PDF Attached

 

September
1 stocks were bullish and prices exploded to the upside.  USDA export sales will be out Thursday and Friday COT. 

 

 

 

USDA
released it September grain stocks update

 

Reaction:  
Bullish. 

 

  • September
    one US soybean stocks were reported at 523 million bushels versus USDA’s S&D outlook of 575 million, a huge difference, and 53 million below an average trade guess.  Our implied STU is 13.2 percent compared to USDA Sep S&D of 14.7 percent.  It’s as if USDA
    adjusted their stocks to reduce the negative residual after realizing an unchanged production estimate for 2019.  June one soybean stocks were 1.381 billion bushels, 5 less than what was reported three months ago, so unlike corn, September one stocks deviations
    from trade do not reflect previous quarters.  The soybean stocks are a mystery, but regardless how one interprets it, stocks are tighter and that should reflect higher prices year over year.  A 523 carry in for 2020-21, using USDA’s balance sheet, shrinks
    the carryout to 408 million bushels. 
  • 2019
    US corn production was upward revised 3 million bushels to 13.620 billion.  Going forward USDA will revise previous year corn production in every September Grain Stocks report.  Corn September one stocks of 1.995 billion bushels were reported 255 million below
    trade expectations.  Note USDA revised previous quarter June one corn stocks by 205 million bushels!  A big explanation for the deviation in corn stocks from USDA’s S&D stocks projection of 2.253 billion.  Therefore, the trade missed feed/residual demand by
    roughly 50 million bushels, in our opinion.  But what happened with the previous quarters?  We will likely see that question come up in October when USDA typically hosts a statistical conference. 
  • US
    wheat production came in lower than the trade estimate by 15 million bushels to 1.826 billion due to downward revision to winter wheat led by hard red winter.  Wheat stocks came in much below trade expectations at 2.159 billion bushels, implying a potential
    25 to 50-million-bushel upward revision by USDA to its feed demand in the upcoming supply and demand report. 
  • We
    question both the US 2019 soybean and corn production figures.  Corn is at least 200 mil bu too high and soybeans 5-15 million too low. 
  • FI
    price projections were revised.  

 

 

 

 

 

 

Weather
and Crop Progress

 

 

 

 

 

 

 

MOST
IMPORTANT WEATHER TO WATCH

  • AREAS
    OF CONCERN
    • U.S.
      hard red winter wheat areas will be dry for the next ten days to two weeks and temperatures will be warmer than usual
    • Montana
      and South Dakota wheat areas need greater moisture too
    • Russia’s
      Southern Region remains too dry for winter crop planting and will receive no significant moisture for the next ten days to two weeks, although some brief showers will occur near the Ukrainian border over the coming week
    • Kazakhstan
      wheat areas are still critically dry in unirrigated areas and rain is unlikely for the next two weeks
    • Northeastern
      China continues to receive rain too frequently and summer crop maturation and harvesting remain slow; this pattern will prevail through the weekend and then “some” improvement is expected next week
    • South
      Africa winter crop areas need rain as do future spring planting areas; rain is expected in eastern parts of the nation, but not in the west
    • Brazil’s
      center west and center south crop areas will be drier than usual into the middle of October further delaying the planting of early soybeans and some corn; however, some showers will occur October 10-14
    • Brazil
      coffee areas will experience little to no rain of significance for the next ten days; Some showers are expected October 10-14
    • Brazil
      temperatures will remain very warm to hot over the next ten days especially in center west crop areas where extremes of 100 to 110 Fahrenheit are expected
    • Northwestern
      and west-central Argentina will remain too dry over the next ten days
    • A
      tropical cyclone may form in the northwestern Caribbean Sea later this week and could threaten Mexico’s Yucatan Peninsula
  • AREAS
    OF IMPROVEMENT
    • Ukraine
      has received some rain and more will fall into the weekend to improve winter crop planting and establishment conditions
    • Northeastern
      China has seen some net drying recently and fieldwork may be advancing at a “snail’s pace” with more rain coming
    • Net
      drying will occur the remainder of this week in the U.S. Delta and southeastern states benefiting areas that have been too wet in recent weeks

