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Another 132k soybeans were announced for China.  Conab reported the 2019-20 soybean production at 120.9 million tons, 100,000 tons above the previous month.  Exports were seen up 2 million tons to 82 million tons for 2020.  Conab Brazil corn production was upward revised 1.6 million tons to 102.1 million, with the second corn crop seen at 74.9MMT, up from 73.5MMT last month and compares to 73.2 million tons for 2018-19.  Egypt bought 120k Russian wheat and Syria floated an import tender for wheat. 

 

Weather and Crop Progress

WEATHER OF GREATEST INTEREST

 

  • A strong storm, called a derecho, brought welcome rain to some of the driest areas in and around northwestern and central Iowa Monday, but damaging winds accompanied the storm and some corn was damaged was also noted from eastern Nebraska across central Iowa and into northern Illinois.
    • Corn was flattened in many central Iowa locations as reported wind speeds of 75-95 mph with extremes as high at 112 mph were received
      • It is too soon to speculate on the extent of the damage to the corn crop as local factors could help to block damaging winds from affecting fields while other fields nearby could have been fully exposed to the wind. 

 

  • Rain in the heart of the U.S. Midwest Monday was good for corn and soybeans

 

  • U.S. outlook remains very good for the next two weeks in the Midwest, Delta and southeastern states, although there will still be some pockets of dryness and crop stress
    • The stressed crop areas will be relatively small compared to the majority of the nation’s production region
    • Losses in Iowa from drought and wind will be the biggest negative for the nation this year, but so many other areas have done or are doing well
    • Dryness will also remain a concern in parts of the Delta, but there will be some rain periodically in the coming week to offer at least a little relief
    • No excessive heat is expected anytime soon, although some warmer conditions are expected for a little while

 

  • West Texas will get some showers and thunderstorms this week and into early next week, but they will be brief and light failing to soak the region
    • Sufficient moisture will be present to help keep temperatures from becoming excessively hot
      • Highest temperatures this week will occur Wednesday through Saturday when readings range from 97 to 106 degrees Fahrenheit
      • Highest temperatures early this week will be in the 90s to 103
    • Temperatures will not be quite as warm late in the coming weekend or next week due to some higher relative humidity and a few showers

 

  • U.S. northwestern Plains and southwestern Canada’s Prairies will not receive much rain for the next ten days favoring harvest progress for early season crops, but stressing some of the late season crops

 

  • Far western U.S. weather will be dry and warm during the next ten days as the monsoon flow remains sporadic and light

 

  • Ontario and Quebec weather is mostly good with alternating periods of rain and sunshine over the next two weeks
    • Recent rain bolstered topsoil moisture and removed concern over dryness

 

  • Most of eastern China will receive rain at one time or another over the next ten days to two weeks with only a few areas in the interior southeast of China getting little to no rain.
    • Some locally heavy rain is expected, but mostly in the second week of the outlook
    • Central Sichuan is the area most likely to see excessive rain over the coming week and flooding of significance may result.
    • Production cuts have already occurred in China this year. The extent of the losses is not known and speculation over those losses will continue for a while. The most important grain and oilseed production areas were not impacted by the worst flooding, but some losses still occurred in a small part of the North China Plain and Yellow River Basin. Rice, rapeseed and some minor corn, soybean and cotton crops were damaged by flooding in the south earlier this year. Groundnut losses could be highest out of all crops noted above.

 

  • Xinjiang, China weather during the weekend was warm and dry
    • Highest temperatures reached the 80s Fahrenheit northeast and the 90s to 108 in other crop areas
    • The region will not likely see much change in weather this week
    • Cotton and other crops are suspected of developing favorably, although cool conditions in the minor production areas of the northeast have reduced yields and may be delaying maturation for some crops.

 

  • Much of India’s key summer crop areas will get significant rain over the next two weeks with a few areas getting a little too much moisture and some areas of local flooding will result
    • Central parts of the nation will likely see a notable increase in rainfall reducing the region’s moisture deficits for the season to date
    • Some increase in rainfall may eventually reach into northern India as well
    • No large scale region of moisture stress is present, although northern Rajasthan into Himachal Pradesh and Jammu and Kashmir need some significant moisture

 

  • Korean Peninsula torrential rain events of late seem to be over or at least winding down
    • A little more heavy rain is possible in the coming week in North Korea
    • Damage to some rice and other crops has occurred in the past week to ten days because of excessive rain and flooding

 

  • More frequent and more abundant rain is expected in mainland areas of Southeast Asia during the coming ten days
    • The moisture boost will be good for rice, sugarcane, coffee and a host of other crops

 

  • Flooding rain is expected in western and southern Myanmar over the next couple of weeks

 

  • Rain continues erratic and mostly absent in Sumatra, Java and parts of Borneo in Indonesia and Malaysia
    • Temperatures have been ebbing warmer than usual as well
    • Rainfall will continue erratic and light for a while in these areas, but some slowly increasing rainfall is expected late this week through most of next week

 

