PDF Attached

 

CFTC
reported a much greater long position in the fund corn position as of last Tuesday.  USDA announced 121,500 tons of soybeans to unknown.  South Korea was again another big buyer of corn Friday.  Futures performance attached after the wheat section. 

 

Weather
and Crop Progress

 

Rice
traders and grain exporters among others should note that a super typhoon headed to the Philippines may have a large impact on crops this weekend. 

 

 

 

 

SA Week 1 Accum Precipitation (mm) Forecast

 

 

MOST
IMPORTANT WEATHER TO WATCH

  • Typhoon
    Goni is a super typhoon over open water well east of the Philippines, but was producing sustained wind speeds of 172 mph and was moving toward the nation
    • Landfall
      is expected in Luzon Island Sunday into Monday as a Category Two or Three hurricane equivalent storm, based on the Saffir-Simpson Wind Scale
    • Damage
      over the Island will be possible with losses to personal property, infrastructure, rice, sugarcane and some tree crops – depending on the storm’s ultimate intensity
    • Landfall
      is expected over the heart of Luzon Island
    • The
      storm size is relatively small which may limit the path of destruction, but it will need to be closely monitored
    • The
      storm may continue west to Vietnam next week with landfall near Da Nang or Hue during mid-week
  • A
    developing tropical disturbance near the Windward Islands was moving west northwesterly into the Caribbean Sea today and it will become a tropical storm during the weekend
    • Landfall
      is expected over Nicaragua and/or Honduras early next week
      • Very
        heavy rain and flooding will impact these areas with some property and crop damage possible
  • Russia’s
    Southern Region and Ukraine will receive periods of rain Friday through early next week
    • Resulting
      rainfall will improve winter crop establishment, although it is rather late in the season
    • Moisture
      totals of 0.30 to 0.80 inch and local totals of 1.00 to 1.50 inches will result from Ukraine into western parts of Russia’s Southern Region
    • Eastern
      parts of Russia’s Southern Region (including the lower Volga River Valley) and Kazakhstan will be left mostly dry
  • Argentina’s
    outlook for the next ten days is drier biased
    • Rain
      advertised for mid-week next week was reduced overnight
    • The
      ten days will be a great opportunity for planting and new crop development
    • Some
      forecast models are suggesting scattered showers and thunderstorms will return during the week of November 9; that rain will prove to be very important after the coming week of dry and mild to warm weather
  • Rain
    scattered across much of Brazil Thursday
    • Areas
      from eastern Santa Catarina to northern and western Minas Gerais, Goias and Mato Grosso reported rain with amounts of 0.10 to 0.62 inch common
      • Local
        totals reached over 1.00  inch with southern Mato Grosso and central Goias among the wetter areas
    • Mostly
      dry weather occurred from Rio Grande do Sul to southwestern Parana, Paraguay and southwestern Mato Grosso do Sul
  • Southern
    and west-central Brazil crop areas, as well as Paraguay and Uruguay, will experience net drying conditions for the next ten days
    • This
      includes Sao Paulo, Parana, Rio Grande do Sul, Santa Catarina, western and central Mato Grosso do Sul and southwestern Mato Grosso
      • Net
        drying in these areas will deplete topsoil moisture and raise some potential for stress in those areas that have not received good rainfall this week
        • The
          greatest rain this week fell in Mato Grosso do Sul and crops there will likely stay in favorable shape despite net drying
        • Crops
          from Rio Grande do Sul to southwestern Parana and Paraguay are expected to be quite dry by Nov. 9
    • Scattered
      showers and thunderstorms advertised for the Nov. 9-14 period will prove to be extremely important after the coming ten days of drying
  • Brazil
    crop areas from the central and northeast parts of Mato Grosso to Minas Gerais and Bahia will be frequent over the next couple of weeks maintaining a good outlook for summer crop development
  • U.S.
    crop weather will be good in the coming week with little to no precipitation
    • Temperatures
      will trend a little colder in the in the north-central and eastern parts of the nation briefly this weekend
    • Strong
      warming is likely in most crop areas east of the Rocky Mountains next week with some areas in the Plains experiencing well above average temperatures
      • The
        heat will shift east while moderating late next week and into the following weekend
    • Western
      U.S. temperatures will trend colder than usual late next week and into the following weekend
  • Next
    round of storminess is expected in the northern Plains and northern Midwest as well as Canada’s eastern Prairies Nov. 7-10
    • Cooling
      will follow that period of storminess into the central U.S.
    • The
      next opportunity for “some” rain in hard red winter wheat areas will occur during the week of Nov. 9
  • U.S.
    hard red winter wheat areas will experience net drying and warmer temperatures through the coming week
    • The
