FI Morning Grain Comments 09/23/21

PDF attached

 

Good
morning.

 

WTI
crude oil was unchanged at 7:54 am CT, USD 33 points lower and Dow futures higher. 

 

Export
sales were withing expectations for soybeans, SBO and wheat, low end of expectations for corn and above expectations for meal.  Soybeans are higher led by another rally in soybean oil as traders try to make sense over yesterday’s confusion over US biofuel
mandate headlines.  Palm futures were up nearly 3%.  Corn is lower but a sharply lower USD may support prices. US biofuel blending proposals might be released sometime by the end of the week.  Wheat futures are higher on follow through buying, strong Black
Sea prices, and renewed global demand. 

 

 

 

 

 

 

 

Weather

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 23, 2021

• Some
  rain fell in Buenos Aires Overnight with central parts of the province getting 1.50 inches, but much of it was less than 0.25 inch.
• Argentina
  is still expected to be in a drier than usual mode for a while with restricted rainfall over the next ten days.
  
• Brazil
  weather was dry Wednesday, but everyone’s focus is on the potential development of isolated to scattered showers and thunderstorms during the week next week and on into early October.
  
• Brazil’s
  rainfall should be erratic and light initially.
• India’s
  monsoon may begin withdrawing next week and more significantly in early October.
  
• The
  late season withdrawal will be good for winter crops, but has slowed summer crop maturation and harvesting in the north.
  
• China
  will see another round of heavy rain in the Yellow River Basin and North China Plain in this coming week.
  
• That
  moisture in China will also be good for future wheat planting, but will delay all kinds of fieldwork until the ground firms up.
  
• Eastern
  Australia is expecting rain in the second week of the outlook
• Russia’s
  Volga Basin is getting much needed rain today and it may continue into the weekend – no general soaking is expected, but sufficient amounts (0.25 to 0.75 inch) will fall to improve topsoil moisture for planting, emergence and establishment of wheat, rye and
  barley
• In
  the U.S. some needed rain will fall in hard red winter wheat areas during mid-week next week that should improve planting conditions temporarily. 
• Tropical
  Depression 18 formed in the Atlantic Wednesday afternoon and was expected to slowly develop into a significant Hurricane in the coming week, but early indications suggest the system will stay northeast of the northern Leeward Islands and well east of North
  America
• A
  tropical cyclone has also formed near Guam that may become a significant storm in the next few days as it possibly moves toward Japan
• Tropical
  Depression Peter has dissipated and Rose will soon as well
• Tropical
  Storm Dianmu will move into Vietnam today and produce heavy rain in a part of the mainland areas of Southeast Asia

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

USDA
export sales

USDA
soybean export sales of 903,000 tons were within expectations and included China (624,200 MT, including decreases of 132,000 MT), Mexico (85,300 MT, including 47,500 MT switched from unknown destinations and decreases of 1,300 MT), and Egypt (58,000 MT). 
Soybean commitment are running 34.5% below the same period a year ago.  Soybean meal old crop sales were 45,000 tons but new-crop was good at 216,400 tons.  On top of that shipments of meal were 244,800 tons, supportive.  Soybean oil sales were only 4,300
tons and shipments 600 tons.  Corn export sales were 373,000 tons, low for this time of year (2.139MMT were sold a year earlier).  Corn commitment this season are running 10.4% above this time last year.  All-wheat sales slowed to 355,900 tons from 617,100
tons previous week but were within a range of expectations.  Pork sales were 32,600 tons. 

 

 

 

Macros

US
Initial Jobless Claims Sep 18: 351K (est 320K; prevR 335k; prev 332K)

US
Continuing Claims Sep 11: 2845K (est 2600K; prevR 2714K; prev 2665K)

Canadian
Retail Sales (M/M) Jul: -0.6% (est -1.2%; prev 4.2%)

Canadian
Retail Sales Ex-Auto (M/M) Jul: -1.0% (est -1.5%; prev 4.7%)

US
Chicago Fed National Activity Index Aug: 0.29 (est 0.50; prevR 0.75; prev 0.53)

 

 

Corn

·        
Corn is lower on soybean/corn spreading, talk of large US supplies, and lower crude oil.  Prices today may see support from a lower USD and Brazil’s decision to drop its import tax on corn imports until December 31.  However,
USDA corn export sales were 373,000 tons, low for this time of year. 

·        
The oats market continues to rally bias nearby position, and this is seen supportive for feedgrains. 

 

December
corn – December oats

 

·        
China will see additional rain across its northern growing areas further delaying corn harvest progress.

