FI Morning Grain Comments 08/23/21

PDF attached

 

Good
morning.

 

Partial
rain relief was noted for the US northern Great Plains and Canadian Prairies over the weekend.  Areas benefiting included north-central North Dakota into southwestern Manitoba, and northern Minnesota into southeastern Manitoba.  Iowa, Kansas and Missouri saw
1-2 inches of rain.  Tennessee saw heavy local rain with one area receiving up to 17 inches.  This week 0.5-1.5 inches will fall across the northern Plains and Great Lakes region. 
MN and WI will see the heaviest amount of rain.  Net drying is expected in the central and southern Plains, the southwestern Corn Belt. 

 

US
agriculture markets are mostly higher (meal turned lower) on technical buying, lower USD, sharply higher energy markets, and oversold conditions after heavy selling occurred late last week. 
Note
many of the outside markets failed to follow the sharply lower Friday session in US agriculture markets.  This week we could see a volatile trade as details may emerge regarding EPA’s proposal to lower US biofuel mandates and ongoing concerns over rising cases
of the Delta Covid-19 variant that could impact grain transportations.  Malaysian palm oil was up 51 points to 4,316 and cash was up $12.50/ton at $1,080/ton.  China soybean complex futures trended lower led by soybeans (down 1.1%).  Offshore values were leading
soybean oil 338 points higher and meal $1.40 lower.  Global
wheat import demand remains robust. 

 

 

 

We
look for US corn conditions to decline 1 in the combined good and excellent categories, and soybeans to remain unchanged.  At 61 and 57 for corn and soybeans respectively, if realized, they both would be at a season low.  Since more than 50 percent of the
spring wheat crop had been collected, USDA will not issue a crop progress update.  Spring wheat G/E last week settled at 11 percent.  Note the range this season was 9 to 45 percent, 45 at the beginning of the season.  September MN rallied about $1.43 since
April 30. 

 

 

Weather
– 7-day below

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR AUGUST 23, 2021

• Brazil
  coffee, citrus and sugarcane areas are advertised wetter today than on Friday beginning this weekend and continuing periodically during the second week of the outlook through September 6
• The
  moisture could help induce much better plant recovery conditions for those crops damaged in late July frost and freezes
• Some
  premature flowering might occur if the rain becomes great enough and that will warrant follow up precipitation a little later in September
• Argentina
  was advertised wetter after day 10 in some of the computer weather forecast model runs overnight
• The
  00z GFS model run was much too wet
• Heavy
  rain is expected in upper U.S. Midwest this week; including Wisconsin and parts of Minnesota
• Lower
  U.S. Midwest and especially the southwestern Corn Belt will be drier biased over the next ten days
  
• A
  new tropical disturbance will evolve later this week off the Caribbean coasts of Nicaragua and Honduras that may evolve into a tropical storm and move across the Yucatan Peninsula during the weekend before reaching northern Veracruz and southern Tamaulipas,
  Mexico early next week
• Assessments
  of crop damage in Veracruz, Mexico from Hurricane Grace will continue this week
• Damage
  to citrus and sugarcane likely occurred and there is some concern over some negative impact on coffee areas
• Canada’s
  Prairies will continue to receive some periodic rainfall over the next week to ten days further improving the moisture profile
• Some
  improvement is soil moisture is also expected in a part of the northern U.S. Plains in the coming ten days
• Eastern
  Europe is advertised to trend cooler during the coming week to ten days
• Some
  rain will accompany the cool down and will bring some relief to the dry areas in the Balkan Countries
• Western
  Europe (i.e. France, the U.K., Belgium, Netherlands, Denmark, Norway and parts of western Germany) will receive limited rainfall over the coming ten days
• Limited
  rainfall and warm weather is expected in central and southern portions of Russia’s New Lands, Kazakhstan and a few areas from eastern Ukraine into the Volga River Basin during the coming ten days
• China
  will stay plenty wet during the next ten days and needs to start drying down; many areas are still quite wet
• Northwestern
  India (Gujarat and Rajasthan) along with Pakistan are expected to continue drier than usual for the next ten days
• Queensland
  and northern New South Wales, Australia will receive some rain today and possibly again late in the weekend into early next week
• If
  the moisture occurs as advertised, it would be very well timed with the start of wheat and barley reproduction and could help improve crop production potentials
• Southern
  Australia winter crops are still semi-dormant and in mostly good shape with little change likely for a while
• Some
  showers will occur to maintain a favorable environment for early spring crop development
• South
  Africa is expecting a favorable mix of rain and sunshine during the next two weeks that might benefit most of the nation’s winter crop areas if today’s outlook verifies – it may be a little too wet, though
• Rainfall
  is improving in Ivory Coast and Ghana as well as in other west-central Africa coffee, cocoa, sugarcane, citrus and cotton areas

