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Wheat
advanced on strong global import demand and crop concerns for parts of Europe.  Soybean complex was little changed while corn fell on lack of bullish news and China/US trade concerns.

 

 

Weather

 

KEY
WEATHER ISSUES OF THE DAY

  • Tropical
    Storm Higos moved into Guangdong, China Tuesday and was dissipating today over the interior of that state
    • Some
      flooding and strong wind impacted coastal areas
  • Tropical
    waves in the Caribbean Sea and tropical Atlantic Ocean are still being monitored for impact on North America
    • A
      tropical wave in the Caribbean Sea will reach the Yucatan Peninsula this weekend as a tropical depression or a weak tropical storm
      • The
        system will then move over the Gulf of Campeche later in the weekend or early next week with landfall in northeastern Mexico expected early in  the week
    • A
      tropical wave 1000 miles east of the Windward Islands will become a tropical depression and probably a tropical storm as it moves through the northern Leeward Islands and to near Puerto Rico this weekend
      • The
        storm will them move through Hispaniola and Cuba before reaching the eastern Gulf of Mexico
      • Landfall
        will be possible between New Orleans and Tampa, Florida, during mid-week next week, but confidence is very low because of its interaction with the Greater Antilles
  • Hurricane
    Genevieve continues east of western Mexico and will stay out to sea far enough to minimize its impact on western Mexico; however, some wind, rain and rough seas will impact a part of Baja California in the next few days
  • Better
    model agreement is in place today for the U.S. outlook over the next week to ten days after Tuesday’s GFS model runs were too wet
  • U.S.
    Midwest, Plains and far western states will receive restricted amounts of rain over the next ten days
    • Net
      drying is expected in most areas except the far northern Midwest and from the Ohio River Valley into the Tennessee River Valley and southeastern states where scattered showers are likely
    • Temperatures
      will be seasonable in most of the Midwest, Delta and southeastern states, but warmer biased at times in the Great Plains and far western United States
    • West
      Texas will see a few showers, but no general soaking and temperatures will continue warm
    • Far
      western U.S. heat wave will continue to slowly abate
    • Northern
      U.S. Plains and Canada’s central and southwestern Prairies will experience restricted rainfall and warm to hot temperatures
  • Excessive
    heat occurred in the northwestern U.S. Plains and Canada’s central and southwestern Prairies Tuesday
    • Afternoon
      highs were in the 90s to 103 degrees from southern Saskatchewan and southern Alberta into Montana and the southwestern Prairies

 

  • Argentina
    is still quite dry, but has a chance for rain during mid-week next week
    • Drought
      threatens the nation’s wheat crop and possibly early season corn planting later next month
    • Rain
      next week will vary from 0.20 to 0.75 inch with a few greater amounts
      • Driest
        in the west and north and wettest southeast
  • Southern
    Brazil has received enough rain to bolster soil moisture in much of the region recently
    • Wheat
      quality might have been at some risk because of wet conditions, but early corn planting will benefit greatly from the moisture
    • Cold
      air in southern Brazil this weekend and early next week could induce some frost and light freezes which may have some impact on reproducing and filling winter wheat
  • Eastern
    and southern Ukraine, Russia’s Southern Region, southeastern Romania and eastern Bulgaria will continue too dry for at least another ten days, despite a few sporadic showers
  • Russia’s
    central and eastern New Lands will receive rain the remainder of this week and into early next week, but drying may evolve shortly after that and the change will be welcome
    • Some
      areas in the region are becoming a little too wet and need to dry down to protect small grain and sunseed quality
  • China
    will continue to experience alternating periods of rain and sunshine during the coming week, but the last days of August are starting to look drier for east-central parts of the nation and the change will be welcome
    • Most
      of the nation east of Tibet has saturated soil and flooding has been an issue at times throughout the summer
  • Xinjiang
    China will continue to experience milder than usual conditions at times over the next week and some rain will fall periodically in the northeast
    • Recent
      temperatures have been milder than usual which may be reducing some of the degree day accumulations for cotton and other crops

 

