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We
raised our outlook for the September trading ranges for KC and MN wheat based on global demand for milling type wheat.  USDA announced 133,000 tons of soybean meal to the Philippines and 252,000 tons of soybeans to unknown. Crop progress and inspections estimates
are below. 

 

Weather
and Crop Progress

 

 

 

7
Day Precipitation Outlook

 

NOT
MANY CHANGES OVERNIGHT

 

  • Hurricane
    Douglas was a major hurricane this morning located 1010 miles east southeast of Hilo, Hawaii moving west northwesterly at 18 mph and producing maximum sustained wind speeds of 130 mph
    • Hurricane
      force wind is occurring out 30 miles from the storm center while tropical storm force wind was occurring out 90 miles
    • Douglas
      will continue to move toward the Hawaiian Islands and will  impact the region this weekend with some damaging wind, heavy rain and flooding
    • The
      storm’s current path takes the system north of the Big Island of Hawaii Saturday night into Sunday as a weakening hurricane
    • The
      storm will move very near to or directly across Maui and have impacts on Lanai and Molokai as well as some of the smaller islands nearby as a tropical storm
    • The
      storm’s small size will help limit the extent of damage, but there is a strong potential that the storm will move across some of the central Islands causing some damage
    • Kauai
      and some of the neighboring islands will not be seriously impacted by the storm, although some high wind speeds and heavy rain is expected

 

  • Tropical
    Storm Gonzalo  may become a hurricane before reaching the southern Windward islands Saturday
    • At
      0800 EDT, the storm was 580 miles east of the southern Windward Islands moving westerly at 15 mph and producing maximum sustained wind speeds of 60 mph
    • The
      storm will pass through the southern Windward Islands Saturday and move into the eastern Caribbean Sea where it will remain through Monday morning – the storm may weaken or possibly dissipate as it moves toward Central America

 

  • Tropical
    Storm Hanna was located 285 miles east of Corpus Christi, Texas at 27.1 north, 92.8 west moving west northwesterly at 9 mph and producing maximum sustained wind speeds of 40 mph
    • Hanna
      will likely move inland near Corpus Christi, Texas Saturday
    • The
      storm will bring heavy rain to portions of southern Texas and could raise some crop quality issues to open boll cotton in southern Texas
    • Flooding
      is expected along the lower Texas coast where 3.00 to 8.00 inches and local totals over 10.00 inches will be possible
    • The
      storm will ultimately end up in northeastern Mexico early next week

 

  • Southwestern
    and some central Canada Prairies crop areas will experience a steady drying trend and warm temperatures over the next week to ten days
    • Crop
      moisture stress will be on the rise
    • Late
      season canola and flax might be impacted with lower yields
    • Early
      season crops will likely be far enough advanced to no be seriously impacted; this includes spring cereals

 

  • China’s
    weather is expected to improve during the next two weeks with no more widespread excessive rain events expected
    • Some
      localized areas of heavy rain will be possible with local flooding, but most of the nation’s damaging weather is over and an assessment of the losses will be made as flood water recedes
      • Recent
        flooding in China has damaged many crops, but assessing the losses has not yet been done because flooding is still under way in many areas

 

  • Northern
    China crops are in mostly good condition, although some flooding recently occurred in Henan and Shandong that might have induced some damage in low-lying areas

 

  • Xinjiang,
    China continues cooler than usual and degree day accumulations are falling below average
    • Weather
      conditions will remain unsettled and a little cooler biased for a while
    • Showers
      will stay near the mountains
    • Northeastern
      Xinjiang cotton areas will see daily highs in the upper 70s and 80s for a while and lows in the 50s and 60s
    • Other
      cotton areas in the province will see daily highs in the middle 80s through the middle 90s with lows in the 60s
    • Warming
      is needed, but not likely for the next ten days

 

  • India’s
    monsoon continues to perform mostly very well, but recent rain has become lighter than usual
    • Rainfall
      in the central and north has been a little light recently and greater rain is needed especially in Rajasthan
      • August
        will be a better month for rainfall in the far northwest
    • Total
      rainfall this summer is expected to be slightly greater than usual, but some of that is predicated upon developing La Nina conditions in late August and September
    • Rain
      has been well enough distributed in recent weeks to support very good crop conditions in most of the nation

 

  • Southern
    Pakistan has not had much rain so far this summer, but improved rainfall is expected next month

 

  • Mainland
    areas of Southeast Asia have been getting enough rain to support crops, but the monsoon has been lackluster recently and greater rain is needed to begin improving long term soil moisture and water supply
    • Portions
      of western Thailand and Vietnam have been reporting the lightest rainfall relative to normal and a boost in rain is needed
    • The
      erratic rainfall is expected to continue for a little while longer, but August should bring greater precipitation

 

  • Philippines,
    Indonesia and Malaysia rainfall has also been a little erratic recently, but like the mainland areas of Southeast Asia crop conditions are mostly rated well with little immediate change likely
  • Eastern
    Australia will receive rain today and Saturday in New South Wales and southeastern Queensland to improve topsoil moisture and support establishing winter crops
    • Lingering
      showers are expected into early next week
    • Other
      areas in Australia will see little rain over the next ten days except near the coasts, but winter crops have stablished relatively well this year
      • Rain
        is still needed in South Australia and more will be needed in Queensland, but the outlook leading into spring is still looking much better than that of the past couple of years

