FI Morning Grain Comments 07/22/20

PDF attached

 

USDA
announced 7-8 soybean cargoes were sold to China and 3-4 cargoes to unknown.   Lower trade for soybeans while corn and wheat are higher.  China/US trade tensions are back in focus as the US ordered China to close its Houston consulate.  Pakistan bought 300k
wheat, Taiwan bought 98,230 tons of US wheat, Japan passed on feed wheat, and South Korea’s KFA passed on corn.  Jordan is back in for wheat.  GFS model still shows good rains over the next week for the majority of the central and upper Midwest.  Offshore
values are leading soybean meal and oil higher.  CBOT soybean oil registrations fell 170 to 2,786 lots.  USD was 26 lower this morning while WTI was down about $0.67.  South American corn basis is firm.  A Bloomberg poll looks for weekly US ethanol production
to be up 18,000 at 949,000 barrels (938-960 range) from the previous week and stocks to increase 244,000 barrels to 20.885 million. Russia’s Agriculture Ministry raised the estimate of wheat plantings by 1.2% to 29.1 million hectares.

 

 

 

Weather
and Crop Progress

UNITED
STATES

Good
model agreement is present today for the U.S. two-week outlook. Ridge building will occur late this week and into the weekend over the Plains and Midwest resulting in warmer temperatures, higher humidity and limited precipitation for a while. A cool airmass
will then come from Canada and break down the ridge and bring some relief from oppressive heat and humidity during the weekend . The relief will bring some rain initially and then cooler and drier air for a little while. Some of the models suggest a reinforcing
shot of cool air in the second week of the outlook with a little rain occurring as it moves through the Midwest. The monsoon flow will continue to feed some moisture into these weather systems and there will be some rain. The GFS Ensemble and is still the
preferred model for the second week of the outlook with a mean position over the high Plains region and weak northwesterly air flow aloft through the northern and eastern Midwest. This will continue to generate some periodic rain and keep temperatures from
being oppressively warm in weeks 2 and 3 of the outlook, but the rain amounts expected during that time will often be a little light resulting in some net drying.

 

Crop
conditions should stay mostly good except for a few pockets during the coming ten days. The drier bias in weeks 2 and 3 will not be absolute or widespread, but the combination of typical mid-summer warmth and erratic showers and thunderstorms will lead to
net drying in many areas and a close watch will be needed to catch the areas trending too dry before they become a problem. Corn and soybean development is still expected to advance normally over the next two weeks with the exception of a few areas that dry
out more than others.

 

EUROPE/BLACK
SEA

• Not
  much change occurred in the first week of the outlook, although some showers were returned by the GFS model to eastern Ukraine early next week
• Rain
  was increased in a part of central and eastern Europe for late next week
• Some
  of the increase was needed
• A
  boost in rain was noted for far western Russia, Belarus and the Baltic States August 1-3, but some of the rain was a little overdone
• GFS
  reduced storminess moving into northwestern Europe August 4-5 removing much of the precipitation advertised previously
• This
  change was needed

 

France
gets a little rain in the next two weeks, but amounts are still far too light to seriously ease long term dryness. Rain will be a little more significant this weekend into next week in parts of the U.K., Belgium, Netherlands and Germany where improved topsoil
moisture is expected for a little while. Net drying is also expected to continue from central and eastern Ukraine into Kazakhstan; including a part of Russia’s Southern Region during the next two weeks.

 

RUSSIA
NEW LANDS

• Not
  much change was noted in the first ten days of the outlook today
• Southwestern
  parts of the Ural Mountains region will get significant rain over the balance of this week while lighter showers occur in other Central New Lands’ locations during the weekend and next week
• Partial
  relief from dryness is expected in some areas
• The
  biggest change in the second week was increased rainfall over the Ural Mountain region August 1-3
• Some
  of this increase was overdone

 

The
bottom line will bring some improved soil conditions to the Ural Mountains region in the central New Lands over the balance of this week with limited rainfall to the northeast. The combination of rain and cooler temperatures will improve sunseed and spring
wheat in a part of the driest region, but the greatest rainfall will not be uniform leaving need for additional rain in some areas. World Weather, Inc. is still anticipating the return of a high-pressure ridge to the region in August, but as long as significant
rain falls before that event crops will have an opportunity for improvement.

 

CHINA

• Additional
  heavy rain fell Tuesday from southern Shaanxi through the heart of Henan and into northern Anhui where 2.50 to more than 8.00 inches resulted in some flooding
• Henan
  is a very important agricultural province and flooding might have damage a few crops, but the impact should not have been nearly as serious there as it has been farther to the south in recent weeks
• Tuesday’s
  heavy rain will shift to Shandong and northern Jiangsu today with similar amounts expected
• Waves
  of locally heavy rain will then occur in the Yangtze River Basin through the balance of this week and the weekend
• Most
  of the coming ten days will bring alternating periods of rain and sunshine to areas north of the Yellow River and throughout the northeastern provinces supporting mostly good crop development
• Rain
  will be more frequent and more abundant in the remainder of China with local flooding periodically, but the worst of the flooding that has occurred this year should be over; crop conditions are unlikely to improve in the areas most impacted by this year’s
  floods, however
• Northern
  China was advertised wetter in the August 1-5 period which will eliminate dryness that is present in a few areas today
  
• Some
  of the heavier rainfall may have been exaggerated

 

AUSTRALIA

• No
  bit changes were suggested through day ten
• Rain
  will fall Friday and Saturday in New South Wales and southeastern Queensland with lingering showers into early next week
• Most
  other areas will experience showers mostly near the coast with net drying in interior parts of the nation
• 06z
  GFS model run reduced rain in Western Australia August 5-6
• This
  change was needed, but the solution is still not correct

 

Australia’s
winter crops will remain in good shape and will be poised for a good start of more aggressive development in the early spring as long as timely rainfall continues. There is still a dryness concern for parts of Queensland and South Australia and many other
areas could dry down quickly if there is not some kind of routine occurrence of rainfall in August.

 

SOUTH
AMERICA

• No
  changes were noted through the coming ten days
• Cordoba
  will miss out on this week’s rain event that is under way now
• Beneficial
  moisture will occur in Buenos Aires and parts of La Pampa and some welcome showers will occur in Entre Rios and Santa Fe by Friday