FI Morning Grain Comments 08/03/20

PDF attached

 

USDA
reported 260,000 tons of soybeans to unknown. 

 

 

 

 

Weather
and Crop Progress

 

7
Day Precipitation Outlook

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS:  U.S. weather is expected to be mostly favorable as it should continue to be in India and China.

            Net
drying will occur in parts of Canada’s Prairies for a while this week into next week which may stress a few crops like those of the northwestern Plains. Crop conditions are improving in Mexico and still look good for Australia with significant rain coming
soon to that nation.

            Early
season corn planting will advance quickly in Brazil, but rain is needed to improve soil moisture for emergence and establishment. Dryness and some excessive heat will be a concern for summer coarse grain and oilseed crops in parts of western and southeastern
Europe as well as eastern Ukraine into Russia’s Southern Region. Dryness will also continue in some of the sunseed areas of Russia’s eastern New Lands.

            Some
concern over net drying will also continue in oil palm production areas of Indonesia.

            Overall,
weather today will likely produce a mixed influence on market mentality with a bearish bias remaining.

 

MARKET
WEATHER MENTALITY FOR WHEAT:  Most of the damage done to this year’s spring cereals has already been done and no further change of great significance is expected unless the harvest season turns wet.  Some lower production is expected from Russia and Europe
due to dryness in the New Lands and in various areas in northwestern and far southeastern Europe. China’s spring wheat has performed well. Australia’s winter crops will benefit greatly from rain coming over the next two weeks and some ongoing dryness in Canada’s
Prairies may further stress late filling crops. Argentina drought will not change over the next two weeks.

            Overall,
weather today will likely leave a neutral to slightly bullish bias to market mentality.

 

 

Bloomberg
Ag Calendar

MONDAY,
August 3:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• International
  Cotton Advisory Committee updates global outlook
• ABAG,
  Brazil’s agri-business association, hosts annual conference
• U.S.
  crop conditions for soybeans, corn, cotton; wheat harvesting progress, 4pm
• USDA
  soybean crush, 3pm
• U.S.
  DDGS production, corn for ethanol, 3pm
• Malaysia
  palm oil export data for July 1-31 from AmSpec, SGS
• Honduras,
  Costa Rica coffee exports for July
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• HOLIDAY:
  Canada

TUESDAY,
August 4:

• U.S.
  Purdue Agriculture Sentiment
• New
  Zealand global dairy trade auction
• Australia
  commodity index

WEDNESDAY,
August 5:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• China’s
  CNGOIC to release supply-demand reports on corn, soybeans
• French
  Agriculture ministry’s 2020 grain estimates
• Malaysia’s
  palm oil export data for August 1-5
• New
  Zealand Commodity Price

THURSDAY,
August 6:

• FAO
  World Food Price Index
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports

FRIDAY,
August 7:

• China’s
  foreign trade data for July, including imports of soybeans and meat
• 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

Source:
Bloomberg and FI

 

 

 

 

 

 

Macros

 

 

 

Corn.

• Corn
  futures are higher following soybeans.
• Technical
  buying was noted despite a surge in the USD by 61 points around the time the day session opened. 
  
• Australia
  reported an outbreak of H7N7 bird flu at a free-range egg farm in the state of Victoria.

 

Corn
Export Developments

• None
  reported

 

 

 

 

 

Soybean
complex.

·        
Soybeans
are higher following a sharply higher soybean oil market.  Palm oil in Malaysia and China was sharply higher overnight.  Late last week EIA reported a large increase in US soybean oil for biodiesel use which is helping CBOT SBO.  Spreading is pressuring US
soybean meal.

·        
USDA announced additional sales for unknown destination(s). 

·        
US weather remains ideal but warmer temperatures return this week for the US Midwest and rains will be less frequent. 

·        
CBOT registrations for soybean oil were down 17 (Bunge). 

·        
China sold 56,958 tons of imported soybeans from reserves at an average price of 3,153 yuan per ton. 

·        
A Reuters poll calls the June U.S. soybean crush to fall for a third straight month to 177.8 million bushels.  Bloomberg estimates below. 

·        
Ukraine sunflower oil was last $790-$805 per ton fob (Sep) Black Sea, according to APK-Inform, up about $25 per ton from the previous week. 

·        
Strategie Grains:  EU rapeseed crop estimated at 16.79 million tons, up from 16.54 previous, and down from 17.12 forecast for 2019. 

·        
Rotterdam values this morning showed soybean oil for the Sep/Oct position was up 2 euros from this time previous session, rapeseed oil up about 7 in the nearby, and soybean meal when imported from South America down $1-4/ton.  

• Offshore
  values this morning was leading CBOT soybean oil 36 lower and meal $1.10 lower.  
  

·        
China bought about 20 to 25 cargoes of soybeans last week, mostly of Brazilian origin. 

·        
China cash crush margins as of this morning, using our calculation, were 150 cents per bushel and compares to 150 cents a week ago and 79 cents around this time last year.

·        
Palm oil: After one day holiday, palm appreciated about 2 percent on good July exports. 

·        
AmSpec: Malaysian palm oil exports for the month of July were up 6.8 percent to 1.740 million tons from 1.629 million tons for June. 

 

 

Oilseeds
Export Developments

• Under
  the 24-hour announcement system, private exporters sold 260,000 tons of soybeans to unknown, 8,000 for 2019-20 and 252,000 tons for 2020-21 shipment. 
  

 

 

 

 

 

 

 

 

 

 

Wheat

• US
  wheat futures
  are lower on nonthreatening US weather and  some of the dry areas of Canada saw rain over the weekend. Net drying is expected to continue from southern Alberta and southwestern and south-central Saskatchewan into central Saskatchewan during much of the next
  two weeks. 
• Australia’s
  winter crops will benefit greatly from rain coming over the next two weeks.
  
• Ukraine
  harvested about 48 percent of the projected planted area or 27 million tons. 
  
• Ukraine
  feed wheat increased $3/ton week of week to about $209-$212/ton 12.5% protein, according to APK-Inform.  
  
• IKAR:
  12.5% Russian wheat down $3.00 per ton to $207 fob.  SovEcon $209/ton. 
• IKAR
  increased their estimate for the 2020-21 Russian wheat crop to 79.5MMT from 78 million previously. 
  
• Paris
  December wheat was down 0.75 euros at 182.  

 

Export
Developments.

• Japan
  seeks 80,000 tons of feed wheat and 100,000 tons of barley on Aug 5 for arrival by end of Jan. 
  
• Syria
  looks to sell and export 100,000 tons of feed barley with offers by Sep 1. 
  

 

Rice/Other

·        
Mauritius seeks 6,000 tons of white rice on August 17 for October through December delivery.