FI Morning Grain Comments 08/31/21

PDF attached

 

Good
morning.

 

Hurricane
Ida left more than 1 million customers without power.  It will take some time to get an idea on damage.  Some facilities could be without power for weeks.  We understand a few grain facilities are impaired.  End of August/early September is traditionally a
slow week for US exports, and a slow week for trading ahead of the long holiday weekend.  Soybeans are mostly with November breaking around 7 am CT. USD is 21 points lower.  Soybean meal is higher on product spreading. Soybean oil is under pressure from lower
WTI crude oil.  Corn is lower after USDA left US crop conditions unchanged.  Wheat is mixed.  FND deliveries were heavy for Chicago and Minneapolis wheat. 

 

 

 

 

Weather

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR TUESDAY, AUGUST 31, 2021

• Tropical
  Depression Ida will continue to produce heavy rainfall from Tennessee and parts of northern Alabama through Kentucky and West Virginia to parts of southern New England and New Jersey over the next two days.
  
• Rainfall
  in other U.S. crop areas should be well mixed with periods of sunshine.
• Texas
  rainfall will be most limited along with the Pacific Northwest, northwestern U.S. Plains and California which are expected to be left dry.
  
• Southwestern
  Canada’s Prairies will be dry biased for the next ten days
• Northwestern
  India is still expecting three waves of rain during the next ten days bringing much needed dryness relief to Gujarat, India and some immediate surrounding areas.
  
• Queensland,
  Australia is also expecting some much needed rain to start off wheat and barley reproduction and follows recent freezes that may help induce some crop improvement.
  
• In
  Brazil, today’s forecast is wetter near mid-month in center west and center south parts of the nation which is normal if it verifies.
  
• Argentina
  is still advertised to receive some periodic rainfall over the next ten days, although it is questionable how much relief will occur to some of the western dry areas. 
• Tropical
  Storm Kate poses no threat to land
• A
  new tropical cyclone is expected to evolve off the west coast of Africa in the next day or two, but initial forecasts keep the system over open water in the central Atlantic Ocean during much of its lifetime
• Western
  Caribbean Sea disturbed tropical weather is not likely to develop over the next few days, but some development might occur during the weekend as it moves north northwesterly
• Europe
  weather will be tranquil into Saturday with net drying from France and the U.K across Germany to Scandinavia
• Showers
  will occur in Spain and Portugal and a few areas from Italy into the Baltic Plain
• Greater
  rain will impact western and central Europe during the late weekend into next week
• Western
  CIS crop areas will see a favorable mix of rain and sunshine
• Net
  drying will continue in Kazakhstan and neighboring areas of southern Russia’s New Lands – at least for one more week
• Good
  coffee, cocoa, rice, sugarcane and cotton weather will continue in most of central Africa

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Tuesday,
Aug. 31:

• U.S.
  agricultural prices paid and received
• EU
  weekly grain, oilseed import and export data
• HOLIDAY:
  Malaysia

Wednesday,
Sept. 1:

• EIA
  weekly U.S. ethanol inventories, production
• Australia
  Commodity Index
• U.S.
  DDGS production, corn for ethanol, 3pm
• Malaysia
  August palm oil export data (tentative)
• USDA
  soybean crush, 3pm

Thursday,
Sept. 2:

• FAO
  World Food Price Index
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Vietnam

Friday,
Sept. 3:

• 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
• HOLIDAY:
  Vietnam

Source:
Bloomberg and FI

 

FND
delivery

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
316,844                 versus   400000-675000  range

Corn                     
562,549                 versus   600000-800000  range

Soybeans           
377,341                 versus   100000-300000  range

 

Macros

China
official PMIs for August: Manufacturing 50.1 (expected 50.1) & Services 47.5 (expected 52.0) . Services were 2nd worst non-PMI figure on record, according to one source. 

Brent
Crude Oil Seen Averaging USD68.02/Barrel In 2021 Versus USD68.76/Barrel In July – RTRS

US
Crude Oil Seen Averaging $65.63/Barrel In 2021 Versus $66.13/Barrel In July Poll

Canadian
GDP (M/M) Jun: 0.7% (est 0.7%; prev -0.3%)

Canadian
GDP (Y/Y) Jun: 8.0% (est 8.8%; prev 14.6%)

Canadian
Quarterly GDP Annualized Q2: -1.2% (est 2.5%; prev 5.6%)

Canada
July GDP Most Likely Fell 0.4% – StatsCan Flash Estimate

 

 

Corn

·        
Corn is lower after USDA left US crop conditions unchanged. 

·        
Ida left more than one million people without power. 

·        
China will auction off 111,321 tons of imported US corn and 13,180 tons of imported Ukrainian corn on September 3. 

