FI Morning Grain Comments 08/03/21

PDF attached

 

Good
morning.

 

It
was dry across the WCB overnight and will remain dry over the next few days.  IA, WI and northern IL have an opportunity for rain later this weekend into early next week, but some models look dry after that occurrence.  There are no issues with the ECB.  An
improvement in the US soybean rating is leading the soybean complex lower.  The lower trade in soybeans is pressuring corn.  Wheat is lower as the spring wheat condition finally improved.  Outside markets show a mixed trade in China with soybeans higher, meal
near unchanged and vegetable oils lower.  Malaysian pam October futures were up 23 points. We are now using a 176.0 and 50.8 US corn and soybean yield.  November soybeans traded below its 100-MA of 13.33 this morning. 

 

 

 

 

 

 

 

 

Weather

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 3, 2021

• Not
  much changed overnight for many areas.
• The
  forecast models are all predicting more rain for Iowa, Minnesota, Wisconsin and northwestern Illinois for this weekend into Monday. 
  
• The
  additional rain will continue to restrict any expansion of the driest conditions from the northwestern Corn Belt.
  
• The
  GFS model run went on to predict a wetter second week of the outlook in the upper Midwest, as well.
  
• The
  model may be too wet for next week.
• There
  will be no threatening weather for South America crop areas during the next two weeks.
  
• Argentina
  still  needs greater rainfall of its semi-dormant wheat crop to ensure a good start in the spring
• Dryness
  in southeastern Europe will fester for a while stressing unirrigated crops in the Balkan Region.
  
• Portions
  of Russia’s Southern Region into Kazakhstan will also continue to deal with a drying trend.
  
• China’s
  heavier rains have ended, but it will stay wet in many areas.
• Some
  flooding rain may evolve in the southern provinces in time because of an active tropical environment. 
• Australia’s
  weather will be a little drier, although some showers will occur periodically in coastal areas
• Rain
  is still needed in Queensland
• India
  will experience more flooding rainfall in northern Madhya Pradesh and immediate neighboring areas of Rajasthan
  
• Rainfall
  since last Friday has varied up over 10.00 inches and this region could receive a similar amount of additional rain by the end of this week
• Flooding
  could become serious enough to harm crops and personal property in the region
• The
  heart of Europe will experience frequent rainfall this week slowing small grain harvest progress while maintaining favorable moisture conditions for summer crops

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

Brazil
selected commodity exports for July.

Commodity                     
July 2021            July 2020

CRUDE
OIL (TNS)                4,375,980             7,794,507

IRON
ORE (TNS)                 31,730,259            33,981,748

SOYBEANS
(TNS)                 8,665,732             9,955,019

CORN
(TNS)                     1,983,372             3,979,224

GREEN
COFFEE(TNS)              142,914               167,791

SUGAR
(TNS)                    2,468,753             3,290,486

BEEF
(TNS)                     166,293               169,274

POULTRY
(TNS)                  391,625               337,257

PULP
(TNS)                     1,414,066             1,447,285

Source:
Reuters and FI

 

USDA
inspections versus Reuters trade range

Wheat         
387,743         versus   325000-515000  range

Corn             
1,383,718     versus   900000-1200000                range

Soybeans   
181,193         versus   10000-300000                     range

 

Soybean
and Corn Advisory

·        
2020/21 Brazil Corn Estimate Lowered 2.0 mt to 84.0 Million Tons.  (USDA estimates total corn production for marketing year (MY) 2020/21 at 93.0 million)

·        
2021 U.S. Corn Yield Unchanged at 175.5 bu/ac

·        
2021 U.S. Soybean Yield Unchanged at 50.0 bu/ac

·        
2020/21 Argentina Corn Estimate Unchanged at 48.0 Million Tons

 

Macros

 

Corn

• Lower
  trade in corn futures this morning despite the US corn conditions declining 2 points.  Corn prices are likely following the sharply lower trade in soybeans. 
  
• The
  morning weather models are forecasting more rain for IA, WI, and northwestern IL.  Some of the models have rain occurring IA early next week but it looks like it dries down again after that. 
  
• Yesterday
  funds bought an estimated net 13,000 corn contracts.
• China
  plans to auction off 219,218 tons of US imported corn on August 6, and 49,760 tons of Ukraine imported corn. 
  
• US
  corn conditions declined 2 points to 62 percent for the G/E ratings, one point below expectations.  We lowered out yield by a bushel.  CO dropped 9 points and OH was up 4.  IN was up 3. 
  

