FI Morning Grain Comments 10/21/21

PDF attached

 

Good
morning

 

Private
exporters reported sales of 130,000 metric tons of corn for delivery to Mexico during the 2021/2022 marketing year.

 

USDA
Export Sales were excellent for soybeans (China and unknown destinations), poor for soybean oil and within expectations for meal, corn and wheat.  China didn’t buy US corn but they bought sorghum.  Pork sales were good at 20,900 tons. 

 

Outside
markets are leading CBOT ag futures lower this morning.  December WTI crude oil is back below $83 and the USD is 2 points higher.  Offshore values are leading soybean oil over 200 points lower and meal over $4.00 lower.  Brazil soybean premiums weakened this
week as the USD continues to gain over the Brazilian real.  Grains are lower on widespread commodity selling.   

 

 

Weather

 

 

 

 

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 21, 2021

• Not
  much precipitation will fall in the U.S. Plains during the next seven to ten days.
  
• Dry
  biases will also continue from Montana into central Canada’s Prairies.
• Rain
  will fall periodically in the U.S. Midwest, Delta and southeastern states this weekend through all of next week
  
• A
  big succession of storms will be coming to northern California and Oregon this weekend into early next week resulting in some flooding rain and impressive mountain snow in the northern Sierra Nevada and other parts of northern California.
  
• Argentina
  will experience some showers today into Saturday, but relief from long term dryness in the subsoil is unlikely and next week will be warm and dry.
  
• Southern
  Brazil is also expected to slowly dry down, but that trend will be mostly favorable for crops in the region – at least for now.
  
• Rain
  will fall in most other areas of Brazil maintaining a good outlook for spring and summer Planting.
  
• Southeastern
  and east-central China are advertised drier today over the next ten days while the north was already advertised to be that way.
  
• India
  will be dry except in the far south and extreme east during the next ten days
  
• Russia’s
  middle and lower Volga River Basin will also receive restricted rainfall over the next ten days.
  
• A
  subtropical storm may evolve in the south-central Mediterranean Sea this weekend bringing heavy rain to Sicily and far southern Italy along with some strong wind speeds. 
• Excessive
  rain is expected in central Vietnam this weekend followed by a weak tropical system coming westward across the South China Sea generating some additional rain of significance during mid-week next week
• Rainfall
  could reach over 20 inches again in some central coastal areas of the nation impacting the Da Nang and Hue areas similarly to that of this past weekend, although this time the greatest rain will be split  into two sessions
  
• Flooding
  will still be a concern
• The
  tropical system is still poised to impact the Central Highlands of Vietnam during mid-week next week, but the weaker system advertised today will only bring heavy rain to the region causing some flooding, but no damaging wind
• A
  tropical cyclone is still expected southwest of Mexico in the eastern Pacific Ocean Friday that will turn northward and move inland over Michoacan late Sunday and Monday
• The
  storm will produce heavy rainfall along the Guerrero, Michoacan and Jalisco coasts with some of the moisture streaming northward to impact Texas coastal areas during the early part of next week
• That
  moisture feed will also help to enhance U.S. Delta and Tennessee River Basin rainfall during mid-week next week

 

Bloomberg
Ag Calendar

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
Export Sales

Soybean
export sales were excellent at 2.878 million tons and included China (1,884,400 MT, although 526,000 MT switched from unknown destinations and decreases of 6,300 MT, good amount for unknown destinations (568,800MT) and the Netherlands (127,300 MT – including
124,000 MT switched from unknown destinations).  Soybean commitments are still running sharply below a year ago, by 36 percent.  Soybean oil export sales were a low 3,000 tons but shipments improved to 8,000 tons.  Canada bought 100 tons of new-crop soybean
oil.  Soybean meal export sales were 240,400 tons, within expectations while shipments were 216,800 tons, down from 301,000 previous week.  Corn export sales were within expectations at 1.273 million tons and included unknown destinations (456,700 MT) and
Mexico (377,100 MT).  There were no corn sales to China.  All-wheat export sales of 362,400 tons were within expectations but down from 567,700 tons previous week.  USDA reported 262,500 tons of sorghum sales, including 127,300 tons to China and 103,000 tons
to unknown.  Pork sales were good at 20,900 tons. 

