FI Morning Grain Comments 10/19/21

PDF attached

 

Good
morning

 

CBOT
soybeans and meal are higher, led by meal that is pressuring soybean oil.  December crush overnight traded at an impressive $1.6275.  January is around $1.4950.  We are hearing some Brazilian producers expected to receive fertilizer and glyphosate have seen
contracts canceled due to lack of supply.  US Midwest weather forecast was mostly unchanged this morning.  US Midwest rain this week should favor the north central Midwest mid-workweek and eastern areas Thursday through Friday.  We are hearing better than
expected soybean yields for IA.  ECB bean harvest was delayed last week and should increase this week.  WCB harvest progress is running hard.  Egypt is in for vegetable oils on Wednesday.  Malaysian is on holiday.  Offshore values are leading soybean oil 37
points lower and meal $1.00/short ton higher.

 

Corn
is slightly higher on ongoing fund buying as WTI crude continues to rally, now above $83//barrel.  US ethanol margins have improved with higher energy prices (WTI) and some estimated they are approaching  2.00.  China approved imports of breeding pigs from
Ireland.  The pigs must be in quarantine no less than 30 days before getting shipped. 

 

US
wheat futures prices are higher on good global demand, short supply for high protein wheat, and unfavorably dry weather across the US Great Plains bias western and southern areas.  Note Russian wheat export prices were stable last week after 13 weeks of consecutive
gains.  The Great Plains will see light showers across eastern NE Tuesday and central TX Thursday.  Rest of the Great Plains will be mainly dry this week. 

 

 

 

 

 

 

Weather

7-day

 

 

 

Bloomberg
Ag Calendar

Tuesday,
Oct. 19:

• EU
  weekly grain, oilseed import and export data
• New
  Zealand global dairy trade auction
• S&P
  Global Platts European Sugar Virtual Conference, day 1
• GrainCom
  conference, Geneva, day 2
• HOLIDAY:
  Malaysia, Pakistan

Wednesday,
Oct. 20:

• EIA
  weekly U.S. ethanol inventories, production
• China’s
  third batch of trade data, including soy, corn and pork imports by country
• Malaysia
  Oct. 1-20 palm oil exports
• S&P
  Global Platts European Sugar Virtual Conference, day 2
• USDA
  total milk production, 3pm
• GrainCom
  conference, Geneva, day 3
• HOLIDAY:
  Indonesia

Thursday,
Oct. 21:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports
• USDA
  red meat production, 3pm

Friday,
Oct. 22:

• 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
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  cattle on feed; cold storage data for pork, beef and poultry, 3pm
• USDA
  NASS Chicken and Eggs. 
• HOLIDAY:
  Thailand

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
139,753                 versus   300000-550000  range

Corn                     
976,218                 versus   650000-850000  range

Soybeans           
2,298,315             versus   1600000-2100000             range

 

Macros

 

Corn

·        
Corn is
slightly higher on ongoing fund buying as WTI crude continues to rally, now above $83//barrel. 

·        
USD was down nearly 30 points and WTI up around 48 cents. 

·        
US ethanol margins have improved with higher energy prices (WTI) and some estimated they are approaching  2.00. 

·        
US corn conditions were unchanged from the previous week at 60 for the combined good and excellent categories, one point below the previous week and 5 points below average. 

·        
China approved imports of breeding pigs from Ireland.  The pigs must be in quarantine no less than 30 days before getting shipped. 

·        
Yesterday cattle futures slipped from a 1-month high in part to higher corn prices. 

·        
Traders should continue to monitor Argentina as some commercials late last week said the government was intervening on corn and wheat export licenses, at least for old crop.

·        
Most of Brazil is forecast to receive 0.75 to 2.50 inches of rain through Friday.  Mato Grosso do Sul and neighboring states will remain dry.

·        
USDA US corn export inspections as of October 14, 2021 were 976,218 tons, above a range of trade expectations, above 842,848 tons previous week and compares to 912,646 tons year ago. Major countries included Mexico for 352,928
tons, China for 144,366 tons, and Japan for 138,644 tons.

 

Export
developments.

• None
  reported

 

 

Soybeans

·        
CBOT soybeans and meal are higher, led by meal that is pressuring soybean oil. 

