FI Morning Grain Comments 09/30/21

PDF attached

 

Good
morning.

 

Grain
Stocks and Small Grains Annual Summary reports are due out at 11 am CT on Thursday.  Estimates are below. 

 

Month/Quarter
end.  WTI is about 90 cents lower and USD near unchanged.  US equities are higher. 

 

Mostly
higher traded in CBOT ag futures.  Third month rolling Malaysian palm oil futures hit an all-time record high of 4,598 before settling 140 higher at 4,595 ringgit.  China is on holiday October 1-8.  Coal shortages continue to hamper China industrial production. 
Some warn the problem will persist throughout the fall quarter. 

 

 

Monthly,
Malaysian 3^rd month rolling palm oil futures

 

Weather

 

 

 

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR SEPTEMBER 30, 2021

• Rain
  fell in a part of the U.S. Plains Wednesday and more is expected into Friday.
  
• Some
  areas benefited more than others and all of it was welcome, despite some disruption to farming activity.
  
• The
  U.S. Midwest will also see scattered showers and thunderstorms over the next several days with a similar impact.
  
• Argentina
  dryness is still a concern for western and northern parts of the nation
• Brazil’s
  center west and center south must have greater rainfall soon to support better soybean other early season crop planting.
  
• Heavy
  rain is expected from northern Rio Grande do Sul into Parana over the next week that may raise a little concern over field conditions and some replanting of early full season corn might eventually be needed while some wheat quality concerns may evolve as well.
  
• Southern
  Australia will receive waves of rain that will be good for reproducing winter crops and recent rain in southeastern Queensland and parts of New South Wales was welcome.
  
• Heavy
  rain in northern China from the Yellow River Basin into the Northeast Provinces is about to begin and last into early next week.
  
• Russia
  and Ukraine winter crop areas will be dry and mild to cool for another week
  
• Western
  Europe will become rainy.
• India’s
  monsoon will begin withdrawing more definitively.  
• Category
  Four Hurricane Sam will threaten no landmass in the western Atlantic Ocean into next week, although it will pass to the east of Bermuda
• Tropical
  Storm Victor formed in the eastern tropical Atlantic Ocean overnight, but will move to the central Atlantic and poses no threat, despite evolving briefly to hurricane status
• Typhoon
  Mindulle is still expected to stay far enough to the east of Japan to minimize its potential impact on Honshu
• A
  disturbance in the eastern Caribbean Sea could have influence on the Greater Antilles this weekend and the Bahamas late this weekend into early next week before coming close to the lower eastern U.S. Coast early next week
• Canada’s
  Prairies, the U.S. Pacific Northwest and northern Plains could encounter cooler temperatures and rain late next week and into the following weekend
• Greater
  than usual rainfall may impact western and northern Colombia, Ecuador and Peru during the next week impacting coffee, cocoa and sugarcane areas among other crops
  
• Eastern
  South Africa will receive some welcome rain in the next ten days

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

 

 

 

 

USDA
Export Sales

USDA
export sales for soybeans were above expectations at 1.094 million tons and included China for 776,500 tons (204,000 tons switched from unknown) and Egypt for 92,500 tons.  Combined old and new-crop soybean meal sales were within expectations and shipments
of 156,100 tons were down from 244,800 previous week.  Soybean oil sales for old crop improved to 6,000 tons and new-crop was much better than expected 22,400 tons.  New-crop soybean oil sales included Guatemala (17,000 MT).  Corn export sales were 370,400
tons, below expectations, near unchanged from the previous week, and included Guatemala(138,400 MT), Mexico (102,600 MT, including decreases of 5,900 MT).  All-wheat sales were poor at 290,100 tons and low end of expectations. 

 

 

 

Macros

US
Initial Jobless Claims Sep 25: 362K (est 330K; prev 351K)

US
Continuing Claims Sep 18: 2802K (est 2790K; prevR 2820K; prev 2845K)

US
GDP Annualized (Q/Q) Q2 T: 6.7% (est 6.6%; prev 6.6%)

US
Core PCE (Q/Q) Q2 T: 6.1% (est 6.1%; prev 6.1%)

US
Personal Consumption Q2 T: 12.0% (est 11.9%; prev 11.9%)

US
GDP Price Index Q2 T: 6.1% (est 6.1%; prev 6.1%)

 

Corn

·        
Corn is higher following wheat.  Lower WTI and lower than expected corn export sales are limiting gains. 