 

 

 

Macros

US$
Cross Current Swaps -3% following Turkey cutting -200bps.  US$ is higher on volume across the board.

 

Corn

·        
Corn is
lower on widespread commodity selling.  USDA export sales were 1.273 million tons, withing expectations, but didn’t include China.  China did buy 127,300 tons of sorghum. 

·        
Reuters: Mexico’s agriculture minister say Mexico will not limit GMO corn imports from U.S. 
https://www.reuters.com/world/americas/mexicos-agriculture-minister-say-mexico-will-not-limit-gmo-corn-imports-us-2021-10-20/

·        
The International Grains Council (IGC) increased their estimate for the 2021-22 global corn crop by 1 million tons to 1.210 billion tons. U.S. corn crop was seen at 381.5 million tons, up from a previous 380.3 million tons.  They
projected the 2021 EU corn production at 67.5 million tons, up from 64.9 million tons previously and above the 2020 crop of 64.6 million tons.

·        
Weekly US ethanol production increased a large 64,000 barrels to 1.096 million (trade was looking for up 10,000), highest level since June 7, 2019, and a record for this time of year.  This was the third consecutive increase. 
Stocks increased 233,000 barrels (trade was looking for a 127,000 increase) to 20.080 million, still relatively low for this time of year.  Early September to date ethanol production is up 5.9 percent from same period year ago.  US gasoline demand increased
448,000 barrels to 9.634 million barrels.  Using a 4-week average, US gasoline demand is running about 1 percent below a comparable period during 2019 (up about 7 percent from 2020).  Ethanol blended into finished motor gasoline fell to 91% from 93.1% previous
week. 

·        
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.  Reuters estimates below. 

 

 

Export
developments.

• None
  reported

 

Soybeans

·        
CBOT soybeans, meal and soybean oil are lower in a risk off trade. WTI December crude oil is back below $83/barrel and USD is higher.  Offshore values were leading meal and soybean oil lower.  USDA export sales were excellent
but product sales declined from the previous week.  Paris rapeseed futures were off 8.50 at 689.75 euros/ton.

·        
Brazil soybean premiums weakened this week as the USD continues to gain over the Brazilian real.  

·        
Cargo surveyor SGS reported month to date October 20 Malaysian palm exports at 920,085 tons, 150,011 tons below the same period a month ago or down 14.0%, and 210,493 tons below the same period a year ago or down 18.6%.

·        
Malaysian palm oil futures:

·        
From this time yesterday morning, Rotterdam meal and oil values were mostly lower and meal unchanged to 2 euros higher. 

·        
Offshore values are leading soybean oil 207 points lower and meal $4.20/short ton lower.

·        
China cash crush margins were last 240 cents/bu on our analysis (224 previous) versus 206 cents late last week and 95 cents around a year ago. 

·        
China

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat futures prices are lower, in part to weaker soybeans and corn.   USDA export sales slowed from the previous week. 

·        
Paris December wheat was down 1.50 euros by around 8:30 am CT at 276.75.  The contract hit a contract high on Wednesday. 

·        
The International Grains Council (IGC) left unchanged their estimate for the 2021-22 global wheat crop at 781 million tons.

·        
USDA Attaché: Egypt Grains.  Wheat imports are seen at 12.4 million tons, up from 12.14 million tons for their 2020-21 projections. 
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Cairo_Egypt_09-16-2021

 

Export
Developments. 

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

·        
Turkey’s TMO purchased an estimated 300,000 tons of wheat.  They sought 11.5% and 12.5% protein content for shipment between Dec. 10 and Dec. 31.

·        
Japan bought 81,318 tons of food wheat as expected.  Original details as follows: 

·        
Jordan passed 120,000 tons of feed barley 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. 

