FI Evening Grain Comments 09/10/20

PDF Attached

 

 

Weather
and Crop Progress

CPC
calls for a 75 percent chance for La Nina conditions through the 2020 winter for the Northern Hemisphere. 

 

 

WEATHER
COMMENTS

CHANGES
OVERNIGHT

• Frost
  and freezes occurred in northern and central parts of Minnesota, and northern Wisconsin Overnight as well as in extreme eastern South Dakota
• Fog
  was present in much of southern Minnesota and western Wisconsin which helped to hold temperatures up
• Clear
  skies were noted from northwestern and west-central Minnesota  to western Nebraska and eastern Wyoming where additional frost and freezes occurred
• Extreme
  lows slipped to 26 at Alliance, Nebraska and Pine Ridge, South Dakota with numerous other readings in the upper 20s from eastern Wyoming and western Nebraska to southwestern South Dakota
• A
  few readings of 26-30 were also noted in small pocket in north-central Minnesota
• Damage
  to crops was low, but some additional impact may have occurred in western Nebraska where readings were colder today than earlier this week
• Center
  west Brazil and some center south crop areas have been advertised to receive a few showers after Sep. 20
• The
  precipitation looks to be erratic and light, but it will be closely monitored since this would be the first rain for early season soybean areas of Brazil
• Argentina’s
  weather is still unfavorable for meaningful rain in west-central parts of the nation for at least the next 10 days
• Western
  Europe still has an opportunity to receive some rain in the second week of the forecast, but the significance of that event is low
• No
  change in the dry bias was noted overnight for central or eastern Ukraine, Russia’s Southern Region western Kazakhstan or southeastern Europe
• Eastern
  Australia’s crop areas are advertised wetter in the September 18-24 period
• GFS
  model was advertising greater rain in U.S. hard red winter wheat areas Sep 18-22 on the 00z model run and Sep 20-22 on the 06z model run, the latter of which has a better chance of verifying – confidence in this change is low
• A
  tropical wave expected to come off the west-central Africa coast this weekend may end up threatening the southeastern United States after September 20, but it is much too soon to have any confidence in the system since it has not evolved yet

WEATHER
TO WATCH

• Eastern
  Australia will receive some needed rain next week to support reproduction in Queensland and northern New South Wales
  
• Some
  rain fell in northern New South Wales Wednesday with amounts of 0.05 to 0.67 inch
  
• The
  precipitation will shift into southeastern Queensland today
• South
  Australia, Victoria and southern New South Wales will receive some rain during the weekend and early to mid-week next week
• A
  boost in rainfall is expected in eastern Australia Sep. 17-20 with some follow up precipitation expected Sep 21-22
• The
  moisture will be ideal for raising topsoil moisture for better reproductive and pre-reproductive conditions for winter crops in New South Wales and Queensland
• Some
  of the rain in Queensland may come a little too late to restore production potentials after recent dryness and frost and freezes
• South
  Australia topsoil moisture will improve easing long term dryness
• Western
  Australia may trend drier over the next couple of weeks while rain increases in eastern parts of the nation
• North
  America weather is expected get back to a more normal weather pattern this weekend and next week
• Less
  rain and warmer temperatures will impact the central United States
• Upper
  level low pressure center over central U.S. Rocky Mountains today will be ejected to the western Great Lakes region Friday through the weekend sending another wave of rain across the central and northeastern Plains and western Corn Belt in addition to that
  which is present in the western Corn Belt today
• Drier
  weather will follow the upper level low pressure center and weekend precipitation so that much of the central and eastern United States experience nearly a week of limited rainfall and seasonably warm temperatures
• Canada’s
  Prairies will see near to above average temperatures and restricted rainfall, although not totally dry
• Central
  and eastern Midwest dryness and warmth recently will give way to some rainfall and cooling briefly Friday into the weekend, but resulting rainfall from the northern Delta to Indiana will continue very limited
• West
  Texas temperatures will slowly return to normal over the next few days rising from the 50s today to the 70s Friday and the 80s during the weekend and early next week
• Boll
  lock may have occurred to many cotton crops from western Texas to southwestern Kansas, but that cannot be determined until warming returns Friday through next week
• Boll
  opening will likely resume in the areas least impacted by recent cold
• High
  temperatures Wednesday failed to warm past the 40s Fahrenheit in many production areas from western Texas to Kansas
• No
  frost or freeze has occurred or is expected in the region
• U.S.
  hard red winter wheat areas have benefited from recent rain and planting should advance more favorably as drier weather evolves this weekend and next week
• U.S.
  northern Plains and Canada’s Prairies will experience more seasonable temperatures and relatively dry biased conditions for the next week to ten days allowing fieldwork to advance relatively well
• Rain
  is needed in the U.S. Pacific Northwest for future autumn planting
• Damage
  to dry edible beans has been significant in Wyoming from this week’s freezes with lighter damage in the northern U.S. Plains
• Dryness
  in central and eastern Ukraine, Russia’s Southern Region and
• western
  Kazakhstan remains quite serious and little to no relief is expected for at least ten days and more likely another two weeks
• Dryness
  also remains a serious concern in portions of southeastern Europe – mostly in the lower Danube River Basin, southeastern Roman and eastern Bulgaria
• France
  and Germany are in need for rain and very little is expected for at least a week
  
