FI Morning Grain Comments 08/18/21

PDF attached

 

Good
morning.

 

Soybeans
are lower early this morning but another 24-hour sale confirmation may limit losses.  Corn is rebounding, in part to the Pro Farmer crop tour pegging day 2 corn yields below USDA’s August estimates.  We thought pod counts would be a little better for the 2
ECB states reported.  Wheat is higher on strong global demand and technical buying. 

 

 

Pro
Farmer projected higher corn yields and lower soybean pod counts than last year in Nebraska.  For Indiana, the tour pegged the corn yield higher than last year and pod count slightly below 2020.  Although the day 2 corn yields are above last year, they still
fall short of USDA’s current projections.  See table below. 

 

 

 

Weather

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 18, 2021

• Cool
  temperatures occurred in western Canada this morning with readings dropping closer to the frost threshold.
  
• Rain
  chances are still improving in eastern parts of Canada’s Prairies and the northern U.S. Plains and upper Midwest for the next five to six days.
• Some
  welcome rain fell in southern Alberta Tuesday and overnight last night in a few eastern Prairies locations.
  
• Tropical
  Storm Henri needs to be closely monitored even though it is not far from Bermuda.
  
• The
  storm has potential to move closer to southeastern New England this weekend with some forecast models suggest landfall is possible.
  
• Henri
  may become a hurricane later this week.
• Tropical
  Storm Grace will also become a hurricane before reaching the Yucatan Peninsula Thursday and again before reaching Veracruz, Mexico this weekend.
  

o  
The storm will produce threatening floods in citrus, rice, sugarcane and coffee areas and may produce property damage in Veracruz.

• Coffee
  areas of Brazil will be very warm to hot over the next ten days further stressing crops damaged by frost in late July. 
• Southeastern
  Europe (the Balkan Countries) will continue too dry for the next ten days
• Crop
  stress will prevail hurting unirrigated late season grain and oilseed production potentials
• Kazakhstan
  and Russia’s southern New Lands will continue very dry and warm through the next ten days threatening late season crops, but benefiting the harvest of spring cereals
• Unirrigated
  spring wheat production was cut from these areas because of heat and dryness this year
• China
  will stay abundantly wet
• India’s
  eastern Gujarat received some needed rain Tuesday, although it was light
• Gujarat,
  western Rajasthan and Pakistan needs significant rain to ensure the best production of unirrigated cotton, groundnuts, guar and other crops
• Australia’s
  Queensland and northern New South Wales and northern parts of Western Australia will need rain in the next few weeks to support winter crops as they begin to move into reproduction
• Southern
  Australia crops are still in good conditions, semi-dormant, but poised to perform well in the early spring
• Western
  Argentina will remain too dry over the next couple of weeks
• Brazil’s
  southernmost crop areas will get some periodic rain
• U.S.
  Midwest weather will remain favorably mixed in the coming week and then trend a little drier in the second week of the outlook

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Wednesday,
Aug. 18:

• EIA
  weekly U.S. ethanol inventories, production
• China’s
  second batch of July trade data for commodities, including corn, wheat, sugar and pork

Thursday,
Aug. 19:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Brazil’s
  Conab releases sugar and cane production data (tentative)
• USDA
  total milk, read meat production
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  India, Pakistan, Bangladesh

Friday,
Aug. 20:

• 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
• China’s
  country-wise import data for farm goods such as soybeans, corn and pork
• FranceAgriMer
  weekly update on crop conditions
• Malaysia
  Aug. 1-20 palm oil export data
• U.S.
  Cattle on Feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

Macros

US
Housing Starts Jul: 1534K (est 1600K; prevR 1650K; prev 1643K)

US
Housing Starts (M/M) Jul: -7.0% (est -2.6%; prevR 3.5%; prev 6.3%)

US
Building Permits Jul: 1635K (est 1610K; prevR 1594K; prev 1598K)

US
Building Permits (M/M) Jul: 2.6% (est 1.0%; prevR -5.3%; prev -5.1%)

Canadian
CPI (Y/Y) Jul: 3.7% (est 3.4%; prev 3.1%)

Canadian
CPI NSA (M/M) Jul: 0.6% (est 0.3%; prev 0.3%)

Canadian
CPI Core-Common (Y/Y) Jul: 1.7% (est 1.8%; prev 1.7%)

Canadian
CPI Core-Median (Y/Y) Jul: 2.6% (est 2.4%; prev 2.4%)

Canadian
CPI Core-Trim (Y/Y) Jul: 3.1% (est 2.5%; prev 2.6%)

 

Corn

·        
US corn is higher on technical buying and US crop yield concerns.  Although rain is expected across the  northern U.S. Plains and upper Midwest for the next five to six days.

·        
Pro Farmer projected higher corn yields and lower soybean pod counts than last year in Nebraska.  For Indiana, the tour pegged the corn yield higher than last year and pod count slightly below 2020. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 1,000 barrels (973-1000 range) from the previous week and stocks down 104,000 barrels to 22,172 million.

