FI Morning Grain Comments 11/05/21

PDF attached

 

Good
morning and happy Friday

 

US
Change In Nonfarm Payrolls Oct: 531K (est 450K; prev 194K; prevR 312K)

–
Unemployment Rate Oct: 4.6% (est 4.7%; prev 4.8%)

 

The
USD is higher again this morning and WTI crude oil is up $1.10. US equities are pointing towards a higher open. Soybeans are down for the third consecutive day.   The slow US export pace and increase in Midwest harvesting progress is weighing on prices.  Positioning
is also seen ahead of the start of the Goldman Roll (starts today) and USDA report due out on Tuesday.  Corn is lower.  Wheat is mixed with MN rebounding after trading sharply lower on Thursday.  Fundamental news is light. Soybean meal and soybean oil are
trading lower.   Malaysia is back from holiday and palm prices fell 3.8% or 191 ringgit to 4,880.  Cash palm was down $40/ton to $1,237.50/ton. China futures increased 1.4% for soybeans, fell 1.3% for meal and were down 2.6% for soybean oil. 

 

 

 

Weather

 

World
Weather Inc.

•  La
  Nina continues to have more control on world weather.
• Each
  day, the South America weather outlook continues to limit rain from eastern Argentina through southern Brazil in a classic La Nina manner and World Weather Inc. anticipates this pattern persisting over many weeks resulting in an eventual stressed environment
  for crops.
• La
  Nina is also encouraging greater and more frequent rainfall for eastern Australia and that situation needs to be closely monitored as winter grain and canola harvesting continues.
  
• China’s
  snowstorm for the weekend is a little weaker today, but still a viable storm with potential to induce travel delays, power outages and severe stress to livestock from Hebei to Heilongjiang and northwest into central and eastern Inner Mongolia.
  
• Southern
  India will be plenty wet with a tropical cyclone this weekend in Arabian Sea and another that will develop in the southern Bay of Bengal.
  
• The
  Bay of Bengal storm will move to the lower India Coast late next week producing adverse weather.
  
• Most
  other areas in the world are seeing little change in advertised weather relative to that of Thursday. 
  
• The
  U.S. will see a large rain and snow event during the middle to latter part of next week in the Midwest and northeastern Plains, but good harvest weather is likely until then. 

 

Bloomberg
Ag Calendar

Friday,
Nov. 5:

• 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
• China’s
  CNGOIC to publish demand-supply reports on corn, soy and other commodities
• FranceAgriMer
  weekly update on crop conditions
• Malaysia
  Nov. 1-5 palm oil exports
• HOLIDAY:
  India

Sunday,
Nov. 7:

• China’s
  first batch of October trade data, including soybean, edible oil and meat imports

Monday,
Nov. 8:

• USDA
  export inspections – corn, soybeans, wheat, 11am
• U.S.
  cotton condition; corn, soy and cotton harvesting; winter wheat planting, 4pm
• Ivory
  Coast cocoa arrivals

Tuesday,
Nov. 9:

• USDA’s
  monthly World Agricultural Supply and Demand (WASDE) report, noon
• China
  farm ministry’s CASDE outlook report
• EU
  weekly grain, oilseed import and export data
• France
  agriculture ministry crop production estimates
• U.S.
  Purdue Agriculture Sentiment, 9:30am

Wednesday,
Nov. 10:

• EIA
  weekly U.S. ethanol inventories, production
• Vietnam’s
  customs department publishes October commodity trade data
• Malaysian
  Palm Oil Board’s data on October output, exports and stockpiles, 12:30pm Kuala Lumpur
• Malaysia’s
  Nov. 1-10 palm oil export numbers by cargo surveyors
• FranceAgriMer
  monthly grains report

Thursday,
Nov. 11:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork and beef, 8:30am
• Port
  of Rouen data on French grain exports
• Brazil’s
  Conab releases data on yield, area and output of corn and soybeans (tentative)
• New
  Zealand Food Prices
• HOLIDAY:
  France

Friday,
Nov. 12:

• 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

Source:
Bloomberg and FI

 

 

 

 

 

Macros

US
Change In Nonfarm Payrolls Oct: 531K (est 450K; prev 194K; prevR 312K)

–
Unemployment Rate Oct: 4.6% (est 4.7%; prev 4.8%)

–
Avg Hourly Earnings (M/M) Oct: 0.4% (est 0.4%; prev 0.6%)

–
Avg Hourly Earnings (Y/Y) Oct: 4.9% (est 4.9%; prev 4.6%)

US
Change In Private Payrolls Oct: 604K (est 420K; prev 317K; prevR 365K)

–
Change In Manufacturing Oct: 60K (est 30K; prev 26K; prevR 31K)

US
Labour Force Participation Rate Oct: 61.6% (est 61.7%; prev 61.6%)

