• EU
  weekly grain, oilseed import and export data
• Australia
  Commodity Index
• New
  Zealand global dairy trade auction

Wednesday,
Aug. 4:

• EIA
  weekly U.S. ethanol inventories, production
• New
  Zealand Commodity Price
• France
  agriculture ministry updates 2021 crop estimates

Thursday,
Aug. 5:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• China’s
  CNGOIC to publish monthly soy and corn reports
• FAO
  World Food Price Index
• Port
  of Rouen data on French grain exports
• Malaysia
  Aug. 1-5 palm oil export data
• Risi
  pulp conference, Sao Paulo
• BayWa
  earnings

Friday,
Aug. 6:

• 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

Saturday,
Aug. 7

• China’s
  first batch of July trade data, incl. soybean, edible oil, rubber and meat imports

Source:
Bloomberg and FI

 

 

 

 

Commitment
of Traders

Position
changes for traditional funds and managed money for the major ag markets were minor.  Funds were more long than expected for corn and wheat, and slightly less long than expected for soybeans. 

 

 

 

 

 

Macros

 

 

Corn

• Lower
  trade in corn futures after weekend rains occurred across many of the dry areas of the US. 
  
• The
  US will trend drier this week than that of last week but the improvement in soil moisture for the WCB which should stabilize crop conditions. 
  
• Look
  for private US production estimates to be released this week  One survey should be out shortly after the close.  We are near trend for the US corn yield. 
  

 

Export
developments.

• Jordan
  is in for wheat and barley. The wheat import tender for 100,000 tons is on August 4 and 100,000 tons of barley on August 5. 
  
• China’s
  Sinograin sold 25,999 tons of imported GMO corn at auction on Friday and 5,423 tons of non-GMO corn.  
  
• Qatar
  seeks about 100,000 tons of barley on August 18 for Sep-Nov delivery. 

 

 

 

Soybeans

• Soybeans
  are lower from weakness in soybean oil and improving US weather. 
• Lower
  than expected Malaysian palm oil export data for the month of July and increasing global Covid-19 cases rolled palm oil futures over overnight.  Malaysian pam October futures were down 249 points and cash off $50.00/ton to $1,030.00/ton. 
  
• The
  Southern Peninsula Palm Oil Millers’ Association estimated July production in some parts of Malaysia to have risen 2% from June.
  
• ITS
  reported Malaysian July palm exports down 5.2% at 1.440 million tons from June.  AmSpec is at 1.427MMT, down 7.7%.  SGS: July palm exports fell 6.3% to 1.448 MMT from 1.546 during June.
  
• The
  EU last week extended import tariffs on US biodiesel for another 5 years, as expected.  
  
• Rotterdam
  oils were mixed and meal 4-10 euros lower. 
• Strategie
  Grains: EU rapeseed crop 17.03 MMT, 2.5% above 166.61 MMT last year and near unchanged from previous estimate. 
  
• China
  cash crush margins were last positive 60 cents on our analysis, versus negative 50 cents late last week and 129 cents around a year ago. 
  
• Offshore
  values are leading SBO 41 points higher and meal $0.40 higher. 
• Malaysian
  palm oil:  

• China
  

 

 

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 from strong global high protein import demand (Egypt and Algeria in for wheat) along with a rally in EU wheat futures.  Weather concerns for Russia also linger. 
  
• Romanian
  wheat was the lowest offer for Egypt’s import tender at $261.49/ton.  Algeria seeks at least 50,000 tons of wheat for Sep-Aug shipment.  Jordan is in for wheat and barley. 
  

• Jordan
  is in for wheat and barley. The wheat import tender for 100,000 tons is on August 4 and 100,000 tons of barley on August 5. 
  
• India
  monsoon rains are projected to be above normal for the months of August and September, according to the state run weather office.  Indian farmers have planted summer-sown crops on 84.8 million hectares, down 4.7% year-on-year (Reuters). 
  
• Russian
  wheat export prices: IKAR up $6/ton to $254 & SovEcon up $10/ton to $225/ton. 
  

• December
  Paris wheat was up 3.50 at 229 euros per ton as of 8:00 am CT. 

 

Export
Developments. 

• Egypt
  is in for wheat for September through October shipment.
• Algeria
  seeks at least 50,000 tons of wheat on Tuesday for Aug/Sep 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. 
  

 

Rice/Other

• South Korea will release 80,000 tons of rice in August to help cool domestic prices. 
  
• South Korea’s Agro-Fisheries & Food Trade Corp. seeks 39,226 tons of rice from the United States for arrival in South Korea on Jan. 31 and March 31, 2022.