PDF Attached

 

Hurricane
Sally made landfall across FL and AL and surrounding states.  This is a slow-moving storm and will cause localized flooding.  Outside of the storm path taking shape to move across the southeast, and the far western US where wildfires are inflicting havoc,
rest of the US weather outlook looks good this week. 
NOPA
crush was perceived to be slightly bearish for the soybean complex.  Grains were lower on technical selling. 

 

USDA
announced additional sales

two
more…WASHINGTON, September 15, 2020–Private exporters reported to the U.S. Department of Agriculture the following activity:

–Export
sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year;

–Export
sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year; and

–Export
sales of 120,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.

 

Weather
and Crop Progress

TROPICAL
COMMENTS

  • Hurricane
    Sally will bring torrential rain and serious flooding to the Mobile Bay area of Alabama with more than 24 hours of heavy rain also impacting areas east  through the Florida Panhandle
    • Areas
      from the western most part of the Florida to the Alabama/Mississippi border will experience the greatest rainfall with the excessive amounts extending inland 150 miles
      • Rain
        totals of 10-20 inches and local totals to 30 inches were suggested by the National Hurricane Center near the Coast
    • Rainfall
      of 3.00 to 9.00 inches will extend northeast from southwestern and south-central Alabama through northern Georgia, northern Alabama and into the Carolinas with 2.00 to 5.00 inches expected to the south in southern and central Georgia and southeastern Alabama
      • The
        greatest rainfall should occur to the north and northeast of the center of the storm
    • Sally
      will weaken to a tropical storm shortly after moving over land Wednesday and to a depression Thursday
    • Wind,
      flood and storm surge damage will be greatest in far southwestern Alabama and extreme western parts of the Florida Panhandle
    • Cotton,
      unharvested corn and soybeans will be threatened with damage from the storm, although only a small amount of lost production is expected
      • Cotton
        will be most impacted with some production loss and considerable quality declines because of too much rain
        • Wind
          damage will be low
    • Significant
      wind damage is also expected in the Mobile Bay area and widespread power outages are expected along with structural damage
  • Hurricane
    Paulette, Tropical Storm Teddy and Tropical Storm Vicky are over open water in the Atlantic Ocean and posting no threat to land
  • Tropical
    wave west of Africa has potential to develop into a tropical cyclone later this week and it will move toward the northern Leeward Islands over the coming week
    • This
      system will need to be closely monitored for possible influence on North America and the Caribbean Islands next week, although there is plenty of time for the system’s potential to change
  • Tropical
    disturbance in the southwestern Gulf of Mexico will be wandering around off the coast of eastern Mexico the next few days and has some potential for becoming better organized over time
    • Most
      likely this system will produce repetitive rainfall in eastern Mexico and in the southernmost tip of Texas for a while, but should not pose a big threat to agriculture – at least not through Thursday
  • Tropical
    disturbance over Philippines will produce rain over the next couple of days
    • This
      system will quickly evolve into a tropical storm and possible typhoon and may threaten central Vietnam with landfall late Thursday and especially Friday into the weekend
      • Flooding
        rainfall and strong wind speeds may impact central and northern parts of Vietnam from this storm

 

OTHER
WORLD WEATHER ISSUES

  • Argentina
    rainfall will remain limited over the next ten days with very little potential for relief to drought conditions in the west

 