·        
We don’t think a smaller US ethanol mandate would have any large implication on corn prices, IMO.  The US currently produces enough ethanol to satisfy the current mandate level. 

·        
Germany asked the European Commission to create a wild boar-free zone along the Polish border to deter African swine fever (ASF).  They asked Poland for help. 

·        
US weekly EIA ethanol production was off 11,000 barrels per day to 926,000 barrels.  Trade was looking for production to be up 4,000.  Stocks increased 101,000 barrels to 20.111 million.  Trade was looking for a 4,000 increase. 
Production for the corn crop year (Sep-Aug) are off to a slow start relative to pre-pandemic levels and stocks are low for this time of year.  With ethanol margins improving due to energies rallying and corn prices dropping, we look for a good recovery in
production over the next few weeks. 

·        
The USDA Broiler Report showed eggs set in the US up 2 percent and chicks placed down 2 percent.  Cumulative placements from the week ending January 9, 2021, through September 18, 2021 for the United States were 6.91 billion.
Cumulative placements were up slightly from the same period a year earlier. 

·        
Germany asked the European Commission to create a wild boar-free zone along the Polish border to deter African swine fever (ASF).  They asked Poland for help.

 

 

 

Export
developments.

• None
  reported

 

Soybeans

·        
Soybeans are higher led by another rally in soybean oil as traders try to make sense over yesterday’s confusion over US biofuel mandate headlines.  US biofuel blending proposals might be released sometime by the end of the week. 

·        
USDA export sales of 903,000 tons included 624,200 tons for China, but crop year to date commitments is running 34.5 percent below this time last year.  41% of USDA’s export projection had been sold.  Soybean meal sales were good
and soybean oil poor. 

·        
Rapeseed futures are trading near an all-time high. 

·        
Argentina said they will appeal the US ruling in biodiesel import duties.  They have 60 days to file. 

·        
Malaysian palm futures were up nearly 3 percent on follow through buying from a report September palm production may fall short of expectations.  December futures were up 117 ringgit and cash increased $30/ton or 2.7%. 

·        
China palm futures were up 2.5%China soybeans were up 0.4%, meal up slightly, and soybean oil climbed 1.6%. 

·        
US biofuel blending proposals might be released sometime by the end of the week. 

·        
Globoil India edible oil conference will run from Thursday to Saturday. Look for direction for price projections for various vegetable oil. 

·        
G.G. Patel & Nikhil Research Company: India’s palm oil imports in 2021/22 are likely to drop 9% from a year earlier to 7.6 million tons from 8.35MMT year ago on a rise in domestic supplies, as farmers expand the area planted with
oilseeds.

• Edible
  oil imports seen at 13.3 mln T vs 13.7 mln T yr ago
• Edible
  oil supply seen at 8.5 mln T vs 8.05 mln T yr ago
• Edible
  oil demand seen at 21.8 mln T vs 21.36 mln T yr ago  (Reuters)

·        
Offshore values are leading soybean oil 4 points higher and meal $0.40/short ton higher. 

·        
China

·        
China cash crush margins were down sharply to 143 cents/bu on our analysis from 161 previous versus 162 cents late last week and 92 cents around a year ago. 

·        
Malaysia:

 

Export
Developments

• None
  reported 

 

Wheat

·        
Wheat futures are higher on follow through buying, strong Black Sea prices, and renewed global demand.  The USDA is sharply lower. 

·        
USDA export sales for all wheat of 355,900 tons are down from 617,100 tons previous week. 

·        
December Paris wheat was up 1.50 at 251 euros. 

·        
The USD was 34 points lower as of 7:52 am CT.

 

Export
Developments. 

·        
Algeria bought 300,000 to 500,000 tons of durum wheat at between $620 and $640/ton c&f. Another trader said Mexican durum was bought at $630 to $640/ton c&f and Canadian at $650/ton c&f, for November shipment.  (Reuters)

·        
Taiwan Flour Millers’ Association bought 49,580 tons of milling wheat from the United States.
It was for
PNW Nov. 6 and Nov. 20 shipment that included 27,780 tons of U.S. dark northern spring wheat of 14.5% protein content at $403.53 a ton FOB, and 16,690 tons of hard red winter wheat of 12.5% protein bought at $356.41 a ton FOB, 5,110 tons of soft white wheat
of 11% protein at $392.69 a ton FOB.

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

·        
Jordan seeks 120,000 tons of wheat on September 29. 

·        
Japan seeks 113,067 tons of food wheat from the US and Canada, this week for October 21-November 20 loading. 

