FI Morning Grain Comments 07/28/20

PDF attached

 

Corn
and soybean futures are lower on good US crop ratings.  We are hearing some fields will see record corn yields south of Memphis.  August is an important month for soybeans while the US corn crop is basically made. 
Corn
and Soybean Advisory are using 178.5 corn and 51.0 soybeans.  FI is at 180.0 and 50.1. 
China
corn futures traded lower, off a 5- year high, after the government announced effective July 30 bidders will have to pay an extra deposit on trades, and also set delivery requirements to make sure companies where not hording corn supplies.  Egypt is in for
wheat and lowest offer was $215.10/ton for 60k Russian wheat. US wheat futures mixed in Chicago while higher in KC and MN.  Technical buying is seen from heavy selling on Monday. 
Palm
oil traded lower on weakness in global cash prices and Indonesia lowering their 2020 target for biodiesel consumption from 9.6 to 8.3 million kiloliters.  Palm futures are down 6 percent this week and 15 percent for the year.  The ringgit is at a 6-week high
against the USD.  USD
was up 20 earlier this morning, WTI weaker and gold mostly lower.  US weather looks very good over the next week with no excessive high-pressure ridge and no prolonged periods of hot temperatures. 

 

 

 

Weather
and Crop Progress

 

 

7
Day Precipitation Outlook

 

 

 

Bloomberg
Ag Calendar

TUESDAY,
July 28:

• EARNINGS:
  Minerva
• HOLIDAY:
  Thailand

WEDNESDAY,
July 29:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• Vietnam’s
  General Statistics Office releases data on exports of coffee, rice and rubber

THURSDAY,
July 30:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• The
  Australian Grains Industry Conference (online event)
• Poland
  to publish grain harvest estimates

FRIDAY,
July 31:

• 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
• Malaysia’s
  palm oil export data for July 1-31 (tentative)
• U.S.
  agricultural prices paid, received, 3pm
• HOLIDAY:
  Singapore, Indonesia, Malaysia

Source:
Bloomberg and FI

 

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
544,010         versus   450000-700000  range

Corn             
797,487         versus   900000-1200000                range

Soybeans   
472,680         versus   350000-700000  range

 

Macros

 

Corn.

• Corn
  futures were down 3.25 cents on good US crop ratings.  The unfavorable weather that traders were concerned about FH July didn’t seem to have an impact on the national crop rating.  We are hearing some fields will see record yields south of Memphis.     
  
• USD
  was up 20 as of 7:07 am CT. 
• China
  corn futures traded lower, off a 5- year high, after the government announced effective July 30 bidders will have to pay an extra deposit on trades, and also set delivery requirements to make sure companies where not hording corn supplies. 
  
• US
  corn and soybean ratings were up by 3 each and should set a bearish undertone tonight.  Note IA, where dryness occurred, corn was 77 G/E. 
  

·        
US CORN – 72 PCT CONDITION GOOD/EXCELLENT VS 69 PCT WK AGO (58 PCT YR AGO) -USDA

·        
US CORN – 82 PCT SILKING VS 59 PCT WK AGO (75 PCT 5-YR AVG) -USDA

·        
US CORN – 22 PCT DOUGH VS 9 PCT WK AGO (17 PCT 5-YR AVG) -USDA

·        
Corn and Soybean Advisory are using 178.5 corn and 51.0 soybeans (yields). 

·        
Bloomberg – China’s imports of U.S. goods in the 1H reached ~23% of the total target for 2020 set in the phase one trade pact

• In
  a Reuters survey, traders see South Africa’s corn crop (2019-20) at 15.461 million tons, 9.081 white and 6.443 million yellow.  15.461 million tons is 37 percent more than 2019.  More than 50 percent of the corn crop has been harvested and delivered to silos. 
  

 

Corn
Export Developments

• Syria
  seeks 50,000 tons of soybean meal and 50,000 tons of corn on Aug 25 for delivery within four months of contract signing.
  

 

 

Soybean
complex.

·        
Soybeans were down more than 7 cents basis old crop and about 10 cents new-crop after USDA showed a 3-point improvement in US soybean conditions.  August is an important month for soybeans while the US corn crop is basically made. 