 

 

USDA Export Sales

 

 

 

U.S. EXPORT SALES FOR WEEK ENDING  10/14/21

 

	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	206.5	1,640.9	1,643.2	111.9	3,167.3	4,144.4	0.0	0.0
SRW	50.9	639.2	403.9	21.0	1,207.4	879.4	0.0	0.0
HRS	62.2	1,000.9	1,507.0	16.6	2,336.8	2,904.7	0.0	0.0
WHITE	60.9	642.8	1,452.2	10.6	1,598.8	1,939.5	0.0	0.0
DURUM	-18.1	42.4	220.9	0.0	61.4	321.6	0.0	0.0
TOTAL	362.4	3,966.2	5,227.2	160.2	8,371.8	10,189.5	0.0	0.0
BARLEY	0.0	23.7	32.9	0.7	6.4	9.1	0.0	0.0
CORN	1,273.1	24,437.8	22,943.7	1,041.7	4,456.4	5,390.9	0.5	337.4
SORGHUM	262.5	2,355.2	2,752.5	37.8	263.6	463.5	0.0	0.0
SOYBEANS	2,878.4	23,431.6	33,926.3	2,207.3	5,836.5	11,423.2	0.0	19.8
SOY MEAL	240.4	3,777.0	3,593.0	216.8	517.8	348.1	6.1	36.6
SOY OIL	3.0	99.5	193.7	8.0	8.5	21.5	0.1	0.1
RICE
L G RGH	67.4	285.7	525.2	2.2	238.1	125.6	0.0	0.0
M S RGH	0.0	7.3	21.3	0.2	1.9	7.6	0.0	0.0
L G BRN	5.8	9.1	12.0	0.5	15.5	9.4	0.0	0.0
M&S BR	0.1	54.3	20.6	0.1	14.2	27.9	0.0	0.0
L G MLD	3.9	77.4	47.8	62.2	204.3	88.5	0.0	0.0
M S MLD	4.4	69.6	113.5	2.9	75.4	80.0	0.0	0.0
TOTAL	81.4	503.3	740.4	68.1	549.4	339.0	0.0	0.0
COTTON		THOUSAND RUNNING BALES
UPLAND	391.8	6,155.7	5,761.9	117.4	1,853.2	2,699.1	63.9	816.3
PIMA	23.9	184.7	254.6	5.4	74.4	123.2	0.0	0.0

 

This
summary is based on reports from exporters for the period October 8-14, 2021.

Wheat:  Net
sales of 362,400 metric tons (MT) for 2021/2022 were down 36 percent from the previous week and 6 percent from the prior 4-week average.  Increases primarily for Nigeria (98,000 MT), Japan (92,100 MT), Colombia (76,100 MT, including 31,000 MT switched from
unknown destinations), Thailand (52,200 MT), and Venezuela (33,000 MT, including 30,000 MT switched from unknown destinations), were offset by reductions for unknown destinations (36,100 MT).  Exports of 160,200 MT were down 65 percent from the previous week
and 66 percent from the prior 4-week average.  The destinations were primarily to Mexico (41,700 MT), Venezuela (33,000 MT), Colombia (32,100 MT), South Korea (30,300 MT), and Taiwan (17,600 MT).

Corn: 
Net sales of 1,273,100 MT for 2021/2022 were up 22 percent from the previous week and 67 percent from the prior 4-week average.  Increases primarily for unknown destinations (456,700 MT), Mexico (377,100 MT, including decreases of 39,300 MT), Japan (230,100
MT, including 114,400 MT switched from unknown destinations, decreases of 62,000 MT, and 55,000 MT – late), Colombia (111,500 MT, including 59,000 MT switched from unknown destinations and decreases of 31,500 MT), and Nicaragua (76,000 MT), were offset by
reductions for Guatemala (15,300 MT).  Total net sales of 500 MT for 2022/2023 were for Canada. 
Exports of 1,041,700 MT were up 14 percent from the previous week and 36 percent from the prior 4-week average.  The destinations were primarily to Mexico (447,500 MT), Japan (176,200 MT), China (143,100 MT), Colombia (93,600 MT), and Guatemala (65,100
MT).

Optional
Origin Sales: 
For 2021/2022, new optional origin sales of 89,800 MT were reported for South Korea (65,000 MT) and Italy (24,800 MT).  Decreases totaling 50,000 MT were reported for unknown destinations.  The current outstanding balance of 339,800 MT is for unknown destinations
(250,000 MT), South Korea (65,000 MT), and Italy (24,800 MT).

Late
Reporting: For
2021/2022, net sales totaling 55,000 MT of corn were reported late for Japan.

Barley: 
No net sales were reported for the week.  Exports of 700 MT were unchanged from the previous week, but up noticeably from the prior 4-week average.  The destination was to Japan.

