FI Morning Grain Comments 11/08/21

PDF attached

 

Good
morning

 

USDA:
Private exporters reported sales of 150,000 metric tons of corn for delivery to Colombia during the 2021/2022 marketing year.

 

Mixed
trade today with soybeans and meal lower and soybean oil mixed.  Corn is lower (fund position was larger than expected as of last Tuesday) and wheat mixed.  Look for positioning ahead of the USDA report due out Tuesday.  Today is the second day of the Goldman
Roll.  We see no major issues with weather for NA and SA but keep an eye on eastern Australia as they received more rain over the weekend. 

 

 

 

Weather

 

World
Weather Inc.

MOST
IMPORTANT WEATHER AROUND THE WORLD

• A
  blizzard will evolve in the upper Midwest Wednesday into Friday of this week
  
• The
  storm will produce 3 to 6 inches of snow and locally more in northern Minnesota, northeastern North Dakota and southern Manitoba, Canada as well as neighboring areas of western Ontario and northwestern Wisconsin
• Snowfall
  of a trace to 3 inches will occur in the remainder of North Dakota, southern Minnesota and eastern South Dakota as well as the remainder of Wisconsin
• Strong
  wind speeds of 25-35 mph and gusts to 45 will be possible during the height of the storm’s intensity late Wednesday night and Thursday
• Rain
  from the same blizzard noted above will move from west to east across the Midwest Wednesday into Friday causing a brief disruption to farming activity
• U.S.
  Midwest farming weather today and Tuesday will remain very good as it will be in the Delta and southeastern states
• A
  follow up storm in the far northern U.S. Plains and northern Midwest this weekend will produce additional snow and rain, but the lower Midwest will not be impacted by much moisture
• A
  couple of other U.S. storm systems are expected next week to bring additional bouts of light precipitation and maintaining a slower harvest pace for some areas
• No
  significant precipitation is expected in western U.S. hard red winter wheat production areas southward into West Texas during the next ten days
• Rain
  is expected in some eastern wheat areas Wednesday of this week and possibly again in the second half of next week
• Moisture
  shortages in wheat areas from Colorado to the Texas Panhandle will maintain concern over unirrigated winter crop conditions
• West
  Texas harvest weather should be mostly good over the next week to ten days
• Less
  frequent and less significant precipitation will occur in the U.S. Pacific Northwest and northern California after this workweek with next week expected to be drier biased for a while
• U.S.
  weekend rainfall was minimal in key grain, oilseed and cotton production areas
  
• The
  only exception was in Florida, southeastern Georgia and the coastal Carolinas where significant rain fell
• Rainfall
  reached 6.28 inches at Daytona Beach, Florida with many other areas from central through northeastern Florida to southeastern Georgia reported 2.00 to more than 4.00 inches
• A
  notable warming trend occurred in the central United States
• Highest
  temperatures occurred in the northern Plains Saturday with readings in the 60s and 70s and Sunday was warmest in the central and southwestern Plains where highs were in the 80s
• Liberal,
  Kansas, Guymon, Oklahoma and both Pampa and Perryton, Texas reached 88 Fahrenheit during the middle of Sunday afternoon
• Relative
  humidity in the central and southwestern Plains Sunday afternoon was varying from 8-25% suggesting strong evaporation for the region
• Rain
  also fell along the coast of Washington and Oregon and into the Cascade Mountains where moisture totals of 0.57 to 1.35 inches resulted
• Some
  lighter rain fell in the northern Rocky Mountains as well
• Limited
  precipitation is still expected in the northwestern U.S. Plains and central parts of Canada’s Prairies through the next ten days, but these areas will eventually have some potential for rain and snow as La Nina becomes more significant
• The
  precipitation potentials should begin to improve late this month and especially in December and January
• U.S.
  temperatures this week will be near to above normal with the warmest bias expected in the northeastern and southwestern parts of nation
• Temperatures
  next week will average near normal except in the Great Basin, southwestern states and central and southern Rocky Mountain region where readings will be above normal
• The
  U.S. bottom line will be good for late season farming activity early this week and then there will be some disruption to fieldwork a little later this week and into next week. None of the delays are expected to become a serious threat to late season fieldwork.
  Planting wheat and its establishment would improve with a longer period of dry and warm weather, but the situation is not critical at this point in time.  Cotton harvest progress in West Texas will advance well, but progress in the Delta and southeastern states
  may be briefly disrupted from time to time without seriously deteriorating the remaining crop conditions
• Southern
  Brazil will receive limited amounts of rain over the coming week leading to net drying in many areas from Sao Paulo into southern Mato Grosso do Sul and in Rio Grande do Sul as well as parts of southern Paraguay
• Some
  showers and thunderstorms will occur from Parana into southern Mato Grosso do Sul and southeastern Paraguay, but resulting rainfall may not be enough to counter evaporation
• Sufficient
  rainfall may occur to support crops, but the need for greater rain will be steadily rising as time moves along
• Rio
  Grande do Sul, Brazil will be driest with little to no rain until late Sunday and Monday of next week when 0.50 to 1.50 inches of rain will occur with some locally greater amounts
  
