FI Mid Morning Grain Comments 10/05/20

PDF attached

 

Morning.

 

USDA
reported 160,020 tons of corn to Mexico.  Traders are mulling over the data due out this week.  Wildcard is what will USDA report for soybean and corn production at the end of this week, which could trump the recent rally post stocks report.  With China on
holiday, news is steady.  SA weather turned slightly unfavorable and more rain is needed for Argentina. 

 

Weather
and Crop Progress

 

 

 

WEATHER
ISSUES OF THE DAY

• Russia’s
  Southern Region remains too dry and no relief is likely for two weeks
• Kazakhstan
  remains too dry and no relief is expected for two weeks
• U.S.
  hard red winter wheat areas will be hot and dry this week and may cool down this weekend into next week, but western areas are unlikely to get much rain
• Northwestern
  U.S. Plains remain quite dry and winter crops are not establishing well
• No
  change in Argentina dryness is expected from central and northern Cordoba and parts of central Santa Fe to northwestern parts of the nation maintaining worry over winter and spring crops
• Brazil
  heat and dryness will last through Friday and then some relief is expected during the weekend and especially next week in center west and center south crop areas
• Western
  Australia is still too dry, although some showers will occur in the far south part of the state late Wednesday into Thursday
• Queensland,
  Australia still needs significant rain for summer crop planting
• Tropical
  Storm Gamma will move into the northwestern coast of Yucatan Peninsula during mid-week and will likely dissipate there
• Heavy
  rain is expected to cause some flooding, but not much crop of world interest comes from the region
• Tropical
  Storm Delta formed between Jamaica and the Cayman Islands this morning and will move across western Cuba late Tuesday or early Wednesday, become a hurricane in the central Gulf of Mexico later this week and then move inland through southeastern Louisiana Friday
• The
  system was expected to become a Category Two hurricane by the time it approaches the Louisiana coast
• The
  storm will move through Alabama and Mississippi and impact parts of Tennessee, Virginia and North Carolina during the weekend
• China
  will experience less rain this week; including the water logged northeast
• Central
  India will trend wetter again next week after this week’s grain is greatest in the south and far eastern states
• South
  Africa weather is slowly improving with rain in the south and east
• Southeastern
  Canada and the U.S. Great Lakes region will continue wetter biased for several more days and then get a brief break from rain

 

WEATHER
TO WATCH IN MORE DETAIL

• U.S.
  harvest weather will remain good for the coming week in the Midwest and Great Plains
• Southeastern
  states harvesting will advance well through mid-week, but could deteriorate with the onset of tropical moisture during the end of this week and the weekend
• Lower
  and eastern portions of the Delta, Alabama and the remainder of Mississippi as well as eastern Louisiana will be impacted by Tropical Storm Delta eventually
• The
  storm will damage some additional cotton in Alabama and parts of Mississippi and could negatively impact eastern sugarcane in Louisiana
• Flooding
  will be widespread from southeastern Louisiana into northern Alabama and southern Tennessee
• Frontal
  system will bring rain to the Pacific Northwest this weekend and across the Great Plains Sunday into early next week and in the heart of the Midwest during early to mid-week next week.
  
• Rain
  totals in the eastern Midwest will range from 0.25 to 0.75 inch  with a few totals to 1.00 inch
• Rain
  totals in hard red winter wheat areas will be 0.20 to 0.75 inch in the east while many areas in the high Plains region will be dry.
• Moisture
  totals in the eastern Dakotas, Minnesota and the western Corn Belt will range from 0.30 to 0.80 inch with a few totals of 1.00 to 2.00 inches; wettest in the upper Midwest
• Rainfall
  in the Pacific Northwest will be less than 0.50 inch in key crop areas while much greater precipitation occurs in western Washington State and in the northern Rocky Mountain region
• Second
  frontal system will pass through the northern Plains and Midwest mid- to late-week next week
  
• Moisture
  totals will vary from 0.10 to 0.60 inch in the Great Lakes region and eastern Midwest while limited rain occurs in the Great Plains and Delta
• Temperatures
  will turn much colder behind the event
• U.S.
  temperatures will trend warmer this week until the weekend frontal system arrives
• Highs
  in the Midwest will rise to the 70s and lower 80s Tuesday into Wednesday
• Slight
  cooling will occur during the latter part of the week with greater cooling early next week after unusually warm conditions occur briefly during the weekend
• High
  temperatures in the Plains will be in the 70s and 80s during much of this week with a few 60s briefly Monday, Wednesday and Thursday
• Extremes
  over 90 will occur daily in the southern half of the Plains during much of this week
• Cooling
  is expected in the Pacific Northwest late this week after very warm conditions occur early to  mid-week
  
