FI Morning Grain Comments 10/26/21

PDF attached

 

Good
morning

 

Private
Exporters Report Sales Activity for China and Mexico

• 199,000
  metric tons of soybeans for delivery to China during the 2021/2022 marketing year
• 125,730
  metric tons of soybeans for delivery to Mexico during the 2021/2022 marketing year

 

We
are seeing a risk off session in most agriculture commodities with exception of soybean oil due to higher WTI crude oil and a higher trade in Malaysian palm oil.  The USD is slightly lower, and equities are suggesting a higher open.  Corn is lower despite
expectations for US harvest delays this week.  Soybean and corn US harvest progress was reported near trade expectations on Monday. Wheat is surprisingly lower despite a much lower than  expected initial winter wheat condition reported by USDA.  Initial winter
wheat conditions were reported at a low 46 percent, well below a Reuters trade guess of 54 percent (49-62 range) and compares to 41 year ago and 52 average.  Turkey bought 235,000 tons of feed barley for Dec 1-20 shipment.  Egypt said they have enough wheat
reserves to last 6 months. 

 

 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 26, 2021

• Argentina
  and southern and center west Brazil were dry Monday and overnight, but both nation’s will get more timely rainfall over the next two weeks support crop needs; however, greater rain will be needed in parts of Argentina and a few areas in southern Brazil will
  dry down over time.
• In
  the U.S., harvest delays resulting from too much weekend and Monday rainfall will continue for much of this week especially when a new storm system comes along during the middle to latter part of this week.
  
• U.S.
  hard red winter wheat areas will be dry biased for a while as will be Montana and central parts of Canada’s Prairies.
  
• Recent
  rain in northern California has induce significant runoff into reservoirs and that drainage will continue over the next couple of days.
  
• Southern
  California remains too dry with little potential for change, despite rain in the San Joaquin Valley Monday. 
  
• A
  storm off the east coast of the United States will produce strong wind and heavy rain New York, New England and New Jersey the next two days
• Europe
  will be dry into Friday as will Russia’s key winter crop areas and Ukraine for at least ten more days. Central and northern India will be dry along with northern and east-central China, but these drier areas will favor winter crop planting and summer crop
  harvesting.
• Eastern
  Australia may trend a little wetter over time, but there is no sign of problematic moisture for winter crops…yet. 
  
• South
  Africa will trend wetter favoring future planting potentials.
• Some
  heavy rain will impact Vietnam’s Central Highlands over the next two days, but no harm will come to coffee or other crops produced in the region, despite the potential for local flooding
• Tropical
  Storm Malou in the western Pacific Ocean will stay southeast of Japan and pose no threat to land during the next week

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections versus Reuters trade range

Wheat                 
140,413                 versus   150000-450000  range

Corn                     
545,127                 versus   750000-1200000                range

Soybeans           
2,103,505             versus   1800000-2625000             range

 

Macros

 

Corn

·        
Corn is lower despite expectations for US harvest delays this week. 

·        
The USD is slightly lower, and equities are suggesting a higher open.  Several major US company earning reports are due out this week. 

·        
US Midwestern rains will occur across the WCB Wednesday, then move across the central areas Thursday, and southeastern areas Friday through Saturday. 

·        
China approved beef imports from Italy. They have recently been expanding their list of countries to import meats, and it at least the third announcement we have seen since early last week. 

·        
US corn harvest progress advanced 14 points to 66 percent and compares to 70 year ago and 53 average.  Traders were looking for the US harvest progress to be reported at 65 percent. 

·        
USDA US corn export inspections as of October 21, 2021 were 545,127 tons, below a range of trade expectations, below 1,048,617 tons previous week and compares to 680,823 tons year ago. Major countries included Mexico for 272,619
tons, Japan for 97,593 tons, and China for 66,851 tons.  Cumulative inspections so far this marketing year are running 24 percent below the same period a year ago. 

·        
USDA’s Attaché estimated Argentina 2021-22 corn production at record of 54.5MMT, 1.5MMT above the USDA October estimate.  2021-22 exports are projected at 40.0MMT, 2.0MMT above USDA. 
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Buenos%20Aires_Argentina_10-20-2021 

 

 

Export
developments.

• None
  reported

 

Soybeans

·        
We are seeing a risk off session in most agriculture commodities with exception of soybean oil due to higher WTI crude oil and a higher trade in Malaysian palm oil.  Paris November rapeseed, soon expiring, was trading 6.25 euros
lower at 678.75 euros. 

