PDF Attached

 

Higher
trade in soybeans and corn while wheat was mixed.  USDA announced 110,000 tons of corn to Mexico.  USDA export inspections were very good for soybeans, withing expectations for wheat and below expectations for corn. 

 

 

Weather
and Crop Progress

 

 

 

 

 

 

 

MORNING
WEATHER MODEL COMMENTS

NORTH
AMERICA

  • No
    general theme changes were noted overnight
    • Restricted
      precipitation is expected through the balance of this week in key crop areas
    • A
      reinforcing shot of cold air expected this late weekend and early next week will induce some rain and snow across in a part of the central Plains and Midwest inducing some short term disruption to fieldwork.
      • GFS
        model may be overdoing precipitation in the central Plains
      • European
        model keeps precipitation limited in hard red winter wheat areas
      • Canadian
        model run favors precipitation in Nebraska, northern and eastern Kansas and northeastern Colorado – similar to the GFS during this same time period
      • Southwestern
        U.S. Plains are unlikely to see any precipitation
    • Drier
      weather evolves again shortly after the early week precipitation event for the latter part of next week and into the following weekend.

 

The
earliest possible time for significant precipitation to fall in hard red winter wheat areas will be after the current succession of cold surges is over. At that time (late next week and more likely in the second weekend of the outlook) some moisture from the
Gulf of Mexico “may” be allowed to stream north into the region. However, World Weather, Inc. is not very confident that “meaningful” rain will occur during this period of time. The situation will be closely monitored.

 

SOUTH
AMERICA

  • No
    theme changes were noted overnight
    • Argentina
      rainfall is expected in the north through mid-week this week
    • Much
      of Argentina will receive rain starting late this weekend in the southwest and advancing northeast early next week
      • Sufficient
        rainfall is expected to bolster topsoil moisture and improve early corn and sunseed planting and establishment conditions
      • Cordoba,
        Santiago del Estero and Santa Fe’s drier biased areas will get rain to ease long term dryness
    • Argentina
      follow up rainfall potentials late next week and into the following weekend will be limited
    • Brazil
      scattered showers and thunderstorms will increase in number today through Friday, but rain intensity will be light benefiting some crop areas much more than others
      • Follow
        up rain will be very important
    • Brazil
      rainfall will diminish Friday through early next week especially in center west crop areas while scattered showers and thunderstorms continue periodically in Minas Gerais and some immediate neighboring areas
    • Brazil’s
      greatest rainfall boost is expected late next week and into the following weekend

 

The
generalities of the South America outlook have not changed much today relative to that of Monday. Northern Argentina will get some rain over the next couple of days and the best generalized rain seen in a few weeks may occur late this weekend into early next
week offering some short term improvements in soil moisture benefiting winter wheat and barley as well as supporting more planting and establishment of early corn and sunseed. Follow up rain will be very important, but it is not expected to occur for a while
and net drying should be quick to resume later next week that might last into late October.

 

BLACK
SEA REGION

  • Light
    rain is advertised this weekend for eastern Ukraine and a few areas in Russia’s Southern Region early next week
    • The
      change was expected and should verify, although resulting rain will be mostly light
  • Additional
    showers will be possible in Russia’s Southern Region, eastern Ukraine and western Kazakhstan during mid- to late-week next week
    • This
      rainfall is expected to be quite light and will likely fail to seriously change soil moisture
  • Net
    drying will occur in the balance of October in eastern Ukraine, Russia’s Southern Region and western Kazakhstan, although the 06z GFS model run suggested more rain was possible near the end of this month
    • The
      return of drying is expected and the return of rain on the 06z GFS model run for late this month will not likely verify
  • Waves
    of rain will continue to impact southeastern Europe including the southern Balkan Countries and the western Black Sea region during the next ten days to two weeks
    • This
      is no change from previous forecasts

 

Overall,
the rain advertised for eastern Ukraine, Kazakhstan and Russia’s Southern region this weekend and next week fits very well with World Weather, Inc.’s previous comments of last week. The moisture will be welcome, but not nearly enough to seriously bolster soil
moisture or change the long term outlook for winter small grains. Follow up rain will be needed as soon as possible to induce good stands.