• Confidence
  in this rain event and another that occurs in far southern Brazil late next week is low and future model runs will be closely monitored
• Center
  west through center South Brazil and in a few northeastern areas will be frequently and abundantly wet during the next ten days to two weeks
  
• Rainfall
  may be heavy at times from Mato Grosso to Minas Gerais, Tocantins and a part of southwestern Bahia
• Rainfall
  will vary from 3.00 to more than 7.00 inches during the next ten days in these areas
• Most
  of the precipitation will be spread out over multiple days limiting the occurrence of serious flooding, but some excessive moisture and minor flooding should be anticipated
• Most
  of Bahia, Piaui and Maranhao and Pernambuco will see 1.00 to 3.00 inches with local totals over 4.00 inches
• Brazil
  temperatures will be near to below average in this first week of the outlook and slightly warmer next week
• Argentina
  temperatures will be near normal this week and next week
• Brazil
  rainfall Friday through Sunday was greatest from Mato Grosso through Goias and Mato Grosso do Sul to portions of Minas Gerais with amounts of 0.20 to 0.88 inch occurring most often with local amounts of 1.00 to 2.25 inches
• Showers
  elsewhere were sporadic and light with less than 0.30 inch of moisture in Parana
• Sao
  Paulo was left mostly dry along with southern Minas Gerais and most of Rio Grande do Sul
• Temperatures
  were seasonably warm with highs in the lower to middle 90s except near the coast and in the far south where 80s and a few upper 70s were noted
• Argentina
  weekend rainfall was limited resulting in net drying for many areas
• The
  exception was in a few Santa Fe, western Entre Rios and Formosa locations where more than 0.50 inch of rain resulted.
  
• Temperatures
  were seasonable
• The
  bottom line for Brazil and Argentina during the next two weeks remains mostly favorable for summer crop development and field progress. Some areas in center west and northern parts of center south Brazil will be a little too wet at times while periods of drying
  in southern Brazil, Uruguay, southern Paraguay and parts of extreme eastern Argentina will be closely monitored, but for now many of these areas get at least a little timely rainfall to stave off a more significant bout of dryness.  Watch future forecast model
  runs for signs of turning drier in eastern Argentina, Uruguay, southern Paraguay and southern Brazil, but for now crop conditions will stay favorable.
  
• Australia
  rainfall during the weekend was scattered in many crop areas, but the precipitation was greatest in the Great Dividing range outside of winter crop areas
• This
  protected wheat, barley and canola quality and maintained a nearly ideal outlook for production
  
• Australia
  weather is expected to be more active this week with rain falling more frequently, but it is still questionable over whether it will be wet enough to harm the quality of winter crops
• Drier
  weather is expected for a while this weekend into the middle part of next week before rain resumes again after that
  
• Drier
  weather will be needed to improve crop maturation and harvest conditions for wheat, barley and canola
• The
  rain in Queensland and some areas in New South Wales will be ideal for the advancement of summer crop planting, emergence and development especially in unirrigated areas
• Livestock
  conditions will be improving as well due to better grazing conditions resulting as soil moisture gets better and grass development accelerates
• Western
  parts of Russia received rain and some snow during the weekend
• Moisture
  totals varied from 0.05 to 0.70 inch with a few amounts over 1.00 inch
• Most
  of this stayed out of the lower half of the Volga Bain and Ukraine where dry conditions prevailed
• Highest
  temperatures were in the 40s and lower 50s Fahrenheit with lows in the 30s and 40s
• Colder
  air was noted east of the New Lands, but there are few to no winter crops produced in that region.
  