  • Philippines rain recently  has been bolstering soil moisture in many areas from western Luzon Island southward to northern Mindanao
    • Recent rainfall has been supportive of crops and little change will occur over the next ten days

 

  • Rain in Western Europe from Wednesday of this week through Wednesday of next week will be sufficient to notably ease dryness in the U.K., France, Belgium and some areas in Germany, Italy and Spain
    • Good model agreement is present today regarding the coming rain of significance
    • Eastern Europe will trend drier during the coming ten days with northeastern areas driest and east-central areas wettest

 

  • Ukraine into Russia’s Southern Region and neighboring areas will continue to be quite dry over the next week to ten days
    • Temperatures will be warm keeping evaporation rates high and limiting the benefit of any rain that falls

 

  • Russia’s New Lands will experience periods of rain through the next ten days to two weeks
    • Sufficient rain is expected to bolster soil moisture with some Ural Mountains region crops becoming a little too wet
      • Spring wheat and sunseed are advancing toward maturity and need dry and warm weather to protect grain and oilseed quality. Rain in the eastern New Lands will improve top and subsoil moisture for late season crop improvements

 

  • West-central Africa rainfall remains minimal in Ivory Coast, Ghana and Benin impacting coffee and cocoa production areas as well as some sugarcane and rice areas
    • Some of the dryness is not unusual for this time of year, but there has been little to no rain since early July which is unusual
    • No rain is expected for the next couple of weeks, but rain will resume late this month and more notably in September

 

  • South Africa rain will continue periodically in the southwest over the next couple of weeks, but most of it will be near the coast and it will not be frequent enough to seriously bolster topsoil moisture for long term crop use
    • Eastern winter wheat and barley areas still need a general rain to support dryland crops which represent 8% of the total crop in the region
    • Temperatures will be cooler than usual

 

  • Australia rainfall will overspread most of the nation at one time or another in the next two weeks
    • The bottom line remains a very good outlook for the nation’s winter crops, although there will still need follow up rain to fix long term moisture deficits in Queensland as well as South Australia

 

  • Argentina’s drought stricken wheat areas will continue mostly dry through August 20
    • Any showers that occur after that will continue sporadic and light into Aug. 25
    • Buenos Aires wheat conditions are still rated favorably along with some in southeastern Santa Fe, Entre Rios and a few areas in La Pampa. Drought continues to seriously threaten wheat production in Cordoba and Santa Fe

 

  • Southern Brazil will receive rain today through August 20 and it will be good for winter wheat, corn planting and early corn establishment
    • Most of the precipitation will fall in Rio Grande do Sul, Santa Catarina, Parana, Paraguay and southern Mato Grosso do Sul leaving areas to the north drier biased; including Sao Paulo and a few locations in southern Minas Gerais and Rio Grande do Sul
    • Dry weather is expected elsewhere in Brazil except coastal areas from Espirito Santo to Bahia where rain is expected periodically

 

  • Mexico precipitation in the coming week to ten days will be greatest in western and southern parts of the nation benefiting many corn, sorghum and dry bean production areas
    • Coffee, citrus, sugarcane and many fruit and vegetable crops will also benefit
    • Northeastern Mexico will be mostly dry
      • Some of the region is still drought stricken

 

  • Central America rainfall will increase this week and continue plentiful next week

 

  • New Zealand rainfall will be below average this week in South Island and above normal briefly in North Island during mid-week this week
    • August 19-21 is expected to trend briefly wetter in the south and drier north

 

  • Southern Oscillation Index was +4.21 this morning and it will continue positive most of this week

 

  • Tropical Storm Jiangmi dissipated in the Sea of Japan overnight
    • Remnants of the system will bring a little rain to Hokkaido, Japan today

 

  • Tropical Depression 06W was located 681 east of Okinawa, Japan at 26.6 north, 139.9 east moving westerly at 10mph and producing maximum sustained wind speeds of 30 mph
    • The storm is very small and expected to move west southwesterly over open water for the next few days while changing little in intensity
    • The system is not likely to impact any major landmass as a significant tropical cyclone and will move toward the southern Ryukyu Islands late this week and into the weekend

 

  • Typhoon Mekkhala (07W) moved into Fujian, China overnight and was quickly dissipating today
    • Some locally heavy rain and brief strong wind speeds accompanied the system inland
    • Little negative impact was suggested on crops, although a little flood damage was suspected to a minor amount of rice

Source: World Weather Inc. 

