FI Evening Grain Comments 10/26/20

PDF Attached

 

Corn
futures traded near their respected 14-month high overnight but lower wheat weighed on prices.  Losses were limited after it was announced by the CBOT that there were 1600 November 420 calls exercised on Friday.  Soybeans traded two-sided but remained at more
than a 4-year high.  US wheat futures traded lower on improving weather across Russia and US Great Plains.

 

 

 

Weather
and Crop Progress

 

 

 

 

MORNING
WEATHER MODEL COMMENTS

NORTH
AMERICA

• Significant
  precipitation will be falling across hard red winter wheat production areas through Thursday
• Moisture
  totals of 2.00 to 4.00 inches and locally more (possibly getting to 6.00 inches) will occur from the Texas Rolling Plains into central Kansas with interior western and central Oklahoma wettest along with north-central Texas
• Moisture
  totals of 0.50 to 1.50 inches will occur in west Texas while the Texas Panhandle gets 1.00 to 2.25 inches
• Snowfall
  of 1 to 3 inches Nebraska to northeastern Colorado, 3 to 8 inches western Kansas to southeastern Colorado with local totals of 8 to 12 inches in southeastern Colorado (near the mountains)
• Snowfall
  of 4 to 10 inches and local amounts to 13 in the Texas Panhandle and immediate neighboring areas with greatest amounts near the New Mexico border
• West
  Texas snowfall of 2 to 6 inches and locally more in the far northwest

 

• Tropical
  Storm Zeta will become a hurricane today and clip the northeast corner of Yucatan Peninsula and then move on to southeastern Louisiana (weakening to tropical storm status as it nears the coast) Wednesday afternoon
• Landfall
  Wednesday afternoon
• The
  storm will turn through Alabama Thursday and to Virginia Thursday night and Friday
• Heavy
  rain will fall with 2.00 to 4.00 inches and local totals to 6.00 inches possible
• Storm
  will move fast through the region
• Georgia
  and northeastern Florida to eastern Carolinas will not get much threatening rain, although a few showers possible
  
• U.S.
  Weather will trend drier and warmer this weekend through next week
• Bitter
  cold conditions will occur early to mid-week this week in the Plains

 

SOUTH
AMERICA

• Rain
  fell in most of Argentina during the weekend
• Santiago
  del Estero and northern Cordoba were missed while restricted rainfall occurred in northwestern Santa Fe
• Rainfall
  of 1.00 to 2.50 inches with local totals to 3.00 inches were noted elsewhere
• The
  moisture was a big boost to summer crop development and future planting and supportive of winter wheat development, as well
• Argentina
  will see less rain in the coming week to ten days with a few showers in central areas Tuesday and Wednesday and then dry until Nov. 4 and 5 when rain will impact some southern and eastern crop areas
• Excellent
  drying conditions will occur to support all kinds of fieldwork and crop development
• Winter
  wheat growth should advance aggressively

 

Overall,
Argentina will see a tremendous change in crop conditions, but there is still need for more rain from northern Cordoba to Santiago del Estero and in northwestern Santa Fe as well as in a few La Pampa locations. Weather conditions will be favorably mixed for
the next two weeks, despite the ongoing need for greater rain in the drier areas noted above.

 

BLACK
SEA REGION

• Rain
  is advertised for Friday through Monday of next week in Russia’s Southern Region
• Amounts
  of 0.20 to 0.75 inch with a few totals over 1.00 inch will be possible
• Areas
  near the Kazakhstan border and near the lower Volga River will see the least rain and may have ongoing dryness issues
• Areas
  near the Ukraine and Krasnodar border will be wettest
• Eastern
  Ukraine will also get a little rain from this event
• Otherwise,
  the ten-day forecast does not bring much change to the region

 

Improvement
is expected to Russia’s Southern Region.  The moisture will help induce improved crop and field conditions, although it comes rather late in the autumn season.  Winter crops will still need more moisture and there will continue to be need for a close watch
on snow cover and bitter cold periods this winter because some of the winter crops may not be well established.

 

CHINA

• No
  general theme changes were noted over the weekend
• A
  favorable mix of sunshine and showers will occur over the next two weeks allowing fieldwork of all kinds to advance
• Winter
  wheat and rapeseed establishment should advance favorably along with the harvest of summer crops

 

INDIA

• No
  general theme changes were noted during the weekend
• Rain
  will be limited to far southern and extreme eastern parts of the nation over the next couple of weeks favoring fieldwork of all kinds

 

AUSTRALIA

• No
  big changes were noted during the weekend for the coming two weeks
• Rain
  fell in eastern parts of the nation during the weekend benefiting spring planting in dryland areas and boosting soil moisture for late reproductive winter crops
• Scattered
  showers in eastern parts of the nation during the next two week should not harm the majority of winter crops, but the region will need to be closely monitored for too much rain that might harm grain and oilseed quality during the maturation and harvest season
• Western
  Australia will remain mostly dry for an extended period of time

 

Spring
and summer planting will advance well in eastern Australia while winter crops in the south continue to fill and mature. Harvesting in northern areas will advance around scattered shower s and thunderstorms with the need for drier weather greatest in northern
New South Wales wheat, barley and canola areas.

