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International

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Lincoln Center

18
W 140 Butterfield Rd. Suite 1450

Oakbrook
Terrace, Il. 60181

 

Grains
and oilseeds ended the week on a high note.  Corn
and soybeans were up five consecutive days. 

 

 

Weather
and Crop Progress

 

 

 

SA Week 1 Accum Precipitation (mm) Forecast

 

EARLY
MORNING WEATHER UPDATE

CHANGES
OVERNIGHT

  • European
    forecast model greatly increased precipitation in U.S. hard red winter wheat areas for next week
    • The
      increase was overdone and unlikely to verify
  • European
    forecast model increased precipitation in Russia’s Southern Region Oct. 30-Nov 2
    • This
      increase was overdone
    • The
      first week of the outlook remains mostly dry
  • European
    model run is a little wetter in Brazil through Monday, but rain in Parana,  Sao Paulo and neighboring areas is still advertised to be limited thereafter
  • U.S.
    hard red winter wheat areas will receive some needed precipitation during the late weekend through early part of next week easing dryness, but follow up moisture will still be needed

 

MOST
IMPORTANT WEATHER TO CONSIDER FOR WEEKEND

  • Dryness
    will continue for much of the next week in Russia’s Southern Region
    • Some
      showers are possible infrequently, but the amount of relief will be restricted
    • Remember
      that a part of this region did get some relief from dryness earlier this week
    • Temperatures
      will remain warmer than usual over the next week to ten days maintaining a favorable environment for winter crop establishment for those areas with topsoil moisture
    • There
      is potential for rain in the Oct. 30-Nov. 3 period, but it will be light
  • Ukraine
    precipitation will be limited through the next ten days, but recent moisture has been helpful for winter crop establishment except in the far east where there is still a pressing need for significant moisture
  • Kazakhstan
    is unlikely to get meaningful moisture in the next ten days, although some sporadic showers may evolve after the end of next week
  • Argentina
    has received beneficial rain this week and more will occur this weekend
    • Rainfall
      Saturday and Sunday will range from 0.50 to 2.00 inches with local totals to 3.00 to 4.00 inches favoring the south and east
    • Follow
      up showers will produce 0.15 to 0.70 inch of moisture Tuesday and Wednesday
    • Mostly
      dry thereafter until Nov. 5 when showers develop in the far south and possibly shift to east-central areas Nov. 6-7 (confidence is low on this event)
  • Argentina
    rain Thursday was not very great with amounts to 0.25 inch; however, some rain overnight in northeastern Santa Fe, southern Corrientes and southern Chaco varied from 0.35 to 0.68 inch with one location in southern Corrientes reporting an unconfirmed 3.06 inches
    through dawn
  • Brazil
    will see rain in most of the nation during the coming ten days
    • Interior
      southern areas will receive the lightest amounts and may experience the most aggressive planting, although will have need for more rain in November
    • Center
      west into Minas Gerais and southern Bahia will receive frequent rainfall especially next week and into the first week of November possibly slowing fieldwork at times
      • Rain
        will be heaviest and most frequent from Goias into Minas Gerais where some farming activity could be slowed
  • Brazil
    rainfall Thursday was erratic with northeastern Minas Gerais, central Goias, northwestern Mato Grosso, eastern Santa Catarina and southern Rio Grande do Sul reporting the most significant amounts
    • Moisture
      totals were rarely more than 0.60 inch through dawn today with as much as 1.00 inch in central Goias
  • U.S.
    hard red winter wheat areas will receive snow, freezing rain, sleet and rain at various times from Sunday into Tuesday
    • Moisture
      totals will be light in western Kansas, southeastern Colorado, northwestern Texas Panhandle and more significant in other areas
      • The
        lighter precipitation areas will receive up to 0.20 inch of moisture
      • Southwestern
        Nebraska to northeastern Colorado will receive up to 0.35 inch of moisture
      • Southeastern
        Texas Panhandle and western Oklahoma will receive 0.20 to 0.60 inch of moisture
      • Central
        Oklahoma to central and eastern wheat areas of Kansas will receive 0.25 to 0.75 inch of moisture with a few amounts over 1.00 inch
        • Greatest
          rain will be in north-central Texas to southeastern wheat areas in Oklahoma where 1.00 to 3.00 inches of rain may fall
    • Snowfall
      will range from 3 to 6 inches and local totals to 8 inches from southwestern Nebraska to northeastern Colorado and 1 to 3 inches with local amounts of 4-5 inches elsewhere in the wheat region
      • Some
        snow will fall as far south western Texas and southwestern Oklahoma
  • U.S.
    northern Plains and upper Midwest snow event Thursday produced 4 to 10 inches of snow with local totals to 12 inches from northern and central South Dakota and southern North Dakota into central and interior northern Minnesota
  • U.S.
    Livestock stress will be ongoing this weekend in the northern Plains and will develop in the central Plains as temperatures plummet and snow begins to fly
  • Extreme
    cold temperatures will occur in the Great Plains this weekend and early next week with lows in the negative and positive single digits into western Nebraska, northeastern Colorado and far northwestern Kansas
  • U.S.
    harvest weather will deteriorate over the coming week due to waves of rain and some snow
  • Harvest