  • Dryness
    in southeastern Europe will prevail for the next week to ten days supporting good summer crop maturation and harvest conditions, but threatening winter crop planting
    • Some
      relief is possible late this month and better weather is expected in October
  • France,
    the U.K., Germany, Spain and Portugal will all get some welcome rainfall beginning this weekend and continuing through all of next week
    • Improved
      soil moisture will occur for better winter crop planting and emergence conditions later this autumn will result
    • Some
      slowing of summer crop maturation and harvesting is expected
  • Dryness
    remains a concern in central and eastern Ukraine, parts of Russia’s Southern region and portions of Kazakhstan
    • Very
      little rain will fall in these areas through the next ten days
  • Western
    Australia rainfall will be limited to the far southwest where crop conditions will stay good
    • Dryness
      in other Western Australia crop areas will raise concern over reproductive conditions if greater rain does not fall soon
      • Northern
        crops in Western Australia will be reproducing through the end of this month
  • Eastern
    Australia will receive significant rain later this week
    • South
      Australia will get rain Wednesday with 0.60 to 2.00 inches possible in some winter crop areas
    • New
      South Wales, Queensland and Victoria will receive rain Thursday into Saturday with 0.50 to 2.00 inches from northern New South Wales into Queensland
    • Rainfall
      of 0.60 to 1.75 inches will also occur in Victoria
    • The
      precipitation will be extremely helpful in raising soil moisture for winter and spring crops, although wheat and barley in Queensland may be a little too far advanced to fully benefit
  • Center
    West and southern parts of center south Brazil are advertised to receive scattered showers and thunderstorms Sep. 20-23 with some follow up rain periodically into the end of this month
    • The
      precipitation might eventually help lift topsoil moisture for some early season soybean planting, but much more rain will be needed
    • Coffee
      and citrus flowering “may” occur in a few areas from Sao Paulo into southern Minas Gerais and Rio de Janeiro while sugarcane and early corn experience a moisture boost to improve crop development; however, most of the region will fail to get quite enough moisture
      to make big changes in crop or soil conditions without follow up moisture
  • Southern
    Brazil rice, corn and wheat areas will get periodic rainfall through the next two weeks
    • Crop
      and field conditions will either improve or continue good through the end of this month
  • China
    rainfall Monday was good in areas from northern Shaanxi to Hebei for future wheat planting
    • Rain
      totals varied from 0.50 to 1.77 inches most often, but one location in northeastern Hebei reported nearly 7.00 inches of rain which resulted in local flooding
    • Rain
      also fell in the Yangtze River Basin with amounts of 1.00 to 3.50 inches
    • Rainfall
      elsewhere was more sporadic and light with needed dry conditions in much of the northeast and some other areas
  • China
    will experience a favorable mix of rain and sunshine in most grain, oilseed, cotton, rice and sugarcane areas during the next two weeks
    • Too
      much rain may fall in some of southern China over the next two weeks
      • Local
        flooding is possible
    • Heilongjiang,
      Jilin and Liaoning will need additional drier biased weather soon to support summer crop maturation and harvest progress
    • The
      mix of weather elsewhere will be good for ongoing summer crop development and helpful in ensuring good soil moisture for rapeseed and wheat planting later this autumn
  • India
    weather over the next two weeks will continue wettest in central, southern and far eastern parts of the nation while net drying occurs in the north
    • The
      environment will good for most crops and fieldwork
  • Western
    Commonwealth of Independent States will experience periodic rain over the next two weeks with a few breaks in the precipitation
    • Most
      of this will occur north of a line from Belarus through southwestern Russia to northern Kazakhstan
    • Net
      drying will occur farther to the south
    • Temperatures
      will trend colder next week with frost and freezes possible in a part of the region west of the Ural Mountains
  • U.S.
    weather over the next ten days
    • Favorable
      summer crop maturation and harvest weather is expected due to restricted rainfall and mild to warm temperatures
    • Southeastern
      U.S. rainfall will be excessive over the balance of this week due to Hurricane Sally, but after that some improved weather is expected; including net drying conditions
    • U.S.
      hard red winter wheat areas will receive limited rainfall which may be good for summer crop maturation and harvest progress
      • Wheat
        planting and emergence will continue, although there is need for greater rain to induce better emergence and establishment in the driest areas
    • West
      Texas rainfall will be limited enough to support favorable crop maturation
    • Northern
      Plains will receive restricted rainfall and experience warm temperatures favoring a good crop maturation and harvest environment
  • U.S.
    temperatures will slip to the frost and freeze threshold in the upper Midwest and northern Great Lakes region late this week with lows in the 30s Fahrenheit and with a few colder readings near the Canada border
    • Some
      extreme lows in the upper 20s will occur in northern Minnesota, but key crop areas in the Midwest will not experience temperatures nearly as cold
    • Overall
      temperatures in the coming week will be warmer than usual from the central and northwestern Great Plains through most of the western states while near to below average farther to the east
      • The
        coolest conditions relative to normal this week will be in the eastern Midwest through the northeastern states
    • Temperatures
      next week will be similar to those of this week, although a little warmer in the eastern Midwest and a little milder in the central Plains
      • Some
        cooling is also expected in the Pacific Northwest and Rocky Mountain region
  • West-central
    Africa will continue to experience periodic showers and thunderstorms over the next couple of weeks
    • Additional
      improvement is expected to coffee, cocoa, rice and sugarcane production areas after rain fell significantly during the weekend
    • Cotton
      areas will also continue to receive some rain for a while longer
    • All
      crops receiving rain will likely benefit from the moisture
  • South
    Africa weather will continue mostly dry over the next seven days with only a few showers in the far east and near the south coast expected
  • East
    central Africa rainfall has been and will continue to be erratic and mostly beneficial over the next ten days
  • Canada
    Prairies will experience scattered showers over the next two weeks while temperatures are near to above average in the southwest and more seasonable northeast
    • Harvesting
      and crop maturation should advance relatively well during the period with only a few delays likely
  • Xinjiang,
    China weather will continue favorable for cotton and other crop maturation and early harvest progress
    • Alternating
      periods of warm and cool weather will occur through the next ten days with restricted rainfall expected
    • The
      environment will support crop maturation, leaf defoliation and early harvesting
  • Mainland
    areas of Southeast Asia will experience periodic showers and thunderstorms over the next couple of weeks
    • Late
      season moisture boosting is extremely important since water supply has not been fully restored from last year’s low levels
  • Philippines
    rainfall will increase over the next few days as a tropical disturbance moves through the nation
    • Locally
      heavy rain is expected and most of the moisture will be welcome for crops throughout the nation
  • Improving
    rainfall in Indonesia and Malaysia is expected over the next two weeks with some heavy rain and possible flooding expected in parts of Kalimantan and Papua New Guinea
  • Ontario
    and Quebec rainfall will occur periodically over the next ten days alternating with periods of rain and sunshine; Temperatures will be seasonable to slightly cooler than usual
  • 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 +9.09 today and it will stay positive this week

