FI Morning Grain Comments 10/05/21

PDF attached

 

Good
morning.

 

WTI
crude oil is extending its rally and USD rebounded to trade 14 points higher this morning.  US equity futures are suggesting a higher open.  Soybean meal, corn and wheat are all lower.  Soybeans turned higher.  Soybean oil is higher following a bullish run
for palm oil.  Malaysian palm futures rallied 155 MYR and cash was up a large $40.00/ton to $1,217.50/ton.  Higher WTI crude oil and expectations for tighter Malaysian palm stocks as of end of September were supportive features for vegetable oils.  Offshore
values are leading SBO and meal higher. 

 

 

Crop
production estimates

FI
soybean estimate

 

FI
corn estimate

 

StoneX
estimated the US corn crop at 15.022 billion bushels and yield at 176.6 bushels/acre.  The yield is down from 177.5 previously and production is up from 14.998 billion reported early September.  StoneX estimated the US soybean crop at 4.436 billion bushels
and yield at 51.3 bushels/acre.  In early September they had a 50.8 yield and production of 4.409 billion. 

 

 

 

Weather

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 5, 2021

• Rain
  fell Monday and overnight from southern Mato Grosso to southern Minas Gerais and northeastern Sao Paulo, Brazil benefiting some of the soybean and corn production areas as well as lifting moisture in a few rice, sugarcane, citrus, and coffee production areas.
  
• Rain
  should impact most of Brazil’s key agricultural areas during the next two weeks improving planting and early season crop development potential for most of the nation.
  
• Argentina
  will continue drier than usual over the coming week to ten days, despite a few showers.
  
• Interior
  parts of eastern Australia will get some rain in the coming week, but southeastern Queensland may stay dry.
  
• Western
  Australia will dry down as well.
• Parts
  of northern China will see waves of rain during the next five to seven days maintaining moisture abundance and keeping fieldwork a little slow, but the moisture will be good for future winter crop development.
  
• Western
  Russia, Ukraine and northeastern Europe will be dry during the coming week
  
• Relief
  from dryness is expected in south-central and parts of southeastern Europe.
  
• Northern
  India will be drying down as the monsoon ends
• A
  tropical cyclone is expected to evolve in the South China sea today and Wednesday and may impact Vietnam and/or China later in the coming week
  
• Another
  tropical cyclone is expected to evolve in the Philippines Sea late this week and into the weekend that may ultimately move toward Taiwan and southeastern China next week
• One
  more tropical cyclone may evolve in the eastern Bay of Bengal a week from now and move toward India later in the same week
• Some
  additional rain fell in coffee areas of Sul de Minas, Brazil Monday and showers will occur erratically until the weekend when it will increase more significantly
  
• Frequent
  rain is expected in Colombia and immediate neighboring areas generating a wet bias in coffee, corn, rice, and sugarcane areas
• Drought
  in the northwestern U.S. Plains will continue for the next ten days
• Net
  drying is expected in the central and southwestern U.S. Plains over the coming week
• Alternating
  periods of rain and sunshine will impact the eastern U.S. Midwest and southeastern states over the coming week slowing fieldwork
• Unusually
  hot weather will impact the northern U.S. Plains and Canada’s Prairies through Wednesday followed by gradual cooling to more normal temperatures
• Aggressive
  storm system followed by colder weather is expected in the Northern U.S. Plains and upper Midwest during mid-week next week
  
• Hurricane
  Sam became a mid-latitude storm near Greenland today
• Tropical
  wave near Bahamas will be slow to move over the next several days, but the potential for development into a tropical cyclone off the lower eastern U.S. coast is still quite low, according to the U.S. National Hurricane Center

 

Bloomberg
Ag Calendar

Tuesday,
Oct. 5:

• International
  Trade (US data)
• EU
  weekly grain, oilseed import and export data
• Moscow
  Golden Autumn Agriculture conference (Oct. 5-8)
• Malaysia
  Oct. 1-5 palm oil exports
• U.S.
  Purdue Agriculture Sentiment, 9:30am
• New
  Zealand Commodity Price
• New
  Zealand global dairy trade auction
• HOLIDAY:
  China

Wednesday,
Oct. 6:

• EIA
  weekly U.S. ethanol inventories, production
• Agricultural
  Technology and Food Salon, a virtual event organized by IFIC (Oct. 6-7)
• HOLIDAY:
  China

Thursday,
Oct. 7:

• FAO
  Food Price Index & cereals supply/demand brief
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, and beef, 8:30am
• Brazil’s
  Conab report on yield, area and output of corn and soybeans
• Port
  of Rouen data on French grain exports
• HOLIDAY:
  China

Friday,
Oct. 8:

• Labor
  Department’s September jobs report
• 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
• China’s
  CNGOIC to publish supply-demand reports on corn, soybeans, and other commodities
• FranceAgriMer
  weekly update on crop conditions