·        
Pakistan seeks 640,000 tons of wheat on Sep. 29
for
shipment between January and February 2022. 

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

 

Rice/Other

·        
Results awaited: Lowest offer $428.94/ton CIF.  Bangladesh seeks 50,000 tons of rice on September 23. 

·        
Bangladesh seeks 50,000 tons of rice on October 4. 

 

 

USDA export sales

USDA soybean export sales of 903,000 tons were within expectations and included China (624,200 MT, including decreases of 132,000 MT), Mexico (85,300 MT, including
47,500 MT switched from unknown destinations and decreases of 1,300 MT), and Egypt (58,000 MT).  Soybean commitment are running 34.5% below the same period a year ago.  Soybean meal old crop sales were 45,000 tons but new-crop was good at 216,400 tons.  On
top of that shipments of meal were 244,800 tons, supportive.  Soybean oil sales were only 4,300 tons and shipments 600 tons.  Corn export sales were 373,000 tons, low for this time of year (2.139MMT were sold a year earlier).  Corn commitment this season are
running 10.4% above this time last year.  All-wheat sales slowed to 355,900 tons from 617,100 tons previous week but were within a range of expectations.  Pork sales were 32,600 tons. 

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING  09/16/21

	CURRENT MARKETING YEAR						NEXT MARKETING YEAR
COMMODITY	NET SALES	OUTSTANDING SALES		WEEKLY EXPORTS	ACCUMULATED EXPORTS		NET SALES	OUTSTANDING SALES
		CURRENT YEAR	YEAR AGO		CURRENT YEAR	YEAR AGO
	THOUSAND METRIC TONS
WHEAT
HRW	34.7	1,572.5	1,637.0	204.8	2,537.6	3,372.1	0.0	0.0
SRW	25.1	749.9	419.2	37.9	945.7	705.5	0.0	0.0
HRS	124.5	980.9	1,732.6	138.0	1,945.1	2,215.5	0.0	0.0
WHITE	115.4	575.5	1,296.5	109.1	1,350.7	1,570.8	0.0	0.0
DURUM	56.2	65.5	256.8	18.1	61.4	277.9	0.0	0.0
TOTAL	355.9	3,944.3	5,342.1	507.9	6,840.4	8,141.8	0.0	0.0
BARLEY	0.0	20.5	33.6	0.0	4.7	8.5	0.0	0.0
CORN	373.0	24,100.0	20,602.2	485.8	845.7	1,992.9	0.0	333.2
SORGHUM	123.0	2,269.4	2,587.0	1.3	3.1	176.9	0.0	0.0
SOYBEANS	902.9	22,659.7	31,996.2	274.4	532.7	3,425.9	10.0	12.0
SOY MEAL	45.0	1,090.6	642.4	244.8	11,190.3	11,466.2	216.4	2,365.2
SOY OIL	4.3	17.0	93.4	0.6	674.6	1,188.0	0.0	7.6
RICE
L G RGH	0.2	175.8	267.6	3.5	173.2	53.0	0.0	0.0
M S RGH	0.0	8.0	27.4	0.1	1.2	1.5	0.0	0.0
L G BRN	2.1	4.7	14.4	0.5	12.8	4.8	0.0	0.0
M&S BR	20.1	42.4	15.0	0.1	13.8	18.1	0.0	0.0
L G MLD	4.9	178.8	59.2	2.5	87.2	57.0	0.0	0.0
M S MLD	1.5	30.3	47.3	13.2	60.6	58.9	0.0	0.0
TOTAL	28.8	440.0	431.0	19.8	349.0	193.4	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	345.4	5,300.8	5,770.3	176.8	1,351.6	1,951.9	0.0	686.8
PIMA	23.5	155.3	212.6	3.8	42.9	76.6	0.0	0.0

 

This
summary is based on reports from exporters for the period September 10-16, 2021.

Wheat:  Net
sales of 355,900 metric tons (MT) for 2021/2022 were down 42 percent from the previous week, but up 1 percent from the prior 4-week average.  Increases primarily for the Philippines (126,600 MT, including decreases of 600 MT), Mexico (71,400 MT, including
decreases of 400 MT), Japan (60,600 MT, including decreases of 500 MT), Nigeria (45,000 MT), and unknown destinations (36,000 MT), were offset by reductions for Canada (8,800 MT).  Exports of 507,900 MT were down 1 percent from the previous week, but up 2
percent from the prior 4-week average.  The destinations were primarily to Mexico (91,400 MT), the Philippines (86,600 MT), Japan (86,400 MT), China (67,800 MT), and South Korea (53,300 MT).