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

USDA
Export inspections

Note
there were no estimates provided by Reuters

 

 

 

GRAINS
INSPECTED AND/OR WEIGHED FOR EXPORT

                 
REPORTED IN WEEK ENDING OCT 22, 2020

                           
— METRIC TONS —

 

————————————————————————-

                                                  
CURRENT     PREVIOUS 

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

 
GRAIN      10/22/2020  10/15/2020  10/24/2019    TO DATE     TO DATE  

 

BARLEY           
798           0          49        9,867        8,674 

CORN         
636,290     911,648     391,231    6,093,191    3,478,787 

FLAXSEED           
0           0           0          389          172  

MIXED              
0           0           0            0            0 

OATS               
0           0           0          996          798 

RYE                
0           0           0            0            0 

SORGHUM       
65,007      74,655      58,320      533,835      308,482 

SOYBEANS   
2,664,352   2,317,798   1,578,604   14,338,789    8,072,375 

SUNFLOWER          
0           0           0            0            0 

WHEAT        
363,806     241,283     543,166   11,042,799   10,622,214 

Total      
3,730,253   3,545,384   2,571,370   32,019,866   22,491,502 

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
New Home Sales Sep: 0.959M (est 1.025M; prevR 0.994M; prev 1.011M)

US
New Home Sales (M/M) Sep: -3.5% (est 1.4%; prevR 3.0%; prev 4.8%)

 

Corn.

• December
  corn futures traded near its respected 14-month but ended 1.50 cents lower as wheat weighed on prices.  Corn was up the previous five trading session, so some of the bearish undertone was technical.  Export inspections were just over 900,000 tons, but half
  the volume posted for soybeans. 
• Losses
  were limited after CBOT announced that there were 1600 November 420 calls exercised on Friday. 
  
• US
  corn harvesting progress was reported at 72 percent, one point below expectations, up from 60 previous week, and compares to 38 percent year ago and 56 percent average. 
  
• USDA
  US corn export inspections as of October 22, 2020 were 636,290 tons, below 911,648 tons previous week and compares to 391,231 tons year ago. Major countries included Mexico for 213,677 tons, China Main for 131,651 tons, and Japan for 71,677 tons.
  
• Toledo,
  OH corn was up 10 cents to 5 under and Davenport, IA was up 4 to 6 under. 
  
• China
  imported 846,498 tons of US corn from the US in September, highest monthly import figure since 2008.  Ukraine corn imports were 200,382 tons, up 63 percent from August.  China 2020 corn imports are expected to be the highest in 15 years. 
  

• Ukraine
  corn export prices were up $20/ton over the last week to $233-$237/ton fob, according to APK-Inform.
  
• Ukrainian
  grain traders union UGA sees Ukraine’s 2020 corn harvest falling to 30 million tons from 35.9 million tons in 2019 because of poor weather.
• APK-Inform
  agriculture consultancy said earlier on Monday a possible sharp decline in the 2020 corn harvest combined with rising global prices had raised Ukrainian corn export prices by $20 per ton over the past week.
  
• Ukraine’s
  Economic Minister left their 2020-21 corn production unchanged at 33 million tons, and exports were projected at 26 million tons.  36 million tons were produced last year. 
  

• 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.
• The
  EU crop monitor lowered its estimate for 2020 corn yield to 7.42 tons per hectares from 7.83 tons in September, 2.1 percent below the five year average. 
  
• Germany
  ASF: 91 cases since September 10 

 

Corn
Export Developments

• Taiwan’s
  MFIG issued an import tender for 65,000 tons of corn on October 27 for Jan/Feb shipment. 
  

 

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 and hit a 4-year high bias the nearby position.  They opened lower following weakness in wheat.  Bull spreading on good Chinese demand and excellent export inspections lifted November 4 cents higher.  January was up 2.50 cents.  Brazil and
  Argentina’s weather forecast looks good for the next two weeks.  Argentina saw rain over the weekend.
• Soybean
  meal ended higher in the front three months on bull spreading.  December was up $3.20 short ton. 
  
• Soybean
  oil was sharply higher on higher outside vegetable oil markets at the open and prices eventually eased to end 35 higher basis the December.  Cash palm oil was up 4.4%.  Futures were up 124 points to back over 3000.  AmSpec reported Malaysia’s Oct. 1-25 palm
  oil exports up 7 percent from the same period year ago at 1,412,361 tons.  ITS reported at 7.2 percent increase to 1.319 million tons. 
  
• We
  hear early US soybean oil yields are coming in around 11.80 pounds per bushel. 
  

• US
  soybean harvesting progress was reported at 83 percent, 3 points below expectations, up from 75 previous week, and compares to 57 percent year ago and 73 percent average. 
  