 

CHINA

  • No
    general theme changes noted overnight
    • Restricted
      rainfall is expected in northeastern China and in the northern Yellow River Basin as well as the North China Plain where summer crop harvest progress and winter crop planting and establishment will advance favorably
    • Rain
      will continue periodically over the coming week from Shaanxi and Shanxi southward to Guangxi and Guangdong
      • Net
        drying is advertised for much of eastern China during the second week of the forecast

INDIA

  • No
    general theme changes were noted overnight
    • Rain
      is expected to occur significantly in interior southern India over the next several days
    • Rain
      is expected to develop in central India late this week and into early next week
      • Sufficient
        amounts of rain will fall to stall summer crop maturation and harvest progress while raising some crop quality issues for cotton, soybeans, pulse crops and some rice
    • The
      rain will retreat to the south again during the second half of next week bringing back some improving weather

 

AUSTRALIA

  • No
    big changes were noted overnight in the coming ten days to two weeks
    • GFS
      model continues to attempt to bring rain to southern parts of Western Australia during mid-week next week and again October 27-28
      • Confidence
        in these advertised rain events remains low because of drier biased conditions advertised by the European and Canadian model runs

The
very strongly positive Southern Oscillation Index (+12.58) today may be providing some evidence that rain may not evolve in Western Australia because there is a tendency for strongly positive SOI values are associated with greater rain potentials in eastern
Australia and less rain potential in the west. 

Source: 
World Weather Inc. 

 

 

 

Bloomberg
Ag Calendar

Tuesday,
Oct. 13:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • China
    trade data on soybeans and meat imports
  • New
    Zealand Food Prices
  • France’s
    agriculture ministry crop estimates
  • U.K.’s
    AHDB Grain Market Outlook Conference
  • U.S.
    winter wheat planted, 4pm
  • HOLIDAY:
    Thailand

Wednesday,
Oct. 14:

  • Leman
    China Swine Conference, Chongqing, day 1
  • FranceAgriMer
    monthly crops report
  • Global
    Food Forum, Australia, day 1
  • Malaysia
    3Q cocoa grinding figures

Thursday,
Oct. 15:

  • Malaysia
    Oct. 1-15 palm oil export data
  • Port
    of Rouen data on French grain exports
  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • Global
    Food Forum, Australia, day 2
  • Leman
    China Swine Conference, Chongqing, day 2
  • European
    Cocoa Association grindings

Friday,
Oct. 16:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • 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
  • Asia
    3Q cocoa grinds
  • Cocoa
    Association of Asia’s webinar on Asian cocoa demand
  • Leman
    China Swine Conference, Chongqing, day 3

Source:
Bloomberg and FI

 

USDA
inspections versus Reuters trade range                                            

Wheat      
514,086     versus  400000-650000           range

Corn         
632,184     versus  650000-900000           range

Soybeans  
2,157,012  versus  1200000-2200000       range

 

 

 

GRAINS
INSPECTED AND/OR WEIGHED FOR EXPORT

                 
REPORTED IN WEEK ENDING OCT 08, 2020

                           
— METRIC TONS —

————————————————————————-

                                                  
CURRENT     PREVIOUS 

             ———–
WEEK ENDING ———-  MARKET YEAR  MARKET YEAR

 
GRAIN      10/08/2020  10/01/2020  10/10/2019    TO DATE     TO DATE  

 

BARLEY         
1,896       1,397           0        9,020        8,625 

CORN         
632,184     884,157     480,647    4,319,958    2,506,319 

FLAXSEED           
0           0         100          389          172 

MIXED              
0           0           0            0            0 

OATS               
0           0           0          996          798 

RYE                
0           0           0            0            0 

SORGHUM          
192     157,647      38,825      461,947      228,176 

SOYBEANS   
2,157,012   2,004,867     956,056    9,095,531    5,162,862 

SUNFLOWER      
    0           0           0            0            0 

WHEAT        
514,086     678,715     497,468   10,437,123    9,498,368 

Total      
3,305,370   3,726,783   1,973,096   24,324,964   17,405,320 

————————————————————————-

CROP
MARKETING YEARS BEGIN JUNE 1 FOR WHEAT, RYE, OATS, BARLEY AND

FLAXSEED; 
SEPTEMBER 1 FOR CORN, SORGHUM, SOYBEANS AND SUNFLOWER SEEDS.

INCLUDES
WATERWAY SHIPMENTS TO CANADA.

 

Macros

US
CPI (M/M) Sep: 0.2% (exp 0.2%; prev 0.4%)

–        
CPI Ex Food And Energy (M/M) Sep: 0.2% (exp 0.2%; prev 0.4%)

–        
CPI (Y/Y) Sep: 1.4% (exp 1.4%; prev 1.3%)

–        
CPI Ex Food And Energy (Y/Y) Sep: 1.7% (exp 1.7%; prev 1.7%)

IMF
Sees 2020 World GDP Shrinking 4.4% Vs -5.2% Estimate In June

Citigroup
Q3 20 Earnings:

–        
Revenue: $17.3B (exp $17.2B) 

–        
Adj EPS: $1.40 (exp $0.93)

–        
Banking Revenue: $5.1B

–        
Net Credit Losses: $1.92B

 

USDA:
Farm use of futures, options and marketing contracts

https://www.ers.usda.gov/webdocs/publications/99518/eib-219.pdf?v=4500.1

 

Corn.