 

UNITED
STATES

  • Dryness
    will continue in the U.S. Plains for at least ten days and probably longer
  • Rain
    in the Midwest will be most frequent and significant in the Great Lakes region where field working delays will be most frequent
  • Improving
    conditions are likely in the U.S. Delta and southeastern states
  • Rain
    will fall briefly in the lower Midwest this weekend briefly disrupting fieldwork
  • Temperatures
    are still expected to be cold in the heart of the Midwest into next week while the western U.S. is quite warm

BRAZIL

  • Worry
    over dryness in center west and center south will continue with little to no rain for the next ten days
  • Some
    showers may develop thereafter, but with restricted rainfall resulting for some areas into mid-month
  • Temperature
    will continue hot in many areas

ARGENTINA

  • Rain
    is still not well distributed over the next two weeks, but there will be some precipitation
  • Central
    and northern Cordoba, parts of Santa Fe, Santiago del Estero and other northwestern Argentina crop areas are unlikely to see much rain of significance for at least ten days
  • Temperatures
    will be seasonable to slightly cooler biased

INDIA

  • Rain
    will be greatest in the west-central, south and far eastern parts of the nation
  • Net
    drying in the north and central crop areas
  • Some
    rain will return to central India briefly during the second half of next week

MAINLAND
SOUTHEAST ASIA

  • Near
    to above average rainfall is expected with northern Thailand to Myanmar and Bangladesh wetter than usual

CHINA

  • Drier
    weather occurred in the northeast Tuesday, but frequent showers today into next Monday will restrict harvest progress in a part of the region
  • Northeast
    China will trend drier next week
  • Best
    harvesting and planting weather is expected in the Yellow River Basin and North China Plain over next ten days with a mix of rain and sunshine
  • Southern
    China will continue wet with frequent rain near and south of the Yangtze River over the next ten days

EUROPE

  • Additional
    waves of rain are expected in France and immediate neighboring areas in western Europe over the coming week
    • Excessive
      wind and heavy rain will impact western France, northern Spain and western parts of the United Kingdom late today through the weekend
      • Some
        property damage may result
    • Additional
      high wind speeds and rain may impact the U.K. and northern France late in the weekend and early next week
  • Flooding
    rain may evolve in northern Poland this weekend into next week
  • Rain
    will also fall frequently in western Ukraine, southern Poland and northern Romania into Friday bolstering soil moisture for much improved rapeseed and winter grain establishment
  • A
    favorable mix of showers and sunshine will occur elsewhere in Europe over the next two weeks
  • Temperatures
    will be mild to cool in the west and warm east

WESTERN
CIS

  • Temperatures
    will be warmer than usual in the coming week to ten days
  • Waves
    of rain will be greatest in central and western Ukraine where some local flooding might eventually develop (mostly in the west)
  • Showers
    in far western Russia, the Baltic States and Belarus will be a low impact on farming activity
  • Limited
    rainfall is expected in the Middle and lower Volga River Basin, Russia’s Southern Region and Kazakhstan over the next ten days
  • Good
    harvest weather In New Lands

AUSTRALIA

  • Brief
    periods of rain will impact Victoria, South Australia and New South Wales during the next ten days to two weeks maintaining good field moisture
  • Western
    Australia will get some brief showers in southern crop areas Thursday into Friday, but more frequent and more significant rain throughout the state is needed to benefit crops

INDONESIA/MALAYSIA

  • Periodic
    rain is expected over the next two weeks maintaining a mostly good environment for most crops

MEXICO/CENTRAL
AMERICA

  • Rain
    will continue greatest from far southern Mexico into Central America
  • A
    possible tropical cyclone in the northwestern Caribbean Sea by Friday may impact the Yucatan Peninsula this weekend