 

  • Argentina
    has received some welcome rain in parts of Buenos Aires and La Pampa over the past two days improving wheat conditions
    • Cordoba
      is unlikely to get much rain of significance and it produces 20-23% of the total wheat crop
      • Cordoba
        has been quite dry since the planting season began and a cut in production has already occurred and more will be possible if dryness prevails much longer
    • Other
      crop areas in Argentina have had timely rainfall to support wheat and barley, although this week’s rain was a little disappointing in parts of Santa Fe which has also been experiencing some dryness
    • Drier
      weather will be returning to Argentina this weekend and it may last ten days leaving the dry areas without much hope for change

 

  • Southern
    Brazil’s soil conditions and weather will continue plenty moist for a while
    • Winter
      crop conditions are mostly good in Rio Grande do Sul and areas north into Parana, but Sao Paulo and a few other areas have been quite dry recently
    • Summer
      crop harvest progress has been good
    • Conditions
      for early season corn planting are looking favorable, but timely rain will need to continue in August to ensure early crops are successful

 

  • Harvest
    weather in center west and center south Brazil for Safrinha crops has been and will continue to be good

 

  • U.S.
    weather is expected to remain favorable over the next ten days, despite an erratic distribution of rain
    • No
      extreme heat is expected
    • Showers
      will continue periodically
    • The
      second week of the outlook will trend a little drier, but the models are likely to fall back into a classic mid-summer weather pattern of periodic showers and thunderstorms and warm temperatures in weeks 2 and 3
      • This
        pattern usually leads to net drying which is not unusual for August
      • Pockets
        of dryness will evolve and some new crop stress will be possible, but much of this is going to occur in August and not in this next ten days – no widespread serious moisture shortage is expected through the second week of August
    • Corn
      pollination and early season soybean blooming will continue to advance well in this environment

 

  • West
    Texas received some scattered showers and thunderstorms this week with a few more expected today and possibly into the weekend before drier weather evolves for a little while
    • Some
      additional shower activity is possible late next week and into the following weekend, but it may be less significant than that of this week
    • Most
      of the daily rainfall expected through the weekend and that which occurs late next week will be erratic and not great enough to seriously change soil moisture, but it will help put a little moisture in the air and supplement some irrigation
      • Many
        areas will still be dry
    • No
      extreme heat is expected for at least the next ten days
      • Daily
        highs in the 90s will occur often with a few readings near 100 during the weekend and through mid-week next week

 

  • U.S.
    Delta is one of the drier areas in the U.S. crop region with central parts of the region driest
    • Showers
      will occur periodically over the next couple of weeks resulting in some relief in the driest areas, but more rain may still be needed

 

  • U.S.
    southeastern states are seeing enough rain to maintain mostly good crop conditions, but very warm temperatures are accelerating drying rates between rain events
    • Daily
      highs in the 90s will prevail for the next week temperatures will be warmest next week

 

  • Far
    northwestern U.S. Plains will struggle for big soakings of rain over the next couple of weeks and net drying is expected
    • Temperatures
      will also be quite warm at times

 

  • U.S.
    Pacific Northwest rainfall will be minimal over the next two weeks

 

  • California
    and the Great Basin will be dry and warm for a while

 

  • Drying
    will continue from portions of central and eastern Ukraine through a part of Russia’s Southern Region to Kazakhstan
    • Dryness
      has been eased recently in northeastern Ukraine and a little more rain may fall next week after a period of drying

 

  • France
    remains too dry and parts of the United Kingdom, Belgium, Netherlands and northwestern Germany also need rain
    • These
      areas will not get much moisture, but there will be a few showers coming up briefly this weekend and next week
    • Germany,
      the U.K., Belgium and Netherlands may get enough rain for temporary crop improvements in a few areas next week

 

  • Portions
    of the southernmost Balkan Countries in southeastern Europe need greater rain to improve dryland crops
    • Scattered
      showers will occur during the coming week to ten days
    • No
      rain is expected in the southern Balkans or from eastern Ukraine into western Kazakhstan

 

  • Ontario
    and Quebec, Canada have some pockets of dryness, but most crops in the two provinces are still developing relatively well
    • Any
      missed rain could lead to greater crop stress and a close watch on the situation is warranted

 

  • South
    Africa weather over the next couple of weeks will include limited rainfall and temperatures will trend a little warmer over time.