·        
Bloomberg survey:  U.S. Cattle on Feed placements are seen down 7.1% to 1.76 million head. 

 

Export
developments.

• Results
  awaited:  Qatar seeks about 100,000 tons of barley on August 18 for Sep-Nov delivery. 
  
• Turkey
  seeks 270,000 tons of barley on August 20 for shipment between Sep 1 and Sep 25. 
  

 

 

 

Soybeans

·        
Soybeans, meal and soybean oil are mostly lower on favorable US weather (both ECB and WCB will see rain this week), lower lead by offshore product values, and technical selling.  November soybeans overnight broke through its 50-day
MA of 13.54 and nearing the 100-day MA at 13.5075. 

·        
USDA announced 131,000 tons of soybeans sold to China. 

·        
Malaysian palm oil fell 107 points (off 3%) to 4301 and cash was down $20/ton at $1,080/ton.  Malaysian will keep its September crude palm oil export duty unchanged at 8 percent. 

·        
Indonesia’s June palm oil exports fell 26.8% from the same month a year earlier to 2.03 million tons due to volatile prices, according to GAPKI.  Crude palm oil production was up 9.4% in June from a year earlier to 4.48 million
tons. 

·        
Indonesia is expected to raise its export duties for September to $166 from $93 in August. 

·        
Pro Farmer projected higher corn yields and lower soybean pod counts than last year in Nebraska.  For Indiana, the tour pegged the corn yield higher than last year and pod count slightly below 2020.  

·        
Argentine producers sold 27.3 million tons of 2020-21 soybeans, according to the  AgMin, down from 29.4 million tons at this time last year. 

·        
Offshore values are leading soybean oil 30 points higher and meal $3.40 lower. 

·        
Rotterdam vegetable oils were unchanged to 3 euros lower and meal unchanged to 4 euros lower. 

·        
Malaysian palm oil

·        
China cash crush margins were last positive 106 cents on our analysis (previous 101) versus 87 cents late last week and also 87 cents around a year ago. 

·        
China

 

Export
Developments

·        
Under the 24-hour announcement system, private exporters sold 131,000 tons of soybeans to China. 

·        
Egypt’s GASC seeks at least 30,000 tons of soybean oil and 10,000 tons of sunflower on Thursday for arrival Oct 5-25.  Payment is for 180-day letters of credit or at sight. 

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 3,700 tons of non-GMO soybeans on August 19 for arrival between Oct. 20 and Nov. 19.

 

Wheat

·        
Wheat is higher in the nearby months on technical buying and strong global demand. 

·        
EU December wheat was up 3.25 euros at the time this was written at $246 (257.75 absolute contract high established Friday). 

·        
Kazakhstan expects 2021 grain production to fall 24% to 15.3 million tons due to drought conditions.  The country has harvested 1.5 million tons of grain from 9.9% of the area. Exports could end up between 6.5 and 7.0 million
tons of grain, down from about 8 million tons in 2020-21.

·        
APK-Inform estimated Ukraine grain exports rising to 57 million tons from 45.5 million during 2020-21, including 21.1 million tons of wheat and 31 million tons of corn. 

·        
EU soft wheat exports so far this season reached 2.33 million tons by Aug. 15, including 407,000 tons for South Korea.

 

Export
Developments. 

·        
Algeria bought 230,000-250,000 tons of wheat at $350-$351/ton for September shipment. 

·        
Egypt seeks wheat for Oct 5-15 shipment and Romanian origin was lowest offered at $294.99/ton. 

·        
Jordan was believed to have passed on wheat.   Lowest offer was $346/ton c&f. 

·        
Japan is in for 143,765 tons of food wheat this week. 

·        
Japan in a SBS import tender, passed on feed wheat and barley.  It was to
be
loaded by Nov. 30 and arrive in Japan by Jan. 27, 2022. 

·        
Bangladesh saw no offers for 50,000 tons of wheat. 

·        
The Philippines seeks 280,000 tons of feed wheat on August 19 for October/November shipment.

·        
Jordan seeks 120,000 tons of feed barley on August 19. 

·        
Pakistan seeks 400,000 tons of wheat on August 23 for Sep/Oct shipment. 

·        
Morocco seeks 363,000 tons of US durum wheat under a tariff import quota on August 24 for shipment by December 31. 

 

Rice/Other

• (Reuters) – “Vietnam will consider cutting the area under rice cultivation if prices of the grain fall further, the country’s agriculture minister said, as farmers struggle to offload their new harvest due to weak demand
  and strict coronavirus movement curbs……Prices for Vietnam’s 5% broken rice RI-VNBKN5-P1 have fallen to around $390 per tonne, the lowest since February 2020, due to weak demand. Vietnam is the world’s third-largest exporter of the commodity after India and
  Thailand…Hoan did not say by how much Vietnam planned to cut the rice production area, but state media reports cited the ministry as saying earlier this year that it could cut the rice growing area by 5.4% to 3.5 million hectares (8.6 million acres) by 2030.”