FI Morning Grain Comments 09/20/21

PDF attached

 

Good
morning.

 

China
and US economic concerns are hitting global equity and commodity markets this morning.  Several factors are in play.  Evergrande problem in China. Upcoming Fed meeting, to name a couple.  WTI crude oil is $1.43 lower and USD 17 points higher.  Down futures
are pointing towards a more than 650-point decline. 

 

The
soybean complex is lower on US shipping woes and bearish outside markets.  Corn is down for the third consecutive day.  Funds are little more than 200,000 contracts long in corn.  Wheat prices fell as well.  US harvest weather remains favorable.  China’s north
and southwest portions of the corn belt will see heavy rains during the first half of the workweek, delaying harvesting progress. 

 

 

 

 

Weather

7-day

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR SUNDAY, SEP. 19, 2021

• U.S.
  eastern and northern Midwest, Delta and southeastern states will be wet early this week as remnants from Tropical Depression Nicholas merge with a mid-latitude cool front.
  
• Drier
  weather will follow for near a week.
• Frost
  and freezes will impact Canada’s Prairies early this week and frost will be possible in the upper U.S. Midwest, as well, but no serious crop damage is expected.
  
• Net
  drying will occur in Canada’s Prairies and the U.S. Plains and western Corn Belt over the next ten days raising some worry over continued drought in Canada and developing dryness in U.S. hard red winter wheat areas. 
  
• In
  South America the outlook has not changed much of Argentina or southern Brazil, but center west and center south Brazil will start seeing pre-monsoonal showers and thunderstorms this weekend and next week that may lift topsoil moisture for some early soybean
  planting.
• Belarus
  and southwestern Russia started receiving heavy rain during the weekend and that will bolster soil moisture for better winter crop emergence. 
  
• China
  experienced some heavy rain during the weekend in the Yellow River Basin and North China Plain and more will occur later this week.
• Northeastern
  China will be wettest early this week.
• India’s
  monsoon will continue nationwide for the next ten days. 
• Europe
  weather will be favorably mixed this week
• Africa
  rainfall has been and will continue good for coffee, cocoa, sugarcane, rice and other crops
• Australia
  will experience limited rainfall in this coming week, but there will be some showers in the south as there were during the weekend

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Monday,
Sept. 20:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions – corn, cotton, soybeans; winter wheat planted, 4pm
• China’s
  third batch of country-wise August trade data, including soy, corn and pork imports
• Monthly
  MARS bulletin on crop conditions in Europe
• USDA
  total milk production, 3pm
• Ivory
  Coast cocoa arrivals
• Malaysia
  Sept. 1-20 palm oil exports
• HOLIDAY:
  China, Japan, Korea

Tuesday,
Sept. 21:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• HOLIDAY:
  China, Korea

Wednesday,
Sept. 22:

• EIA
  weekly U.S. ethanol inventories, production
• U.S.
  cold storage data – pork, beef, poultry, 3pm
• HOLIDAY:
  Hong Kong, Korea

Thursday,
Sept. 23:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Globoil
  India – international vegetable oil conference, day 1
• The
  UN Food Systems Summit
• USDA
  red meat production, 3pm
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Japan

Friday,
Sept. 24:

• 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
• Globoil
  India – international vegetable oil conference, day 2
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  cattle on feed, hogs and pigs inventory, poultry slaughter, 3pm

Saturday,
Sept. 25:

• Globoil
  India – international vegetable oil conference, day 3

Source:
Bloomberg and FI

 

 

 

 

 

 

 

Commitment
of Traders

Fund
long positions were less than expected for corn, soybeans and soybean meal.  Near expectations for soybean oil and wheat. 

 

 

 

 

Macros

 

Corn

·        
Corn is down for the third consecutive day.  Funds are little more than 200,000 contracts long in corn.  US harvest weather remains favorable.  Index funds were good sellers of corn for the week ending 9/14.

·        
Look for US field yield reports this week to again vary.  Some are calling the US yield around 172-173 bu/ac but we are in the camp of near 177.  USDA September was 176.3.   

