PDF attached

 

 

USDA
announced 132,000 tons of soybeans to China.  Taiwan seeks US wheat and Saudi Arabia bought barley.  Soybean oil is the feature this morning, ripping higher, from strength in global vegetable oil markets. 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weather
and Crop Progress

 

 

UNITED
STATES

  • U.S.
    crop weather continues to be mostly good, but parts of Iowa have been too dry in the past couple of weeks along with portions of Ohio, eastern Indiana, central Illinois, central Missouri and in a number of other random locations
  • The
    northern Delta has also been rather dry recently along with much of Texas and southwestern Oklahoma (excluding the Texas Panhandle
  • Today’s
    GFS and European forecast model runs are agreeing that rain will concentrate on two areas this week; the first is from North Dakota to Wisconsin and upper Michigan  and the other will occur from Nebraska into southern Illinois and parts of far southern Indiana
    and immediate neighboring areas
    • These
      areas get rainfall varying from 1.50 to more than 4.00 inches over the next ten days with areas in between these regions getting 0.50 to 1.50 inches
    • Sufficient
      rain still occurs in a large enough part of the Midwest to support corn pollination and soybean development even though there will be some pockets of dryness
    • Both
      models provide some relief to dryness in Iowa and Ohio and Indiana so that moisture stress is kept from getting so extreme that production cuts become a big concern
  • Another
    period of warm and humid weather with restricted rainfall is expected briefly during the end of this week and over the weekend, but it will be followed by another cool front and another opportunity for rain early next week and then another brief bout of drier
    and warmer weather
    • The
      environment will not be ideal, but supportive of summer crop development

 

The
overall bottom line remains generally favorable for key U.S. corn and soybean production areas in the Midwest. Rain in the Delta stays somewhat limited while the southeastern states experience a favorable mix of rain and sunshine. A tropical wave still moves
across the Gulf of Mexico this week bringing greater rain to southern Louisiana and the upper half of the Texas coast late this week before spreading some of that moisture into other parts of Texas. The GFS model run suggests some showers in West Texas from
this tropical wave during the weekend while the European model keeps the moisture too far to the south. The GFS solution is most likely and World Weather, Inc. anticipates at least some rain during the weekend from this event. Monsoonal moisture slowly increases
in the southern Rocky Mountain region as time moves along this month. Temperatures will be warmest during the Friday through Sunday period and again late next week, but sufficient cooling is expected after each event to provide some relief for crops.

 

 

EUROPE/BLACK
SEA

  • A
    boost in rainfall was suggested this morning by the GFS model run this morning for much of western Europe
    • Some
      of the increase in rainfall is expected to verify, although the European model has not bought into the potential for Rain in France, but has increased rain in parts of the U.S. and Germany
  • Weather
    next week trends drier again in western Europe, although a few showers occur in the U.K. at times
  • GFS
    model keeps eastern Ukraine and Russia’s Southern region relatively dry over the next ten days to two weeks while the European model has the driest conditions in southern Ukraine and parts of Russia’s Southern Region
    • The
      GFS solution seems to be best
  • Rain
    and thunderstorms are scattered in most other areas

 

The
bottom line does offer some short-term relief in western Europe with some showers in France, Germany, Belgium and the U.K. late this week and into the weekend. No general soaking is expected, but any moisture would be welcome. There will be need for more generalized
rainfall. Dryness in parts of southern and Eastern Ukraine into Kazakhstan and parts of Russia’s Southern Region will remain a concern for the next couple of weeks, despite any showers that evolve. Temperatures will be seasonable with a warmer than usual bias
in Spain, Portugal, southern France and parts of the southern Balkan Countries

 

 

RUSSIA
NEW LANDS

  • Some
    rain is expected along with cooling temperatures in the New Lands this week
    • Rainfall
      will be greatest in the Ural Mountains region and in West Siberia while rainfall elsewhere is expected to be more restricted

 

A
break from warm and dry weather is expected in the New Lands over the coming week to ten days with cooler temperatures and at least some rain. A part of the region east of the Ural Mountains will likely get some locally heavy rainfall as suggested by many
of the forecast models, but parts of the New Lands will be missed and a close watch on the precipitation distribution is warranted.

 

 

CHINA

  • Additional
    torrential rain fell during the weekend with one location in southwestern Anhui getting almost 28.00 inches for the weekend
    • Flooding
      is most serious in southern and central Anhui, southeastern Henan and a parts of Jiangsu, southeastern Sichuan, Guizhou and northwestern Hunan where rainfall of 5.00 to 10.00 inches was common over saturated soil
      • Reports
        of serious flooding are surfacing along with implied comments of significant crop and property damage
  • A
    good mix of rain and sunshine is expected in northern China over the next couple of weeks, although there will be some pockets of topsoil dryness that will need to be closely monitored
  • Waves
    of heavy rain will continue in east-central and southeastern China over the next two weeks that may induce additional flooding at times, but the excessive rain should not be as great as it has been, but the region will still need to dry out

 

Most
of northern and far southern China’s weather will be favorable for crop development, but flooding in the Yangtze River Basin is serious and the damage to agriculture has been significant, but it may be a while to assess the extent of the loss.

