FI Morning Grain Comments 10/22/21

PDF attached

 

Good
morning

 

CBOT
soybean futures are mixed this morning.  Soybean oil turned lower before the break, in turn pressuring soybeans.  Meal remains higher.  The USD is trading around 13 points lower and WTI up 88 cents.  US equities were mixed.  Corn and wheat are higher on technical
buying.  Export developments were quiet overnight.  Tunisia bought barley and wheat. 

 

 

 

 

Weather

 

 

7-day

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 22, 2021

• Southwestern
  Argentina was receiving some light rain early today and the precipitation will advance from southwest to northeast today and Saturday with only temporary relief from drying.
  
• Not
  much other rain will occur in that nation through the end of next week, but a change toward wetter biased conditions may begin in western areas as November begins.
  
• Brazil
  will see a very good mix of weather during the next ten days supporting spring and summer planting and early crop development.
  
• In
  the United States, a more active weather pattern is still expected later this weekend through next week bringing some delay to farming activity in the Midwest, Delta and southeastern states, but improved weather will follow.
  
• Not
  much moisture is likely in U.S. hard red winter wheat areas or from Montana into central Canada’s Prairies.
  
• Flooding
  rain and impressive mountain snow will occur in northern California and southwestern Oregon this weekend resulting in some flooding, but a huge increase in run off and soil moisture will result. 
  
• Other
  areas in the western U.S. will also get light amounts of rain and mountain snow. 
  
• Flooding
  rain is still expected in central Vietnam this weekend and again during mid-week next week.
  
• Coastal
  areas will be most impacted, but Vietnam’s Central Highlands will be impacted during the middle to latter part of next week raising concern over coffee and other crops.
  
• A
  subtropical-like storm is expected to evolve in the Mediterranean Sea this weekend impacting southern Italy, Sicily and possibly Greece next week.
  
• Northern
  and eastern China will be dry biased for a while
• Ukraine,
  Russia’s Volga Basin and interior parts of Europe will experience net drying for much of the coming week to ten days.
  
• South
  Africa will get some welcome rain in the next ten days for summer crop planting. 

 

Bloomberg
Ag Calendar

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

Monday,
Oct. 25:

• Monthly
  MARS bulletin on crop conditions in Europe
• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  poultry slaughter, 3pm
• U.S.
  cotton condition; corn, soy and cotton harvesting; winter wheat planting, 4pm
• Malaysia
  Oct. 1-25 palm oil exports
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  New Zealand

Tuesday,
Oct. 26:

• EU
  weekly grain, oilseed import and export data
• EARNINGS:
  WH Group

Wednesday,
Oct. 27:

• EIA
  weekly U.S. ethanol inventories, production
• Brazil’s
  Unica releases cane crush, sugar output data (tentative)

Thursday,
Oct. 28:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports

Friday,
Oct. 29:

• 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
• Vietnam’s
  General Statistics Office releases October trade data
• FranceAgriMer
  weekly update on crop conditions
• U.S.
  agricultural prices paid, received, 3pm

Source:
Bloomberg and FI

 

ADM
cancelled 1,165 KC wheat registrations Thursday afternoon from two KS locations.  KC registrations that have been sitting at 1,273 since late September dropped to only 108 as of Friday. 

 

 

 

 

 

Macros

Canadian
Retail Sales M/M Aug: 2.1 (est 2.0%; prev -0.6%)

–
Retail Sales Ex-Auto M/M Aug: 2.8 (est 2.6%; prev -1.0%)

 

 

Corn

·        
Corn is
higher in the front four months with emphasis on bull spreading as wheat is sharply higher.  News in the corn market is light and has been all week.  USDA’s export sales report yesterday showed decent corn commitments, but sales need to increase to reach USDA’s
export projection.  There is still plenty of time to go. 

·        
At around 7:12 am CT, paper paid 11 1/4 for 2000 July 700 calls.