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Monday,
Aug. 23:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions – corn, cotton, soybeans, wheat, 4pm
• Monthly
  MARS bulletin on crop conditions in Europe
• Ivory
  Coast cocoa arrivals

Tuesday,
Aug. 24:

• EU
  weekly grain, oilseed import and export data
• U.S.
  poultry slaughter

Wednesday,
Aug. 25:

• EIA
  weekly U.S. ethanol inventories, production
• Malaysia
  Aug. 1-25 palm oil export data
• Unica
  cane crush, sugar production (tentative)

Thursday,
Aug. 26:

• 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,
Aug. 27:

• 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

Source:
Bloomberg and FI

 

 

 

 

Commitment
of Traders

We
don’t see any major influence on prices although the corn was little more long than expected and soybeans less long than expected. 

 

 

 

 

 

 

 

 

Macros

 

Corn

·        
Corn is higher this morning on light technical buying and weekend weather showing some areas of the WCB missed out on rain.  Higher soybeans and wheat are lending support.  Ongoing concerns the EPA could lower biofuel mandates
could limit gains. Rain this week will be heaviest across the Minnesota and Wisconsin, and far northern IA. 

·        
AgRural: Center-South corn area had been 79% harvested and 4.1% of new-crop corn had been planted. 

·        
Pro Farmer estimated the US corn yield at 177 and production at 15.116 billion, and soybeans at 51.2 and production at 4.436 billion bushels, both bearish in our opinion. 

·        
Cattle on Feed was near expectations for August 1 on feed, but placements and marketings fell short of expectations.  The less than expected placements could be slightly supportive. 

 

Export
developments.

• Results
  awaited:  Qatar seeks about 100,000 tons of barley on August 18 for Sep-Nov delivery. 
  

 

 

Soybeans

·        
The CBOT complex is up sharply on technical buying after steep losses were recorded last week.  Note many of the outside markets failed to follow the sharply lower US trade on Friday. 

·        
This week we could see a volatile trade as details may emerge regarding EPA’s proposal to lower US biofuel mandates and ongoing concerns over rising cases of the Delta Covid-19 variant that could impact grain transportations. 

·        
Pro Farmer estimated the US corn yield at 177 and production at 15.116 billion, and soybeans at 51.2 and production at 4.436 billion bushels, both bearish in our opinion. 

·        
Malaysian palm oil was up 51 points to 4,316 and cash was up $12.50/ton at $1,080/ton. 

·        
China soybean complex futures trended lower led by soybeans (down 1.1%). 

·        
Offshore values are leading soybean oil 338 points higher and meal $1.40 lower.  

·        
Rotterdam vegetable oils were unchanged to 10 euros lower and meal mixed. 

·        
Cargo surveyor SGS reported month to date August 20 Malaysian palm exports at 781,291 tons, 88,251 tons below the same period a month ago or down 10.1%, and 109,152 tons below the same period a year ago or down 12.3%. (correcting
from Friday morning comment)

·        
Malaysian palm oil

·        
China cash crush margins were last positive 119 cents on our analysis versus 110 cents late last week and 90 cents around a year ago. 

·        
China

 

Export
Developments

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

 

Wheat

·        
US wheat futures are higher, erasing some of the losses sustain on Friday.  The USD was 30 points lower.  Global import demand remains robust. 

·        
EU December wheat was up 2.50 euros at $247 at the time this was written.  September was up 0.50 euro. 

·        
The Euro is higher. 

·        
President Putin said the Russian 2021 grain crop could end up around 127 million tons. 

·        
IKAR noted Russian 12.5% wheat from Black Sea ports for supply in September was $295 a ton (FOB) at the end of last week, up $8 from the previous week.  SovEcon reported wheat prices were up $13 to $299 a ton.

 

Export
Developments. 

·        
Pakistan received offers for 400,000 tons of wheat for Sep/Oct shipment.  Lowest was $355.99/ton. 

·        
Mauritius seeks 47,000 tons of wheat flour, optional origin, on Sept. 21 for various 2022 shipment.

·        
Turkey confirmed they bought 245,000 tons of feed barley late last week. 

·        
Jordan seeks 120,000 tons of feed barley on August 26. 

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

·        
Jordan seeks wheat on Aug 25.

·        
Bangladesh seeks 50,000 tons wheat on September 1.

 

Rice/Other

• Egypt seeks 200,000 tons of raw sugar for Oct-Dec shipment on August 28.