FI Morning Grain Comments 09/27/21

PDF attached

 

Good
morning.

 

WASHINGTON,
September 27, 2021—Private exporters reported to the U.S. Department of Agriculture export sales of 334,000 metric tons of soybeans for delivery to China during the 2021/2022 marketing year.

 

WTI
crude is higher and USD slightly higher.  Soybeans are higher led by meal/oil spreading while most grains are lower from favorable US weather and disappointing US hog inventories.  Mineral oil provided some support to palm oil early, but palm futures settled
lower on renewed talk of higher palm production.  China was mixed.  Offshore values are leading meal higher and SBO lower.  News since yesterday was light and we look for traders to start positioning ahead of the Thursday USDA reports.

 

 

 

 

Weather

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 27, 2021

• U.S.
  hard red winter wheat areas will get rain this week, but not in the west
• U.S.
  Midwest will get rain over the coming week beginning in the second half of the week in the western Corn Belt and Advancing to the east thereafter
• West
  Texas will get some showers and experience cooling to slow crop maturation later this week
• Drought
  will continue undaunted in Canada’s Prairies, the northwestern U.S. Plains and most of the far western United States
• Argentina’s
  west-central and northwest will continue too dry and in need of rain
• Eastern
  Argentina and southern Brazil will get rain this week
• Brazil’s
  center west and center south crop areas will see less rain this week, but it will resume during the weekend and next week
• Southern
  and eastern Australia crop areas will get rain in this coming week
• China
  weather will be mixed with a little too much rain continuing in the north
• India
  will see heavy rain from Telangana to Gujarat early this week and then scattered showers of light intensity will impact the nation for another week 
• Parts
  of southern Europe are still dry
• Western
  Commonwealth of Independent States will be drier this week 
• Russia’s
  Volga River Basin crops will improve after recent rain, but temperatures will be cool
• Typhoon
  Mindulle may pass to the southeast of Honshu Japan late this week
• Category
  Four Hurricane Sam will remain over open water in the Atlantic Ocean with little threat to land for a while, but will pass to the east of Bermuda this weekend 

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

Saturday,
Sept. 25:

• Globoil
  India – international vegetable oil conference, day 3

Monday,
Sept. 27:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  crop conditions – corn, cotton, soybeans; winter wheat planted, 4pm
• Ivory
  Coast cocoa arrivals

Tuesday,
Sept. 28:

• EU
  weekly grain, oilseed import and export data

Wednesday,
Sept. 29:

• EIA
  weekly U.S. ethanol inventories, production
• Vietnam’s
  General Statistics Office releases Sept. trade data
• Brazil’s
  Unica releases sugar output and cane crush data (tentative)

Thursday,
Sept. 30:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• USDA
  quarterly stocks – corn, soy, wheat, barley, oat and sorghum, noon
• U.S.
  wheat production, noon
• U.S.
  agricultural prices paid, received, 3pm
• Ivory
  Coast farmgate cocoa prices to be announced
• Malaysia
  September palm oil exports
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  Canada

Friday,
Oct. 1:

• 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
• New
  cocoa season in Ivory Coast starts
• U.S.
  DDGS production, corn for ethanol
• USDA
  soybean crush, 3pm
• Australia
  commodity index
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  China, Hong Kong

Source:
Bloomberg and FI

 

 

 

 

 

 

 

Commitment
of Traders

Funds
were more long in corn, Chicago wheat and meal while soybean oil and soybeans were less long, but we don’t see any price implications given the small discrepancies between estimates and actual positions as of last Tuesday.  Index funds added to their long
position in corn and sold soybeans. 

 

 

 

 

 

 

Macros

 

Corn

·        
Corn is lower on US harvest pressure and disappointing US hog inventories. 

·        
Higher WTI crude oil may limit losses and could create a two-sided trade. 

 

Export
developments.

• Taiwan’s
  MFIG seeks 65,000 tons of corn September 28 for shipment between Dec. 6 and Dec. 25, 2021, or later if from the PNW. 
  

 

US
hog inventories were bearish as they are running 96.1 percent from a year ago versus 98.3 percent trade estimate.  June-to-August pig crop that was down 6% from last summer, supportive for winter month hog prices but bearish for feed.  Friday afternoon pork
carcass cutout value jumped $6.48 to $110.77 per cwt, highest since Aug. 27.  Side note, cattle on feed beat expectations and inventories as of September 1 were second largest on record. 

 

 

US
cattle on feed was better than expected as of September 1 and placements were much higher than expected at 102.3 percent.  September 1 on feed was second highest on record. 

 

 

Soybeans

·        
Soybeans are higher from a rally in soybean meal on concerns China power outages will reduce feed supplies.  Lower trade in soybean oil is aiding meal as well. 

·        
Rapeseed futures traded at all-time high on Friday but are off 3.25 euros this early Monday. 

·        
Offshore values are leading CBOT soybean oil 85 points lower and meal $1.00/short ton higher. 

·        
Malaysian palm futures decreased 47 ringgit and cash was down $15.00/ton to 1,142.50. 

·        
China palm futures were up 0.2%.  China soybeans were down 0.7%, meal down 0.3%, and soybean oil climbed 0.3%. 

·       
China

·        
China cash crush margins were last 160 cents/bu on our analysis versus 159 cents late last week and 90 cents around a year ago. 

·        
Malaysia:

 

Export
Developments

• Last
  week USDA bought 1,260 tons of vegetable oil in 4 liter cans and 1,071 tons in plastic bottles, under the PL480 program.  Prices for the cans ranged from $1,900.94 to $2,525.26 per ton. The plastic bottles were done at a price of $1,783.83 per ton.

 

Wheat

·        
Wheat futures are mixed on lack of fresh news.  Three import tender announcements were reported since late Friday. 

·        
Paris wheat is trading off a 5-week high, with December down 1.50 at 251.75 euros. 

·        
The USD was 7 points higher as of 8:19 am CT.

 

Export
Developments. 

·        
Algeria seeks 50,000 tons of wheat, optional origin, on September 28, with results likely September 29, for November 1-15 and November 16-30 shipment. 

·        
The UN seeks 200,000 tons of milling wheat on October 8 for Ethiopia for delivery 90 days after contract signing.

·        
Jordan seeks 120,000 tons of feed barley on September 30 for Dec-Feb shipment. 

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

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

·        
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.