 

 

7 Day Precipitation Outlook

 

Bloomberg Ag Calendar

TUESDAY, August 11:

  • Brazil Conab releases area, production and yield data for corn, soybeans
  • EARNINGS: Wilmar

WEDNESDAY, August 12:

  • USDA’s monthly World Agricultural Supply and Demand (Wasde) report, noon
  • China CASDE monthly crop supply and demand report
  • Vietnam data on coffee, rice and rubber exports in July
  • EIA U.S. weekly ethanol inventories, production, 10:30am
  • U.S. soybean, corn acreage, noon
  • EARNINGS: BRF, Marfrig
  • HOLIDAY: Thailand

THURSDAY, August 13:

  • USDA weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • Port of Rouen data on French grain exports
  • New Zealand Food Prices
  • EARNINGS: JBS, Olam

FRIDAY, August 14:

  • 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
  • EARNINGS: Golden Agri-Resources

SATURDAY, August 15:

  • Malaysia palm oil export data for Aug 1-15 from AmSpec

Source: Bloomberg and FI

 

 

 

 

 

 

 

 

 

 

Macros

Canadian Housing Starts Jul: 245.6K (est 205K; prevR 212.1K; prev 211.7K)

US PPI Final Demand (M/M) Jul: 0.6% (est 0.3%; prev -0.2%)

US PPI Ex Food, Energy (M/M) Jul: 0.5% (est 0.1%; prev -0.3%)

US PPI Ex Food, Energy, Trade (M/M) Jul: 0.3% (est 0.2%; prev 0.3%)

US PPI Final Demand (Y/Y) Jul: -0.4% (est -0.7%; prev -0.8%)

US PPI Ex Food, Energy (Y/Y) Jul: 0.3% (est 0.0%; prev 0.1%)

US PPI Ex Food, Energy, Trade (Y/Y) Jul: 0.1% (est 0.1%; prev -0.1%)

 

Corn.

https://twitter.com/search?q=corn%20derecho&src=typeahead_click

About 1 million residents lost power from the storm. 

  • There was talk upward to 400 million bushels of corn could be lost and another analyst warned the national yield could slip 2.5 bu/ac or more.  We think the US harvest area will decline in October but don’t think the yield will decline that much if the producer claims insurance and takes the acres out of production. 
  • Corn basis firmed 10 cents at Burns Harbor, IN, and was up 2 cents at Blair, NE.  River Terminals were steady to easier.  Ethanol plant location at Annawan, IL, was up 10 cents. 
  • Conab Brazil corn production was upward revised 1.6 million tons to 102.1 million, with the second corn crop seen at 74.9MMT, up from 73.5MMT last month and compares to 73.2 million tons for 2018-19.  The corn yield was revised up slightly to 5.520 tons/hectare from 5.453 last month. 
  • AgriPac sees the new-crop Argentina corn area at 6.3-6.4 million hectares, up from their forecast for 6.0 million for 2019-20.  Argentina will start corn plantings next month.  Another analyst sees 6.3 million hectares, according to a Reuters story. 
  • USD was 10 points higher as of 2:20 CT and WTI 31 cents lower. 
  • Argentina is in talks with China to sell pork. 

 

Corn Export Developments

·         Israel seeks on July 20 seeks about 200,000 tons of corn and 350,000 tons of soybean meal.

·         Taiwan’s MFIG on August 13 seeks up to 65,000 tons of optional origin corn for October 28-Nov 16 shipment.  Egypt is in for wheat. 

 

 

 

Updated 8/10/20

  • September corn is seen in a $3.05 and $3.35 range.  December lows could reach $2.95.  The US is staring down at a large crop. 

 

Soybean complex.

 

Oilseeds Export Developments

·         Under the 24-hour reporting system, private exporters reported 132,000 tons of soybeans for delivery to China for 2020-21 shipment.

·         Israel seeks on July 20 seeks about 200,000 tons of corn and 350,000 tons of soybean meal. 

 

NOPA.  We are hearing downtime during July was larger than June and much larger than July 2019.  

 

 

Updated 8/10/20

  • September soybeans are seen in a $8.50-$8.90 range.
  • September soybean meal is seen in a $275 to $295 range. 
  • September soybean oil range is seen in a 29.75 to 31.75 range.

 

Wheat

 

Export Developments.

  • Egypt bought 120,000 tons of Russian wheat for Sep 25-Oct 5 shipment at $205.50/ton plus $14.10 freight.  Payment will be at sight. 
  • Syria seeks 200,000 tons of soft wheat from Russia on Sept. 14.
  • Jordan seeks 120,000 tons of optional origin wheat on August 12 for Nov-Dec shipment.  Lowest offer was $205.90 for Russian wheat. 

·         The World Food Program plans to send 50,000 tons of wheat to Lebanon. 

  • Pakistan seeks 1.5 million tons of wheat on August 18. 
  • Syria looks to sell and export 100,000 tons of feed barley with offers by Sep 1. 

 

Rice/Other

·         Mauritius seeks 6,000 tons of white rice on August 17 for October through December delivery. 

·         South Korea’s Agro-Fisheries & Food Trade Corp. seeks 60,556 tons of rice from Vietnam and other origins, on Aug. 19, for arrival in South Korea between Dec. 31, 2020, and February 28, 2021.

 

 

Updated 8/5/20

  • Chicago September is seen in a $4.95-$5.40 range.
  • KC September; $4.10-$4.55 range. 
  • MN September $4.9Z0-$5.40 range.

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International │190 S LaSalle St., Suite 410│Chicago, IL  60603

W: 312.604.1366

treilly@futures-int.com

AIM: fi_treilly

ICE IM:  treilly1

Skype: fi.treilly

 

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