-Weakening vegoil prices expected mid-2022
-Trade estimate summary for USDA reports Thursday
-Hogs and Pigs report sharply lower than expected/Cattle on Feed higher than expected
-USDA reports soybean sales to China
USDA’s quarterly Grain Stocks report and Small Grains Annual Summary report will be out on Thursday at 11:00 AM CT. Our pre-report commentary/analysis can be found on Market Insights at https://portal.rjobrien.com/MarketInsights/Blog/Read/45273. A summary of the average trade
estimates is the last page.
Friday afternoon’s USDA Hogs and Pigs report showed the U.S. hog crop notably below expectations at 96.1% of last year vs the average trade estimate of 98.3. The 3.9% year-over-year decline was the largest reduction for any quarter since June 2014. The surprisingly low figure was contributed to by USDA notably lowering the previous two quarters’ figures as well with hogs and pigs as of June 1 lowered to 96.2 from 97.8 originally reported and March 1 to 96.9 from 98.3 originally reported.
Friday’s Cattle on Feed report showed cattle on feed as of Sept 1 at 98.6% of last year, above average expectations of 97.9, as placements at 102.3 were sharply above average expectations of 99.0, while marketings of 99.6 were slightly below average expectations of 100.0.
USDA reported the sale of 334k tonnes of soybeans to China for 2021/22 delivery this morning.
Ukraine said this year’s wheat crop would be roughly 60% milling quality, about the same proportion as last year’s crop, while the crop size of 33 MMT is up substantially from last year’s 25.4 MMT. The ag ministry, on Friday, raised their estimate of 2021/22 wheat exports to 24.4 MMT from 23.8 MMT last year and compares to last year’s 16.6 MMT and USDA’s current estimate of this year’s exports to be 23.5 MMT.
Widely-followed palm oil analyst Dorab Mistry said he expected Malaysia crude palm oil prices to remain firm at 4,000-4,400 ringgit/tonne through February and then begin to ease into mid-to-late 2022 on rising palm oil production in Malaysia and Indonesia next year. He sees 2022 Malaysian production at 19.2 MMT vs this year’s estimated 18.2 MMT, with Indonesian production next year rising 1 MMT from this year, as well. Specifically, he sees the potential for crude palm oil prices to decline from 3,800 ringgit/tonne to 3,200 from April to September next year. Benchmark Dec Malaysian palm oil futures closed at 4,394 ringgit/tonne overnight. Similarly, head Oil World analyst Thomas Mielke sees rising global veg oil production later in 2021/22 pressuring edible oil prices as he sees world palm oil production rising 3.5-4.0 MMT in the coming year, sunflower oil production rising 3.0 MMT to 22.0 MMT and soybean oil production rising 2.0 MMT to 61.7 MMT.
A wire service poll of South America ag industry participants found an average expectation of next year’s Brazilian soybean crop to be a record 143.8 MMT vs Conab’s current estimate of this year’s crop at 135.9 MMT and compares to USDA’s current early assumption of 144.0 MMT next year and this year’s 137.0 MMT.
Friday afternoon’s CFTC Disaggregated COT data for the week ended 9/21/21 showed funds being small mixed participants in the ag space with net buying of 2.1k contracts in corn (net long 214k), net sellers of 5.7k soybeans (net long down to 50k) and minor net buyers of 0.5k CBOT wheat (net short 5k). Funds were net sellers of 8.1k contacts in soybean oil (net long 39k) and 2.2k SBM (net short 19k) and small net buyers in KCBT wheat of 1.4k (net long 39k). Funds were essentially net even in MPLS wheat and are net long 13k contracts.