    delays are expected in the Dakotas, Minnesota and Wisconsin through most of next week and possibly into the first days of November because of the region’s deep snowpack and expected wet field conditions that will follow the snow melt
  • North
    America warming is expected is the second half of next week through the first week in November and precipitation should be more limited favoring better harvest progress in areas that are not too wet
    • Some
      drying is needed before fieldwork can resume in the central Midwest as well as the northwestern Corn Belt
  • U.S.
    Delta and southeastern states will experience waves of rain over the coming week the greatest of which will occur during the workweek next week
    • Delays
      in harvest progress will result
    • Drier
      weather will occur in the following week
    • Some
      heavy rain might evolve if tropical moisture streams north to merge with a mid-latitude storm system as advertised in some models today
  • U.S.
    Pacific Northwest will receive rain and snow this weekend bringing a moisture boost to some crop areas while boosting mountain snowpack
  • California
    and the southwestern United States will remain dry for much of the coming ten days
  • Ontario
    and Quebec, Canada harvest delays will continue for one more week because of frequent precipitation
    • The
      region needs to dry out
  • Canada’s
    Prairies will experience a notable rain, freezing rain and snow event early next week, but most of this year’s harvest is done
  • Eastern
    Australia will be closely monitored for too much rain over the next few weeks, but for now most of the wheat, barley and canola is still rated favorably and rain expected will benefit the planting and emergence of dryland summer crops
  • Western
    Australia is not likely to see much more than a few spotty showers in the far south over the next ten days
  • South
    Australia, Victoria and southern New South Wales winter crop conditions remain very good with little change likely
  • Hurricane
    Epsilon has passed to the east of Bermuda and should turn to the northeast away from North America this weekend posing no land impact
  • Typhoon
    Saudel was located in the central South China Sea today and will move westerly through Saturday while slowly weakening
    • Landfall
      is expected in central Vietnam north of Hue late Sunday or early Monday
      • Heavy
        rain will bring on some additional flooding to water-logged areas of central Vietnam
  • Follow
    up rainfall in Vietnam from a tropical wave early next week and another tropical cyclone during mid-week will result in total rainfall of 6.00 to 20.00 inches of rain by the latter part of next week along nearly all of the central Vietnam Coast
    • Damage
      to infrastructure, personal property and agriculture will continue with each of the three systems noted above
  • A
    new tropical cyclone will form east of the Philippines this weekend and move across the heart of the nation Sunday and Monday before moving to Vietnam Tuesday and Wednesday
  • A
    third tropical cyclone may evolve east of the Philippines late next week and into the following weekend that will threaten the nation; the first storm to impact the nation this week was Tropical Storm Saudel
  • South
    Africa will experience showers erratically over the central and eastern parts of the nation during the coming week with some potential for greater rain in the following week
    • Generalized
      rain is needed to support spring and summer planting
      • La
        Nina should help ensure a good rainy season this summer
  • India’s
    monsoon will start withdrawing a little faster over the next several days ending rain and harvest delays in the west-central crop areas
    • Rain
      will fall frequently in far southern India and in the extreme east for much of the coming week to ten days
  • Europe
    will experience increasing precipitation in the west over this coming week while eastern areas are relatively dry biased and a little warmer than usual
    • Winter
      crops are establishing well in much of the continent, despite less than ideal early season planting conditions
  • China
    weather will be almost ideal for winter wheat and rapeseed planting and summer crop harvesting during the next ten days
    • Soil
      moisture will be good for quick winter crop germination and plant emergence
  • Disturbed
    tropical weather in the Caribbean Sea and southeastern Gulf of Mexico the remainder of this week will be closely monitored for possible tropical cyclone development over the next week
    • Two
      systems may come out of the region with one moving over western Cuba and then moving to the Bahamas and then farther out to sea in the Atlantic next week
      • A
        second storm system may evolve and move across the Yucatan Peninsula and then into the central Gulf of Mexico where it might merge with a mid-latitude storm over the lower Mississippi River Basin next week
  • Southern
    Oscillation Index fell during the weekend down to +8.18 and the index may begin to rise this weekend
  • Southeast
    Asia rainfall over the next two weeks will be erratic, but all areas will be impacted multiple times supporting most crop needs; some flood potentials will gradually rise in localized areas
  • Mexico
    precipitation will be scattered over far southern crop areas during the coming week
    • Net
      drying is expected for many other summer crop areas supporting crop maturation and harvest progress
  • Central
    America will be wetter than usual over the next ten days to two weeks keeping late season crop maturation and harvest progress slow, but the moisture is improving long term water supply.
    • Some
      flooding is possible