      next good chance for precipitation may hold off until after Nov. 11
  • West
    Texas will experience dry and warmer weather over the next ten days and that will translate into better harvest conditions
    • Cotton
      fiber impacted by recent rain and snow will be bleached white once again
  • U.S.
    Delta and southeastern states will experience an extended period of dry weather improving crop and field conditions for better harvesting
  • U.S.
    Midwest harvest conditions will be great though the end of next week and probably through Nov. 9 as well
    • The
      exception may be in the northern and eastern Great Lakes region where brief periods of precipitation are possible
    • Winter
      wheat establishment will improve and some additional planting will occur in time
  • U.S.
    Pacific Northwest will see precipitation along the coast in the northern Rocky Mountains, but crop areas will not see much precipitation for the next ten days
    • Some
      precipitation will be possible in the week of Nov. 9
  • California
    may get a few showers in the week of Nov. 9, but resulting moisture will be light
  • Southeastern
    Canada corn and soybean harvest weather is improving with rain and snow limited to Sunday and Monday
  • Western
    Australia will get some rain late Sunday into Tuesday morning lifting topsoil  moisture for some late maturing winter grain and oilseed crops
    • Most
      of the precipitation comes rather late in the season, but a little benefit will result
    • Northern
      harvest progress will be briefly disrupted, but no crop quality decline is expected
  • Portions
    of eastern Australia will receive some rain into the weekend, but much drier weather is expected next week
    • The
      drier outlook will favor improved winter wheat, barley and canola maturation and harvest conditions
    • Sufficient
      soil moisture will remain to support ongoing winter crop development in the south
    • Planting
      of cotton, sorghum and other summer crops should advance aggressively in areas that have received rain recently
    • Rain
      is still needed in western dryland crop areas of Queensland and some in north-central New South Wales
  • South
    Africa will receive some welcome rain during the next ten days to two weeks improving planting conditions for most summer grain, oilseed and cotton crops
    • Late
      maturing winter wheat and canola might also benefit from some of the rain, but most winter crops are a little too far advanced to fully benefit
  • India
    weather will be favorable for late season crop development and widespread harvesting over the next ten days
    • Winter
      crop planting, emergence and establishment will advance well too
    • Rain
      will be confined to the far south and few areas in the far Eastern States
  • Much
    of China was dry Thursday and more of the same will occur for a while in the coming week to ten days
    • A
      few showers will occur periodically, but fieldwork will advance around them and the moisture will be good for winter crop planting, emergence and establishment
  • Waves
    of rain will continue to impact parts of Southeast Asia that are not being impacted by tropical cyclones over the next ten days to two weeks; most crop conditions will remain favorable
    • Central
      Vietnam will likely be impacted by Typhoon Goni during the first half of next week with additional heavy rain and strong wind speeds possible near Da Nang, Hue and Quang Tri
    • Northeastern
      Vietnam and southwestern China may be impacted by another tropical cyclone during the weekend of Nov. 7-8
  • Brief
    periods of precipitation will move across the European continent over the coming week resulting in a favorable mix of moisture and sunshine for winter crops
    • Fieldwork
      will advance around the precipitation
    • This
      weekend and next week should trend drier
    • Temperatures
      will be near to above average
  • Western
    CIS precipitation (outside of Ukraine and Russia’s Southern Region) will be erratic and temperatures will be warmer than usual
    • Winter
      crops are turning dormant in the west and north which is normal
  • Kazakhstan
    is unlikely to get meaningful moisture in the next ten days, although some sporadic showers may evolve late this week or during the weekend
  • Canada’s
    Prairies will experience some significant snowfall in northern Saskatchewan today and tonight with brief bouts of light precipitation elsewhere periodically over the next week
    • A
      major winter storm might impact a part of the region Nov. 7-8
  • Southern
    Oscillation Index fell during the weekend down to +3.84 and the index may continue to drifting lower over the next couple of days and then level off; the index has fallen from a peak of +12.58 on October 13.
  • 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
    • A
      tropical cyclone will impact Honduras or Nicaragua early next week

·        
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 northwestern Ethiopia rainfall is erratic and light

    • Some
      heavy rain may fall in Uganda early this week

·        
New Zealand rainfall will be near to above average in western and northern parts of the nation through the coming week while drier than in eastern South Island