·        
China set the 2022 corn import quota at 7.2 million tons, but several agencies believe they will well surpass that level. 

·        
A Reuters trade estimate for ending US 2020-21 corn stocks is 1.155 billion bushels, 32 million below USDA’s current projection.  History between average September 1 stocks versus average estimates suggests corn prices should
be more prone to price reactions (in percentages) given the discrepancies, but price reactions among years vary due to the corn/soybean/wheat price relationships.  We think corn reacts the best to stocks when looking at price reactions, then soybeans followed
by wheat. 

·        
Weekly US ethanol production fell an unexpected 12,000 barrels per day (trade weas looking for up 13,000) to 914,000 barrels, lowest since late August.  Stocks increased for the second consecutive week by 109,000 to 20.220 million
barrels, near expectations. 

·        
The USDA Broiler Report showed eggs set in the United States up 6 percent and chicks placed down 3 percent.  Cumulative placements from the week ending January 9, 2021, through September 25, 2021, for the United States were 7.09
billion. Cumulative placements were up slightly from the same period a year earlier.

·        
The US has allocated 500 million dollars to monitor African swine fever and prevention. 

 

Export
developments.

• None
  reported

 

 

 

 

Soybeans

·        
Soybeans are higher on good export sales but a 6.00 euro decline in November EU rapeseed and lower trade might be limiting gains.  Soybean oil is up 57 points.  Offshore values favor SBO over meal.  US weather will turn drier
after a light weekend event for the Corn Belt and temperatures will remain above normal over the next week to two weeks. 

·        
Third month rolling Malaysian palm oil futures hit an all-time record high of 4,598 before settling 140 higher at 4,595 ringgit.  Cash palm rose $20/ton to $1,172.50/ton. 

·        
AmSpec reported Malaysian exports of Malaysian palm oil for September increased 33.6% to 1,628,168 tons from 1,219,166 tons during August. 

·        
Cargo surveyor ITS reported a 40 percent increase to 1.699 million tons from 1.2131 million during August. 

·        
China is on holiday October 1-8. 

·        
Coal shortages continue to hamper China industrial production, especially three northeastern provinces.  Some warn the problem will persist throughout the fall quarter. 

·        
A Reuters trade estimate for ending US 2020-21 soybean stocks is 174 million bushels, only one million below USDA’s current projection. 

·        
Canada is on holiday today.

·        
Offshore values are leading CBOT soybean oil 16 points higher and meal $2.90/short ton lower. 

·        
Overnight there was little change in China soybean and meal futures.  China soybeans oil was 144 higher or 1.6% and palm was up 2.1%. 

·        
China cash crush margins were last 175 cents/bu on our analysis (169 previous) versus 159 cents late last week and 90 cents around a year ago. 

 

Export
Developments

• None
  reported

 

 

 

 

Wheat

·        
Wheat is higher on steady global demand despite export sales coming in at the low end of expectations.  

·        
Lower US Great Plains saw as expected rain yesterday.  The central and southern areas will see rain today through Sunday. 

·        
Paris December wheat was up 1.50 at 257.50 euros. 

·        
The USD was 3 points lower as of 7:54 am CT.

·        
US wheat production when updated should end up at a 19-year low.  A Reuters survey calls for all-wheat production to end up at 1.680 billion bushels, below USDA August estimate of 1.697 billion.  In 2002, US wheat output stood
at 1.606 billion bushels, with 24 percent of the planted area abandoned.  This year USDA looks for 26 percent abandonment, and that figure should rise based on analysts’ estimates for spring wheat.  The focus on the all-wheat crop for this report will be on
other spring and durum production.  The trade looks for a 16-million-bushel reduction in other spring to 327 million from 343 million, and a 1 million reduction in durum to 34 million from 35 million in August. 

·        
US all-wheat stocks are estimated at 1.852 billion bushels and if realized would be the lowest for the end of the summer quarter since 2007-08, and down from 2.158 billion year earlier. 

 

Export
Developments. 

·        
Tunisia seeks 125,000 tons of soft wheat and 100,000 tons of barley on Friday for shipment in November and December. 

·        
Jordan passed on 120,000 tons of feed barley.  Export sales due out at the bottom of the hour. 

·        
Yesterday it was noted Pakistan’s lowest offer for 640,000 tons of wheat was $377.00/ton
for
shipment between January and February 2022. 