·        
West-central Africa will experience erratic rain through the next ten days favoring coffee, cocoa, sugarcane, rice and other crops

    • Daily
      rainfall is expected to be decreasing as time moves along which is normal for this time of year
    • Cotton
      areas will benefit from drier weather

·        
East-central Africa rain will be erratic and light over the next couple of weeks, but most of Uganda and southwestern Kenya will be impacted while Tanzania and Ethiopia rainfall is erratic and light

    • Some
      heavy rain may fall in Uganda

·        
New Zealand rainfall will be increasing across North Island and western areas of South Island over the coming week

    • Temperatures
      will be seasonable with a slight cooler bias in the south

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

Friday,
Oct. 23:

  • China
    customs publishes trade data on imports of corn, wheat, sugar and cotton
  • 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
  • Unica
    data on Brazil’s cane crush, sugar production (tentative)
  • U.S.
    cattle on feed, poultry slaughter, 3pm
  • HOLIDAY:
    Thailand

Sunday,
Oct. 25:

  • China
    customs publishes country-wise soybean and pork import data

Monday,
Oct. 26:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • U.S.
    crop conditions, harvesting progress for soybeans, corn, cotton, 4pm
  • EU
    weekly grain, oilseed import and export data
  • Monthly
    MARS bulletin on crop conditions in Europe
  • Malaysian
    Oct. 1-25 palm oil export data
  • Ivory
    Coast cocoa arrivals
  • HOLIDAY:
    Hong Kong, New Zealand

Tuesday,
Oct. 27:

  • Virtual
    Palm Oil Conference, day 1
  • EARNINGS:
    WH Group

Wednesday,
Oct. 28:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • Virtual
    Palm Oil Conference, day 2
  • HOLIDAY:
    Indonesia