• USDA
  US corn export inspections as of July 29, 2021, were 1,383,718 tons, above a range of trade expectations, above 1,184,012 tons previous week and compares to 726,657 tons year ago. Major countries included China for 839,556 tons, Mexico for 316,284 tons, and
  Japan for 64,142 tons.
• FC
  Stone sees the Brazil corn crop at 87.14 million tons versus 87.93MMT previous (59.6 second corn crop for this year). 
  
• June
  US corn for ethanol use came in slightly below expectations. 

 

 

Export
developments.

• Taiwan’s
  MFIG bought about 55,000 tons of corn sourced from South Africa at an estimated 249.38 a bushel c&f over the December contract.  The tender sought shipment between Oct. 6 and Oct. 25 if the corn is sourced from the U.S. Gulf, Brazil, or Argentina, they said.
  If sourced from the U.S. Pacific Northwest coast or South Africa, shipment was sought between Oct. 21 and Nov. 9. (Reuters)
• 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. 
  
• Qatar
  seeks about 100,000 tons of barley on August 18 for Sep-Nov delivery. 
• Turkey
  bought around 515,000 tons sought for FH September shipment.  Prices ranged from $275.80 and $286.90/ton. 
  

 

 

Soybeans

• An
  improvement in the US soybean rating is leading the soybean complex lower.  November soybeans are below a 100-day MA of $13.33.  Major support is seen at $13.00. 
  
• Malaysian
  pam October futures were up 23 points and cash up $2.50/ton to $1,032.50/ton. 
  
• The
  US June soybean crush was about as expected but soybean stocks were 108 million pounds below expectations. 
  
• Rotterdam
  oils were 1-25 euros lower and meal 1-5 euros higher. 
• China
  cash crush margins were last positive 63 cents on our analysis (60 previous) versus 50 cents late last week and 129 cents around a year ago. 
  
• Offshore
  values are leading SBO 20 points higher and meal $3.00 lower. 
• Malaysian
  palm oil:  

• China

• FC
  Stone sees the Brazil 2021-22 (new-crop) soybean crop at 143.3 million tons. 
  
• US
  soybean crop ratings were up two for the combined good/excellent, 3 points above expectations. Our August yield is up one tenth of a bushel from last week.  KS was down 3, MN down 2 and NE down 2. 
  

• USDA
  US soybean export inspections as of July 29, 2021, were 181,193 tons, within a range of trade expectations, below 242,044 tons previous week and compares to 557,607 tons year ago. Major countries included Mexico for 43,406 tons, Vietnam for 38,166 tons, and
  Indonesia for 29,523 tons.

 

 

Export
Developments

• Egypt’s
  GASC seeks at least 30,000 tons of soybean oil and lowest offer was $1,379 a ton c&f.  Lowest offer for 10,000 tons of sunflower oil was $1,274 a ton.  Both are for arrival between Oct. 1-20.

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

 

Wheat

• Lower
  trade in US wheat futures as the US spring wheat crop finally saw an increase in crop ratings.  Idaho, MN, and the Dakota’s improved from the previous week.  Parts of Russia’s Southern Region into Kazakhstan will continue to see net drying. 
  
• US
  spring wheat rating increased one point.  Trade was looking for a one-point decline.  We made minor changes to spring and durum production.  Spring wheat harvest was 17 percent, 6 points above trade expectations.  Winter wheat harvest was 91 percent, as expected. 
  

• USDA
  US all-wheat export inspections as of July 29, 2021, were 387,743 tons, within a range of trade expectations, below 515,214 tons previous week and compares to 556,987 tons year ago. Major countries included Mexico for 106,275 tons, Philippines for 77,997 tons,
  and Korea Rep for 49,114 tons.
• December
  Paris wheat was down 0.75 at 230 euros per ton as of 7:15 am CT.

 

Export
Developments. 

• Algeria
  seeks at least 50,000 tons of wheat for Aug/Sep shipment. 
• The
  Taiwan Flour Millers’ Association seeks 48,000 tons of grade 1 northern spring, hard red winter and white milling wheat to be sourced from the United States, on Aug. 6 for shipment from the U.S. Pacific Northwest coast between Sept. 24 and Oct. 8.
• Japan
  seeks 119,435 tons of food wheat this week.

• 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. 
  

• Turkey’s
  TMO seeks up to around 395,000 tons of 11.5-12.5% milling wheat (395k) for late September 16-30 shipment.  The wheat is sought on August 4.
  

 

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.