Late
Reporting: 
For 2021/2022, net sales and exports totaling 16,000 MT of durum wheat were reported late for Italy. 

Corn: 
Net sales of 373,000 MT for 2021/2022 primarily for Canada (135,800 MT, including decreases of 1,400 MT), Mexico (134,500 MT, including decreases of 64,800 MT), Japan (72,200 MT, including 1,400 MT switched from unknown destinations), unknown destinations
(28,800 MT), and China (4,200 MT), were offset by reductions for Jamaica (4,700 MT).  Exports of 485,800 MT were to Mexico (254,500 MT), China (140,200 MT), Japan (32,300 MT), Jamaica (19,900 MT), and Guatemala (17,100 MT).

Optional
Origin Sales: 
For 2021/2022, the current outstanding balance of 170,000 MT is for unknown destinations

Barley: 
No net sales or exports were reported for the week. 

Sorghum: 
Total net sales for 2021/2022 of 123,000 MT were for China.  Exports of 1,300 MT were to Mexico.

Rice:
 Net
sales of 28,800 MT for 2021/2022 were down 9 percent from the previous week and 41 percent from the prior 4-week average.  Increases were primarily for South Korea (20,000 MT), Canada (4,700 MT), Saudi Arabia (1,600 MT), Costa Rica (1,200 MT), and Mexico (400
MT).  Exports of 19,800 MT were down 76 percent from the previous week and 66 percent from the prior 4-week average.  The destinations were primarily to Japan (12,000 MT), Mexico (4,500 MT), Canada (2,400 MT), Saudi Arabia (400 MT), and Jordan (200 MT). 

Soybeans: 
Net sales of 902,900 MT for 2021/2022 primarily for China (624,200 MT, including decreases of 132,000 MT), Mexico (85,300 MT, including 47,500 MT switched from unknown destinations and decreases of 1,300 MT), Egypt (58,000 MT), Japan (43,700 MT, including
40,600 MT switched from unknown destinations and decreases of 1,000 MT), and the Netherlands (30,800 MT, including 28,000 MT switched from unknown destinations), were offset by reductions for unknown destinations (800 MT).  Net sales for 2022/2023 of 10,000
MT resulting in increases for unknown destinations (12,000 MT), were offset by reductions for Indonesia (2,000 MT).  Exports of 274,400 MT were primarily to Mexico (83,800 MT), Japan (73,300 MT), China (66,200 MT), the Netherlands (30,800 MT), and Malaysia
(6,200 MT).

Export
for Own Account:
For 2021/2022, the current exports for own account outstanding balance is 5,800 MT, all Canada.

Soybean
Cake and Meal: 
Net sales of 45,000 MT for 2020/2021 were down 53 percent from the previous week and 24 percent from the prior 4-week average.  Increases primarily for Canada (12,900 MT, including decreases of 400 MT), the Philippines (10,800 MT), Guatemala (6,800 MT), Mexico
(5,300 MT), and Malaysia (4,000 MT), were offset by reductions primarily for the Dominican Republic (2,900 MT) and Panama (1,000 MT). 
For 2021/2022, net sales of 216,400 MT were primarily for Mexico (47,400 MT), France (45,000 MT), Germany (45,000 MT), the Dominican Republic (38,000 MT), and unknown destinations (15,000 MT). 
Exports of 244,800 MT were up noticeably from the previous week and up 85 percent from the prior 4-week average.  The destinations were primarily to the Philippines (69,400 MT), the Dominican Republic (58,100 MT), Mexico (34,500 MT), Canada (27,900 MT),
and Guatemala (20,900 MT). 

Soybean
Oil: 
Net sales of 4,300 MT for 2020/2021 resulting in increases for Jamaica (4,000 MT) and Mexico (600 MT), were offset by reductions for Canada (300 MT).  Exports of 600 MT were down 83 percent from the previous week and 72 percent from the prior 4-week average. 
The destination was primarily to Canada (300 MT).