WEST-CENTRAL
AFRICA

  • Waves
    of rain will continue through the next ten days favoring coffee, cocoa, sugarcane, rice and other crops

EAST-CENTRAL
AFRICA

  • Rain
    will be erratic and light over the next couple of weeks

PHILIPPINES

  • Rain
    will impact most of the nation over the next ten days to two weeks maintaining a favorable outlook for crops

CANADA
PRAIRIES

  • Showers
    will occur most often in the eastern half of the Prairies leaving most other areas dry during the next week
  • Temperatures
    will be near to above average in the west and near to below average in the east

ONTARIO/QUEBEC

  • Rain
    will fall frequently over the next week to ten days while temperatures are mild to cool resulting in delayed summer crop maturation and harvesting

TROPICAL
STORM MARIE REMAINS WEST OF MEXICO

  • The
    storm will move away from North America and poses no threat to land

NEW
ZEALAND

  • Conditions
    will trend cooler this week while precipitation diminishes and becomes mostly confined to the west coast of South Island
  • Southern
    Oscillation Index was +9.93 today and it will stay significantly positive throughout this week

Source:
World Weather Inc. 

 

 

 

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

WEDNESDAY,
Sept. 30:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • USDA
    quarterly corn, soybean, wheat, sorghum, barley and oat stocks
  • U.S.
    wheat production for Sept.
  • Roundtable
    on Sustainable Palm Oil virtual discussion on seasonal haze
  • Malaysia
    Sept. 1-30 palm oil export data
  • U.S
    agricultural prices paid, received for Aug., 3pm
  • Poland
    to release grains output data
  • HOLIDAY:
    Korea

THURSDAY,
Oct. 1:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • Port
    of Rouen data on French grain exports
  • USDA
    soybean crush, DDGS output, corn for ethanol, 3pm
  • Australia
    commodity index for Sept.
  • Webinar
    on the effects of climate change on coffee production in Southeast Asia
  • Honduras,
    Costa Rica coffee exports monthly stats
  • International
    Cotton Advisory Committee releases monthly world outlook
  • HOLIDAY:
    China, Hong Kong, Korea

FRIDAY,
Oct. 2:

  • 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
  • HOLIDAY:
    China, Hong Kong, India, Korea

Source:
Bloomberg and FI

 

 

 

 

Corn.

 

 

 

 

 

 

Corn
Export Developments

  • Results
    awaited:  Iran seeks 200,000 tons of corn feed and 200,000 tons of soybean meal on Sep 30 for OND shipment.  The corn will be out of the Black or EU or South America. 

 

 

Updated
9/30/20

  • December
    corn is seen in a $3.60-$4.00 range. (up 20, up 15)  2020-21 to average $3.75 for corn and $2.85 for oats. 

 

Soybean
complex
.
 

 

Oilseeds
Export Developments

  • Under
    the 24-hour reporting system, US exporters reported the following:
    • Export
      sales of 215,000 tons of soybeans for delivery to unknown during the 2020/2021 marketing year
  • Results
    awaited:  Iran seeks 200,000 tons of corn feed and 200,000 tons of soybean meal on Sep 30 for OND shipment.  Soybean meal will be out of Brazil, Argentina and/or India. 

 

 

 

Monthly
Biodiesel Production Report

U.S.
production of biodiesel was 162 million gallons in July 2020, 11 million gallons higher than production in June 2020. There were a total of 1,238 million pounds of feedstocks used to produce biodiesel in July 2020. Soybean oil remained the largest biodiesel
feedstock during July 2020 with 775 million pounds consumed, above 747 in June and 709 million in July 2019.  We were looking for 758 million pounds.  We lifted our 2019-20 US soybean oil for biodiesel production to 7.800 billion pounds from 7.725 billion
and compares to USDA’s 7.750 billion pounds.