 

  • West-central
    Africa will receive periods of rain over the next couple of weeks maintaining a favorable environment for coffee, cocoa, cotton, rice and sugarcane
    • Greater
      rain is needed in Ivory Coast and Ghana where rainfall so far this month has been notably lighter than usual

 

  • Russia’s
    New Lands will receive some cooler temperatures and scattered showers during the coming week to ten days resulting in better soil and crop conditions after recent dry and warm weather
    • Not
      all areas will get adequate relief and will need additional rain
      • About
        30% of the spring wheat and sunseed areas will get relief
      • All
        other areas will need significant rain

 

  • Northeastern
    Mexico will continue very dry and warm to hot over the next two weeks
    • Scattered
      showers and thunderstorms are likely elsewhere with rainfall mostly near to above average
    • Improving
      soil moisture in many areas will lead to better crop development potential

 

  • Central
    America rainfall will be well mixed over the next ten days with rain falling in most areas, although amounts may be a little lighter than usual in Honduras

 

  • New
    Zealand rainfall over the next couple of weeks will be erratic and most often light with temperatures being near to below average

 

  • Southern
    Oscillation Index was +4.18 this morning and the index will rise additionally this week

 

 

Bloomberg
Ag Calendar

FRIDAY,
July 24:

  • ICE
    Futures Europe weekly commitments of traders report, 1:30pm (6:30pm London)
  • CFTC
    commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • U.S.
    Cattle on Feed, Poultry Slaughter, 3pm
  • FranceAgriMer
    weekly update on crop conditions
  • Brazil
    Unica cane crush, sugar production (tentative)
  • HOLIDAY:
    Japan

SATURDAY,
July 25:

  • AmSpec
    to release Malaysia’s palm oil export data for July 1-25
  • China’s
    3rd batch of June trade data, incl. country breakdowns for energy and commodities (tentative)

MONDAY,
July 27:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • U.S.
    crop conditions for soybeans, corn, cotton; winter wheat progress, 4pm
  • MARS
    crop bulletin – monthly report on crop conditions in Europe
  • International
    Sugar Organization webinar on China’s market
  • EU
    weekly grain, oilseed import and export data
  • Indonesia
    palm oil export tax for August to be announced sometime during the week
  • Ivory
    Coast cocoa arrivals
  • HOLIDAY:
    Thailand

TUESDAY,
July 28:

  • EARNINGS:
    Minerva
  • HOLIDAY:
    Thailand

WEDNESDAY,
July 29:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • Vietnam’s
    General Statistics Office releases data on exports of coffee, rice and rubber

THURSDAY,
July 30:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • Port
    of Rouen data on French grain exports
  • The
    Australian Grains Industry Conference (online event)
  • Poland
    to publish grain harvest estimates

FRIDAY,
July 31:

  • ICE
    Futures Europe weekly commitments of traders report, 1:30pm (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
  • Malaysia’s
    palm oil export data for July 1-31 (tentative)
  • U.S.
    agricultural prices paid, received, 3pm
  • HOLIDAY:
    Singapore, Indonesia, Malaysia

Source:
Bloomberg and FI

 

CFTC
Commitment of Traders

 

Traditional
fund estimates were off this week for soybeans rather than corn (last couple weeks way off estimates). 

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn             
-164,993      6,564    308,516     -3,311   -100,543        994

Soybeans           
39,084      3,730    170,514      1,961   -205,838     -2,156

Soyoil             
22,981     32,689     87,144     -1,938   -121,257    -34,750

CBOT
wheat         -19,561      1,152    126,311      2,160    -84,792        151

KCBT
wheat         -27,413      4,403     53,969        645    -30,144     -5,716

=================================================================================

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn             
-137,770     -4,146    205,993      1,669    -95,337        348

Soybeans           
75,809      9,834    121,879     -1,654   -211,073        825

Soymeal           
-29,178      1,273     76,777      3,681    -90,865     -3,641

Soyoil             
36,897     26,699     85,067     -3,027   -142,535    -31,734

CBOT
wheat             474      8,800     87,934     -5,128    -80,837      4,869

KCBT
wheat         -18,159      5,407     45,822      1,873    -28,136     -7,161

MGEX
wheat         -20,653     -2,127      2,070       -208     12,229      1,130

                
———- ———- ———- ———- ———- ———-

Total
wheat        -38,338     12,080    135,826     -3,463    -96,744     -1,162

 

Live
cattle         29,673      7,995     84,48

 

 

 

 

 

Macros

US
New Home Sales Change Jun: 776K (est 700K; prev R 682K)


New Home Sales (M/M) Jun: 13.8% (est 3.6%; prev R 19.4%)


Median Sale Price (USD) May: 329.2K (prev 317.9K), +5.6% From June 2019

 

Corn.

·        
China imported 3.66 million tons of corn from January to June, 51% of its annual quota. Wheat imports were 3.35 million tons, 35% of its yearly quota at 9.64 million tons. 

·        
December corn support is seen at $3.2725 and resistance at $3.4650. 

·        
Mexico corn imports so far through June are running 5 percent higher than year ago at 7.73 million tons, with US comprising 7.5 million tons.  So much for the SA/Mexico deal worked out under trade
tensions.  Mexico benefits the most importing from the US, and the US imports by products Mexico produces such as tortillas and HFCS.  Mexico is a large consumer of white corn. 

·        
We see Brazil’s 2020-21 (2021-22 local) corn area could expanding 0.5-1.5 percent. 

 

Corn
Export Developments

  • Syria
    seeks 50,000 tons of soybean meal and 50,000 tons of corn on Aug 25 for delivery within four months of contract signing.