·        
Algeria ended up buying 580,000 tons of wheat this week, optional origin, at prices around $364/ton c&f for November 1-15 and November 16-30 shipment.  They last paid about $353 to $356.60/ton back in late August. 

·        
Bangladesh plans to buy 100,000 tons of wheat from Russia in a government-to-government tender. 

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

 

Rice/Other

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

 

 

 

USDA Export Sales

USDA export sales for soybeans were above expectations at 1.094 million tons and included China for 776,500 tons (204,000 tons switched from unknown) and Egypt for 92,500 tons.  Combined old and new-crop
soybean meal sales were within expectations and shipments of 156,100 tons were down from 244,800 previous week.  Soybean oil sales for old crop improved to 6,000 tons and new-crop was much better than expected 22,400 tons.  New-crop soybean oil sales included
Guatemala (17,000 MT).  Corn export sales were 370,400 tons, below expectations, near unchanged from the previous week, and included Guatemala(138,400 MT), Mexico (102,600 MT, including decreases of 5,900 MT).  All-wheat sales were poor at 290,100 tons and
low end of expectations. 

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING  09/23/21

 

	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	149.3	1,567.8	1,633.2	153.9	2,691.5	3,658.2	0.0	0.0
SRW	19.6	666.7	321.0	102.8	1,048.5	806.5	0.0	0.0
HRS	51.5	988.5	1,709.8	43.8	1,988.9	2,345.7	0.0	0.0
WHITE	74.8	582.0	1,304.5	68.3	1,419.0	1,679.0	0.0	0.0
DURUM	-5.0	60.5	233.8	0.0	61.4	298.6	0.0	0.0
TOTAL	290.1	3,865.5	5,202.3	368.9	7,209.3	8,787.9	0.0	0.0
BARLEY	5.0	25.5	33.6	0.0	4.7	8.5	0.0	0.0
CORN	370.4	23,794.1	21,879.2	676.2	1,522.0	2,743.0	0.0	333.2
SORGHUM	78.8	2,235.7	2,567.6	112.5	115.6	235.1	0.0	0.0
SOYBEANS	1,093.9	23,224.8	33,447.8	528.7	1,061.4	4,565.4	7.8	19.8
SOY MEAL	66.8	1,001.3	520.2	156.1	11,346.5	11,602.0	162.9	2,528.1
SOY OIL	6.0	22.4	68.7	0.6	675.2	1,219.0	22.4	30.0
RICE
L G RGH	11.5	185.5	358.2	1.8	175.1	54.5	0.0	0.0
M S RGH	0.0	8.0	27.0	0.0	1.2	2.0	0.0	0.0
L G BRN	0.2	4.4	13.8	0.6	13.4	5.5	0.0	0.0
M&S BR	12.1	54.3	15.1	0.1	13.9	18.2	0.0	0.0
L G MLD	7.1	139.7	57.4	46.2	133.5	60.9	0.0	0.0
M S MLD	44.1	68.4	75.9	6.0	66.6	63.0	0.0	0.0
TOTAL	75.1	460.3	547.3	54.8	403.7	204.1	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	571.4	5,708.3	5,785.9	163.9	1,515.5	2,170.1	0.0	686.8
PIMA	16.9	160.4	221.3	11.7	54.6	87.4	0.0	0.0

 

 

This
summary is based on reports from exporters for the period September 17-23, 2021.

Wheat:  Net
sales of 290,100 metric tons (MT) for 2021/2022 were down 19 percent from the previous week and 30 percent from the prior 4-week average.  Increases primarily for Japan (51,500 MT, including decreases of 5,700 MT), Taiwan (49,600 MT), Nigeria (44,700 MT, including
44,000 MT switched from unknown destinations), the Philippines (41,500 MT), and Colombia (41,300 MT, including decreases of 1,400 MT), were offset by reductions primarily for unknown destinations (66,400 MT).  Exports of 368,900 MT were down 27 percent from
the previous week and 19 percent from the prior 4-week average.  The destinations were primarily to China (71,400 MT), Nigeria (50,000 MT), Thailand (47,500 MT), Mexico (46,400 MT), and Venezuela (38,900 MT). 

