FI Morning Grain Comments 10/20/21

PDF attached

 

Good
morning

 

WTI
is lower and USD near unchanged.  CBOT soybean complex, corn, and wheat are all higher.  Palm futures surged higher after coming back from holiday.  Indonesia warned they are curbing exports of raw materials and didn’t rule out crude palm oil.  CBOT crush
prices basis the nearby positions remain unusually high.  Lack of US producer selling for soybeans, and corn, are supporting cash prices.  Latest import rumors suggest China bought up to 40 cargoes of soybeans on last week’s break, from various origins and
they recently bought 2-4 cargoes of SRW for December/January shipment.  Egypt’s GASC seeks at least 30,000 tons of soyoil and lowest offer was believed to be $1,468 a ton c&f followed by $1,500 a ton.  Lowest offer for at least 10,000 tons of sunflower oil
was $1,475 a ton c&f.  A Bloomberg poll looks for weekly US ethanol production to be up 10,000 barrels (1020-1055 range) from the previous week and stocks up 127,000 barrels to 19.974 million.

 

 

 

La
Nina Update

First
half October SST’s average -0.7 versus -0.29 for September, and there is a 92 to 93 percent probability La Nina will occur from now until at least January 2022. 

 

 

La
Nina has been developing more aggressively in recent weeks but nothing like what we saw last year when La Nina peaked in November 2020.  While La Nina is expected to continue into the Northern Hemisphere’s winter, this event has yet to have a major influence
on world weather patterns, but something we need to monitor.  A strong La Nina event tends to yield greater rainfall than normal across many tropical and subtropical areas of the world.  On the other hand, La Nina can also reduce rainfall for the US central
Great Plains and western Corn Belt. Dryness can also impact eastern Argentina, southern Brazil, Uruguay, and far southern Paraguay.  Meanwhile a wet bias could occur in eastern Australia, Southeast Asia, India, and South Africa.

 

 

Weather

7-day

 

World
Weather Inc.

 

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

 

Canadian
CPI NSA (M/M) Sep: 0.2% (est 0.2%; prev 0.2%)

Canadian
CPI (Y/Y) Sep: 4.0% (est 4.3%; prev 4.1%)

Canadian
CPI Core-Common (Y/Y) Sep: 1.8% (est 1.9%; prev 1.8%)

Canadian
CPI Core-Median (Y/Y) Sep: 2.8% (est 2.6%; prev 2.6%)

–
CPI Core-Trim (Y/Y) Sep: 3.4% (est 3.3%; prev 3.3%)

 

Corn

·        
Corn is
higher following soybeans and wheat.  Gains might be limited on a lower WTI crude oil trade and near unchanged USD.  There is talk here and there of China committing to soybeans and wheat, but we have not seen them in for corn for a while.  China is looking
to limit speculation in the energy markets. 

·        
China’s AgMin said the fall grain harvest was around 80 percent and the recent rainy weather was “generally limited.” 

·        
China’s AgMin warned pig prices may continue to fall after the Lunar New Year next year if production is not substantially reduced, causing heavy losses in pig farming.  (Reuters)  The sow herd in
August to September was 10% higher than normal levels and that the number of commercial pigs in the fourth quarter of 2021 and the first quarter of 2022 will significantly increase year-on-year.

·        
China approved imports of beef imports from Russia, effective October 18.  They also recently approved breeding pigs from Ireland. 

·        
Bloomberg Survey: U.S. Cattle on Feed Herd Seen Down 0.6% Y/y.  Oct. 1 herd seen falling y/y to 11.65m head. That would be the fourth straight month that the feedlot herd declined. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 10,000 barrels (1020-1055 range) from the previous week and stocks up 127,000 barrels to 19.974 million.

·        
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.

 

University
Of Illinois 2022 Planting Decisions

Schnitkey,
G., C. Zulauf, K. Swanson and N. Paulson. “2022 Planting Decisions, Nitrogen Fertilizer Prices, and Corn and Soybean Prices.”
farmdoc
daily
(11):145,  Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, October 19, 2021.

https://farmdocdaily.illinois.edu/2021/10/2022-planting-decisions-nitrogen-fertilizer-prices-and-corn-and-soybean-prices.html

 

 

Export
developments.

• None
  reported

 

 

Soybeans

·        
CBOT soybeans and meal are higher, led by soybean oil after Malaysia traded higher post one-day holiday.  Indonesia warned they are curbing exports of raw materials and didn’t rule out crude palm
oil.  CBOT crush prices basis the nearby positions remain unusually high.  Lack of US producer selling for soybeans and corn continues to support cash prices.

·        
There was talk China bought up to 40 cargoes of soybeans on last week’s break, from various origins.  We would think most of it would be from Brazil.  

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

·        
China’s September soybean imports from Brazil were 5.936 million tons, an 18 percent decrease from the previous year (7.25 million tons).  Imports from the US were only 169,439 tons, down from 1.17
million tons during September 2020. 

·        
Malaysia October 1-20 palm oil exports were reported by ITS at 956,987 tons, down 15 percent from 1.121 million during the same period last month.  AmSpec reported an 8 percent decrease from month
earlier to 978,917 tons. 

·        
Malaysian palm oil futures: back from holiday

·        
From this time yesterday morning, Rotterdam meal and oil values were 20-30 euros higher and meal mostly 2-10 euros higher. 

·        
Offshore values are leading soybean oil 54 points higher and meal $0.40/short ton lower.

·        
China cash crush margins were last 224 cents/bu on our analysis (216 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.  The west central and southern areas will see rain Saturday and Sunday. 

·        
USDA Attaché: Brazil 2021-22 soybean crop at 145 million tons, above 137MMT 2020-21. 

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Brasilia_Brazil_10-01-2021

 

Export
Developments

·        
Egypt’s GASC seeks at least 30,000 tons of soyoil and lowest offer was believed to be $1,468 a ton c&f followed by $1,500 a ton.  Lowest offer for at least 10,000 tons of sunflower oil was $1,475
a ton c&f.  Shipment is for arrival in Egypt between Dec. 5-25.

 

 

Wheat

·        
US wheat futures prices are higher on ongoing talk of tight global supplies. 

·        
We are hearing China recently bought 2-4 cargoes of SRW for December/January shipment. 

·        
Paris December wheat was up 1.50 euros by around 7:15 am CT at 275.25. 

·        
China planted 26% of winter wheat by October 19, below the 27% average for normal years, due to constant rains since September, according to the China AgMin.

·        
USDA Attaché: Australian 2021-22 wheat crop at 31.5 million tons, 1.8MMT below the record 2020-21 crop and 30 percent above a 10-year average. 

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Canberra_Australia_10-15-2021

·        
The Great Plains will see light showers across the central TX Thursday, eastern KS Saturday, and NE and eastern parts of KS and OK on Sunday.  Rest of the Great Plains will be mainly dry this week. 

·        
Ukraine grain exporters and the AgMin agreed to a 25.3-million-ton wheat export cap for the 2021-22 season, well up from 17.5 million tons in 2020-21. 

 

 

 

 

Export
Developments. 

·        
Jordan bought 60,000 tons of wheat.  Earlier they saw 5 participants in its 120,000-ton wheat import tender.

·        
Russian grain trader Demetra supplied 60,000 tons of wheat to Algeria. 

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

·        
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. 

·        
Turkey seeks 235,000 tons of feed barley on October 26. 

·        
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.