 

INDIA

  • Monsoonal
    rainfall is expected to impact most of the nation over the next two weeks
  • Far
    western Rajasthan and neighboring southern Pakistan will be slow to get needed rain and those areas will need to be closely monitored
  • Heavy
    rain and flooding is possible in parts of Madhya Pradesh and the Ganges River Basin

 

AUSTRALIA

  • Rain
    is still expected Thursday and Friday in eastern parts of the nation with sufficient rainfall in northern and central New South Wales and southeastern Queensland to improve winter crop conditions
  • Limited
    rainfall is expected elsewhere over the next ten days

 

South
America

  • No
    significant change was noted from Sunday’s forecasts for rain in southern Argentina Tuesday through Thursday and for the same in southern Brazil late this week and into the weekend
  • A
    second wave of rain was increased in far southern Brazil during the early part of next week

 

Source:
World Weather Inc. and FI

 

 

Bloomberg
Ag Calendar

MONDAY,
July 20:

  • USDA
    weekly corn, soybean, wheat export inspections, 11am
  • U.S.
    crop conditions of soybeans, corn, cotton; winter wheat progress, 4pm
  • EU
    weekly grain, oilseed import and export data
  • Malaysia’s
    palm oil export data for July 1-20
  • Ivory
    Coast cocoa arrivals

TUESDAY,
July 21:

  • USDA
    total milk production, 3pm
  • New
    Zealand global dairy trade auction

WEDNESDAY,
July 22:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • U.S.
    cold storage – pork, beef, poultry, 3pm
  • Thai
    Rice Exporters Association’s briefing on rice export outlook in 2H

THURSDAY,
July 23:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • China
    trade data, including cotton, corn, wheat and sugar imports
  • International
    Grains Council monthly report
  • Port
    of Rouen data on French grain exports
  • USDA
    red meat production, 3pm
  • HOLIDAY:
    Japan

FRIDAY,
July 24:

  • 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
  • U.S.
    Cattle on Feed, Poultry Slaughter, 3pm
  • FranceAgriMer
    weekly update on crop conditions
  • Brazil
    Unica cane crush, sugar production (tentative)
  • HOLIDAY:
    Japan

SATURDAY,
July 25:

  • AmSpec
    to release Malaysia’s palm oil export data for July 1-25
  • China’s
    3rd batch of June trade data, incl. country breakdowns for energy and commodities

    (tentative)

 

Source:
Bloomberg and FI

 

 

 

 

CFTC
commitment of traders

reported again showed a large discrepancy in the corn position relative to trade estimates. 

 

 

 

 

 

Macros

 

 

 

 

Corn.

·        
Resistance for December corn is seen near 3.48, support 3.3050.

·        
Safras & Mercado estimated the Brazilian corn production for the upcoming 2020-21 season (plantings starts September) at a record 116 million tons, up from their 2019-20 forecast of 107.3 million tons.  They see the planted area
at 19.66 million hectares, up 1 percent from 2019-20.  This comes as trade estimates for the upcoming soybean planted area to rise 2 to 3 percent. 

 

 

 

Corn
Export Developments

 

 

Soybean
complex
.

·        
Safras & Mercado, in their initial estimate, looks for Brazilian new-crop soybean planted area to rise 1.8 percent from 2019-20 and production to come in around a record 131.7 million tons, up 5.4% from their 2019-20 forecast. 
Meanwhile, StoneX estimated Brazil soybean planted area at over 38 million hectares (93.9 million acres).  Note USDA looks for 38.3 million hectares, and the Attaché at 38.5 million. 

·        
Rotterdam values this morning showed soybean oil for the August/September position was down 7-8 euros from this time previous session, rapeseed oil unchanged in the nearby, and soybean meal when imported from South America unchanged
to mixed. 

·        
China rapeseed oil futures reached a 7-year high. 

  • Offshore
    values this morning was leading CBOT soybean oil 44 lower and meal $1.50 higher.  

·        
China cash crush margins as of this morning, using our calculation, were 129 cents per bushel and compares to 134 cents a week ago and 29 cents around this time last year.

 

 

 

Oilseeds
Export Developments

 

Wheat

·        
Paris December wheat was down 1.25 at 185.00, at the time this was written.

 

Export
Developments.

  • Taiwan
    seeks 98,230 tons of US wheat on Wednesday. 
  • Jordan
    seeks 120,000 tons of wheat on July 21 for Sep-Nov shipment. 
  • Japan
    in an SBS import tender seeks 80,000 tons of feed wheat and 100,000 tons of barley on July 22 for arrival by December 24.
  • Awaited:
    Ethiopia postponed an import tender for 400,000 tons of wheat to July 20 from July 10. 
  • Syria
    seeks 200,000 tons of milling wheat from Russia by July 28. 

 

Rice/Other

  • None
    reported

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International │190 S LaSalle St., Suite 410│Chicago, IL  60603

W: 312.604.1366

treilly@futures-int.com

AIM: fi_treilly

ICE IM: 
treilly1

Skype: fi.treilly

 

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