    • Temperatures
      will be seasonable

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

Monday,
Nov. 2:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • USDA
    soybean crush, corn for ethanol, DDGS output, 3pm
  • U.S.
    crop conditions, harvest for soybeans, corn, cotton, 4pm
  • Costa
    Rica, Honduras October coffee exports
  • Cotton
    supply/demand outlook from International Cotton Advisory Committee
  • Australia
    Commodity Index
  • Ivory
    Coast cocoa arrivals
  • HOLIDAY:
    Brazil

Tuesday,
Nov. 3:

  • U.S.
    Purdue Agriculture Sentiment, 9:30am
  • New
    Zealand global dairy trade auction
  • FT
    Global Food Systems conference
  • EARNINGS:
    Andersons, AB Foods
  • HOLIDAY:
    Japan

Wednesday,
Nov. 4:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • New
    Zealand Commodity Price

Thursday,
Nov. 5:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • China’s
    CNGOIC to publish monthly soybean and corn reports
  • FAO
    World Food Price Index
  • Guatemala
    October coffee exports
  • Port
    of Rouen data on French grain exports
  • Malaysian
    Nov. 1-5 palm oil export data

Friday,
Nov. 6:

  • 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:
    Argentina

Saturday,
Nov. 7

  • China’s
    trade data on soybeans and meat imports

Source:
Bloomberg and FI

 

CFTC
Commitment of Traders

The
much more longer fund position in corn might become a bearish factor when trading resumes Sunday evening. 

 

 

 

 

 

 

 

 

CME
will revise their futures price limits effective February 2.  Details can be found in the PDF after the wheat section. 

 

Macros

US
Chicago PMI Oct: 61.1 (est 58.0; prev 62.4)

US
University Of Michigan Consumer Sentiment Oct F: 81.8 (est 81.2; prev 81.2)

US
University Of Michigan Current Conditions Oct F: 85.9 (est 84.9; prev 84.9)

US
University Of Michigan Expectations Oct F: 79.2 (est 78.8; prev 78.8)

US
University Of Michigan 1 Year Inflation Oct F: 2.6% (prev 2.7%)

US
University Of Michigan 5-10 Year Inflation Oct F: 2.4% (prev 2.4%)

US
Employment Cost Index Q3: 0.5% (est 0.5%; prev 0.5%)

US
Personal Income Sep: 0.9% (est 0.4%; prevR -2.5%; prev -2.7%)

US
Personal Spending Sep: 1.4% (est 1.0%; prev 1.0%)

US
Real Personal Spending Sep: 1.2% (est 0.8%; prev 0.7%)

US
PCE Deflator (M/M) Sep: 0.2% (est 0.2%; prev 0.3%)

US
PCE Deflator (Y/Y) Sep: 1.4% (est 1.5%; prevR 1.3%; prev 1.4%)

US
PCE Core Deflator (M/M) Sep: 0.2% (est 0.2%; prev 0.3%)

US
PCE Core Deflator (Y/Y) Sep: 1.5% (est 1.7%; prevR 1.4%; prev 1.6%)

Canadian
GDP (M/M) Aug: 1.2% (est 0.9%; prevR 3.1%; prev 3.0%)

Canadian
GDP (Y/Y) Aug: -3.8% (est -4.2%; prev -5.0%)

Canadian
Industrial Product Price (M/M) Sep: -0.1% (est 0.1%; prev 0.3%)

Canadian
Raw Materials Price Index (M/M) Sep: -2.2% (est 0.3%; prev 3.2%)

 

Corn.

 

Corn
Export Developments

 

 

 

 

 

Updated
10/29/20

December
corn is seen in a $3.90-$4.30 range

 

Soybean
complex
.
 

  • Argentina
    oilseed crushers union SOEA announced on Friday a 24-hour strike over Covid-19 bonus payments. 
  • Argentina’s
    government on Friday said China’s Sinograin will increase soybean purchases next year by around 1 million tons to 4 million tons and soybean oil to around 400,000 tons from 300,000 tons. 