·        
Not sure we will see USDA 24-hour for soybeans today. We heard one cargo traded out of the Gulf for October, while China was busy buying February through May shipment of Brazilian soybeans. 

·        
There were no changes in CBOT registrations. 

·        
US SOYBEAN – 72 PCT CONDITION GOOD/EXCELLENT VS 69 PCT WK AGO (54 PCT YR AGO) -USDA

·        
US SOYBEANS – 76 PCT BLOOMING VS 64 PCT WK AGO (72 PCT 5-YR AVG) -USDA

·        
US SOYBEANS – 43 PCT SETTING PODS VS 25 PCT WK AGO (36 PCT 5-YR AVG) -USDA

• Yesterday
  ICE canola futures reached an 18-month high. 

·        
Arc Mercosul projected Brazilian soybean output in the 2020-21 season at a record of 129.15 million tons, up 3.44% from the prior season.  They have a planted area of 38.43 million hectares (94.9m acres), up 3.8% from last year.

·        
Soybean and Corn Advisor is at 131 million tons for new-crop Brazil soybeans. 

·        
Rotterdam values this morning showed soybean oil for the August/September position was down 10 euros from this time previous session, rapeseed oil up 13 in the nearby, and soybean meal when imported from South America unchanged
to 2 euros lower. 

• Offshore
  values this morning was leading CBOT soybean oil 8 lower and meal $4.80 lower.  
  

·        
China cash crush margins as of this morning, using our calculation, were 154 cents per bushel (166 previous) and compares to 147 cents a week ago and 41 cents around this time last year.

·        
Palm oil traded lower on weakness in global cash prices and Indonesia lowering their 2020 target for biodiesel consumption from 9.6 to 8.3 million kiloliters.  Palm futures are down 6 percent this
week and 15 percent for the year.  The ringgit is at a 6-week high against the USD. 

 

 

 

Oilseeds
Export Developments

• None
  reported

 

Wheat

• US
  wheat futures
  were lower in Chicago while higher in KC and MN.  Technical buying is seen from heavy selling on Monday.  Note US crop spring wheat conditions improved last week. 
  
• Egypt
  is in for wheat and lowest offer was $215.10/ton for 60k Russian wheat.  
• US
  SPRING WHEAT – 97 PCT HEADED VS 91 PCT WK AGO (98 PCT 5-YR AVG) -USDA
• US
  SPRING WHEAT – 70 PCT CONDITION GOOD/EXCELLENT VS 68 PCT WK AGO (73 PCT YR AGO) -USDA
• US
  SPRING WHEAT – 1 PCT HARVESTED (1 PCT YR) (3 PCT 5-YR AVG) -USDA
• US
  WINTER WHEAT – 81 PCT HARVESTED VS 74 PCT WK AGO (82 PCT 5-YR AVG) -USDA
• Paris
  December wheat was down 0.50 at 183.00.

 

Export
Developments.

• Egypt
  seeks wheat for September 1-10 shipment. Lowest offer was $215.10/ton for 60k Russian wheat.  
  They
  paid $227.28 and $224.48/ton for Ukraine wheat on July 20. 
• Results
  awaited:  Syria seeks 200,000 tons of milling wheat from Russia by July 28. 
  
• Jordan
  seeks 120,000 tons of wheat on July 29. 
• Syria
  looks to sell and export 100,000 tons of feed barley with offers by Sep 1. 
  

 

Rice/Other

·        
US RICE – 76 PCT CONDITION GOOD/EXCELLENT VS 73 PCT WK AGO (68 PCT YR AGO) -USDA

·        
US RICE – 43 PCT HEADED VS 32 PCT WK AGO (53 PCT 5-YR AVG) -USDA

·        
US COTTON – 49 PCT CONDITION GOOD/EXCELLENT VS 47 PCT WK AGO (61 PCT YR AGO) -USDA

·        
US COTTON – 84 PCT SQUARING VS 73 PCT WK AGO (84 PCT 5-YR AVG) -USDA

·        
US COTTON – 42 PCT SETTING BOLLS VS 27 PCT WK AGO (44 PCT 5-YR AVG) -USDA