Morning Highlights 10.18.21


Kevin Stockard

Oct 18, 2021

Highlights                           

  • China’s Q3 GDP growth slowed to 4.9% YoY vs a 5.2% estimate; however, retail sales were up 4.4% in September vs 3.3% estimates. An energy crunch that led to factories shutting down was partially to blame for the GDP drop and will continue to be a problem as winter heating season has arrived early in China. Real estate was also a concern, highlighted by Evergrande who has debt payments due at the end of the week. The early outlook for Q4 growth is 3-4%.
  • China’s Dalian coal futures were up over 6% overnight, while iron ore futures fell nearly 6%.
  • UK covid cases are at their highest in 3 months, with 45,140 reported on Sunday, potentially due to a new mutation dubbed “delta plus.”
  • Former Secretary of State Colin Powell died this morning at age 84 due to complications from covid.
  • November options expire this Friday, 10/22/21.
  • As of 7:00 am CT, crude oil is up 1.23 at $83.51/barrel, gold is down 5.2 at $1,763.1, DOW down 142 at 35,029, U.S. dollar index is up 142, and Euro is down 145 pts.

Corn

 

  • China’s corn imports in September were up 226% from last year to 3.53 MMT. Milo imports were up 14.4% from last year to 650,000 MT and are up 110% year-to-date.
  • The Commitments of Traders report for the week ending 10/12/21 showed funds were net sellers of 22,665 corn contracts and are now net long 227,931 contracts.

 

Outlook:  Dec corn down 1 ½ to up 1 ½ overnight..  not much activity after what was likely a busy harvest weekend. Exports and yield prospects are both growing.

 

 

Oilseeds

 

  • Malaysian palm oil futures were up 1% overnight and China’s Dalian soyoil was up 2.4%.
  • Egypt’s GASC is tendering for 30,000 MT of soyoil and 10,000 MT of sunflower oil for Dec arrival. GASC says they have 5 months of cooking oil reserves.
  • China’s pork production was up 43% in Q3 to 12 MMT, a 3 year high.
  • Commitments of Traders showed funds were net sellers of 20,385 soybean contracts, now long 29,068 contracts, sellers of 8,260 soymeal, now net short 40,324 contracts, and sellers of 2,194 soyoil, now long 72,984 contracts.

Outlook:  Nov beans up 4 to down 5 overnight.. negative data about the Chinese economy is certainly not going to help soybeans this morning. Sellers will focus on the increasing supply side.

 

Wheat

 

  • China’s Sep wheat imports were down 40.4% from last year to 640,000 MT, but are still up 25% year-to-date.
  • Ukraine’s Ag Ministry says their grain exports are up 11.7% so far in the 2021/22 marketing year, including 10.7 MMT of wheat, 4 MMT of barley, and 1.5 MMT of corn. APK Inform raised their Ukraine grain export estimate from 56.9 MMT to 57.2 MMT.
  • Pakistan is tendering to buy 90,000 MT of milling wheat for January shipment. Jordan is tendering for 120,000 MT of wheat and 120,000 MT of barley for LH Jan to FH March shipment. Ethiopia issued two wheat tenders for 200,000 MT and 400,000 MT.
  • COT data showed funds were net sellers of 13,758 Chicago wheat contracts, now short 8,546 contracts, sellers of 1,660 KC wheat contracts, now net long 48,286 contracts, and net buyers of 559 Minneapolis wheat, now net long 15,896 contracts.

 

Outlook:  Dec KC wheat down ½ to up 5 ½ overnight.. Dec Matif wheat made a new contract high overnight before pulling back, as world cash markets remain firm.