FI Evening Grain Comments 10/26/20

Oct 26, 2020







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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.

  • 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. 

 

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.
 

  • 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.

  • 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

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International
One Lincoln Center
18 W 140 Butterfield Rd.

Suite 1450

Oakbrook Terrace, Il. 60181

W: 312.604.1366

treilly@futures-int.com

ICE IM: 
treilly1

Skype: fi.treilly

 

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