Thursday,
Oct. 29:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • Port
    of Rouen data on French grain exports
  • Vietnam’s
    General Statistics Office releases commodity trade data for October
  • International
    Grains Council monthly report
  • EARNINGS:
    ADM
  • HOLIDAY:
    Indonesia, Malaysia

Friday,
Oct. 30:

  • 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
  • U.S.
    agricultural prices paid, received, 3pm
  • HOLIDAY:
    Indonesia

Source:
Bloomberg and FI

 

CFTC
Commitment of Traders

 

 

 

 

 

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

               
        Net        Chg        Net        Chg        Net        Chg

Corn              
240,281     64,948    330,383      4,791   -509,863    -78,208

Soybeans          
189,163      1,535    199,492     -1,813   -380,294     -6,238

Soyoil             
66,521        695    114,420         17   -196,837      2,070

CBOT
wheat          23,860      7,435    127,962     -2,117   -131,799     -5,144

KCBT
wheat          16,563      4,200     65,859        822    -83,334     -6,137

=================================================================================

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn            
  218,825     47,956    173,633      6,944   -469,159    -80,191

Soybeans          
231,892      5,447    122,303     -3,408   -373,040     -7,461

Soymeal            
81,624      4,555     86,614      2,700   -216,733    -10,109

Soyoil             
82,034       -154     97,291      3,276   -214,368     -1,099

CBOT
wheat          49,728     11,138     73,154     -6,462   -112,499       -184

KCBT
wheat          38,146      5,950     45,977        270    -83,138     -6,521

MGEX
wheat           4,492      6,266      2,291         47    -12,422     -9,005

                
———- ———- ———- ———- ———- ———-

Total
wheat         92,366     23,354    121,422     -6,145   -208,059    -15,710

 

Live
cattle         34,941    -21,096     73,330     -2,124   -117,732     17,050

Feeder
cattle       -8,531     -4,696      6,286      1,168        262      2,986

Lean
hogs           42,058      4,905     52,430      1,092    -97,034     -2,009

 

                     
Other             NonReport                  Open

                       
Net        Chg        Net        Chg   Interest        Chg

Corn              
137,501     16,821    -60,800      8,469  2,150,651    146,249

Soybeans           
27,205     -1,095     -8,359      6,517  1,326,365      8,562

Soymeal            
22,345        309     26,151      2,545    522,739      4,604

Soyoil             
19,149        760     15,896     -2,782    526,968     -2,692

CBOT
wheat           9,640     -4,317    -20,025       -175    592,895     56,386

KCBT
wheat          -1,897       -815        911      1,116    279,840     14,610

MGEX
wheat           3,176        653      2,464      2,040     74,258      7,179

                
———- ———- ———- ———- ———- ———-

Total
wheat         10,919     -4,479    -16,650      2,981    946,993     78,175

 

Live
cattle         19,851      3,407    -10,389      2,763    316,579      1,228

Feeder
cattle        1,647     -1,169        337      1,711     51,454      3,710

Lean
hogs           14,392     -2,688    -11,847     -1,299    270,736    -20,520

 

Source:
Reuters, CFTC and Reuters

 

 

 

Macros

US
Markit Manufacturing PMI Oct P: 53.3 (est 53.5; prev 53.2)


Services PMI Oct P: 56.0 (est 54.6; prev 54.6)


Composite PMI Oct P: 55.0 (prev 54.3)

 

Corn.

