FI Morning Grain Comments 10/27/21

PDF attached

 

Good
morning

 

WTI
crude oil is more than $1.00 lower after data showed US crude oil supplies were higher than expected.  This and risk off is sending a negative sentiment across US commodity markets.  The USD is 15 points lower.  All major agriculture markets were trading lower. 

 

 

Weather

 

 

World
Weather Inc.

WORLD
WEATHER HIGHLIGHTS FOR OCTOBER 27, 2021

• A
  tropical depression moving into Vietnam’s Central Highlands today will not impact coffee in a negative manner, but additional heavy rain is expected into Saturday along the central Vietnam coast where Hue has had more than 49.00 inches of rain so far this
  month.
• Northwestern
  Argentina is expecting rain Friday and southwestern parts of the nation will get it Sunday and Monday.
  
• There
  is still a high potential for below average rainfall in central and eastern Argentina, Uruguay, southern Brazil, and southern Paraguay over the next two weeks with this same region hurting for moisture later in November.
  
• Brazil’s
  center west and center south crop areas will stay favorably wet over the next couple of weeks.
  
• In
  the U.S., another large storm will produce generalized rainfall in the western Corn Belt today and Thursday and in the eastern Midwest Thursday into Saturday.
  
• Drier
  and colder weather will then follow this weekend and next week.
• Fieldwork
  will be slow to get back on track, but improvements are forthcoming. 
• Western
  most parts of U.S. hard red winter wheat country will be dry biased for the next couple of weeks as will Montana and central Canada’s Prairies and the southwestern U.S. including southern California.
  
• West
  Texas will be dry as well.
• Australia
  still has a huge winter crop coming with good weather supporting it
• Northern
  and east-central China will see good drying conditions for all kinds of fieldwork and the same is true for central and northern India.
  
• Russia’s
  Volga Basin may get some moisture in the second week of the outlook.
• Western
  Europe will start trending wetter this weekend and next week. 
• South
  Africa rainfall will be great for spring and summer crop planting and emergence

 

Bloomberg
Ag Calendar

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

 

 

 

 

Macros

US
Durable Goods Orders Sep P: -0.4% (est -1.1%; prev 1.8%; prevR 1.3%)

–
Durables Ex Transportation Sep P: 0.4% (est 0.4%; prev 0.3%)

–
Cap Goods Orders Nondef Ex Air Sep P: 0.8% (est 0.5%; prev 0.6%; prevR 0.5%)

–
Cap Goods Ship Nondef Ex Air Sep P: 0.4% (est 0.5%; prev 0.8%; prevR 0.6%)

US
Wholesale Inventories (M/M) Sep P: 1.1% (est 1.0%; prev 1.2%)

–
Retail Inventories (M/M) Sep: -0.2% (est 0.2%; prev 0.1%; prevR 0.2%)

US
Advanced Goods Trade Balance Sep: -$96.3B (est -$88.3B; prev -$87.6B; prevR -$88.2B)

 

Corn

·        
CBOT corn is lower following weaker soybeans and WTI crude oil. 

·        
South Africa’s CEC sees the 2020-21 corn crop at 16.211 million tons, up from the 15.300 million tons last season and unchanged from the previous forecast.  It consists of 8.609 million tons of white and 7.602 million tons of
yellow.

·        
WTI crude oil is more than $1.00 lower after data showed US crude oil supplies were higher than expected.  US crude oil inventories rose by 2.3 million barrels in the week ending Oct. 22, according to the American Petroleum Institute.
That was more than the expected 1.9-million-barrel gain.

·        
Germany reported a bird flu H5N1 outbreak at a goose farm in Brunsbüttel in Schleswig-Holstein. 

·        
A Bloomberg poll looks for weekly US ethanol production to be up 1,000 barrels (1065-1120 range) from the previous week and stocks up 261,000 barrels to 20.341 million.

 

 

Export
developments.

• None
  reported

 

Soybeans

·        
CBOT soybeans, meal and oil are all lower from a lower lead in outside related commodity markets.  China futures for the soybean complex were down 0.5-0.7%.  Some people noted the recent outbreak of Covid-19 in China were weighing
on vegetable oil price, and another source cited India demand concerns, but we think the weaker vegetable values were more related to global energy prices and weakness in SA soybean oil cash prices on Tuesday. 

·        
It was dry across Brazil over the past day, promoting soybean planting progress.  Argentina will remain on the drier side for the balance of the workweek with some rain expected this weekend but the country will need additional
rain going forward. 

·        
Argentina soybean sales as of October 20 were running at 32.7 million tons (2020-21 crop year), below 33.9 million year earlier. 

·        
Malaysian palm futures were down 46 ringgit overnight to 4,966.  Cash palm was down $25/ton to $1,265 per ton. 

·        
Malaysian palm oil futures:

·        
Rotterdam meal values were near unchanged to 5 euros lower and vegetable oils mixed. 

·        
Offshore values are leading soybean oil 11 points higher and meal $2.10 short ton lower. 

·        
China crush margins on our analysis was last $2.30/bu, down from $2.47 at the end of last week and compares to $1.39 a year ago. 

·        
China

 

Export
Developments

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

 

Wheat

·        
US wheat futures are mostly lower.  After Egypt said they have enough wheat reserves to last 6 months, they floated an import tender.  Lowest offer was $327.00/ton fob ($356.50/ton with shipping costs) was for Russian origin for
shipment between Dec. 1 and Dec. 10. It appears only Russia and Ukraine wheat was presented. 

·        
The US Great Plains weather forecast appears to be wetter for the Great Plains bias NE into Texas.  Rains will occur across the eastern areas today into early Thursday before turning drier Friday through the weekend.

·        
Paris December wheat was down 1.75 euros by around 7:30 am CT at 283. 

·        
Ukraine exported 18.2 million tons of grain so far in the 2021-22 July-June season, up 17.5% from 15.5 million tons year earlier.  That included 11.7 million tons of wheat, 4.2 million tons of barley and 2 million tons of corn.

 

Export
Developments. 

·        
Egypt is in for wheat and lowest offer was $327.00/ton fob ($356.50/ton with shipping costs) was for Russian origin for shipment between Dec. 1 and Dec. 10. It appears only Russia and Ukraine wheat was presented. 

·        
Jordan passed on 120,000 tons of wheat. 

·        
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.