Monday

• U.S.
  crop conditions – corn, cotton, soybeans; winter wheat planted, 4pm

Tuesday

• USDA
  S&D’s, Crop production

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
611,621                 versus   250000-500000  range

Corn                     
808,814                 versus   375000-700000  range

Soybeans           
844,488                 versus   400000-900000  range

 

Macros

US
Trade Balance (USD) Aug: -73.3B (est -70.6B; prev -70.1B)

Canadian
International Merchandise Trade (CAD) Aug: 1.94B (prev 0.78B)

 

Corn

·        
Corn is
lower on US harvest pressure and unchanged crop conditions.  The trade will likely look for a slight uptick in US corn and soybean yield next week when USDA updates their S&D’s.  We are looking for higher yields for corn and soybeans for the October report. 
The US will continue talks with China this week over trade policies. 

·        
Northern, northwest China and Sichuan Basin will experience heavy rainfall (Bloomberg)

·        
US corn conditions were unchanged in the combined good and excellent categories, at trade expectations.  We left our US corn yield and production estimated unchanged from the previous week at 178.5 bu/ac and production at 15.197
billion bushels from the previous week.  US corn harvest progress was reported at 29 percent complete, up from 18 last week and compares to 24 percent last year and 22 percent 5-year average. 

·        
USDA US corn export inspections as of September 30, 2021 were 808,814 tons, above a range of trade expectations, above 636,037 tons previous week and compares to 910,973 tons year ago. Major countries included Mexico for 291,440
tons, Japan for 160,028 tons, and China for 140,951 tons.

 

Export
developments.

• None
  reported

 

 

Soybeans

·        
Soybeans turned higher after trading lower for the majority of the overnight session on US harvest pressure and expectations for Brazil to see good rains this week that will promote planting progress.  November soybeans are at
a 9-1/2 month low.  Soybean oil rallied following energy markets and palm oil. Meal is lower on product spreading. 

·        
Malaysian palm futures rallied 155 MYR and cash was up a large $40.00/ton to $1,217.50/ton.  Higher crude oil and expectations for tighter Malaysian palm stocks as of end of September were supportive features. 

·        
The US midwestern central and eastern crop areas should see favorable rain through Thursday. 

·        
AgRural reported Brazil was 4% complete with soybean plantings vs. 2% year ago. 

·        
China is on holiday through October 7. 

·        
US soybean conditions were unchanged in the combined good and excellent categories, at trade expectations, but we increased our US soybean yield and production estimated from the previous week to 51.5 bu/ac (+0.9 bu/ac) and production
to 4.446 billion bushels (up 17 mil bu).  US soybean harvest progress was reported at 34 percent complete, up from 16 last week and compares to 35 percent last year and 26 percent 5-year average. 

·        
USDA US soybean export inspections as of September 30, 2021 were 844,488 tons, within a range of trade expectations, above 485,469 tons previous week and compares to 2,083,224 tons year ago. Major countries included China for
354,634 tons, Indonesia for 122,200 tons, and Mexico for 102,827 tons.

 

Export
Developments

• Egypt
  seeks vegetable oils and lowest offer to buy at least 30,000 tons of soyoil was $1,381 a ton c&f.  The tender seeks arrival in Egypt between Nov. 25 and Dec. 20. GASC said traders should submit offers for payment with 180-day letters of credit and at sight
  (immediate payment).  One offer for 10,000 tons of sunflower oil was reported at $1,391 a ton c&f for 10,000 tons.
  

 

December
oil share

Source:
Reuters and FI

 

Wheat

·        
Wheat is lower on technical selling. 

·        
The USD was 14 points higher as of 7:44 am CT.

·        
Eastern Australia is expected to get more rain which is starting to gain attention during harvest season but does favor late planted crops.   

·        
Ukraine planted 3.1 million hectares of winter wheat as of October 4 or 46% of the expected area. 

·        
The US should see mostly dry weather across the Great Plains and western Corn Belt this week. 

·        
US winter wheat planting progress increased 13 points to 47 percent and compares to 50 percent year ago and 46 average.  Winter wheat plantings were 2 points above trade expectations. 

·        
USDA US all-wheat export inspections as of September 30, 2021 were 611,621 tons, above a range of trade expectations, above 383,584 tons previous week and compares to 679,769 tons year ago. Major countries included Philippines
for 242,343 tons, Peru for 67,456 tons, and Korea Rep for 53,669 tons.

 

Export
Developments. 

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

·        
Japan seeks 130,963 tons of food wheat from the US, Canada, and Australia for December loading. 

·        
Taiwan seeks 48,000 tons of wheat on October 7 for November 25 and December 9 shipment. 

·        
Jordan seeks 120,000 tons of feed barley on October 7 and 120,000 tons of wheat on October 6. 

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

·        
Turkey seeks 310,000 tons of feed barley, on Oct. 8. 

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

 

Rice/Other

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

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