 

Corn
Export Developments

  • USDA
    announced 110,000 tons of corn to Mexico. 
  • Jordan
    passed on 120,000 tons of feed barley for Jan/Feb shipment.
  • Iran
    seeks 200,000 tons of barley on October 14. 
  • Taiwan’s
    MFIG seeks 65,000 tons of corn on October 14 for Dec/Jan shipment. 

 

 

 

Updated
10/9/20

December
corn is seen in a $3.75-$4.10 range

China
could easily change the global balance sheet if they boost corn imports above 15 million tons in 2021. 

 

Soybean
complex
.
 

  • The
    US soybean complex traded two-sided, ending higher in part to strength in outside markets, Argentina workers launching a strike this afternoon, and technical buying after selling off hard on Monday.  Many hedge funds returned to work today after some of the
    US markets were on holiday Monday.  We were a little taken back from the late session rally with the USD trading more than 45 points higher.  WTI rallied 86 cents by just before 2:00 PM CT.  September China soybean imports were larger than expected.  USDA
    export inspections for soybeans were excellent.  Offshore values this morning were leading US products higher, led by soybean oil.  Palm futures advanced for the seventh consecutive session. 
  • Funds
    bought 8,000 soybeans, 3,000 soybean meal and 4,000 soybean oil. 
  • Argentina
    oilseed workers, led by the Argentina Federation of Oilseeds Workers, plan to start an open-ended strike at 2 PM today.  The group represents some crush workers of the Rosario area, but not the northern area.  We don’t see significant impact on Argentina’s
    soybean and product export pace as October is typically slow and strikes are generally short lived.
  • USDA
    US soybean export inspections as of October 08, 2020 were 2,157,012 tons, within a range of trade expectations, above 2,004,867 tons previous week and compares to 956,056 tons year ago. Major countries included China Main for 1,626,472 tons, Mexico for 182,517
    tons, and Indonesia for 90,478 tons.
  • US
    soybean crop conditions were reported by USDA at 62 percent for the combined good and excellent categories, down 1 from previous week and compares to 54 year ago and 64 for the 5-year average.  A Reuters trade average was looking for 64 percent.
  • US
    soybean harvest progress was reported at 61 percent complete, up from 38 percent last week and compares to 23 year ago and 42 average.   Soybeans dropping leaves was reported at 93 percent. 
  • There
    were no major changes to the South American weather forecast.  Argentina will continue to see rain late this weekend in the southwest and northeast early next week.  Brazil scattered showers will increase today and last through Friday. 
  • China
    imported a record 9.8 million tons of soybeans during September, higher than expected, and closes the Sep-Oct period at 98.5 million tons.  At this time last year, we were forecasting less than 90 million tons.  China hog and breeding sows are back to 80 percent
    normal within China.  Note we are at 102 million tons for 2020-21 China soybean imports.  China cash crush margins improved from the previous session. 
  • Indonesia’s
    President told his ministers to prepare for the potentially hazardous impact of an upcoming La Nina event.  Above normal rainfall is associated with La Nina. 
  • China
    committed to buy 1.7 million tons of Malaysian palm oil through 2022.

 

 

Oilseeds
Export Developments

  • Iran’s
    SLAL seeks 200,000 tons of soybean meal and 200,000 tons of barley on October 14 for OND shipment. 
  • Syria
    seeks 50,000 tons of soybean meal and 50,000 tons of corn on October 26 for delivery within four months of contract. 

 

 

Updated
10/12/20

November
soybeans are seen in a $10.25-$11.10 range

December
soybean meal is seen in a $345-$385 range

December
soybean oil is seen in a 32.50-35.00 range

 

Wheat

  • US
    winter wheat planting progress was reported at 68 percent complete, one point above trade expectations, up from 52 percent last week and compares to 61 year ago and 61 average.   41 percent of the US winter wheat crop is emerged. 

  • Paris
    (Matif) December wheat was 2.00 higher at 202.75 euros.
  • France’s
    AgMin lowered its estimate for soft wheat to 29.2 million tons from 29.5 million in Sep due to a reduction in harvested area and yields. 

 

Export
Developments.

  • Algeria
    started buying wheat for Oct/Nov shipment.  One trader noted around $263.50 per ton at least some of the wheat could originate from the Black Sea region. 
  • Japan
    seeks 87,110 tons of food wheat later this week from Canada (25k) and rest from the US. 
  • Pakistan
    seeks 300,000 tons of wheat on October 14 for arrival by end of January. 
  • Jordan
    seeks 120,000 tons of wheat on October 14, optional origin, for Jan -late Feb shipment.
  • 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

·        
Mauritius seeks 5,500 tons of white rice on October 20 for Dec 15-Mar 15, 2021 delivery.

 

Updated
10/9/20

December Chicago wheat is seen in a $5.70-$6.30 range

December KC wheat is seen in a $5.20-$5.70 range

December MN wheat is seen in a $5.35-$5.60 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

ICE IM: 
treilly1

Skype: fi.treilly

 

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