• Precipitation
  in Russia and Ukraine will be restricted for ten days from central Ukraine into the Volga Basin north of Russia’s Southern Region and southeast of Russia’s Central Region
• Moisture
  will occur in all other areas and in sufficient amounts to bolster soil moisture for use in the spring
• Some
  significant snow will fall this week across northern Russia which should expand snow cover that has been mostly confined to areas east of the Ural Mountains recently
• Winter
  crops in Russia and Ukraine are adequately established even though there is need for more moisture in Ukraine and the middle and lower Volga Basin. As long as snow cover is present during extreme weather during the winter crops in these areas should perform
  well in the spring as long as soil moisture has improved by that time.
• China
  began to experience the season’s first significant snow event of the season during the weekend and it will continue into Tuesday in the northeast
• Beijing
  reported its first snow 23 days earlier than usual and temperatures early this week were expected to be the coldest in ten years
• Much
  more snow will fall, although areas from Liaoning to central Heilongjiang will be most impacted with another 4 to 12 inches of accumulation expected.
  
• Travel
  delays have already occurred and many businesses and schools will be close into Tuesday
  
• Bitter
  cold temperatures will follow the snow event
• Concern
  over livestock in the region remains, although Inner Mongolia missed the greatest snow and concern over livestock losses had been greatest for that region
• Snow
  will linger in northeastern China through mid-week this week
• China
  will see net drying during the middle to latter part of this week with some light snow returning to northeastern China this weekend
  
• Unusually
  cold temperatures early this week will give way to more seasonable conditions this weekend into next week
• Freezes
  will occur southward to the northern Yangtze River Valley Tuesday and Wednesday
• Most
  of China’s adverse weather will be confined to the northeast provinces early this week. Late season fieldwork will be on hold with some unharvested crops to be buried in snow. Livestock stress will be reduced over time.  Dry or mostly dry conditions in the
  Yellow and Yangtze River Basins will be very good for late season summer crop harvesting and the planting of rapeseed and a few other late season crops.
  
• A
  weak tropical cyclone in the Arabian Sea this week will drift west southwesterly over open water and not have much impact on crops this week
• Another
  tropical cyclone will evolve in the southern Bay of Bengal today and move northwest while intensifying
  
• Landfall
  is possible in southern Andhra Pradesh near the Tamil Nadu border Thursday
  
• Heavy
  rain and flooding are expected in northeastern Tamil Nadu, southern Andhra Pradesh and southeastern Karnataka during the middle to latter part of this week
• Some
  damage to rice, cotton and a few oilseed crops might result from this event.
  
• A
  few areas of flooding will also occur in sugarcane areas, but damage to that crop because of wind and flooding should be low
• South
  Africa rainfall was scattered in eastern parts of the nation during the weekend, but much of it was not enough to counter evaporation or seriously change crop or field conditions
• Greater
  rain is needed in South Africa to improve summer crop planting, emergence and establishment conditions
  
• Western
  rainfall in the nation should be minimal for summer crops leaving a strong need for significant moisture over the next two weeks
• Eastern
  crop areas will see periodic rainfall and all of it will be welcome, but larger volumes of rain may still be needed
• Good
  harvest weather continues in winter crop areas
• Europe
  weather will be favorable for fieldwork of all kinds this week, although it will have to advance around brief bouts of light rainfall
• Italy
  and the Adriatic Sea region will see frequent bouts of rain this week with some of the moisture eventually pushing deeper into the Balkan Countries
• Indonesia
  and Malaysia weather will be wet biased over the next two weeks with frequent rain expected over saturated or nearly saturated soil causing some flooding
• Coastal
  areas of Central Vietnam will likely trend wetter than usual this week resulting in some flooding from Da Nang southward to
  
• Rain
  totals in the coming week may range from 5.00 to 15.00 inches resulting in some flooding, but mostly along the coast
• Some
  of the heavy rain may eventually push into the Central Highlands of Vietnam, but confidence is low
  
• Philippines
  weather will remain favorably mixed with rain and sunshine through the next two weeks
• Central
  parts of Algeria’s coastal region received heavy rainfall during the weekend with amounts pushing up to 5.00 inches through dawn Sunday
  
• Much
  lighter rain fell in other areas in northern Algeria while Tunisia and Morocco were left mostly dry
• Additional
  rain will fall along the central Algeria coast periodically this week with another 1.00 to 4.00 inches
• Some
  additional flooding is possible, but enough of a break from the weekend heavy rain before the next wave of heavy rain arrives to help reduce the severity of new flooding
  
