9/10/21

Morning Commentary 9/10/21

USDA September Crop Report Day; US Gulf Slowly Rises Back to Export Capabilities as Power Restored; Presidents Biden/Xi Talk Overnight

6:30 CT CBT Prices: Nov soybeans are up 2.50 cents at $12.74, Dec corn is up 1.50 cents at $5.115 with December Chi wheat up .50 of a cent at $6.925.

AgResource Morning Grain/Soy Comment & Analysis: Good Morning! CBT futures are firmer this morning on the progress in restoring US Gulf export capacity along with an overnight talk between US President Biden and Chinese President Xi.

The US initiated the talk to help improve US/Chinese relations. Included in the talks were a broad array of subjects including environmental, economic and that competition does not veer into conflict. USTR is said to be completing a US/China trade review which is expected to be announced in the coming weeks. This was the 2nd visit between the 2 leaders with the last hour-long visit occurring in February. The CBT will see the less competitive US/Chinese relations as being helpful for Chinese demand of US ag goods.

The USDA will release its September Crop Report at 11 AM CT today. The report has become the most important of the autumn as NASS incorporates FSA data to adjust planted/harvested acres. NASS is including the FSA data based on the high percentage of US farmers that have already reported their program acres. Historically, it was October when such FSA acres were tallied, but their inclusion in September makes today’s report especially important to longer term CBT price direction.

ADM announced that it will restart two export facilities (Ama and Reserve) by the end of the month while damage at their Destrehan facility will take a few weeks longer. ADM said it has already started loading export shipments with its mid-stream equipment on the lower Miss River. Other US exporters are also reopening or close to reopening which has helped US Gulf CIF/FOB trade return. Zennoh and Bunge are either reopening or close to reopening as the Mississippi export channel restarts from the crippling blow offered by hurricane Ida. This is good news with the US grain harvest to fully start in the coming weeks.  

China ag ministry estimated a 3 MMTs fall in domestic corn use due to slumping pig prices/profits. China’s ag ministry cut their 2021/22 Chinese corn feed estimate to a record 290.7 MMTs. China left is corn import estimate unchanged at 20 MMTs. On soybeans, China estimated 21/22 imports at a record large 102 MMTs. The ag ministry has been too low on their import estimates of key grains and soy for several years running. No end stock totals are offered.

Brazilian President Bolsonaro said that truckers would stand down and end blockades by Sunday. The truckers came to Bolsonaro’s support as he battled Brazil’s Supreme Court which called for his removal from office. The truck blockades threatened to curtail Brazilian ag exports and cropping inputs.

Malaysian November palmoil futures fell 114 ringgits at 4,278 RM/MT. Paris December wheat is down €1.25 at €238.25/MT. Dalian January corn was unchanged at $9.71/Bu while December soymeal rallied by $2.00/MT to $561.10.

Good luck with USDA September Crop Report. As the US Gulf returns to business, ARC would look for end users to secure a bearish report on tightening world grain/oilseed supplies. ARC sees no slowing in world demand, although the USDA weekly export sales data will be low due to the Gulf being closed.

North American Weather Pattern Discussion: The primary US weather models agree and our confidence in the forecast is high. A below normal rainfall and above normal temperature pattern will hold across the Central US into late September.

A Ridge of high pressure elongates and shifts east across the Central US early next week producing much above normal temperatures with highs in the 80’s to the mid 90’s. A few lower 100’s is possible across the C Plains. Dryness and summerlike warmth pushes US crop maturity.

 A cold front knifes through the W Midwest late Wednesday/Thursday which produces a lite to moderate showers of .10-.60” which is about half of what was forecast in prior days. The 10-day rainfall map is from the EU model. Soil moisture draws will be sizeable looking forward into September 20th. The dry weather will produce a quickened harvest pace but cause worry for winter wheat seed germination.

There is no evidence of any frost risk for Central US crops into Sept 25th. This is a  warm to hot weather pattern for the Central US into October.

The extended range forecast calls for dry and ongoing warm conditions.  The Western US drought will be deepening with fire risk staying extremely high.

Limited Central US Rainfall With Summer Like Temps in the 80's/90's:

The Start of the Rainy Season is Delayed until Early October: 

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