Sorghum: 
Net sales of 262,500 MT for 2021/2022 were up noticeably from the previous week and from the prior 4-week average.  Increases were reported for China (127,300 MT), unknown destinations (103,000 MT), and Eritrea (32,200 MT, including 30,000 MT switched from
unknown destinations).  Exports of 37,800 MT were down 39 percent from the previous week and 32 percent from the prior 4-week average.  The destinations were primarily to Eritrea (32,200 MT) and China (3,100 MT).

Rice:
 Net
sales of 81,400 MT for 2021/2022–a marketing-year high–were up noticeably from the previous week and up 54 percent from the prior 4-week average.  Increases primarily for Mexico (47,800 MT), Honduras (17,100 MT), El Salvador (9,000 MT), Jordan (3,700 MT),
and Canada (2,600 MT), were offset by reductions primarily for Iraq (7,100 MT).  Exports of 68,100 MT were up noticeably from the previous week and up 79 percent from the prior 4-week average.  The destinations were primarily to Iraq (32,900 MT), Haiti (25,600
MT), Canada (4,000 MT), Mexico (3,100 MT), and Jordan (1,000 MT).  

Exports
for Own Account:
For 2021/2022, the current exports for own account outstanding balance is 100 MT, all Canada.

Soybeans: 
Net sales of 2,878,400 MT for 2021/2022 were up noticeably from the previous week and from the prior 4-week average. Increases were primarily for China (1,884,400 MT, including 526,000 MT switched from unknown destinations, decreases of 6,300 MT, and 54,000
MT – late), unknown destinations (568,800 MT), the Netherlands (127,300 MT, including 124,000 MT switched from unknown destinations and decreases of 2,700 MT), Egypt (97,300 MT), and Bangladesh (57,800 MT, including 55,000 MT switched from unknown destinations). 
Exports of 2,207,300 MT were up 29 percent from the previous week and up noticeably from the prior 4-week average.  The destinations were primarily to China (1,659,500 MT), the Netherlands (127,300 MT), Mexico (97,500 MT), Turkey (66,000 MT), and Japan (63,900
MT).

Export
for Own Account:
For 2021/2022, the current exports for own account outstanding balance is 5,800 MT, all Canada.

Late
Reporting: For
2021/2022, net sales totaling 54,000 MT of soybeans were reported late for China.

Soybean
Cake and Meal: 
Net sales of 240,400 MT for 2021/2022 primarily for Ecuador (64,900 MT, including decreases of 100 MT), Canada (49,800 MT, including decreases of 2,000 MT), Denmark (45,000 MT), Colombia (35,100 MT, including 9,200 MT switched from unknown destinations and
decreases of 200 MT), and Nicaragua (18,000 MT), were offset by reductions primarily for Mexico (6,900 MT), Spain (6,000 MT), and Guatemala (4,600 MT).  For 2022/2023, net sales of 6,100 MT were reported for Japan (3,600 MT) and the Netherlands (2,500 MT). 
Exports of 216,800 MT were primarily to the Philippines (48,700 MT), Colombia (47,300 MT), Guatemala (34,000 MT), Mexico (23,500 MT), and Canada (17,200 MT).  

Soybean
Oil: 
Net sales of 3,000 MT for 2021/2022 were reported for Mexico (2,200 MT) and the Dominican Republic (800 MT).  Total net sales of 100 MT for 2022/2023 were for Canada.  Exports of 8,000 MT were to Guatemala (7,500 MT), Mexico (400 MT), and Canada (100 MT).