Corn: 
Net sales of 370,400 MT for 2021/2022 primarily for Guatemala (138,400 MT), Mexico (102,600 MT, including decreases of 5,900 MT), Canada (87,600 MT, including decreases of 200 MT), Japan (77,400 MT, including 88,600 MT switched from unknown destinations and
decreases of 11,800 MT), and Costa Rica (33,000 MT, including 30,000 MT switched from unknown destinations), were offset by reductions primarily for unknown destinations (110,900 MT).  Exports of 676,200 MT were primarily to Mexico (262,200 MT), China (140,400
MT), Japan (107,900 MT), Honduras (49,500 MT), and Costa Rica (30,900 MT).

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

Barley: 
Total net sales of 5,000 MT for 2021/2022 were for Japan. No exports were reported for the week.

Sorghum: 
Net sales of 78,800 MT for 2021/2022 were reported for unknown destinations (65,000 MT), Mexico (11,300 MT), and China (2,500 MT, including decreases of 1,400 MT).  Exports of 112,500 MT were to China (110,500 MT) and Mexico (2,000 MT).

Rice:
 Net
sales of 75,100 MT for 2021/2022 were up noticeably from the previous week and from the prior 4-week average.  Increases were primarily for Japan (39,300 MT), Taiwan (12,000 MT), Guatemala (6,000 MT), El Salvador (5,400 MT), and Canada (3,900 MT).  Exports
of 54,800 MT were up noticeably from the previous week and up 29 percent from the prior 4-week average.  The destinations were primarily to Iraq (43,100 MT), Canada (2,900 MT), Mexico (2,800 MT), Jordan (2,600 MT), and Saudi Arabia (2,500 MT). 

Soybeans: 
Net sales of 1,093,900 MT for 2021/2022 primarily for China (776,500 MT, including 204,000 MT switched from unknown destinations), Egypt (92,500 MT), the Netherlands (86,300 MT, including 84,000 MT switched from unknown destinations), Turkey (55,000 MT), and
Mexico (43,400 MT), were offset by reductions for unknown destinations (131,400 MT).  Total net sales of 7,800 MT for 2022/2023 were for Cuba.  Exports of 528,700 MT were primarily to China (292,200 MT), the Netherlands (86,300 MT), Italy (39,200 MT), Mexico
(33,900 MT), and Spain (33,000 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 66,800 MT for 2020/2021 were up 48 percent from the previous week and 22 percent from the prior 4-week average.  Increases primarily for the Philippines (47,300 MT), Spain (31,900 MT, including 30,000 MT switched from Italy), Canada (5,800 MT),
Costa Rica (4,900 MT), and Guyana (3,700 MT switched from unknown destinations), were offset by reductions primarily for Italy (30,000 MT). 
For 2021/2022, net sales of 162,900 MT primarily for Guatemala (59,400 MT), the Dominican Republic (38,500 MT), Mexico (21,900 MT), Canada (15,000 MT), and Colombia (8,900 MT), were offset by reductions for Costa Rica (4,900 MT). 
Exports of 156,100 MT were down 36 percent from the previous week, but up 17 percent from the prior 4-week average.  The destinations were primarily to the Philippines (48,200 MT), Spain (31,900 MT), Mexico (25,800 MT), Colombia (17,500 MT), and Panama
(11,000 MT).    

Soybean
Oil: 
Net sales of 6,000 MT for 2020/2021 were up 39 percent from the previous week and up noticeably from the prior 4-week average.  Increases were reported for Costa Rica (2,500 MT), Morocco (1,900 MT), the Dominican Republic (900 MT), Venezuela (500 MT), and
Canada (200 MT).  Net sales for 2021/2022 of 22,400 MT were primarily for Guatemala (17,000 MT), the Dominican Republic (2,400 MT), and Canada (2,300 MT).  Exports of 600 MT were up 6 percent from the previous week, but down 71 percent from the prior 4-week
average.  The destinations were to Canada (500 MT) and Honduras (100 MT).