• USDA
  US soybean export inspections as of October 22, 2020 were 2,664,352 tons, above 2,317,798 tons previous week and compares to 1,578,604 tons year ago. Major countries included China Main for 2,021,055 tons, Mexico for 103,231 tons, and Thailand for 84,543 tons.
  
• Toledo,
  OH soybeans was up 7 cents to 5 under and Davenport, IA was up 6 to 8 under.  Soybean meal basis was steady to firm.  Mankato was up $3/short ton.  Chicago was up $1.00/short ton. 
  

• AgRural
  reported a jump in Brazil soybean plantings as of Thursday to 23 percent from 8 percent previous week and compares to 35 percent year ago.  IMEA reported an increase in Mato Grosso plantings to 25 percent from 8 percent previous week, below 65 percent last
  year and 49 percent average.   Separately, Safras reported that as of October 25, 19.4 percent of the Brazil crop had been planted, below 35.6 percent from last year. 
  
• January
  through September Paraguay crushings dropped by 10 percent from the same period a year ago to 2.55 million tons, and also down from a three-year average of 2.84 million tons. 
  
• Ukraine
  sunflower oil export prices were up $15-20/ton over the last week to $985-$995/ton fob, for October-November, according to APK-Inform.  The national sunflower producers association mentioned Ukraine sunflower see refineries were running at reduced capacity
  from lack of supply.  2020-21 (Sep-Aug) sunflower exports may reach only 5.6 million tons from 6.6 million in 2019-20. 
  
• We
  heard China bought 2-3 US soybean cargoes late last week. 
• China
  imported 7.25 million tons of Brazil soybeans during the month of September, up 51.4 percent from year earlier, and 1.17 million tons of US soybeans, down 32.4 percent from 1.75 million tons in September 2019.  China imported 9.8 million tons of soybeans during
  September, up 19 percent from year earlier. 

 

Oilseeds
Export Developments

·        
Under the 24-hour announcement system, private exporters reported to the U.S. Department of Agriculture:

–Export
sales of 135,000 tons of soybean meal for delivery to the Philippines during the 2020/2021 marketing year; and

–Export
sales of 120,700 tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.

• The
  USDA seeks 240 tons of packaged vegetable oil under the PL 480 program for Dec 1-31 shipment, on November 3. 
  

• Results
  awaited:  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

 

Wheat

• All
  three US wheat markets traded lower  on
  improving weather across Russia and US Great Plains.  Russia saw improving crop conditions after getting rain last week, according to SovEcon.  This week will be on the drier side for Russia, but temperatures will be slightly above normal.  Back in the US,
  the weather outlook is wetter for the Southern Great Plains.  One analyst noted precipitation will be 200 percent above normal precipitation over the next two weeks. 
  
• KC
  type wheat led the US markets lower with Dec settling 17.75 cents lower.  Chicago Dec was down 12.75 cents and MN December down 12.50 cents. 
  
• USDA
  reported initial US winter wheat rating at 41 percent for the combined good and excellent categories, 11 points below expectation and lowest since the 2013-14 crop year (planted fall 2012), and compares to 56 percent last year and 53 percent average. 
  

• US
  winter wheat planting progress was reported at 85 percent, one point below expectations, up from 77 previous week, and compares to 83 percent year ago and 80 percent average.  62 percent of the wheat crop was emerged, 2 points above average.  The KS rating
  fell one point from the previous week to 29 percent G/E. 
• USDA
  US all-wheat export inspections as of October 22, 2020 were 363,806 tons, above 241,283 tons previous week and compares to 543,166 tons year ago. Major countries included Japan for 105,399 tons, China T for 53,248 tons, and El Salvador for 49,406 tons.
  

• Israel
  will provide 5 USD million worth of wheat aid to Sudan. 

• Paris
  (Matif) December wheat was down 2.50 at 207.25 euros.

• Ukraine
  will leave its 2020-21 wheat export quota unchanged at 17.5 million tons.  Ukraine already fulfilled 57 percent of this amount 
  
• Ukrainian
  milling wheat prices were up $7.00/ton at $255-$258/ton, a 21-month high, FOB Black Sea, according to APK-Inform. 
  

 

Export
Developments.

• South
  Korea’s FLC bought 50,000 tons of feed wheat, optional origin, at $268.84/ton c&f for March shipment. 
  
• Pakistan
  seeks 320,000 tons of wheat on November 3 for arrival by November 3 for arrival by the end of January. 
  
• Syria
  seeks 200,000 tons of wheat from the Black Sea on October 28.
• Turkey
  bought 175,000 tons of milling wheat. 
• Jordan
  seeks 120,000 tons of feed barley on October 27, optional origin, for LH December through FH March shipment.
  
• Jordan
  seeks 120,000 tons of wheat on October 28 for Feb/Mar shipment. 

• Sudan
  seeks 1 million tons of wheat through US assistance.

 

Rice/Other

·        
China donated 1,500 tons of rice to South Sudan. 

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

 

Updated
10/20/20

December Chicago wheat is seen in a $6.10-6.60 range

December KC wheat is seen in a $5.50-$6.10 range

December MN wheat is seen in a $5.55-$6.20 range