Cotton: 
Net sales of 391,800 RB for 2021/2022 were up noticeably from the previous week and up 20 percent from the prior 4-week average.  Increases were primarily for China (272,800 RB, including decreases of 100 RB), Turkey (76,900 RB), Vietnam (15,800 RB, including
300 RB switched from Japan), Mexico (6,200 RB), and Bangladesh (5,000 RB, including decreases of 100 RB).  Net sales of 63,900 RB for 2022/2023 were primarily for China (50,000 RB) and Turkey (13,200 RB).  Exports of 117,400 RB were up 23 percent from the
previous week, but down 16 percent from the prior 4-week average.  The destinations were primarily to China (46,400 RB), Mexico (18,700 RB), Turkey (11,900 RB), Pakistan (9,600 RB), and Bangladesh (8,500 RB).  Net sales of Pima totaling 23,900 RB–a marketing-year
high–were up noticeably from the previous week and up 58 percent from the prior 4-week average.  Increases were primarily for India (17,000 RB), Peru (2,800 RB, including decreases of 300 RB), and China (1,800 RB).  Exports of 5,400 RB were down 49 percent
from the previous week and 28 percent from the prior 4-week average.  The destinations were primarily to India (4,500 RB), Austria (500 RB), and Peru (200 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 415,700 pieces for 2021 were up 62 percent from the previous week and 13 percent from the prior 4-week average.  Increases primarily for China (277,700 whole cattle hides, including decreases of 7,900 pieces), South Korea (63,000 whole cattle
hides, including decreases of 1,000 pieces), Thailand (23,700 whole cattle hides, including decreases of 1,000 pieces), Mexico (20,200 whole cattle hides, including decreases of 100 pieces), and Cambodia (10,600 whole cattle hides), were offset by reductions
for Taiwan (1,000 pieces).  Exports of 472,100 pieces were up 37 percent from the previous week and 35 percent from the prior 4-week average.  Whole cattle hide exports were primarily to China (299,000 pieces), South Korea (53,500 pieces), Thailand (37,300
pieces), Mexico (33,600 pieces), and Taiwan (20,600 pieces). 

Net
sales of 150,500 wet blues for 2021 were up noticeably from the previous week and up 22 percent from the prior 4-week average.  Increases primarily for China (136,200 unsplit, including decreases of 100 unsplit), Mexico (8,400 grain splits, including decreases
of 400 grain splits), and Italy (7,300 unsplit and 100 grain splits, including decreases of 13,100 unsplit), were offset by reductions for Vietnam (1,300 unsplit), Thailand (200 unsplit), and South Korea (100 grain splits).  Net sales of 52,100 wet blues for
2022 were reported for Italy (28,100 unsplit) and Vietnam (24,000 unsplit).  Exports of 227,900 wet blues were up 75 percent from the previous week and 72 percent from the prior 4-week average.  The destinations were primarily to Italy (88,700 unsplit and
12,500 grain splits), China (77,700 unsplit), Vietnam (16,000 unsplit), Thailand (13,400 unsplit), and South Korea (7,000 grain splits and 1,600 unsplit).  Total net sales of 48,200 splits were reported for China, including decreases of 4,400 splits.  Exports
of 335,200 pounds were to China (255,200 pounds) and Vietnam (80,000 pounds).

Beef: 
Net
sales of 7,800 MT reported for 2021–a marketing-year low–were down 50 percent from the previous week and 51 percent from the prior 4-week average.  Increases were primarily for Japan (2,300 MT, including decreases of 300 MT), China (1,600 MT, including decreases
of 200 MT), South Korea (1,100 MT, including decreases of 400 MT), Taiwan (1,100 MT, including decreases of 100 MT), and Mexico (300 MT, including decreases of 200 MT).  Net sales reductions of 200 MT for 2022 resulting in increases primarily for Chile (200
MT) and Indonesia (100 MT), were more than offset by reductions for South Korea (500 MT).  Exports of 17,100 MT were up 10 percent from the previous week, but unchanged from the prior 4-week average.  The destinations were primarily to South Korea (5,400 MT),
Japan (4,000 MT), China (3,000 MT), Mexico (1,400 MT), and Taiwan (1,100 MT). 

Pork: 
Net
sales of 20,900 MT reported for 2021 were down 38 percent from the previous week and 36 percent from the prior 4-week average.  Increases primarily for Mexico (10,200 MT, including decreases of 500 MT), South Korea (3,700 MT, including decreases of 300 MT),
Japan (3,200 MT, including decreases of 200 MT), Colombia (800 MT, including decreases of 300 MT), and the Dominican Republic (800 MT), were offset by reductions for Bahamas (200 MT) and New Zealand (100 MT).  Net sales of 1,400 MT for 2022 were primarily
for Chile (1,300 MT).  Exports of 32,800 MT were up 11 percent from the previous week and 5 percent from the prior 4-week average.  The destinations were primarily to Mexico (15,000 MT), Japan (4,400 MT), China (4,100 MT), Colombia (2,700 MT), and Canada (1,800
MT).