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

TUESDAY,
Sept. 15:

  • Australia’s
    Abares releases quarterly agricultural commodities report
  • Malaysia
    palm oil export data for Sept. 1-15
  • France’s
    agriculture ministry to publish crop estimates
  • World
    Agri-Tech Innovation Summit, Sept. 15-16
  • New
    Zealand global dairy trade auction
  • HOLIDAYS:
    El Salvador, Guatemala, Honduras, Nicaragua

WEDNESDAY,
Sept. 16:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • FranceAgriMer
    supply and demand estimates
  • Future
    Food-Tech conference, Sept. 17-18
  • HOLIDAYS:
    Malaysia, Mexico

THURSDAY,
Sept. 17:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • USDA
    total milk production for August, 3pm
  • Port
    of Rouen data on French grain exports
  • Biosev
    SA 1Q 2021 earnings

FRIDAY,
Sept. 18:

  • 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

Source:
Bloomberg and FI

 

Macros

US
Import Price Index (M/M) Aug: 0.9% (exp 0.5%; prev 0.7%)

–        
Import Price Index (Y/Y) Aug: -1.4% (exp -2.1%; prev -3.3%)

–        
Export Price Index (Y/Y) Aug: -2.8% (exp -3.2%; prev -4.4%)

Canadian
Manufacturing Sales (M/M) Jul: 7.0% (exp 9.0%; prev 20.7%)

US
Industrial Production (M/M) Aug: 0.4% (exp 1.0%; R prev 3.5%)

–        
Capacity Utilisation Aug: 71.4% (exp 71.4%; R prev 71.1%)

–        
Manufacturing (SIC) Production Aug: 1.0% (exp 1.3%; R prev 3.9%)

 

Corn.