·        
Yesterday there were rumors China bought 10 cargoes of soybeans. 

·        
January CBOT soybeans are near their 20-day MA of $12.4525. 

·        
Crush margins are higher this morning with January near $1.61. 

·        
CBOT soybean open interest dropped 16,702 contracts in part to positioning ahead of November deliveries. 

·        
Brazil rains this week will favor Mato Grosso, Goias, south Minas, Sao Paulo, north MGDS through Saturday.  Lighter rains are expected in RGDS on Saturday.  Argentina will be dry through Friday.  La Pampa and SE BA may see rain
this weekend.  The 10-day for Argentina does show a sign of improvement. 

·        
China cash crush margins on our analyses were 248 cents/bu (263 previous) versus 247 cents late last week and 95 cents around a year ago. 

·        
China futures were 0.4% for soybeans, down 0.7% for meal and up 1.2-1.8% for vegetable oils. 

·        
Cargo surveyor SGS reported month to date October 25 Malaysian palm exports at 1,205,755 tons, 203,963 tons below the same period a month ago or down 14.5%, and 225,144 tons below the same period a year ago or down 15.7%. 

·        
Malaysian palm futures were up 43 ringgit overnight to 5,012.  Cash palm was up $20/ton to $1,290/ton. 

·        
Malaysian palm oil futures:

·        
Rotterdam meal values were unchanged to 2 euros lower and vegetable oils mixed. 

·        
Offshore values are leading soybean oil 66 points lower and meal $1.60 short ton lower. 

·        
China

·        
US soybean harvest progress was 73 percent, one point shy of expectations, up 13 points from the previous week and compares to 82 percent year ago and 70 average.  Traders were looking for the US harvest progress to be reported
at 74 percent. 

·        
USDA US soybean export inspections as of October 21, 2021 were 2,103,505 tons, within a range of trade expectations, below 2,449,732 tons previous week and compares to 2,888,760 tons year ago. Major countries included China for
1,539,053 tons, Mexico for 225,310 tons, and Japan for 55,681 tons.

·        
Singapore plans to launch standardized guidelines for renewable energy certificates (RECs).  One certificate represents that one megawatt-hour (MWh) of electricity was generated from a renewable energy source and delivered to
the grid.

 

Export
Developments

·        
The USDA seeks 20 tons of vegetable oil in 4 liter cans  for Dec 1-13 shipment on November 2.

·        
Private Exporters Report:

199,000
metric tons of soybeans for delivery to China during the 2021/2022 marketing year

125,730
metric tons of soybeans for delivery to Mexico during the 2021/2022 marketing year

 

Wheat

·        
US wheat futures are surprisingly lower despite a much lower than expected initial winter wheat condition reported by USDA.  It is still early in the season and dormancy is not for at least another month. 

·        
The US Great Plains saw dry weather yesterday and the forecast for the week is unchanged.  Rains will occur across the central and northwestern areas today then move into the eastern areas Wednesday into early Thursday before
turning drier Friday through the weekend.

·        
Paris December wheat was down 1.75 euros by around 7:40 am CT at 280.25. 

·        
Egypt said they have enough wheat reserves to last 6 months.  China approved beef imports from Italy. They have recently been expanding their list of countries to import meats, and it at least the third announcement we have seen
since early last week. 

·        
US winter wheat plantings reached 80 percent, one point below expectations, up 10 points from the previous week and compares to 84 year ago and 80 average.  Traders were looking for the US planting progress for winter wheat to
be reported at 81 percent. 

·        
Initial winter wheat conditions were reported at a low 46 percent, well below a Reuters trade guess of 54 percent (49-62 range) and compares to 41 year ago and 52 average.  White wheat posted a very low rating while SRW and HRW
were above their 5-year averages using our adjusted crop condition adjusted basis. 

·        
USDA US all-wheat export inspections as of October 21, 2021 were 140,413 tons, below a range of trade expectations, below 141,450 tons previous week and compares to 399,645 tons year ago. Major countries included Taiwan for 37,087
tons, Japan for 34,826 tons, and Mexico for 29,239 tons.

 

Export
Developments. 

·        
Turkey bought 235,000 tons of feed barley for Dec 1-20 shipment. 

·        
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.