  • Safras
    & Mercado estimated the Brazil soybean crop at 133.5 million tons, up from 132.17 million tons previously. 
  • A
    Reuters trade guess looks for the September US soybean crush to end up near 171.3 million bushels (170.9-172.0 range), down from 174.6 million in August and above 162.3 million bushels in August 2019.  US soyoil stocks at the end of September were seen at
    1.826 billion pounds (1.764 and 1.875 range), down from 1.958 billion pounds at the end of August and a fifth straight decline, but above 1.775 billion pounds at the end of September last year.
  • Last
    we heard IL soybean oil was 100 over, East 125 over, West 75 over and Gulf 575 over. 
  • Offshore
    values this morning were leading CBOT soybean oil 33 higher (45 higher for the week to date) and meal $3.00 higher ($1.20 higher for the week). 
  • Local
    Chinese soybean prices hit a 12-year high on Friday. 
  • China
    will open its palm oil futures contract to non-China participants but no date was set yet.  Soybean oil and soybean meal may follow, if approved. 
  • China
    cash crush margins were 139 cents on out our calculation (126 previous session) compared to 95 last week and 151 year ago. 

 

  • AmSpec
    reported palm oil exports during the morning of October at 1.701 million tons, up from 1.631 million tons from September, a 4.3 percent rise.  Meanwhile ITS reported at 5.6 percent increase to 1.690 million tons from 1.601 million during September. 

 

  • The
    Malaysian palm market fell after a one-day holiday and up 2.2 percent for the week. 

 

 

U.S.
production of biodiesel was 163 million gallons in August 2020. Biodiesel production during August 2020 was 1 million gallons higher than production in July 2020. There was a total of 1,239 million pounds of feedstocks used to produce biodiesel in August 2020.
Soybean oil remained the largest biodiesel feedstock during August 2020 with 745 million pounds consumed versus 775 million during July and 701 million in August 2019.  Futures International was looking for 769 million pounds for Aug.  We are using 7.835 billion
pounds for 2019-20 whereas USDA is at 7.850 billion.  We are at 8.000 billion pounds for 2021-22 and USDA is at 8.100 billion. 

 

 

 

 

Oilseeds
Export Developments

 

 

Updated
10/29/20

January
soybeans are seen in a $10.30-$11.00 range

December
soybean meal is seen in a $370-$390 range

December
soybean oil is seen in a 32.80-33.50 range

 

Wheat

  • US
    wheat futures prices eased on Russian rains and covid virus concerns.
  • CIF
    US soft wheat shot up 6 to 10 cents in the front three monthly positions in part to rumors Mexico was pricing US wheat.  CIF US wheat basis might have also been getting a boost from slowing shipments from other major exporting countries. Canada weekly wheat
    exports of 279,200 tons as of Oct 25 are half of previous week and Russian weekly wheat exports are slowing, down 37 percent to 1 million tons. Both countries saw a surge in wheat exports by 26 percent year over year and 11 percent, respectively, for Canada
    and Russia.  Black Sea wheat fob prices have backed off from earlier this week from around $257/ton to $247-$248/ton.  
  • Ukraine
    exported 16 million tons of grain since July, 2.7 million tons less than same period a year ago, according to agro-industrial complex of Ukraine.  This included 10.33 million tons of wheat (down 850,000 tons year over year), 3.37 million tons of barley and
    2.22 million tons of corn (down 1.73 million tons) have been exported.  Note 2019-20 was a record 57.2 million tons for the crop year. 
  • Paris
    (Matif) December wheat was down 0.75 euro at 205.75 euros. 
  • French
    soft wheat plantings were 66 percent as of October 26, up from 45 percent week earlier, and near its respected 5-year average. 
  • China
    set the minimum purchasing price for domestic wheat in 2021 at 2,260 yuan ($338) a ton, up 0.9% from 2,240 yuan/ton this year.  They separately that it had set the volume of wheat to be purchased at minimum price next year at 37 million tons, unchanged from
    2020.

 

Export
Developments.

  • South
    Korea’s SPC bought US (22,800 tons) and Canadian (4,000) milling wheat for arrival in March 2021. 
  • Russian
    wheat was the lowest offer in Ethiopia’s 400,000 tons wheat import tender at $243.90/ton c&F. 
  • Pakistan
    seeks 320,000 tons of wheat on November 3 for arrival by November 3 for arrival by the end of January. 

 

Rice/Other

·        
Syria seeks 37,400 tons of white rice on November 23.  White Chinese/Egyptian short grain white rice of third or fourth class was sought. Shipment is sought within three months of order confirmation. 

 

Updated
10/29/20 (lowered)

December Chicago wheat is seen in a $5.85-6.15
range

December KC wheat is seen in a $5.30-$5.75
range

December MN wheat is seen in a $5.25-$5.80
range

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International
One Lincoln Center
18 W 140 Butterfield Rd.

Oakbrook Terrace, Il. 60181

W: 312.604.1366

treilly@futures-int.com

ICE IM: 
treilly1

Skype: fi.treilly

 

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