Morning Commentary 9/15/21

CBOT Corn Adds To Tuesday's Gain on Disappointing Yield Discussion; Argentine Grain Exchange Initial Crop Forecasts; NOPA out at 11 AM CT

6:30 CT CBT Prices: Nov soybeans are up 8.00 cents at $12.905, Dec corn is up 4.25 cents at $5.245, with December Chi wheat up 2.50 cents at $7.035.

AgResource Morning Grain/Soy Comment & Analysis: Good Morning! CBOT futures extended Tuesday’s rally overnight in moderate volume. Expanding US export demand for corn/soybeans, stout spot cash market bids, and disappointing early corn yield results offered bullish fundamental fodder. Moreover, price charts are hinting that seasonal lows were formed following last week September USDA Crop report. End users are taking notice and extending their forward coverage.

CBT open interest fell 1,733 contracts in Chi wheat but rose 3,203 contracts in corn and 598 contracts in soybeans. Traders are closely following daily open interest totals with managed money expected to show a fondness for new net long positions heading into a new quarter.

NOPA will be out today with its August Member Crush Report. ARC sees the August NOPA crush rate at 155 Mil Bu with soyoil stocks at 1,554 Mil pounds. The report will help to statistically tidy up the 2020/21 US soybean balance sheet ahead of the coming NASS September 1st Stocks Report on September 30th.

The Argentine Grain Exchange (BAGE) estimated 2022 Argentine corn production at a record 55 MMTs while soybean production slides to 44 MMTs as farmers seed more corn acres (17.5 Mil acres) while soy seedings slide to 40.6 Mil acres. La Nina continues to build, and Argentine farmers see corn as better in battling this ocean/weather phenomena as there is the flexibility to seed their crop in December to better withstand early season dryness.

Cargill Westwego confirmed that electrical power had been restored and that their elevator was again loading boats for export. Cargill also confirmed that its structurally damaged Reserve elevator has power, and it is looking at phasing a reopening without specific dates as damage is still being assessed. The US Gulf continues to slowly reopen with CIF values rising on new demand.

Malaysian November palmoil futures rallied to sharp gains of 100 ringgits at 4,440 RM/MT. The rally in other world vegoil prices and a slower recovery of Malaysian production produced the bullish backdrop. A test of the contract high at 4,530 RM/MT is now in sight as pennant chart pattern forms.

November Daily Malaysian Palmoil Chart: Bullish Pennant Forming: 

Paris wheat futures are up €1.75 at €244.75/MT on tightening milling grade stocks. French traders have been able to negotiate lower quality contracts for wheat exports to China at 75 kilos/MT. Its likely that China is taking the lower quality French wheat bought last spring for feed.

Dalian January corn rose $.02 to $9.74/Bu while December soymeal rallied by $1.20/MT to $569.00. Chinese soybean crush margins are again positive.

The Brazilian rainy season shows no evidence of starting. The hot/dry weather will prevent early corn/soybean seeding. This becomes a worry in October.

Midwest corn harvested yield data is disappointing with record yields only reported on fields that applied fungicide on multiple occasions. Otherwise, early yields are below producer expectations. ARC Research sees harvest lows as being formed and a rally effort into the September 3Oth NASS Stocks Report.

North American Weather Pattern Discussion: The primary US weather models agree and our confidence in the forecast is high. Nicholas became a tropical depression late Tuesday with heavy rainfall dousing the Gulf States. The storm will track slowly northeast and weaken considerably heading into Friday. Additional rain for S Louisiana, S Mississippi and S Alabama will range from 2-5.00” which will spark low-lying flooding.

The remainder of the Central US will hold in a warm/dry trend with summerlike high temperatures in the upper 70’s to the mid-90’s. The heat/dryness will push crop maturity. The attached 10-day rain graphic is from the GFS model. A progressive weather pattern is forecast for the next 10 days. A Ridge of high pressure elongates and progresses east across the Central US thru the weekend with a Trough producing rain for the N Plains and the Northern Lake States late next week. Temps cool modestly with highs retreating to the mid 60’s to mid 80’s.

The Midwest harvest becomes active this weekend amid the warm/dry weather. The extended range forecast maintains a warm temperature pattern with below normal rainfall into the end of September. Early harvest progress should be active.

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