·        
Soybean and Corn Advisory lowered their estimate for Brazil 2020-21 corn production by 2MMT to 82 million tons. Brazil new-crop corn plantings should ramp up by end of next week after rains fell last week. 

·        
USDA Attaché: Brazil cattle on hog herds.

·        
Post forecasts that the cattle herd will grow four percent in 2021 and 2022, while beef production is forecast to decrease six percent in 2021. 

·        
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Livestock%20and%20Products%20Annual_Brasilia_Brazil_08-15-2021

·        
US corn conditions were unchanged but still below late August levels.  We left production unchanged. 

·        
91% of the corn crop was in the dough stage vs. 85% last week, and 59% is denting vs. 41% last week. 9% is mature.

·        
USDA US corn export inspections as of August 26, 2021 were 562,549 tons, below a range of trade expectations, below 745,303 tons previous week and compares to 423,765 tons year ago. Major countries included Mexico for 284,506
tons, China for 138,681 tons, and Japan for 40,793 tons.

 

Export
developments.

·        
Taiwan’s MFIG bought 65,000 tons of corn from Argentina at a premium of 268.89/bu over the March futures, for around November/early Dec shipment.

 

 

 

 

Soybeans

·        
Soybeans are mostly lower November breaking around 7 am CT. USD is 23 points lower.  Soybean meal is higher on product spreading. Soybean oil is under pressure from lower WTI crude oil. 

·        
CBOT posted 236 soybean oil deliveries. 

·        
Offshore values are leading the CBOT products higher. 

·        
Malaysia was on holiday.

·        
ITS: Malaysian Aug palm exports reached 1.213 million tons, a 15.8% decrease from July. 

·        
US crop conditions were unchanged for the G/E categories but were slightly lower on the state adjusted basis.  We made a small downward adjustment to US production. 

·        
The US soybean crop is 93% setting pods vs. 92% average.  9% of the soybean crop is dropping leaves vs. 7% average.

·        
Offshore values this morning were leading soybean oil 175 points higher and meal $2.20 higher.

·        
Malaysian palm oil

·        
China cash crush margins were last positive 112 cents on our analysis (121 previous) versus 121 cents late last week and 80 cents around a year ago. 

·        
China

·        
USDA US soybean export inspections as of August 26, 2021 were 377,341 tons, above a range of trade expectations, above 239,957 tons previous week and compares to 820,655 tons year ago. Major countries included Mexico for 121,952
tons, China for 71,401 tons, and Japan for 60,784 tons.

 

Export
Developments

• None
  reported before 8 am CT. 

 

 

 

Wheat

·        
Wheat is mixed with Chicago lower (through May position) and KC also seeing bear spreading.  Harvesting pressure and heavy deliveries are pressuring Minneapolis. 

·        
There were 1,000 Chicago wheat deliveries and 283 Minneapolis deliveries.  KC were 122. 

·        
Ukraine AgMin: 2021 wheat harvest brought in 32.52 million tons from 99.4% of the sowing area, with a yield of 4.62 tons per hectare.  The ministry said a total of 44.4 million tons of grain had been harvested as of Aug. 26. 

·        
Lebanon flour millers are seeing a fuel shortage threatening bread production. 

·        
US spring wheat harvest advanced to 88% complete vs. 71% average.

·        
The USD was 20 points lower at the time this was written 

·        
December Paris wheat was down 1.50 euros at 245.25. 

·        
USDA US all-wheat export inspections as of August 26, 2021 were 316,844 tons, below a range of trade expectations, below 729,288 tons previous week and compares to 535,415 tons year ago. Major countries included Mexico for 70,397
tons, Philippines for 63,813 tons, and Malaysia for 24,493 tons.

 

Export
Developments. 

·        
Algeria seeks at least 50,000 tons of wheat for October shipment.  Results could be finalized on Wednesday/offers today. 

·        
Iran’s GTC bought 180,000-240,000 tons of Russian wheat over the past two weeks for October and beyond shipment. 

·        
Jordan seeks 120,000 tons of wheat on September 1.

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

·        
Jordan seeks 120,000 tons of feed barley on September 2 for LH October through FH December shipment.

·        
Turkey seeks 300,000 tons of milling wheat on September 2 for September 10 through October 10 shipment.  They last bought 11.5% and 12.5% wheat on August 4 at $297.40-$308.90/ton c&f. 

·        
Taiwan weeks 48,875 tons of US wheat on September 3 for October 15-Novmeber 1 shipment.  They last bought US wheat on August 6, various classes at various prices. 

·        
Pakistan seeks 550,000 tons of wheat on September 7 for October through November shipment. 

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

 

Rice/Other

• South
  Korea seeks 42,200 tons of rice for arrival in South Korea between February 28 and April 2022.  20,000 tons of that is of US origin, rest optional .