  • Corn
    futures traded at a fresh 14-month high bias the nearby contract and December closed 3.0 cents higher at $4.1925/bu.  Looks like the December/March corn contracts may soon trade inverse.  As it should.  We see much of the US corn export demand during the late
    December through April period.
  • Chatter
    overnight was a Reuters story talking about China imports of grains may surge as the government may increase corn import quotas.  Set at 7.2 million tons, it could rise to at least 15 million tons, in our opinion, after China booked 12 million tons of US corn
    and 5 million tons from Ukraine and other countries. 
  • China
    corn imports were 6.7 million tons during the first 9 months of 2020.  That’s the highest in 15 years.  September corn imports were 1.08 million tons. 
  • China
    corn futures rose to a 14-month high. 
  • USD
    was 18 lower as of 1:26 pm CT, and crude was $0.73 lower. 
  • US
    corn basis was up 5 cents at Seneca, IL to option, Cedar Rapids up 3 to option, and Blair, NE up 5 to 11 under. 
  • French
    corn harvesting progress was running at 77 percent as of October 19, up from 64 percent previous week and compares to 42 percent year ago. AGPM, a French growing group, warned of disappointing French corn crop, at 13.6 million tons, below the AgMin estimate
    of 13.8 million tons. 
  • Ukraine
    harvested 83 percent of their grain crop, or 48.8 million tons from 12.7 million hectares. 
  • Germany
    ASF: 5 new cases; 91 cases since September 10 
  • South
    Africa Reuters poll:  New crop corn area 2.64 million hectares (2020-21), up 8.3 percent, or 2.4 million hectares.  White was estimated at 1.6 million for 2020-21.  The poll also called for 2019-20 South African corn production to end up near 15.353 million
    tons, down from 15.422 million tons projected in September.
  • USDA
    Cattle on Feed report showed a huge year over year increase in placements and fed placements.  September 1 on feed was slightly above expectations.  That’s supportive corn. 

 

RFA
letter to recommend reciprocal tariffs on ethanol imports from Brazil

https://ethanolrfa.org/wp-content/uploads/2020/10/RFA-Letter-to-President-Re-Brazil-Ethanol-Trade-10-22-20.pdf

 

 

Corn
Export Developments

 

 

Updated
10/23/20

December
corn is seen in a $4.00-$4.40 range

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

 

Soybean
complex
.
 

  • Soybeans
    traded two-sided, lower on profit taking and improving SA weather, but turned higher into the close on fund buying.  Soybean meal also traded two-sided.  The front month contracts also rallied into the close.  Some of the strength in soybean meal was the devaluation
    of the Argentine currency, with the unofficial “blue” peso rate falling to 190:1 against the USD. This is well away from the values of the official Argentine peso at 78:1 against the USD.  Devaluation of the currency usually limits producer selling.  Soybean
    oil was on the defensive early due to demand uncertainty as a second Covid-19 wave spreads across the globe but turned higher after soybeans rallied. 
  • November
    soybeans led the rally late and settle 10 cents higher.  Jan crush was last at 1.2450 and March at 1.1050.  December soybean meal settled at $386.50, up $4.00, but the contract failed to test yesterday’s high.  December soybean oil settled near its session
    high at 34.11, up 42 points. 
  • US
    ECB soybean basis firmed this week as crushers compete with barge business as demand for soybeans is very strong at the Gulf.  Today we heard Claypool took their soybean bid to +20F and +20H. 
  • We
    heard China bought 4 US soybean cargoes late Thursday out of the PNW and Gulf.  They were inquiring for Q1 Brail shipment but no trades were heard of.  USDA did not report any 24-hour soybean sales.  It was rumored the 20,000-ton USDA export sales sale announced
    in the weekly report for China was an error and should have been soybean oil.  USDA did not make a correction as of Friday early afternoon. 
  • Offshore
    values this morning were leading CBOT soybean oil 17 lower (77 higher for the week to date) and meal $2.60 lower ($2.70 higher for the week to date). 
  • China
    cash crush margins were 95 cents on out our calculation (vs. 96 from previous session) compared to 88 last week and 125 year ago. 

 

Oilseeds
Export Developments

58,000
tons at $470.95 a ton c&f for arrival in South Korea around Apr. 8.

59,000
tons at $441.49 a ton c&f for arrival in South Korea around May 20.

  • 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
10/23/20

November
soybeans are seen in a $10.60-$11.25 range

December
soybean meal is seen in a $370-$4.10 range

December
soybean oil is seen in a 33.50-35.00 range