FI Morning Grain Comments 10/01/21

PDF attached

 

Good
morning.

 

Please
note I will be out the balance of the week, attending the AFOA conference in Nashville. 

 

USDA
supply and demand, export inspections and crop progress are due out today.  For the USDA report, we don’t look for much in the way for surprises.  We expect no major changes for the US corn and soybean harvested area.  General consensus is for the US corn
yield to decrease a touch and soybean yield to be up around a half a bushel.  Our bias is for both corn and soybean yields to improve from September. 

 

This
morning we are seeing a weaker trade in the soybean complex and corn.  Palm futures fell 2%.  US wheat contracts are mostly higher after Egypt floated an import tender.  USD is now about 18 higher, WTI 26 cents lower, and equities higher. 

 

 

 

 

 

Weather

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 12, 2021

• Few
  changes were noted around the world in this first week of the outlook overnight.
  
• However,
  the second week will become more active in Europe, Russia and neighboring areas.
  
• India
  is still expecting rain in Uttar Pradesh and some far northern parts of the nation later this week.
  
• Most
  of India’s wetter biased weather is expected in the southern and eastern parts of the nation.
  
• China’s
  weather will be well mixed for a while with the Yellow River Basin, North China Plain and northeastern provinces seeing a net drying bias for a while.
  
• Tropical
  Storm Kompasu is still expected to move to Hainan, China Wednesday and Thursday and then into northern Vietnam Thursday into the weekend.
  
• Some
  damage to sugarcane and rice is possible especially on Hainan Island.
• Argentina
  will experience scattered showers during the balance of this week and then trend drier again for the weekend and especially next week.
  
• Brazil
  weather will be well mixed for most of the nation’s grain, oilseed, cotton, rice, coffee, citrus and sugarcane production areas over the next ten days.
  
• U.S.
  weather will continue active in the northern Plains today and Wednesday and across part of the southern Plains and Midwest during the balance of this week before seven days of drying evolves to support harvest progress and some winter crop planting.  
• Livestock
  stress is likely in eastern Montana, eastern Wyoming, the far western most Dakotas due to heavy snow, cold rain, windy conditions and falling temperatures
• Snow
  accumulations of 4 to 10 inches will be common with a few areas to get upwards to 15 inches
• Warm
  soil temperatures will melt the snow quickly, but there will still be some livestock stress and travel issues
• Moisture
  totals in the western Dakotas will range from 1.00 to 2.50 inches and the remainder of the Dakotas and Minnesota will
• receive
  0.50 to 1.50 inches with southwestern Minnesota and southeastern South Dakota driest
• An
  active weather pattern will also continue in eastern portions of the U.S. Plains and the Midwest into the latter part of this week before drier biased conditions evolve this weekend and last through most of next week
• Good
  harvest weather is expected this weekend and especially next week
• U.S.
  Delta and southeastern states will see a mix of weather during the next ten days, but moisture totals will be light and infrequent enough to support improved field conditions
• U.S.
  west-central and southwestern Plains will continue mostly dry as will the interior Pacific Northwest and most of California
• Europe
  rainfall will continue greatest in the southeast this week, but a more active weather pattern is expected in the central and north next week
• Russia,
  Belarus, the Baltic States and parts of Ukraine will experience a more active weather pattern next week after tranquil weather continues for a while longer this week

 

Bloomberg
Ag Calendar

Tuesday,
Oct. 12:

• USDA’s
  monthly World Agricultural Supply and Demand Estimates (WASDE) report, noon
• USDA
  export inspections – corn, soybeans, wheat, 11am
• China
  farm ministry’s CASDE outlook report
• U.S.
  crop conditions – corn, cotton, soybeans; winter wheat planted, 4pm
• AHDB
  grain market outlook conference
• French
  agriculture ministry’s crop production estimate
• EU
  weekly grain, oilseed import and export data
• Vietnam
  customs to release September commodity trade data
• HOLIDAY:
  Brazil

Wednesday,
Oct. 13:

• China’s
  first batch of September trade data, including imports of soybeans, meat and edible oils
• New
  Zealand food prices
• France
  AgriMer monthly grains report
• European
  cocoa grindings
• Brazil
  Unica cane crush, sugar output data (tentative)
• HOLIDAY:
  Thailand

Thursday,
Oct. 14:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• EIA
  weekly U.S. ethanol inventories, production
• Port
  of Rouen data on French grain exports
• North
  America cocoa grindings
• Suedzucker
  half-year earnings
• Agrana
  half-year earnings
• HOLIDAY:
  Hong Kong

Friday,
Oct. 15:

• 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
• U.S.
  monthly data on green coffee stockpiles
• Malaysia
  Oct. 1-15 palm oil exports
• FranceAgriMer
  weekly update on crop conditions
• HOLIDAY:
  India

Source:
Bloomberg and FI

 

 

 

 

 

 

 

 

 

 

Macros

 

Corn

·        
Corn is
lower on weaker soybeans, higher USD, and lower WTI crude oil. 

·        
USDA is due out at 11 am CT.  The US corn yield is projected at 176 bushels per acre, down from 176.3 last month. The soybean yield is pegged at 51.1 bu/ac, up from 50.6 last month. 