US
Payroll Employment Rises By 531,000 In October; Unemployment Rate Edges Down To 4.6%

 

Canadian
Net Change In Employment Oct: 31.2% (est 41.6%; prev 157.1%)

–
Unemployment Rate Oct: 6.7% (est 6.8%; prev 6.9%)

–
Hourly Wage Rate Permanent Employees Oct: 2.1% (est 2.1%; prev 1.7%)

Canadian
Full Time Employment Change Oct: 36.4K (prev 193.6K)

–
Part Time Employment Change Oct: -5.2K (prev -36.5K)

 

Corn

·        
Corn futures are lower on weakness in soybeans but higher wheat is limiting losses.  We look for harvest progress to be up 12 points this week to 86 percent after dry weather occurred across the heart of the Midwest.   

·        
Goldman roll for December contacts starts today.

·        
France harvested 73 percent of their corn crop as of November 1, up from 54 percent week earlier and 11 days below average.  Last year the corn crop was 93 percent harvested. 

·        
France raised their alert status on bird flu disease after 130 bid flu cases have been reported across Europe since August. 

 

Export
developments.

• None
  reported

 

Soybeans

·        
CBOT soybeans are
down for the third consecutive day on lower soybean oil and positioning ahead of the Goldman Roll (starts today) and USDA report due out November 9. 

·        
The US Midwest will see light rain for the northern areas over the weekend.  Rain returns to the north central areas Tuesday.  Brazil will see rain across Mato Grosso, Goias, Minas Gerais, MGDS, south Parana, and Santa Catarina
through Tuesday.  Argentina will see precipitation across the northern Cordoba, Santa Fe, and Entre Rios today, and central La Pampa through Tuesday. 

·        
Argentina’s government ended a brief oilseed worker strike on Thursday.  The strike was over taxes.  Argentina will hold general elections on November 14 (mid-term). 

·        
Malaysian palm futures fell 3.8% or 191 ringgit to 4,880.  Cash palm was down $40/ton to $1,237.50/ton.

·        
China futures increased 1.4% for soybeans, fell 1.3% for meal and were down 2.6% for soybean oil.

·        
Malaysia – back from a one day holiday. 

·        
Argentina has a chance for showers, but precipitation amounts will remain well below normal.

·        
Rotterdam meal values were 3-8 euros lower and vegetable oils unchanged to 15 euros lower. 

·        
Offshore values are leading soybean oil about 36 points higher (57 higher for the week to date) and meal $1.50 short ton lower (14.50 lower for the week). 

·        
China crush margins on our analysis was last $2.30/bu ($2.42 previous), compared to $2.32 at the end of last week and compares to $1.15 a year ago.

·        
China

 

Export
Developments

·        
None reported

 

USDA
Attaché on China oilseeds

“China’s
soybean imports in marketing year (MY) 20/21 hit a record 99.8 million metric tons (MMT) on high feed demand in the swine and poultry sectors. Soybean imports are expected to reach 101 MMT in MY 21/22 on increasing demand for soybean meal and soybean oil and
lower imports of rapeseed year-over-year. U.S. share of China’s soybean imports reached 37.2 percent in MY 20/21.”

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Beijing_China%20-%20People’s%20Republic%20of_11-01-2021

 

Wheat

·        
US Chicago and Minneapolis wheat futures are higher on technical buying while KC is mixed.  Lack of direction and higher USD may weigh on prices during the day session. 

·        
Paris December wheat was up 0.50 euros by around 8:00 am CT at 290.50/ton.

·        
France had planted 80 percent of their soft wheat crop as of November 1, up from 61 percent week earlier. 

·        
Ukraine harvested 87% of their grain crop or 67.8 million tons of the expected area according to the AgMin. 

·        
Russia’s SovEcon estimated wheat exports for 2021-22 at 34 million tons, down 300,000 tons from previous.  India is on holiday.

·        
The US Great Plains weather forecast is unchanged this morning and net drying will prevail for the western and southern wheat areas through next week. 

 

USDA
Attaché on India wheat

“Official
MY 2021/2022 trade figures for wheat exports through August 2021 at 1.99 MMT, are up significantly from 218,000 MT last year. Market sources report that 250,000-300,000 MT were shipped in September and that 700,000 to 800,000 MT will be exported in October
2021. Exports are destined for Nepal, Sri Lanka, Bangladesh, Indonesia, and Middle East and African countries. Sources inform that Indian wheat trades at $310-$315/MT freight-on-board (FOB), enjoying a $15-$20/MT advantage in these markets after accounting
for the freight costs.”

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_New%20Delhi_India_10-30-2021

 

Export
Developments. 

·        
Ethiopia seeks 300,000 tons of milling wheat on November 9.

·        
Ethiopia seeks 400,000 tons of wheat on November 30. 

 

Rice/Other

·        
None reported