• Some
  forecast models are suggesting some moisture will occur late next week and into the following weekend in parts of France, Germany and neighboring areas
• Russia’s
  eastern New Lands will begin receiving rain again in the second half of next week, but the precipitation will be brief and light
• The
  region will dry down for nearly a week
• The
  break from frequent rainfall will be good and should help get some fieldwork to advance
• There
  is some concern that West Siberian small grains and sunseed might have been negatively impacted by recent frequent rain
• Western
  portions of Russia’s New Lands will receive rain relatively frequently over the next week to ten days – this includes the Ural Mountains region
• Northwestern
  Russia precipitation is expected to occur periodically in the next couple of weeks resulting in some slowing of winter wheat and rye planting and establishment as well as some delay to 2020 harvesting
• However,
  favorable weather has occurred up until now supporting fieldwork and early winter crop emergence
• Alternating
  periods of rain and sunshine are expected which should limit the delays somewhat
• Northeastern
  China received additional rain from remnants of Typhoon Haishen Wednesday
• Flooding
  should have begun to subside
• Additional
  rainfall of 0.30 to 2.43 inches resulted with northern Jilin, western Heilongjiang and neighboring areas of Inner Mongolia wettest
• Rain
  will occur a little too often in parts of northeastern China through the next ten days maintaining wet field conditions
• Too
  much rain since mid-August has delayed crop maturation and induced some concern for crops produced in low-lying areas
• East-central
  China weather should be favorably mixed over the next ten days supporting late season crop development and allowing some crop maturation to take place
• Soil
  moisture will be good for early season wheat planting later this month and in October
  
• Xinjiang,
  China weather in the northeast may not be ideal for harvest progress due to periods of light rain and cool weather into early next week
• Southern
  and western parts of Xinjiang will continue to experience good crop maturation conditions with some leaf defoliation getting under way
• Western
  Argentina remains too dry with little change likely, although rain will fall in southern and northeastern Argentina over the coming week
• Southern
  Argentina will receive a few more light showers today and in eastern areas Friday, but west-central areas will remain drought stricken for at least ten days
• Northeastern
  Argentina will get some rain this weekend and early next week benefiting some grain and cotton areas
  
• There
  is some potential for improved rainfall in Argentina after Sep. 22, but confidence is low
• Central,
  western and southern Mexico and much of Central America will continue to receive frequent rain leading to saturated soil conditions and some flooding
• the
  moisture boost will be very good for improving water supply and easing long term dryness in Honduras, Nicaragua, Panama and parts of central through southwestern Mexico
• West-central
  Africa received some rain Wednesday
• Amounts
  of 0.27 to 1.34 inches occurred in Ivory Coast while amounts to 0.57 inch occurred in Ghana
• Much
  more rain is needed to ease long term dryness
• Additional
  precipitation is expected periodically over the next two weeks
• Tropical
  Storm Paulette was over open water in the central Atlantic Ocean and will stay over open water through the weekend
• The
  storm will move to near Bermuda by early next week and could be a hurricane at that time
• The
  storm poses no threat to North America
• Tropical
  Storm Rene was well west northwest of the Cabo Verde Islands this morning  and it will stay over open water while intensifying over the next two days
• The
  storm may become a Hurricane by Friday night and then weaken during the weekend
• Rene
  poses no threat to land
• Tropical
  Wave near the North Carolina Coast will move to the U.S. Carolina Coast later today
• The
  system is not expected to evolve into an organized tropical cyclone before reaching land, but rainfall will be enhanced over the Carolinas and neighboring states through the weekend because of the event
• Brazil
  rainfall will continue greatest in the far south of the nation for at least the next ten days
• Rain
  is advertised from Parana to southern Minas Gerais and possibly northwest to Mato Grosso Sep 21-24, but the event is too far out in time to have much confidence
• The
  moisture would reach into some citrus, sugarcane and coffee production areas and might be good for early corn, but early indications suggest only very light rain
  