• No
  threatening cold nighttime temperatures are expected
• Russia’s
  Southern Region is still advertised to be mostly dry for the next ten days, but some showers will be possible October 15-22; confidence is very low
  
• Most
  of the region was dry during the weekend and very little precipitation was expected in the next week to ten days
• Ukraine
  and portions of southeastern Europe will receive waves of rain later this week through most of next week
• Sufficient
  rain will fall to relieve some of the driest areas from dryness
• Rainfall
  of 0.75 to 2.50 inches and local totals over 4.00 inches may occur by the end of next week
• Temperatures
  will be warmer than usual in much of the forecast period

 

• Europe
  will continue to experience waves of rain over the next two weeks, but the intensity in western areas will be much less than that of this past weekend
  
• Spain,
  Portugal, Bulgaria and southeastern Romania will be driest with some areas in the Iberian Peninsula staying dry
• Temperatures
  in western Europe will  be near normal while those in the east are warmer than usual
• Europe
  weekend rainfall was moderate to heavy in the U.K., western and southern France and northern Italy where rain totals varied from 1.00 to 3.00 inches and locally more
• More
  than 5.00 inches  of rain fell in northeastern Italy
• Much
  of eastern Europe was dry
• Temperatures
  were mild to cool in the west and warm east
• Western
  CIS weather during the weekend was largely dry with frost and freezes scattering across western and central Russia and northern Kazakhstan
• The
  freezes were non-threatening
• Australia
  is not expecting any surprises relative to Friday’s or Sunday’s forecast through the coming week
• Dry
  weather is expected in much of Western Australia and in the majority of interior Queensland and some locations in northeastern New South Wales
• Some
  showers will occur in southwestern parts of Western Australia briefly late Wednesday and Thursday
• Rain
  will fall from eastern South Australia through Victoria and western and southern portions of New South Wales where moisture totals will vary from 0.75 to 1.50 inches and a few totals over 3.00 inches
• Victoria
  will be wettest
• Temperatures
  will be seasonable
• Australia’s
  weekend precipitation was minimal in key crop areas and temperatures were warm
  