  • CBOT
    corn
    traded
    lower on technical selling and an increase in Argentina corn registrations.  Lower wheat added to the negative undertone.   US weather is mostly non-threatening this week and harvest progress is expected to advance throughout the country, with exception of
    parts of the lower Delta and Southeast where heavy rain will occur.  Some of the corn harvested south of KY has high moisture content.  $3.70 is now a key resistance level for December corn. 
  • USD
    was up 4 points earlier and WTI crude oil up about $1.14 as of 2:20 PM CT. 

  • Argentina’s
    coop association booked a large 883,000 tons of Argentina’s export licenses overnight, busiest day since August 25. 
    Yesterday
    Argentina offers were up 3 cents. 
  • More
    dead wild boar have been discovered in the German state of Brandenburg, later to find out five additional cases of African swine fever (ASF) have been initially found in wild boars.  German wholesale pig prices fell 14% on Friday. 
  • China’s
    August pig herd was up 31.3% from year ago and sow herd up 37%. Note ASF began in August 2018.
  • We
    are reading that the three storms across northeast China flattened 25 million tons of corn.  Other circulations are talking up to 30-million-ton loss and/or deficit for 2020-21 but the fact remains no one knows how much corn is sitting in reserves.   Note
    they have inventories for the 2016 through 2019 crops.  They sold 54+ million tons of 2014 and 2015 inventories this season already and bought around 10 million tons from Ukraine and US for 2020-21 delivery.  China expanding TRQ requirements is a wild card. 
    http://www.feedandgrain.com/news/typhoons-flatten-chinas-northeast-grain-region#:~:text=Concerns%20are%20mounting%20over%20the,the%20South%20China%20Morning%20Post  
  • We
    estimate the US corn yield at 177.5 bushels per acre, 1.0 bushel below USDA.  Our harvested area is 55,000 acres below USDA, resulting in a production of 14.807 billion bushels, 93 million below USDA’s September estimate.   Soybean and Corn Advisory: 2020
    U.S. Corn Estimate Unchanged at 176.0 bu/ac
  • A
    Bloomberg poll looks for weekly US ethanol production to be up 1,000 at 942,000 barrels (918-960 range) from the previous week and stocks to increase 345,000 barrels to 20.338 million.

 

Corn
Export Developments

–Export
sales of 120,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.

 

 

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
.

  • AmSpec
    reported Malaysian palm Sep 1-15 palm exports at 780,305 tons, up 12.4 percent from the same period a month ago.  ITS reported 12.2% increase to 779,160 tons.  SGS Sep 1-15 palm oil shipments 745,565 ton, up 12.2% from previous month.
    Malaysian
    palm was up again (reached 8-month high) by roughly 48MYR and cash up $2.50/ton.  Traders expect end-stocks in September to remain unchanged from a month earlier. 

 

 

U.S.
August soybean crush dropped by more than expected 4.4 million bushels to 165.1 million bushels, lowest level in nine months (Nov) and well below 172.8 million during the month of July and compares to 168.1 million during August 2019.  The daily rate slowed
to 5.32 million bushels, lowest since September 2019 and down from 5.57 million (4.5 percent) last month and below 5.42 million during August 2019.  The southeast region was hit the hardest, dropping to 16.9 million bushels from 21.4 comparable month year
earlier, followed by the MN/ND/SD/MT region. 

 

End
of August soybean oil stocks were 1.519 billion pounds, only 4 million pounds above an average trade guess, despite the 4.4-million-bushel crush miss by the trade and above 1.401 billion year earlier.  The soybean oil yield of 11.60 pounds per bushel was unchanged
from the previous month, an indication implied soybean oil demand was not as good as expected during August.

 

Soybean
meal exports were a large 754,600 short tons, second highest for the month of August in history, down from 876,000 during July and above 699,000 short tons from August 2019.  The meal yield fell to 47.06 from 47.22 for July. 

 

The
report was seen a little friendly for soybean meal over soybean oil, but the lower than expected crush and high soybean oil stocks relative to the crush rate looks like it adds to the negative sentiment see for the overall soybean complex. 