• Center
  west Brazil looks to be dry and very warm to hot through Sep. 20
• South
  Africa will be mostly dry through Monday
• More
  rain is needed to support winter crop development and improve soil moisture for spring and summer crop planting next month
• Some
  rain is expected during mid-week next week in eastern parts of the nation
• Northern
  India will be dry this week while rain falls in central, southern and eastern parts of the nation
• Cotton
  conditions will improve after being too wet earlier this month
• Most
  grain and oilseed crops as well as pulses are suspected of being in very good shape
• Improved
  rainfall has occurred in Indonesia and Malaysia recently
• More
  precipitation is needed in southern Sumatra and western Java where it has been driest in recent months
• Some
  erratic rainfall is expected over the next ten days with many areas getting additional moisture
• Mainland
  areas of Southeast Asia continued to report erratic rainfall recently
• Crop
  conditions are rated favorably, but greater rain is needed to ensure good water supply over the dry season
• Water
  supply has not been replenished very well this year and greater rain is needed
  
• Rain
  has been greatest in northern Luzon Island recently while most other areas in the Philippines have experienced net drying
• Philippines
  rainfall should increase during the coming week
• Pakistan
  weather is improving after flooding in late August
• Central
  and southern Pakistan has been dry for a while and will continue dry
• Very
  little rain will fall over the next ten days
• Ontario
  and Quebec will experience a good mix of rain and sunshine over the next two weeks; some drying will be needed thereafter to induce better crop maturation and harvest conditions
• New
  Zealand rainfall will be near to above average during the coming week and temperatures will be a little cooler than usual
• Southern
  Oscillation Index was +8.43 today and it will stay positive the remainder of this week, although some weakening will continue over the next few days

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

THURSDAY,
Sept. 10:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• Malaysian
  Palm Oil Board’s end-Aug. palm oil stockpiles, production, export data
• Malaysia
  palm oil export data for Sept. 1-10
• Conab’s
  data on production, area and yield of soybeans and corn in Brazil

FRIDAY,
Sept. 11:

• (Overnight)
  China agriculture ministry’s (CASDE) monthly report on supply and demand
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• USDA’s
  monthly World Agricultural Supply and Demand (Wasde) report, noon
• 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
• New
  Zealand food prices

Source:
Bloomberg and FI

 

 

Macros

US
Initial Jobless Claims: 884K (est 850K, prev 881K)

US
Continuing Claims: 13385K (est 12904K, prev 13254K)

US
PPI Ex Food and Energy (M/M) Aug: 0.4% (est 0.2%, prev 0.5%)

US
PPI Final Demand (Y/Y) Aug: – 0.2% (est -0.3%, prev -0.4%)

US
PPI Ex Food And Energy (Y/Y) Aug: 0.6% (est 0.3%, prev 0.3%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Corn.

• CBOT
  corn rose today on fund buying and headline Chinese demand.  There is more and more talk China will have to import well more than 10 million tons of corn this crop-year.  A Bloomberg article noted China may need to import about 30 million tons of corn next
  year.  China corn futures hit their highest level since 2015.  China did not offer any corn out of auctions this week following heavy sales since May where China government auctions sold nearly 57 million tons of corn.  While no official statement has come
  out about all the sovereign and state-owned company buying, the price-action and headlines support it.
  
• Cash
  basis markets were firm today as we approach harvest. 
• Funds
  bought an estimated net 18,000 contracts.
• Given
  the price action over the last week and option flow seen in soy and corn, the market may be expecting a bullish report.
• Germany
  reported a suspected case of African swine fever
  in a wild boar in Brandenburg, near the German-Polish border.  If verified, this is the first case for Germany in at least a few years.  Cases ballooned in about 10 other EU countries over the past couple of years.  Germany is EU’s largest pig producer.  South
  Korea banned pork imports from Germany. 
• CME
  hogs gapped higher.  It’s seen supportive for US soybean meal and corn if other countries are added to the list banning Germany pork imports, such as China and Japan. 
  