Cotton: 
Net sales of 345,400 RB for 2021/2022 were up 21 percent from the previous week and 27 percent from the prior 4-week average.  Increases were primarily for China (219,800 RB), Turkey (52,700 RB), Pakistan (36,200 RB), Vietnam (9,700 RB, including 3,700 RB
switched from China, 500 RB switched from Japan, and decreases of 500 RB), and Peru (5,500 RB, including decreases of 100 RB).  Exports of 176,800 RB were down 26 percent from the previous week and 7 percent from the prior 4-week average.  The destinations
were primarily to

Turkey
(36,000 RB), China (32,700 RB), Vietnam (25,700 RB), Mexico (22,700 RB), and Pakistan (19,700 RB).  Net sales of Pima totaling 23,500 RB were up noticeably from the previous week and up 86 percent from the prior 4-week average.  Increases were primarily for
India (16,000 RB), Peru (2,400 RB), Turkey (1,500 RB), China (1,300 RB), and Greece (900 RB).  Exports of 3,800 RB were up 23 percent from the previous week, but down 45 percent from the prior 4-week average.  The destinations were to India (2,800 RB), China
(500 RB), Peru (300 RB), and Pakistan (200 RB).

Optional
Origin Sales: 
For 2021/2022, the current outstanding balance of 8,800 RB is for Pakistan. 

Exports
for Own Account: 
For 2021/2022, the current exports for own account outstanding balance of 4,800 RB is for China (4,700 RB) and Vietnam (100 RB).

Hides
and Skins: 
Net sales of 366,700 pieces for 2021 were up 32 percent from the previous week and 19 percent from the prior 4-week average.  Increases primarily for China (214,700 whole cattle hides, including decreases of 62,400 pieces), South Korea (96,400 whole cattle
hides, including deceases of 800 pieces), Brazil (16,900 whole cattle hides, including decreases of 100 pieces), Thailand (15,600 whole cattle hides, including decreases of 800 pieces), and Mexico (12,500 whole cattle hides, including decreases of 6,400 pieces),
were offset by reductions for Turkey (100 pieces) and Japan (100 pieces).  Exports of 342,000 pieces were down 19 percent from the previous week and 22 percent from the prior 4-week average.  Whole cattle hides exports were primarily to China (243,800 pieces),
South Korea (42,100 pieces), Mexico (16,100 pieces), Thailand (10,500 pieces), and Taiwan (9,900 pieces).

Net
sales of 142,900 wet blues for 2021 were down 28 percent from the previous week, but up 8 percent from the prior 4-week average.  Increases primarily for China (93,800 unsplit), Vietnam (43,600 unsplit, including decreases of 100 unsplit), and Mexico (11,900
grain splits, including decreases of 5,600 unsplit), were offset by reductions for Italy (500 unsplit) and Thailand (100 unsplit). 
Total
net sales for 2022 of 5,000 wet blues were for Mexico. 
Exports of 145,400 wet blues were down
34 percent from the previous week and 6 percent from the prior 4-week average.  The destinations were primarily to Italy (49,100 unsplit and 6,400 grain splits), Vietnam (31,300 unsplit), China (28,700 unsplit), Thailand (12,100 unsplit), and Mexico (6,100
grain splits and 1,700 unsplit).  Net sales of 1,201,600 splits were reported for Vietnam (1,200,000 pounds) and Taiwan (1,600 pounds).  Exports of 249,600 pounds were to Taiwan (169,600 pounds) and Vietnam (80,000 pounds). 

Beef: 
Net
sales of 15,800 MT for 2021 were up 3 percent from the previous week and 17 percent from the prior 4-week average.  Increases were primarily for Japan (5,100 MT, including decreases of 1,000 MT), South Korea (3,200 MT, including decreases 400 MT), China (3,000
MT, including decreases of 100 MT), Taiwan (900 MT, including decreases of 100 MT), and Canada (800 MT, including decreases of 100 MT).  Net sales of 1,600 MT for 2022 primarily for Mexico (1,100 MT), were offset by reductions for South Korea (100 MT).  Exports
of 18,200 MT were up 8 percent from the previous week and 1 percent from the prior 4-week average.  The destinations were primarily to Japan (5,000 MT), South Korea (4,700 MT), China (3,500 MT), Taiwan (1,400 MT), and Mexico (1,200 MT).  
 

Pork: 
Net
sales of 32,600 MT for 2021 were up 29 percent from the previous week and 12 percent from the prior 4-week average.  Increases were primarily for Mexico (16,300 MT, including decreases of 500 MT), Japan (6,800 MT, including decreases of 100 MT), Canada (2,000
MT, including decreases of 500 MT), South Korea (1,900 MT, including decreases of 800 MT), and Colombia (1,600 MT).  Exports of 36,100 MT were up 40 percent from the previous week and 28 percent from the prior 4-week average.  The destinations were primarily
to Mexico (19,000 MT), Japan (4,800 MT), China (4,700 MT), Canada (1,900 MT), and South Korea (1,800 MT).