 

Oilseeds
Export Developments

  • Under
    the 24-hour announcement system, USDA announced private exporters sold:

–Export
sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year

–Export
sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year

  • USDA
    CCC seeks 40,750 tons of soybean meal for export to Indonesia and Cambodia on Sep 16 for Nov 10-20 shipment. 
  • USDA
    CCC seeks 3,000 tons of vegetable oils on Sep 17 for October 16-31 shipment. 

 

 

Third
month rolling palm oil

Source:
Eikon and FI

 

Updated
9/11/20

  • November
    soybeans are seen in a $9.75-$10.50 range.   $9.60 average for 2020-21
  • December
    soybean meal is seen in a $310-$340 range.    $305 average for 2020-21
  • December
    soybean oil is seen in a 33.00-35.50 range.     34.00 cents average for 2020-21

 

Wheat

  • Wheat
    traded
    lower from technical selling.  December Chicago traded through its 20- and 200-day MA’s.  $5.25 appears to be a good support level for Dec Chicago.  The good start to US winter wheat seedings and upward revision to Kazakhstan’s grain crop kicked off the negative
    undertone.  The USD turning higher by late session trading.  We look for US 2020-21 winter wheat seedings to expand from last year due to decent US weather and prices that higher than a year ago, attractive for producer taking crop insurance.  Chicago and
    MN wheat prices are nearing our predicted trading range lows. 
  • After
    the close Egypt announced they seek wheat for November 10-20 shipment.  Japan seeks 104,870 tons of milling wheat.  Taiwan’s MFIG seeks corn while South Korea’s SPC seeks 38,000 tons of US and/or Canadian wheat.  Ethiopia is in for 200,000 tons of wheat. 
  • Paris
    (Matif) December wheat was down 1.75 at 187.00 euros.
  • Rain
    will be restricted for the EU this week and temperatures will be warmer than normal. 
  • France’s
    AgMin sees the wheat crop at 29.5 million tons, down from the 29.7 million estimated last month and 39.6 million in 2019.  That’s a 25 percent decrease from 2019. 
  • Kazakhstan’s
    Ministry of Agriculture increased the 2020 grain harvest forecast by 0.5% to 18 million tons, up from 17.4 million tons of grains in clean weight in 2019.  This marketing year the republic plans to export 7.5-8 million tons of grain.
  • Russian
    grain exports are off to a slow start for the season, but September shipments could end up a record, according to JSC Rusagrotrans.  Exports were estimated at nearly 5.85 million tons, including around 5.2 million tons of wheat.
  • India
    via Reuters – Rains were 17% above average in June – the first month of the annual rainy season – but July rains were 10% below average. The monsoon picked up again in August and were 27% above average.

 

Export
Developments.

  • Egypt
    announced they seek wheat for November 10-20 shipment. 
  • Turkey
    saw offers for 500,000 tons of wheat with prices coming in around $240.49/ton c&f for Sep 23-Oct 16 shipment. 
  • Pakistan
    got offers for 170,000 tons of wheat with lowest offer around $274/ton c&f.
  • South
    Korea’s SPC group seeks 38,000 tons of US and/or Canadian wheat for LF Jan shipment. 
  • Japan
    is in for 104,870 tons of food wheat this week. 

  • Results
    awaited: Syria seeks 200,000 tons of soft wheat from Russia. 
  • Jordan
    seeks 120,000 tons of wheat on Sep 16 for LH October shipment.
  • Iran
    seeks to export 700,000 tons of barley by Friday. 
  • Ethiopia
    seeks about 80,000 tons of milling wheat on Sept. 30.
  • Ethiopia
    seeks 400,000 tons of wheat by October 13.
  • (new
    9/15) Ethiopia seeks about 200,000 tons of milling wheat on October 15.

 

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
9/11/20

  • December
    Chicago is seen in a $5.30-$5.55 range.    2020-21 average $5.55
  • December
    KC $4.50-$4.95.       2020-21 average $5.05
  • December
    MN $5.20-$5.50.
        2020-21 average $5.45

 

 

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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