• Highest
  weekend afternoon temperatures were in the 80s and a few lower 90s Fahrenheit in Queensland, New South Wales and South  Australia while cooler with highs in the 60s and 70s in Western Australia
• Some
  frost may have occurred in southwestern most Western Australia as low temperatures slipped into the 30s and lower 40s Fahrenheit, but no  permanent crop damage resulted
• China’s
  Yangtze River Basin reported excessive rainfall during the Friday through Sunday morning period with 3.25 to more than 9.00 inches from eastern Sichuan through Hubei to Jiangsu
• 11.14
  inches of rain occurred in eastern Hubei
• Dry
  weather  occurred in the Yellow River Basin and North China Plain as well as the southeastern coastal areas
• Showers
  occurred in the Northeast Provinces, but rainfall was not more than 0.25 inch through dawn Friday
• Temperatures
  were very warm to hot in the southeastern provinces while frost and freezes occurred in most of central and western Inner Mongolia
• China
  weather will improve this week with more limited rainfall in the Northeastern Provinces, Yellow River Basin, North China Plain, east-central provinces and southeastern crop areas
• Totally
  dry weather is not expected, but rain amounts will be light and infrequent enough to allowing summer crops to mature and for some harvesting and planting to take place
• Next
  week’s weather will trend wetter in the south of China and in some east-central and  northeastern areas, but not in the Yellow River Basin or North China Plain
• Temperatures
  will be seasonable this week with a slight warmer bias in the northeast and slight cooler bias in the southeast
• India
  rain during the weekend was greatest in eastern parts of the nation and along the central west coast and temperatures were warm to hot in the northwest and more seasonable elsewhere
• India
  will experience frequent rain in the east and south over the next week with central areas trending wetter again next week as well
• Some
  crop maturation and harvest disruption is expected
• Northern
  India will continue to be mostly dry favoring summer crop maturation and harvest progress and some winter crop planting
• Brazil
  rainfall during the weekend occurred from eastern Parana through Rio Grande do Sul into northeastern Santa Fe Argentina with rainfall varying from 0.25 to 1.25 inches; some data from South America was missing during the weekend
• Argentina
  temperatures were mild to warm and Brazil continued hot in many areas except the far south
• Extreme
  highs in center west and center south Brazil ranged from 100 to 108 degrees Fahrenheit with an extreme of 110 in Paraguay
• Brazil
  weather will be dry biased in center west and center south crop areas through Saturday
• Scattered
  showers develop Sunday and continue daily through most of next week
• Daily
  rainfall will vary from 0.20 to 0.75 inch with a few 1.00 to 2.00-inch totals
• The
  greatest rain is expected in Minas Gerais, southern Espirito Santo, Rio de Janeiro and areas south into northeastern Parana
• A
  few locations in Mato Grosso could also receive a few daily rain totals over 1.00 inch
• Improved
  soil moisture should support at least some improved topsoil moisture for better soybean and corn planting
• Some
  improved coffee flowering and pollinating conditions will also occur
• Citrus
  will flower additionally
• Sugarcane
  development will become more aggressive as topsoil moisture improves
• Argentina
  rainfall is expected to be limited over the coming week to ten days with rain most likely in Buenos Aires early and late this week and again early next week
• Crop
  moisture stress will continue in the driest areas of Cordoba, Santa Fe, Santiago del Estero, western Chaco and areas northwest to Salta
• South
  America temperatures will be very warm to hot in center west and center south Brazil this week and then cooler next week
• Argentina
  temperatures will be seasonable during both weeks
• Southeast
  Asia rainfall during the weekend and that which is expected over the next ten days has been and will be erratic, but all areas will be impacted multiple times in the next two weeks supporting most crop needs
• Ontario
  and Quebec, Canada reported additional rain during the weekend maintaining wet field conditions
• Drying
  is needed to promote summer crop maturation and harvest progress and to support wheat planting and establishment
• Southeastern
  Canada will experience additional rain early this week and then may experience a full week of net drying; temperatures will be seasonable
• Mexico
  precipitation will be most significant in the far south  of the nation over the coming week to ten days
• Central
  America will be wetter biased over the next ten days to two weeks further easing long term dryness and possibly delaying early season crop maturation.
  
• South 
  Africa weekend weather brought showers to the south and east parts of the nation while dry weather occurred in many other areas
• Temperatures
  were seasonable
• Additional
  rain will impact southern and western South Africa over the coming  week
• The
  precipitation will begin to improve topsoil moisture for spring planting and winter crop reproduction, but greater rain will still be needed

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

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

·        
Philippines rain will be widespread over the next ten days to two weeks maintaining a favorable outlook for crops

·        
New Zealand temperatures will be near to below average over the next seven days while precipitation is lighter than usual with the greatest amounts likely along the lower west coast of South Island

• Southern
  Oscillation Index was +9.90 today and it will stay significantly positive through the coming week

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

MONDAY,
Oct. 5:

• 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
• U.K.
  wheat and barley production estimates
• Ivory
  Coast cocoa arrivals
• Malaysia
  Oct. 1-5 palm oil export data
• ANZ
  Commodity Price
• HOLIDAY:
  China, some states of Australia

TUESDAY,
Oct. 6:

• Purdue
  Agriculture Sentiment
• New
  Zealand global dairy trade auction
• HOLIDAY:
  China

WEDNESDAY,
Oct. 7:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• HOLIDAY:
  China

THURSDAY,
Oct. 8:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• UN
  FAO World Food Price Index
• India
  SEA-Globoil webinar with Dorab Mistry, Thomas Mielke and James Fry
• Brazil’s
  Conab releases first report on 2020-21 planted area, output and yield of soy and corn
• Port
  of Rouen data on French grain exports
• EARNINGS:
  Suedzucker, Agrana
• HOLIDAY:
  China

FRIDAY,
Oct. 9:

• USDA’s
  WASDE report with world supply/demand crops update, stockpiles noon
• 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
• China’s
  CNGOIC to publish monthly soy and corn reports
• China
  agriculture ministry (CASDE) to release its monthly data on supply and demand
• FranceAgriMer
  weekly update on crop conditions
• Brazil
  Unica cane crush, sugar production (tentative)
• HOLIDAY:
  Korea

Source:
Bloomberg and FI

 

 

 

 

 

 

USDA
inspections estimates via Reuters              

Wheat         
400000-650000

Corn             
650000-1100000

Soybeans   
1050000-1550000

 

Macros

US
Markit Services PMI Sep F: 54.6 (est 54.6; prev 54.6)

–
Markit Composite PMI Sep F: 54.3 (prev 54.4)

 

Corn.