• UAC:
  Ukraine corn crop 36MMT, down from 35.3MMT. 

o   
Agritel Sees Ukraine’s 2020 Corn Crop Falling to 33.5m Tons

o   
Ukraine’s Economy Ministry cut its forecast for corn crop to 33m tons

• US
  EIA weekly ethanol production increased a larger than expected 19,000 barrels and stocks decreased a large 889,000 barrels.  A Bloomberg poll looked for weekly US ethanol production to be up 5,000 and stocks to increase 16,000 barrels to 20.898 million.
  

 

Corn
Export Developments

• None
  reported

 

 

Updated
9/9/20

• December
  is seen in a $3.40-$3.85 range.  2020-21 to average $3.75 for corn and $2.85 for oats. 
  

Soybean
complex.

• CBOT
  November soybeans finished lower today on profit-taking, capping a 12-session rally. China bought an additional 195,000 tons of soybeans. 
  
• Funds
  sold an estimated net 1,000 soybeans, sold 1,000 soybean meal and net even on soybean oil. 
  

• Conab
  adjusted their 2019-20 Brazil soybean crop to 124.8 million tons, as expected after revising seven years of data late last month. 
  
• Brazil
  may extend their zero-tariff past the US election, according to a Reuters story. 
  
• Argentina
  2020-211 soybean production was seen at 50 million tons by the Rosario Exchange, first estimate of the crop year.  Argentina corn production was projected at 48 million tons.  Note soybean plantings were reduced from 17.4 last year to 17.3 million  this year. 
  
• Ukraine
  sunflower oil exports increased 10% during the 2019-20 September-August season to 6.68 million tons, – national sunoil producers association.
• We
  heard China bought a few cargoes of US soybeans on Wednesday. 
• AmSpec
  1-10 September palm exports were 472,780 tons, up 10 percent from previous period last month.  SGS reported a 26 percent increase to 467,420 tons from 372,067 tons month earlier.  ITS showed a 10.3 increase in shipments. 
  

 

 

Oilseeds
Export Developments

• Results
  awaited: Algeria seeks up to 30,000 tons of soybean meal on September 9 for first half October shipment. 
  
• USDA
  24-hour announced private exporters reported the following activity:
• Export
  sales of 195,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year; and

 

 

 

 

 

Updated
9/9/20

• November
  soybeans are seen in a $9.50-$10.50 range.   $9.60 average for 2020-21
• December
  soybean meal is seen in a $300-$330 range.    $305 average for 2020-21
• December
  soybean oil is seen in a 32.50-35.00 range.     34.00 cents average for 2020-21

 

Wheat

• Wheat
  closed higher on good global import demand, persistent dryness across the Black Sea region.
• The
  USD was lower mid-session which lent support to wheat, the DXY climbed back to end marginally higher.  
  
• Wheat
  looks like it is still trying to buy acres as the higher price will prompt the farmer to sow more area during this time of year.
  
• Funds
  bought an estimated net 5,000 Chicago wheat contracts. 
• Paris
  December wheat ended up 1.00 euro at 189.75 euros/mt.
• Russia’s
  SovEcon estimated the wheat crop at 83.3 million tons from 82.6 million tons previously.
  
• Czech’s
  2020 grain harvest was reported at 7.35 million tons by the stats office, 4.8 percent higher than 2019 (7.02 million tons). 
  

 

Export
Developments.

• Tunisia
  is tendering for 25,000 tons of durum and 42,000 tons of million wheat on September 11 for Oct/early Nov delivery. 
  
• Saudi
  Arabia SAGO seeks 715,000 tons of 11 and 12.5 percent wheat on Friday for delivery between November and January. 
  
• Jordan
  seeks 60,000 tons of wheat on Sep 16 for LH October shipment.
• Yesterday
  Pakistan bought about 60,000 tons of wheat at around $248/ton c&f for October shipment. 
  
• Ethiopia
  seeks 400,000 tons of wheat by October 13.
• Turkey
  seeks 500,000 tons of milling wheat (min 12.5%) on September 15 for Sep 23-Oct 16 shipment. 
  
• Ethiopia
  seeks about 80,000 tons of milling wheat on Sept. 30.

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 113,999 tons of rice on Sep 16 for arrival in South Korea between Jan. 31, 2021, and June 30, 2021.

·        
Syria is in for 39,400 tons of white rice on September 30. 

 

Updated 9/9/20

• December Chicago is seen in a $5.35-$5.60 range.    2020-21 average $5.55
• December KC $4.55-$5.00.       2020-21 average $5.05
• December MN $5.25-$5.55.
      2020-21 average $5.45