FI Morning Grain Comments 09/13/21

PDF attached

 

Good
morning.

 

WASHINGTON,
September 13, 2021—Private exporters reported to the U.S. Department of Agriculture export sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year.

 

Soybeans,
meal, corn and wheat are all lower on favorable US weekend weather for crop development, corn harvest progress and winter wheat planting progress.  The USD was 26 points higher as of 7 am CT.  Soybean oil found support from a snap in Malaysia’s losing streak
after Malaysian September 1-10 palm exports were reported 29% higher form the same period last month by SGS at 548,420 tons. In addition, India lowered their import taxes on crude palm oil to 2.5% from 10%.  We are seeing a few more wheat import developments. 
While many traders were looking for short term lows to be in during last Friday’s session, we can’t ignore favorable US harvesting pressure for corn and eventually for soybeans.  Our thinking is for October yields to tick higher when updated by USDA next month
if crop conditions hold steady or improve over the next couple of weeks.  Next set of major reports will be quarterly stocks and small grains summary at the end of this month.  We look for US wheat production to be upward revised by a small amount. 

 

 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR SEP. 13, 2021

• Typhoon
  Chanthu will block shipping to and from the Shanghai and Hangzhou Bay areas of China for the next three days.
  
• No
  port damage is expected, but the storm will prevent ships from coming and going through those areas.
  
• The
  storm will eventually move through southern South Korea and impact a part of western Japan.
  
• Tropical
  Storm Nicholas is expected to impact the middle and upper Texas coast today and Tuesday producing very heavy rain and windy conditions. Some port closures will be possible there as well.
  
• Weather
  in key crop areas around the world has not changed greatly since Friday.
• Good
  harvest progress is expected in North America this week,
• Argentina
  will be drying out while southern Brazil gets significant rain over the next few days.
  
• Southeastern
  and east-central China will dry down for several days and then get rain next week.
  
• Rain
  in Australia will be limited to coastal areas for a while.
• Parts
  of Russia’s Volga River Basin and Ukraine will get some rain this weekend into next week improving winter crop emergence and establishment potential.
  
• India
  will stay wet in the central, north and east. 
• Europe
  weather will be favorably mixed with sufficient sunshine and warm conditions to support fieldwork in many areas
• Central
  Vietnam is recovering from excessive weekend rain brought on by Tropical Storm Conson that moved from Da Nang Vietnam to southern Laos
• Heavy
  rain also fell Friday into Saturday in northern and western Luzon Islands, Philippines due to Typhoon Chanthu
• Eastern
  Taiwan was also beat up by Super Typhoon Chanthu early in the weekend with excessive rain and strong wind speeds
• Canada’s
  Prairies will trend cooler this week with frost and some freezes expected in the west and north and freezes may occur next week in southeastern areas

Source:
World Weather Inc. 

 

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Monday,
Sept. 13:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions – corn, cotton, soybeans; spring wheat harvest, 4pm
• AB
  Sugar trading update
• Ivory
  Coast cocoa arrivals
• New
  Zealand Food Prices

Tuesday,
Sept. 14:

• EU
  weekly grain, oilseed import and export data
• France
  agricultural ministry crop production estimate
• Ros
  Agro capital markets day
• Abares’
  agricultural commodities — September quarter 2021

Wednesday,
Sept. 15:

• EIA
  weekly U.S. ethanol inventories, production
• FranceAgriMer
  monthly grains report
• Malaysia
  Sept. 1-15 palm oil exports
• Brazil’s
  Unica releases cane crush and sugar output data (tentative)

Thursday,
Sept. 16:

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

Friday,
Sept. 17:

• 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

Funds
sold more than expected ag contracts for the week ending September 7, but positions were not that far off from trade expectations, with expectation to soybean meal, which could have been reflected in Friday’s (Sep 10) price reaction as funds added 3,000 contracts
with prices up $4.40-$5.50/short ton, mainly on spreading. 

 

 

 

 

 

 

 

 

Macros

 

Corn

·        
Favorable weekend US harvest weather is pressuring corn futures this morning. 
Soybeans,
meal, and wheat were also lower. 