·        
China’s north and southwest portions of the corn belt will see heavy rains during the first half of the workweek, delaying harvesting progress. 

·        
NOLA shipping concerns continue to weigh on prices.  We are hearing there are several barges still stranded after settling on land after the river swelled. 

·        
Keep an eye on USDA inspections and shipments out of the Gulf, which should give us an indication if shipments resumed. 

·        
Brazil spot fob corn is cheaper than US origin by about $4/ton. 

·        
On a positive note, China August imports of US corn were 2.93 million tons, 17 percent higher than the previous record in July.  Ukraine imports of corn fell 12% to 301,383 tons. 

·        
Cattle on feed and the hogs & pigs reports will be released after the close on Friday. 

 

Export
developments.

• None
  reported

 

 

Soybeans

·        
November soybeans are flirting with its 200-day MA of $12.6750.  The soybean complex is lower on US shipping woes, higher USD, lower energy prices and carnage in the US equity markets.  We don’t discount the November testing its
recent contract low of $12.6275. 

·        
Egypt is in for vegetable oils. 

·        
Malaysian palm oil futures hit a 2-week low on Monday, settling at 4,173 ringgit, off 88.  Cash palm fell $17.50/ton to $1,092.50/ton.

·        
Malaysia left its October crude palm oil export tax unchanged at 8%.  They raised their reference price of 4,472.46 ringgit ($1,068.18) per ton for October, up from 4,255.52 ringgit in September.

·        
AmSpec reported Malaysian September 1-20 palm oil exports at 1.089 million tons, well up from 788,211 tons (38.2%) during the same period in August.  ITS reported a 43.5 percent increase to 1.121 million tons. 

·        
China is on holiday through Tuesday, returning Wednesday. 

·        
China August soybean imports were down 1.2% from a year ago and the US share of Aug imports, of only 17,575 tons, fell to its lowest since November 2018 (Aug 2020 was 166,370 tons).  China imported 9.04 million tons of Brazil
soybeans in August, up from 8.15 million year earlier, a 10.9% increase. 

·        
On a positive note, China August imports of US corn were 2.93 million tons, 17 percent higher than the previous record in July. 

·        
Offshore values are leading soybean oil 24 points lower and meal $1.70/short ton lower. 

·        
China cash crush margins were last positive 162 cents on our analysis versus 162 cents late last week and 92 cents around a year ago. 

 

Export
Developments

• Egypt’s
  GASC seeks 30,000 tons of soyoil and 10,000 tons of sunflower oil on Wednesday for arrival Nov. 15-30 and/or Dec. 1-15. 
  

 

Wheat

·        
Wheat prices are following corn and soybean lower along with a higher USD. 

·        
The central US Great Plains will see favorable temperatures and dry conditions for hard red winter wheat planting progress this week. 

·        
Argentina saw rain over the weekend across La Pampa.  Southern Brazil also picked up on rain. 

·        
Russian wheat export prices at the end of last week increased for the 10th consecutive week.  SovEcon reported a $1.50 increase to $304.50/ton from the previous week and IKAR reported a $1.00 rise to $301/ton for 12.5% protein
Black Sea wheat for early October shipment. 

·        
The USD was 17 points higher as of 7:47 am CT.

·        
December Paris wheat was down 2.75 at 245.00 euros. 

 

Export
Developments. 

·        
Algeria seeks 50,000 tons of durum wheat on September 22 for November shipment. 

·        
Jordan seeks 120,000 tons of feed barley on September 23 for Dec. 16-31, Jan. 1-15, Jan. 16-31, and Feb. 1-14.

·        
Pakistan’s lowest offer for 500,000 tons of wheat was $383.50/ton c&f. 

·        
Turkey seeks 260,000 tons of feed barley on September 21 for October 8-October 31 shipment. 

·        
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. 

• Jordan
  seeks 120,000 tons of wheat on September 22 for LH December through FH February shipment. 
  
• Taiwan
  seeks 49,580 tons of US wheat on September 23 between November 6 and November 20. 
  

 

Rice/Other

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