• Tunisia
  will also receive some light rainfall
• Southwestern
  Morocco remains in a multi-year drought with little rain of significance expected over the next couple of weeks
• West-central
  Africa will experience a good mix of weather during the next ten days to two weeks
• Less
  frequent rain in cotton areas will translate into better crop maturation conditions
• Coffee,
  cocoa, sugarcane and rice will also benefit from less frequent and less significant rainfall, although completely dry weather is not likely for a while
• East-central
  Africa weather will be favorably mixed for a while supporting coffee, rice, cocoa and a host of tropical crops
• Mexico’s
  weather will drier biased for the next ten days except along the lower east coast where periodic rainfall is expected
• Central
  America rainfall will be erratic over the next two weeks with the greatest rain expected in Costa Rica and Panama
• West-central
  and southwestern Colombia, Ecuador and northern Peru agricultural areas will be closely monitored over the next few weeks as the potential for flooding increases.
  
• Coffee,
  sugarcane, corn and a host of other crops may eventually impacted by too much rain in Colombia
  
• Harvest
  delays have already occurred and there is more coming
• Central
  Asia cotton and other crop harvesting will advance normally as dry and warm conditions prevail
• Much
  of these crops are already harvested
• Today’s
  Southern Oscillational Index was +6.80 and it was expected to drift higher over the coming week
• New
  Zealand rainfall is expected to be near to above average except along the lower east coast of South Island where precipitation may be a little lighter than usual
  
• Temperatures
  will be seasonable.
• A
  mid-latitude low pressure center off the lower east U.S. coast today has some potential to acquire subtropical characteristics over the next few days as it moves east northeasterly
  
• The
  storm will impact Bermuda Tuesday into Wednesday bringing some heavy rainfall
• The
  system will move away from North America

 

Bloomberg
Ag Calendar

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

 

 

 

 

CFTC
Commitment of Traders

Big
miss on corn longs last week as OI increased a large amount on fund buying.  We are concerned on bullish optimism as soybean prices failed to follow suite (as of last Tuesday) against the appreciation in grains and caution longs as we head into a period of
favorable US harvest weather and good progress of SA plantings. 

 

 

 

 

 

 

 

 

 

 

 

Macros

 

Corn

·        
Corn futures are lower from good US harvesting weather and lack of bullish news.  The funds position in corn as of last Tuesday was more long than expected. 

·        
We look for harvest progress to be up 12 points last week to 86 percent after dry weather occurred across the heart of the Midwest.   

·        
Second day for the Goldman roll for December contacts.

·        
Look for positioning ahead of the USDA report due out Tuesday.

·        
Export developments are quiet.

·        
Bird flu continues to spread across Europe.  Poland reported an outbreak of H5N1.  Last week France raised their alert status on bird flu. 

 

Export
developments.

• USDA:
  Private exporters reported sales of 150,000 metric tons of corn for delivery to Colombia during the 2021/2022 marketing year.
  

 

Soybeans

·        
CBOT soybeans and
meal are lower from positioning and a lower USD.  Soybean was mixed in part to a mixed trade in overseas values (China vegetable oils were sharply lower).  China soybean imports of 5.11 MMT during October were lowest since March 2020. 

·        
We see no major issues with weather for NA and SA but keep an eye on eastern Australia as they received more rain over the weekend. 

·        
Brazil is 67 percent complete on soybean plantings as of Thursday according to AgRural, above 56 percent year earlier. 

·        
China futures decreased 1.4 for soybeans, fell 0.5% for meal and were down 3.5% for soybean oil.

·        
Malaysia

·        
Rotterdam meal values were unchanged to 6 euros lower and vegetable oils unchanged to 5 euros higher. 

·        
Offshore values are leading soybean oil about 50 points higher and meal $1.00 short ton higher. 

·        
China crush margins on our analysis was last $2.52/bu, compared to $2.30 at the end of last week and compares to $0.85 a year ago.

·        
China

 

Export
Developments

·        
None reported

 

 

Wheat

·        
US wheat is mixed.  The USD is lower, and some traders are positioning ahead of the USDA report.   The CFTC report did show longs holding a good position for the KC and MN markets. 

·        
Paris December wheat was down .3.00 euros by around 7:45 am CT at 284.75/ton.

·        
Ukraine’s AgMin showed the winter wheat planting area down 8.5% at 6.09 million hectares, down from 6.11 million in 2020-21, and well below the 6.66 million projected before sowings started. 

 

Export
Developments. 

·        
Jordan seeks 120,000 tons of animal feed barley on Nov. 10 for shipment combinations of March 1-15, March 16-31, April 1-15 and April 16-30. 

·        
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