  • India
    will receive some heavy rain in central parts of the nation during the coming week to ten days
    • Flooding
      is expected in Madhya Pradesh, southern Rajasthan and parts of Gujarat as well as in a few northern Telangana, Chhattisgarh and Odisha locations
      • Crop
        damage is possible
  • Australia
    rainfall in the coming week to ten days will be limited to southernmost parts of the nation with Victoria wettest
    • Dryness
      remains a concern for Queensland and South Australia with some wheat and barley reproduction expected early next month in southern Queensland making rain very important
  • Dryness
    in west-central Africa will prevail over the next ten days, although a few more showers and thunderstorms will occur infrequently
    • The
      precipitation will be welcome, but not likely enough to counter evaporation leaving an ongoing need for greater rain
    • Seasonal
      rains will return to this area late this month and more likely in September
      • The
        longer range outlook calls for abundant rain in these areas later this year
  • Europe
    weather over the next ten days will bring brief periods of rain to many areas, but net drying will continue in central through southern France, Spain, southern Portugal, the Italian Peninsula and eastern Bulgaria to southern and eastern Romania and Moldova
    • Crop
      moisture stress will continue in each of these areas until greater rain falls
    • Temperatures
      will be near to above average over the next ten days

 

  • Western
    CIS crop areas will experience an erratic rainfall pattern over the next ten days resulting in areas of net drying and some pockets of significant rain
    • Drying
      in the western parts of the CIS will be good for early season crop maturation and harvest progress
    • Late
      season crops in the south will continue stressed, but good soil moisture in the north and west will support crops when rain is not falling
    • Temperatures
      will be seasonable
  • Interior
    southern Pakistan rainfall will be restricted over the next two weeks leaving rice, sugarcane and cotton dependent upon irrigation for normal crop development
    • Temperatures
      will be warmer than usual
    • Some
      areas near the India border will trend a little wetter for a few days
  • Greater
    rain is needed in parts of Myanmar, Cambodia and Vietnam, although very few areas are considered too dry
    • Rain
      is expected to fall periodically over these areas resulting in abundant soil moisture and some local flooding
  • Indonesia
    rainfall continued erratic Tuesday
    • Recent
      rain has been most significant in “portions” of Kalimantan and a few Malaysian locations while more limited in other areas
    • Rainfall
      over the next ten days will continue erratic, but at least some rain will fall in each production area at one time or another
    • Rain
      is needed most in parts of Sumatra and western Java
  • Ontario
    and Quebec weather is mostly good with alternating periods of rain and sunshine over the next two weeks
    • Temperatures
      will be seasonable
  • South
    Africa rain will continue periodically in the southwest over the next week, 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
  • 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 be frequent enough to support all crop needs
  • New
    Zealand rainfall will be above average this week except in southern parts of South Island where it will be lighter than usual
  • Southern
    Oscillation Index was +5.92 this morning and it will continue to rise over the next few days

Source:
World Weather Inc. 

 

 

Bloomberg
Ag Calendar

WEDNESDAY,
August 19:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • ISO
    online conference on Sugar and Health
  • USDA
    total milk production

THURSDAY,
August 20:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • Brazil
    Conab sugar, cane and ethanol production
  • Port
    of Rouen data on French grain exports
  • China
    International Cereals and Oils Industry Summit
  • USDA
    red meat production, 3pm
  • HOLIDAY:
    Malaysia
  • EARNINGS:
    Cherkizovo

FRIDAY,
August 21:

  • 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
  • China
    International Cereals and Oils Industry Summit, day 2
  • Malaysia
    palm oil export data for August 1-20
  • U.S.
    cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

 

ProFarmer
Stats: based on what FI collected

#
times ProFarmer was below USDA’s Aug corn yield over the past 13 years: 8 or 62% of the time

#
times ProFarmer was above USDA’s Aug corn yield over the past 13 years: 5 or 38% of the time

#
times ProFarmer was below USDA’s Aug soybean yield over the past 13 years: 10 or 77% of the time

#
times ProFarmer was above USDA’s Aug soybean yield over the past 13 years: 3 or 23% of the time

 

