FI Morning Grain Comments 09/01/21

PDF attached

 

Good
morning.

 

Follow
through selling on US Gulf export concerns for corn and soybeans while wheat is mixed as global import demand remains strong with Algeria the latest country to buy a large amount of wheat.  The US will see good rain for the remainder of the week benefiting
late developing crops bias the north and central Great Plains into the central/lower western Corn Belt. 

 

 

 

Weather

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 1, 2021

• Some
  welcome rain fell in southern Argentina Tuesday and early today.
• Most
  of it occurred in Buenos Aires and La Pampa benefiting wheat and barley.
• Cordoba
  and many areas to the east and north remained dry, but some of those areas may get some rain next week.
  
• Showers
  are still being offered for center west and center south Brazil in the second half of next week and during the following weekend.
  
• Most
  of the precipitation will be extremely brief and light and should not change soil moisture in any grain, coffee, citrus or sugarcane area in a significant manner.
  
• U.S.
  weather will be favorable for this time of year, but rain is expected to occur less frequently and less significantly after a disturbance moves from the Dakotas into the upper Midwest tonight into Friday morning.
  
• Northwestern
  India is still expecting rain today and again next week that will improve crop and field conditions in Gujarat.
  
• Queensland,
  Australia will receive rain this weekend into early next week to benefit some wheat and barley. 
  
• Russia,
  Ukraine and Kazakhstan weather will include some rain during the next ten days to two weeks, although eastern areas will have to wait until next week for their rain. 
• Cool
  weather will impact western Russia this weekend through next week resulting in cloudiness and some showers and drizzle
• West-central
  Africa rainfall will continue periodically and support coffee, cocoa, sugarcane, rice and cotton
• East-central
  Africa rainfall will remain favorably distributed
• Southeast
  Asia rainfall will be favorably distributed over the next two weeks
• Many
  areas in China will remain plenty wet over the next two weeks, although rainfall in east-central areas will diminish next week

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

Farm
Futures
issued early 2022 US plantings and the corn area was estimated at 94.3 million acres, up 1.7% from USDA’s 2021 estimate.  US soybeans were expected to expand 3.7% to 90.8 million acres.  All-wheat was pegged at 49.7 million acres, up 6.3%, with winter at 35.4
million (up 5.1%), spring and durum at 14.3 million (up 5.1%).  737 producers were survey from July 13 to Aug. 1. 

 

Macros

US
ADP Employment Change Aug: 374K (est 638K; prevR 326K; prev 300K)

US
MBA Mortgage Applications Aug 27: -2.4% (prev 1.6%)

 

 

Corn

·        
Corn is lower for the third consecutive session on US export concerns.  At least two out of six grain facilities located in or around the NOLA Gulf area have confirmed elevator damage.  One is down indefinitely. 

·        
USDA NASS corn for ethanal demand is due out later. 

·        
A Bloomberg poll looks for weekly US ethanol production to be down 7,000 barrels (890-945 range) from the previous week and stocks down 77,000 barrels to 21.146 million.

·        
EIA reported June ethanol production at 30.682 million barrels, slightly below our expectations, and well above year ago.  We left our 5.056 billion corn for ethanol use unchanged and for next year have 5.145 billion.  NASS is
due out with corn for ethanol use for July on Wednesday. 

 

Export
developments.

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

 

 

 

 

Soybeans

·        
Soybeans are down for the fifth consecutive session on follow through selling over slowing US Gulf exports, favorable US weather and weaker soybean oil.  Meal moderately lower.  Malaysian palm futures, after a one day holiday,
fell 78 MYR to 4,176 and cash was down $5.00/ton to $1,090/ton, mainly on poor palm export data.  China soybean futures were off 1.1%, meal down 0.8%, and soybean oil dropped 1.2% overnight.

·        
We heard at least two US Gulf soybean cargoes for October shipment were switched to Brazil.  

·        
USDA NASS crush is due out later.  Bloomberg average calls for 165.2 million soybeans for July, down from 184.5 million year ago and soybean oil stocks at the end of July to end up near 2.136 billion, up from 2.123 billion year
earlier. 

·        
June SBO use for biofuel was a poor 663 million pounds versus 788 during May, also lowest for all of 2021. 

·        
Cargo surveyor SGS reported August Malaysian palm exports at 1,191,053 tons, 257,430 tons below the same period a month ago or down 17.8%, and 251,852 tons below the same period a year ago or down 17.5%.  AmSpec reported 1.219
million tons, down from 1.428 million previous month.  ITS: Malaysian Aug palm exports reached 1.213 million tons, a 15.8% decrease from July. 

·        
Offshore values this morning were leading soybean oil 58 points higher and meal $1.90 lower.

·        
Malaysian palm oil

·        
China cash crush margins were last positive 105 cents on our analysis (112 previous) versus 121 cents late last week and 80 cents around a year ago. 

·        
China

 

Export
Developments

• Egypt’s
  GASC seeks at least 30,000 tons of soyoil and 10,000 tons of sunflower oil on Thursday for arrival between October 20-November 5.  At sight and 180-day letters of credit would be considered. 
  

 

 

 

Wheat

·        
US wheat is again mixed on lack of direction.  The downward trend this week in corn and soybeans is bearish for wheat futures but helping offset that is strong global import wheat demand. 
Note December Chicago wheat hit a 4-week low during yesterday’s session before rebounding to close 1.25 cents lower. 

·        
The USD was 5 points lower at the time this was written. 

·        
Paris wheat has been in a sideways trading range since August 18. 
December
Paris wheat was down 0.25 euros at 245.00. 

·        
India monsoon rains are expected to be above normal for the month of September.  June through August rainfall was about 9% deficient. 

·        
Ukraine AgMin: Grain exports for July-August totaled 8.6 million tons, up from 7.73 million year ago, including 4.6 million tons of wheat, 2.8 million tons of barley and 1.26 million tons of corn. 

·        
Russia AgMin: Farmers have already sown winter grains for next year’s crop on 2.4 million hectares, down from 3.5 million hectares at Sept 1, 2020. 

·        
Yesterday SovEcon lowered their Russia wheat crop estimate to 75.4 million tons from 76.2 million previously.  Low spring wheat yields were noted. 

 

Export
Developments. 

·        
Algeria started buying wheat (390,000-460,000 tons noted) and prices were initially reported at $353-$355/ton c&f.  They are in for October shipment.  Results could be finalized today. 

·        
Jordan passed on 120,000 tons of wheat.

·        
Results awaited: Bangladesh seeks 50,000 tons wheat.

·        
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. 

·        
Turkey seeks 245,000 tons of animal feed barley on September 7 for Sep 15-Oct 8 shipment. 

·        
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 .