·        
We expect US soybean and corn harvest activity to slow this weekend across the heart of the Midwest due to rain, especially Sunday bias IA through central and northern IL.  The ECB will see harvest disruptions early next week
through at least Wednesday. 

·        
FranceAgriMer reported 32% of the French corn crop had been harvested by October 18, up from 15% a week earlier, well below 75% around the same time a year ago.  The corn crop development is running about 10 days behind the average
rate of the past five years-FranceAgriMer.

 

 

Export
developments.

• None
  reported

 

Soybeans

·        
CBOT soybeans are mixed after trading higher overnight.  Soybean oil turned lower before the electronic break, in turn pressuring soybeans.  Meal remains higher on higher corn and product spreading.  Note Paris November rapeseed
extended losses, down about 10.50 euros to 675.75/ton as of around 8:10 am CT. 

·        
Some traders noted global supply concerns for soybeans, particularly with potential back to back South American weather problems (ENSO pattern). 

·        
We expect US soybean and corn harvest activity to slow this weekend across the heart of the Midwest due to rain. 

·        
Rumors earlier this week China may have secured around 40 cargoes of soybeans from various origins since last week’s USDA report is not out of reach.  Problem is, we wonder if they will be able to keep up with product demand with
power outages affecting crush rates. 

·        
China cash crush margins on our analyses improved from the previous week to 247 cents/bu (240 previous) versus 206 cents late last week and 95 cents around a year ago.  China futures were mixed on Friday (vegetable oils ended
lower).  China soybean oil prices overnight did trade near a 10-year high on tight stocks, and the high prices are supporting crush margins. 

·        
Malaysian palm futures were down 44 ringgit overnight and for the week posted a nearly 1% decline.  Cash palm was down $5.00/ton. 

·        
Malaysian palm oil futures:

·        
From this time yesterday morning, Rotterdam meal values were 5-10 euros lower and vegetable oils 2-7 euros lower. 

·        
Offshore values are leading soybean oil 101 points higher (89 lower for the week to date) and meal $1.60 short ton higher ($5.30 lower for the week)

·        
China

 

Export
Developments

·        
None reported

 

Wheat

·        
US wheat futures prices are higher on technical buying and renewed concerns over tight stocks. 

·        
ADM cancelled 1,165 KC wheat registrations Thursday afternoon from two KS locations.  KC registrations that have been sitting at 1,273 since late September dropped to only 108 as of Friday. 

·        
The December/March KC wheat spread ripped higher as a result.  KWH2-KWZ1 (KC March premium)

·        
Export developments were quiet overnight other than Tunisia buying soft wheat and barley. 

·        
Matif and Minneapolis wheat hit fresh contract highs.

·        
FranceAgriMer reported 40% of the expected French soft wheat area had been planted by Oct. 18, up from 13% a week earlier and in line with year ago.  Winter barley sowing was 59% complete, slightly above year earlier. 

·        
Russia will raise their floating export tax to $67/ton from $61.30 (in effect since Oct. 20) and is using a base price of $295/ton from $287.60 previous week. 

·        
Paris December wheat was up 2.75 euros by around 8:00 am CT at 279.25. 

·        
Ukraine harvested 77% of their 2021 grain crop, including 32.3 million tons of wheat, 9.6 million tons of barley, 11.2 million tons of corn. 

 

FI’s
2022 initial winter wheat projections (late October/early November)

G/E
estimated by FI at 56 percent versus 41 percent year ago and 52 for the 5-year average. 

 

 

Export
Developments. 

·        
Tunisia bought about 50,000 tons of optional origin soft wheat and 100,000 tons of animal feed barley.  The wheat was bought in two 25,000 ton consignments at an estimated $373.45 a ton c&f.  The barley was bought in two 25,000
ton consignments at an estimated $349.22 a ton c&f and $346.05 a ton c&f.  The wheat is for shipment between Nov. 15 and Dec. 15 and barley for shipment between Nov. 25 and Dec. 20.

·        
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.