·        
News is light for corn. 

·        
Traders should keep an eye on the December 200-day MA at $505.25.  A close below this level could signal a potential leg down to the $4.90-$4.95 area. 

·        
Baltic Dry Index was up nearly 8 percent to 4,163 points. 

 

Export
developments.

·        
None reported. 

 

Soybeans

·        
US soybeans and meal are lower
in part to USDA’s upward revision to the US soybean yield and increasing concerns over the spread of Covid-19 variants.  There is a new covid-19 outbreak in the province of Fujian (Beijing Capital). China’s Fujian bans population from leaving the city & suspends
bus, taxi, and train services. 

·        
Soybean oil found support from a snap in Malaysia’s losing streak after Malaysian September 1-10 palm exports were reported 29% higher form the same period last month by SGS at 548,420 tons. In addition, India lowered their import
taxes on crude palm oil to 2.5% from 10%, while the tax on crude soyoil and crude sunflower oil was reduced to 2.5% from 7.5%. The base import tax on refined grades of palm oil, soyoil and sunflower oil were lowered to 32.5% from 37.5%. Reuters noted after
the cuts, “crude palm oil, soyoil and sunflower oil imports will be subject to a 24.75% tax in total, including a 2.5% base import duty and other taxes, while refined grades of palm oil, soyoil and sunflower oil would carry a 35.75% tax in total.” 

·        
Offshore values are leading SBO 4 points higher and meal $0.90/short ton lower. 

·        
Malaysian palm oil

·        
China cash crush margins were last positive 137 cents on our analysis versus 139 cents late last week and 97 cents around a year ago. 

·        
China

·        
Argentina’s government signed a short-term deal with Belgian firm to dredge the Parana River.  The Parana is at its lowest in 77 years.

 

Export
Developments

• Under
  the USDA 24-hour announcement system, private exporters export sales of 132,000 tons of soybeans for delivery to unknown during the 2021-22 marketing year.

 

EIA
releases plant-level U.S. biofuels production capacity data

https://www.eia.gov/todayinenergy/detail.php?id=49516&src=email

 

Wheat

·        
Wheat is lower on good global weather and higher USD. 

·        
We are seeing a few more import developments. 

·        
December Paris wheat was down 0.50 at 237.25 euros. 

·        
The USD was 18 points higher as of 7:56 am CT.

·        
Tropical storm expected to impact TX and surrounding areas.  This could slow wheat shipments. 

·        
Russia exported 7.7 million tons of grain so far this season, down nearly 26 percent from the previous season.  Wheat exports fell 21.6% to 6.7 million tons, barley 43.7% to 0.9 million tons and corn 63.9% to 0.1 million tons.

·        
Russian wheat prices appreciated for the ninth consecutive week to $300/ton for 12.5% protein, according to IKAR, up $0.50/ton previous week.  SovEcon reported a $2.00 increase to $303/ton.

·        
Next set of major reports will be quarterly stocks and small grains summary.  We look for US wheat production to be upward revised by a small amount. 

 

Export
Developments. 

·        
Saudi Arabia’s SAGO bought 382,000 tons of wheat for November arrival.  The 12.5% protein content was bought at an average price of $355.68 a ton c&f. 

·        
Algeria bought around 330,000 tons of feed barley, optional origin, at $307-$308/ton for October shipment. 

·        
Jordan seeks 120,000 tons of feed barley on September 16 for Dec/Jan/Feb shipment. 

·        
Pakistan issued a new import tender for 500,000 tons of wheat set to closed on September 20. 

·        
Jordan seeks 120,000 tons of wheat on September 15 for last half December through first half February shipment. 

·        
Japan’s Ministry in their regular SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival in Japan by Feb. 24, 2022, set to close on Sept. 15.

·        
Bangladesh’s state grains buyer seeks another 50,000 tons of milling wheat on September 16. 

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

·        
Morocco seeks 363,000 tons of US wheat on September 21 for arrival by the end of the year. 

 

Rice/Other

·        
Bangladesh seeks 50,000 tons of rice on September 23.