• CBOT
  corn was mixed, now slightly higher, as of mid-morning on lack of direction. 
  
• USDA
  reported 160,020 tons of corn to Mexico but that is seen as routine. 
• Corn
  OI was up 18,478 on Friday.
• USD
  was 41 lower as of 9:30 am CT and that is supportive for exports.  
• French
  corn crop ratings, delayed in reporting, were 58% as of Sep 28, unchanged from previous week (same as year ago).  32 percent of the crop had been harvested. 
  
• Germany
  ASF:  3 new cases; 49 cases since September 10 

 

USDA
Attaché on Brazil Grain & Feed

https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Brasilia_Brazil_09-27-2020

 

Corn
Export Developments

• Syria
  seeks 50,000 tons of soybean meal and 50,000 tons of corn on October 26 for delivery within four months of contract. 
  

 

Source:
Trade News Service

 

Soybean
complex.  

• The
  soybean complex was mixed as of mid-morning on technical reversal in product spreads. The lower USD is minimizing losses in soybeans as US harvest pressure continues to weigh on soybeans. 
  

• CBOT
  soybean OI was up 13,162 on Friday.
• Argentina
  soybean registrations were running at 7.911 million tons as of Sep 23 vs. 9.684 million previous period (April-March).  Cumulative shipments were 6.316 million tons, down from 8.839 million for comparable period 2019-20. 
  

• Offshore
  values this morning were leading CBOT soybean oil 79 higher and meal $2.70
  higher. 
• Rotterdam
  soybean oil values were down about 17 euros, rapeseed oil 12 higher in the benchmark positions, and Rotterdam meal mostly 6-9 euros higher from this time previous session. 
  
• Malaysian
  palm oil – cash unchanged and futures were up 13 points to 2721 MYR. 

 

Oilseeds
Export Developments

• Egypt’s
  GASC seeks 30,000 tons of soybean oil and 10,000 tons of sunflower oil for Nov 25-Dec 15 arrival on Tuesday. 
  
• Syria
  seeks 50,000 tons of soybean meal and 50,000 tons of corn on October 26 for delivery within four months of contract. 
  

 

 

Wheat

• US
  wheat futures are higher on appreciating Black Sea wheat prices and unfavorable weather delaying plantings across Ukraine and parts of Russia. 
  
• APK-Inform:
  Ukraine milling wheat +$3.00 to $236-$240/ton 12.5% milling wheat fob.
• IKAR:
  Russian wheat production for 2020 83 MMT vs. 82.8 MMT previous.  Grain crop 129.7 MMT vs. 129.5 MMT previous. 
  
• IKAR:
  Russian wheat 12.5% $237/ton fob, up $4.00 previous week. 
• Ukraine
  grain exports fell 14.9% from same period year ago to 12.3 million tons.  8.7 million tons of wheat – around 50% of the volume permitted for exports this season – 2.9 million tons of barley, and 678,000 tons of corn. (Reuters)

• Paris
  (Matif) December wheat was up 1.00 at 197.75 euros.

 

Export
Developments.

• Pakistan
  saw offers for 300,000 tons of wheat.  It may have closed at $278.50/ton c&f. 
  
• Tunisia
  seeks 67,000 tons of milling wheat on October 6 for late Oct and Nov 25 shipment. 
  
• Jordan
  issued a new import tender for 120,000 tons of wheat on October 13, optional origin, for Jan -late Feb shipment.
• Jordan
  issued an import tender for 120,000 tons of wheat on October 7, optional origin. 
  
• Turkey
  seeks 135,000 tons of 12.5% and 13.5% wheat on October 9 for oct 16 and Nov 2 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.

·        
Results awaited: Syria is in for 39,400 tons of white rice on September 30.