·        
Rain this week will fall across northern and eastern Plains and most of the Midwest, delaying harvest progress, particularly across North Dakota, eastern Iowa, and Missouri.

·        
We look for US corn harvest progress to be reported around 40 percent as of last Sunday, 9 points above average.  Harvesting delays this week should be uneventful.

·        
Argentina’s AgMin may impose a rule that forces producers to sell old crop corn (recently harvested) before they can register new-crop sales (corn that is going into the ground now).   This is interesting as some producers could
scale back on sowings.  But a lot of corn has already been sold.  The Reuters article that covered this topic mentioned Argentina producers already sold 38.5 million tons of the expected upcoming 55-million-ton crop. 

·        
France’s AgMin raised their corn production estimate by 900,000 tons to 13.9 million tons, up 4.3 percent from 2020. 

·        
China in its monthly supply and demand update lowered their corn production by 850,000 tons to 271 million after cutting the yield due to recent heavy and persistent rain that impacted quality.  Corn acreage, imports and consumption
remain unchanged. 

·        
China hog futures appreciated 3 precent on Tuesday.  China unveiled plans to buy pork from the reserves to support prices.

 

Export
developments.

• Turkey
  seeks 325,000 tons of feed corn on October 14 for November 14 through December 6 shipment. 
  

 

Soybeans

·        
Soybeans are lower (near session lows) on positioning ahead of the USDA report and weaker soybean oil.  November soybeans are at its lowest level since March 31.  Global vegetable oil prices eased overnight led by palm oil. 

·        
CBOT SBO registrations are down 6. 

·        
November Paris rapeseed futures were down 1.25 to 649.25 euros at the time this was written.

·        
France’s AgMin left unchanged their rapeseed production estimate at 3.3 million tons. 

·        
Rotterdam vegetable oil markets were down 20-25 euros from this time yesterday morning and meal was off 2-4 euros. 

·        
Cargo surveyor SGS reported month to date October 10 Malaysian palm exports at 496,696 tons, 51,724 tons below the same period a month ago or down 9.4%, and 66,154 tons below the same period a year ago or down 11.8%.

·        
There was an unusual volume of CME palm oil block trades overnight. Normally we see this type of volume on Sunday night. 

·        
Malaysian palm oil futures declined 2 percent on Tuesday or 100 ringgit to 4,855 and cash palm oil fell $35.00/ton to $1,237.50/ton. 

·        
Offshore values are leading soybean oil 12 points lower and meal $2.00/short ton lower. 

·        
China cash crush margins were last 216 cents/bu (206 previous) on our analysis versus 187 cents late last week and 97 cents around a year ago. 

·        
China in its monthly supply and demand update raised its domestic edible oils consumption and imports in for 2021-22 year from the previous month.

·        
China

·        
AgRural: Brazil soybean crop plantings reached 10% of the estimated area as of Oct. 7, up six percentage points from the previous week and compared to 3% in the same period of 2020/21.  “There was rainfall in a large part of Brazil
last week, which favored fieldwork in regions where the planting was already advanced and also allowed the sowing to start in regions where producers were waiting for better humidity conditions,” per Reuters.

 

Export
Developments

• None
  reported

 

Wheat

·        
Chicago and KC wheat traded higher earlier this morning but gains started to pair on weaker corn and soybeans.  MN wheat is higher in part to Egypt’s import tender.  Egypt’s GASC seeks wheat and lowest offer was believed to be
$325.25 a ton fob from Ukraine.  The wheat was sought for shipment between Nov. 23 and Dec. 3.

·        
The US Great Plains will see rain developing across the eastern areas Tuesday and Wednesday. The southern areas will see rain Thursday and Friday. 

·        
December Paris wheat was 1.25 euros higher at 269.75 euros a ton.

·        
France’s AgMin lowered the soft wheat production estimate by 900,000 tons to 35.2 million tons, up nearly 21 percent from 2020. 

·        
Yesterday SovEcon cut its 2021 estimates for Russia’s wheat crop by 0.1 million tons to 75.5 million tons. 

 

Export
Developments. 

·        
Egypt’s GASC seeks wheat and lowest offer was believed to be $325.25 a ton fob from Ukraine.  The wheat was sought for shipment between Nov. 23 and Dec. 3.

·        
Japan seeks 119,512 tons of food wheat on Thursday for arrival by January 31. 

·        
Jordan seeks 120,000 tons of wheat set to close October 13. 

·        
Japan’s AgMin in a SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of feed barley on October 13 for arrival by February 24.

·        
Pakistan seeks 90,000 tons of optional origin wheat on October 13.  They already bought 550k and 575k since September 23. 

·        
Jordan seeks 120,000 tons of barley on October 14 for LH December through FH February delivery. 

·        
Ethiopia seeks 300,000 tons of milling wheat on November 9.

 

Rice/Other

·        
(Bloomberg) — U.S. 2021-22 cotton ending stocks seen at 3.44m bales, 264,000 bales below USDA’s previous est., according to the avg in a Bloomberg survey of 11 analysts.

• Estimates
  range from 3.16m to 3.75m bales
• Global
  ending stocks seen 181,000 bales lower at 86.5m bales

·        
Mauritius seeks 6,000 tons of white rice on October 26 for January 1-March 31 shipment.