Cotton: 
Net sales of 571,400 RB for 2021/2022 were up 65 percent from the previous week and 92 percent from the prior 4-week average.  Increases primarily for China (418,600 RB), Turkey (39,600 RB, including decreases of 100 RB), Indonesia (33,400 RB), Mexico (16,400
RB), and Vietnam (15,400 RB, including 1,600 RB switched from China), were offset by reductions for Bangladesh (100 RB).  Exports of 163,900 RB were down 7 percent from the previous week and 11 percent from the prior 4-week average.  The destinations were
primarily to China (36,000 RB), Pakistan (34,000 RB), Mexico (23,100 RB), Turkey (16,000 RB), and Thailand (9,200 RB).   Net sales of Pima totaling 16,900 RB were down 28 percent from the previous week, but up 13 percent from the prior 4-week average.  Increases
were primarily for India (10,600 RB), Peru (2,500 RB), China (1,700 RB), Bangladesh (500 RB), and Turkey (400 RB).  Exports of 11,700 RB were up noticeably from the previous week and up 99 percent from the prior 4-week average.  The destinations were primarily
to China (5,600 RB), India (2,800 RB), Egypt (1,700 RB), Pakistan (800 RB), and Peru (700 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 284,600 pieces for 2021 were down 22 percent from the previous week and 17 percent from the prior 4-week average.  Increases primarily for China (186,300 whole cattle hides, including decreases of 19,500 pieces), Mexico (40,900 whole cattle hides,
including decreases of 3,300 pieces), South Korea (34,200 whole cattle hides, including decreases of 2,600 pieces), Thailand (17,200 whole cattle hides, including decreases of 800 pieces), and Taiwan (5,600 whole cattle hides, including decreases of 200 pieces),
were offset by reductions for Germany (200 pieces) and Japan (200 pieces).  Exports of 213,600 pieces were down 38 percent from the previous week and 45 percent from the prior 4-week average.  Whole cattle hides exports were primarily to China (151,900 pieces),
South Korea (21,900 pieces), Thailand (11,300 pieces), Mexico (11,300 pieces), and Taiwan (6,900 pieces).

Net
sales of 130,600 wet blues for 2021 were down 9 percent from the previous week and 5 percent from the prior 4-week average.  Increases were primarily for Italy (31,700 unsplit and 15,600 grain splits, including decreases of 400 unsplit), Thailand (28,500 unsplit,
including decreases of 300 unsplit), Vietnam (25,900 unsplit, including decreases of 100 unsplit), China (20,000 unsplit), and Mexico (8,600 grain splits, including decreases of 200 grain splits).  Exports of 123,000 wet blues were
down
15 percent from the previous week and 12 percent from the prior 4-week average.  The destinations were primarily to Italy (45,200 unsplit and 4,800 grain splits), Vietnam (30,400 unsplit), China (18,900 unsplit), Mexico (10,300 grain splits), and Thailand
(6,900 unsplit).  Net sales of 139,700 splits were reported for China (137,600 pounds) and Taiwan (2,100 pounds).  Exports of 376,600 pounds were primarily to China (212,600 pounds) and Vietnam (120,000 pounds).

Beef: 
Net
sales of 16,100 MT reported for 2021 were up 2 percent from the previous week and 9 percent from the prior 4-week average.  Increases primarily for Japan (5,500 MT, including decreases of 800 MT), South Korea (5,300 MT, including decreases 500 MT), China (2,800
MT, including decreases of 100 MT), Taiwan (1,100 MT, including decreases of 100 MT), and Mexico (700 MT), were offset by reductions for the Philippines (800 MT).  Net sales of 1,000 MT for 2022 were primarily for Guatemala (500 MT), Mexico (200 MT), and Japan
(200 MT).  Exports of 18,500 MT were up 2 percent from the previous week and 3 percent from the prior 4-week average.  The destinations were primarily to Japan (5,500 MT), South Korea (4,900 MT), China (3,500 MT), Taiwan (1,100 MT), and Mexico (1,000 MT).   

Pork: 
Net
sales of 42,500 MT reported for 2021 were up 31 percent from the previous week and 36 percent from the prior 4-week average.  Increases were primarily for Mexico (20,400 MT, including decreases of 400 MT, 200 MT – late), China (14,000 MT, including decreases
of 500 MT), Japan (2,600 MT, including decreases of 300 MT), Colombia (1,400 MT, including decreases of 200 MT), and Nicaragua (900 MT).  Total net sales of 100 MT for 2022 were for Australia.  Exports of 30,300 MT were down 16 percent from the previous week,
but up 2 percent from the prior 4-week average.  The destinations were primarily to Mexico (14,700 MT, including 200 MT – late), China (4,400 MT), Japan (3,600 MT), Canada (1,600 MT), and South Korea (1,600 MT). 

Export
Adjustment:  Accumulated
exports of pork to China were adjusted down 118 MT for week ending September 16^th. This shipment was reported in error.

Late
Reporting:  For
2021/2022, net sales and exports totaling
200 MT of pork were reported late for Mexico