FI Morning Grain Comments 07/21/20

PDF attached

 

USDA
announced another 5 cargoes of soybeans sold to China and unknow and 207,880 tons of corn (old and new) for unknown.  Lower trade led by soybeans this morning on bearish US crop progress.  US corn and spring wheat crop conditions were unchanged.  Soybean conditions
increased one point. Offshore values are pointing towards a lower trade in SBO and SBM.  Malaysia palm traded 20 MRY lower after hitting fresh 5-month highs overnight.  SA soybean oil cash prices were said to be down 10-15 USD from Friday into Monday, according
to one source.  Corn is lower good weather.  South Korea’s NOFI group bought wheat and corn.  US wheat prices are higher on global demand. Egypt is in for wheat.  The Philippines seek 110,000 tons of feed wheat.  Jordan saw two participants for 120k wheat. 
Ethiopia postponed their import tender.  Taiwan seeks US wheat. USD lower this morning while WTI was up more than $1.30.  The euro climbed to its highest in more than four months against the dollar. 

 

 

 

Weather
and Crop Progress

 

 

UNITED
STATES

• Not
  significant changes to the general theme of weather has evolved on recent forecast model runs
• The
  environment will continue sufficiently moist to support most summer crop development in the Midwest with a few exceptions
• Portions
  of the Delta will continue to dry down and parts of the southern and northwestern Plains will experience similar conditions
• Monsoon
  moisture will continue to stream into the southern Rocky Mountain region adding a moisture source for crop areas during the next few weeks
• The
  second week of the outlook still brings some ridge building to the middle of the nation, but an active jet stream prevails with some cool air periodically in Canada and warm air in the U.S. along with plenty of humidity around resulting in favorable support
  of some periodic rainfall
• Pockets
  of drying in the key corn and soybean production areas will continue, but the worst areas of dryness may remain small in size for the next couple of weeks
  
• Sufficient
  subsoil moisture will carry many crops during periods of more limited rainfall except in the areas that have been driest for the longest periods of time
• Rain
  is needed most in a part of northwestern and central Iowa and in random locations in central Illinois, east-central Indiana and quite a few areas in Ohio
  
• The
  Delta also needs greater rain
• Despite
  the stressful environment for some of these drier areas most of the nation’s crop of corn and soybeans is evolving favorably
• West
  Texas rainfall is expected to be briefly enhanced by a tropical wave that will push into the region this weekend after bringing some rain to the Louisiana and upper Texas coast and the Texas Blacklands; the moisture will be greatly diminished by the time it
  gets to West Texas, but sufficient amounts of rain will remain to support at least “some” increased rainfall briefly before drier and warmer weather resumes.
  

 

EUROPE/BLACK
SEA

• No
  significant change was suggested in this first week of the outlook
• Western
  Europe will continue to receive restricted rainfall while central and northeastern Europe remains wettest along with the western CIS
• 06z
  GFS model run brings significant rain to the North and Baltic Sea regions in the last days of July and first days of August
• The
  increase may have been a little overdone today, but some increase is expected
• GFS
  shifted rain from southeastern Ukraine to northeastern Ukraine this weekend
• The
  change was needed
• GFS
  added a little rain to central and northeastern Ukraine July 31-Aug 2
• Some
  of the increase was expected

 

The
bottom line does not bring much change to the European Continent in this first week of the outlook and if rain evolves in the following week as advertised there would be some relief to dryness in parts of northwestern Europe while conditions elsewhere are
mostly status quo. The lack of rain in this first week of the outlook in France and neighboring areas will maintain a stressful environment for summer crops even though there is not much heat. In the meantime, limited rain is still advertised from eastern
and southern Ukraine into Russia’s Southern Region raising concern about long term soybean, corn and sunseed production in unirrigated areas.

 

RUSSIA
NEW LANDS

• GFS
  models overnight reduced rain in the northern and eastern New Lands during this first week of the outlook
• Some
  of the reduction was needed and was consistent with other forecast models
• The
  second week of the outlook is still offering scattered showers throughout much of the New Lands, but rainfall is minimal near the Kazakhstan border where it is already drier than usual

 

The
bottom line offers only partial relief to the dryness situation in the central New Lands. Rain is going to occur in the Ural Mountains region during the balance of this week with sufficient rain in some areas to dramatically increase soil moisture. However,
many other New Lands’ locations will not get much rain until next week and at that time the rain is expected to be light and somewhat sporadic, although most areas get at least some moisture. The environment should provide some relief to moisture stress for
sunseed and spring wheat, although it is questionable how much relief will occur in areas nearest to Kazakhstan.

 

CHINA

• No
  change was suggested in the first week of the outlook
• Rain
  was reduced in east-central and southeastern China for mid-week next week into the following weekend
• Some
  of the reduction was needed; scattered showers and thunderstorms still occur in many areas
• Some
  increase in rainfall was suggested for the northeastern provinces in the early days of August
• Some
  of the increase may have been overdone
• Drier
  weather is now being advertised for the Yangtze River Basin beginning July 31 and lasting through August 4

 

A
good mix of weather is expected in northern China over the next two weeks with most areas getting alternating periods of rain and sunshine. There will be some areas of net drying, however, and those pockets will be closely monitored in the most important corn
and soybean production areas in the northeast for a while. In the meantime, additional rain will impact the Yangtze River Basin over the coming week to ten days, but the last days of July and early August may be drier and there will be no one in China complaining
about that change for a while. Localized areas of flooding will still continue until the drier days of late July and August arrive.

 

AUSTRALIA

• Rain
  Thursday and Friday was increased in southeastern Queensland and reduced in central New South Wales while increased east of the Great Dividing Range in New South Wales