·        
December crush overnight traded at an impressive $1.6275.  January is around $1.4950.  We are hearing some Brazilian producers expected to receive fertilizer and glyphosate have seen contracts canceled due to lack of supply. 
US Midwest weather forecast was mostly unchanged this morning. 

·        
US Midwest rain this week should favor the north central Midwest mid-workweek and eastern areas Thursday through Friday. 

·        
US soybean harvest progress was reported at 60 percent, 2 points below an average trade guess, below 73 year ago and above 55 percent average. 

·        
We are hearing better than expected soybean yields for IA.  ECB bean harvest was delayed last week and should increase this week.  WCB harvest progress is running hard

·        
Egypt is in for vegetable oils on Wednesday. 

·        
Malaysian palm oil futures: Holiday

·        
From this time yesterday morning, Rotterdam meal and oil values were unchanged to 20 euros lower (rapeseed up from yesterday afternoon) and meal mixed. 

·        
Offshore values are leading soybean oil 37 points lower and meal $1.00/short ton higher.

·        
China cash crush margins were last 216 cents/bu on our analysis (203 previous) versus 206 cents late last week and 95 cents around a year ago. 

·        
China

·        
Southern Paraguay and southern Brazil will see a drier weather pattern through the next two weeks that will be beneficial for fieldwork.  Regular rounds of showers and thunderstorms will occur through the next two weeks across
northern Brazil. 

·        
Brazil lorry drivers threatened to go on strike from November 1 if the government does not open discussion to adjust diesel costs and/or increase inland freight prices. 

·        
USDA US soybean export inspections as of October 14, 2021 were 2,298,315 tons, above a range of trade expectations, above 1,743,137 tons previous week and compares to 2,336,517 tons year ago. Major countries included China for
1,711,848 tons, Egypt for 108,836 tons, and Mexico for 78,680 tons.

 

Export
Developments

·        
Egypt seeks 30,000 tons of soybean oil and 10,000 tons of sunflower oil on Wednesday for arrival during December 5-25.

 

Wheat

·        
US wheat futures prices are higher on good global demand, short supply for high protein wheat, and unfavorably dry weather across the US Great Plains bias western and southern areas.  Note Russian wheat export prices were stable
last week after 13 weeks of consecutive gains. 

·        
USD was nearly 30 points lower around the electronic pause. 

·        
Paris December wheat was up 1.00 euro by around 7:35 am CT at 275.00. 

·        
Egypt’s GASC will drop its 15% price advantage given to Egyptian state shipping line National Navigation Company (NNC) to transport wheat.  “GASC operates a parallel freight tender to buy ocean shipping capacity. But offers by
other shipping companies in the freight tender are generally thin because of the price advantage given to NNC.” (Reuters)  Since shipping costs are higher, the current “policy results in higher ocean shipping prices than seeking ships on the open market.” 
This should have a minimal impact on future import tenders. 

·        
Ukraine 2022 winter wheat plantings are around 75 percent complete, or 5 million hectares of the expected 6.68 million hectares, according to the AgMin. 

·        
US winter wheat planting progress increased 10 points from the previous week to 70 percent, 2 points below expectations and compares to 76 year ago and 71 percent average.  44 percent of the winter wheat emerged, below 47 average. 

·        
The Great Plains will see light showers across eastern NE Tuesday and central TX Thursday.  Rest of the Great Plains will be mainly dry this week. 

·        
USDA US all-wheat export inspections as of October 14, 2021 were 139,753 tons, below a range of trade expectations, below 446,652 tons previous week and compares to 242,007 tons year ago. Major countries included Mexico for 39,988
tons, Venezuela for 33,000 tons, and Korea Rep for 30,305 tons.

·        
China plans to start a new round of wheat auctions from state reserves, starting October 20. 

 

Export
Developments. 

·        
Japan seeks 81,318 tons of food wheat on Thursday. 

·        
Jordan seeks 120,000 tons of wheat on October 20.

·        
Turkey seeks 300,000 tons of wheat on Oct. 21 for shipment between Dec. 10 and Dec. 31. 

·        
Jordan seeks 120,000 tons of feed barley on October 21 for FH January through FH March shipment.

·        
Pakistan seeks 90,000 tons of wheat on October 25. 

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

·        
Ethiopia seeks 400,000 tons of wheat on November 30. 

 

Rice/Other

·        
Maldives seeks 25,000 tons of parboiled rice with offers due by October 28. 

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