Macros

Canadian
CPI NSA (M/M) Jul: 0.0% (exp 0.4%; prev 0.8%)

–        
CPI (Y/Y) Jul: 0.1% (exp 0.6%; prev 0.7%)

–        
CPI Core Median (Y/Y) Jul: 1.9% (exp 2.0%; prev 1.9%) 

–        
CPI Core Common (Y/Y) Jul: 1.3% (exp 1.6%; prev 1.5%)

–        
CPI Core Trim (Y/Y) Jul: 1.7% (exp 1.8%; prev 1.8%)

Canadian
Wholesale Trade Sales (M/M) Jun: 18.5% (exp 10.5%; prev 5.7%)

 

Corn.

 

Weekly
US ethanol production

improved 8,000 barrels from the previous week to 926,000 barrels, just shy of the September 2019 to date average of 929,000 barrels, 10 percent below the week average for the 2018-19 Sep-Aug corn crop year.  A Bloomberg poll looked for weekly US ethanol production
to be up 1,000 barrels.  US ethanol stocks grew a large 520,000 barrels to 20.270 million, opposite from a predicted 444,000 barrel decrease the trade expected.  We see this having little influence on US corn futures.  Over the past three weeks weekly ethanol
production average 930,000 barrels.  If this average remains unchanged over the next couple weeks, US corn for ethanol use may fall about 19 million bushels shy of USDA’s projection of  4.850 billion bushels. 

 

 

 

Corn
Export Developments

 

 

Updated
8/17/
20

  • September
    corn is seen in a $3.15 and $3.45 range.  December $3.20-$3.65 range. 

 

Soybean
complex
.

·        
Aug 1-20 Malaysian palm export data is due out Thursday and we look for a 15 to 20 percent decline from the same period last month.  SGS reported 1-15 Aug exports of palm were 20 percent below same
period month earlier at 664,392 tons. 

·        
Indonesia is look at increasing palm export tariffs to keep domestic prices of palm oil cheap enough to promote their biodiesel expansion initiative of 30 percent blend rate.  That rate may increase
to 40 percent sometime in 2021. 

 

Oilseeds
Export Developments

  • USDA
    24-hour:  Private exporters sold 132,000 of soybeans to China for 2020-21 delivery.

  

 

Updated
8/17/20

  • September
    soybeans are seen in a $8.80-$9.30 range.  November $8.80-$9.50.  
  • September
    soybean meal is seen in a $285 to $310 range.  December $285-$320.   
  • September
    soybean oil range is seen in a 30.00 to 33.50 range.  December 29.75-35.00 range.  

 

Wheat

 

Export
Developments.

  • Algeria
    bought about 560,000 tons of milling wheat for Sep and or Oct shipment at around $231-$232/ton. 
  • Results
    awaited: Pakistan seeks 1.5 million tons of wheat.  Lowest offer was $233.85/ton for 200,000 tons of milling wheat. 
  • Jordan
    passed on 120,000 tons of wheat. 
  • Japan
    seeks 117,063 tons of milling wheat on August 20. 

  • Japan
    is also in for 80,000 tons of feed wheat and 100,000 tons of feed barley (SBS) on August 26 for November 30 loading. 
  • Turkey
    seeks 390,000 tons of red milling wheat and 110,000 tons of durum wheat on August 25.   They also seeks feed barley. 
    • Red
      wheat shipment period is between Sep 4 and Oct 10
    • Durum
      shipment period is between Sept. 15 and Oct. 10.
    • Feed
      barley shipment period is between Sept. 11 and Sept. 25.
  • Syria
    looks to sell and export 100,000 tons of feed barley with offers by Sep 1. 
  • Syria
    seeks 200,000 tons of soft wheat from EU/Russia on Sept. 9 and 200,000 tons of wheat from Russia on Sept. 14.

 

Rice/Other

·        
Results awaited: 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
8/17/20

  • Chicago
    September is seen in a $4.90-$5.35 range. December $5.00-$5.50 range. 
  • KC
    September; $4.15-$4.55 range. December $4.30-$4.75.  
  • MN
    September $4.90-$5.25 range.  December $5.05-$5.40.

 

 

 

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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