FI Morning Grain Comments 08/11/20

PDF Attached

 

Another
132k soybeans were announce for China.  Conab reported the 2019-20 soybean production at 120.9 million tons, 100,000 tons above the previous month.  Exports were seen up 2 million tons to 82 million tons for 2020.  Conab Brazil corn production was upward revised
1.6 million tons to 102.1 million, with the second corn crop seen at 74.9MMT, up from 73.5MMT last month and compares to 73.2 million tons for 2018-19.  The corn yield was revised up slightly to 5.520 tons/hectare from 5.453 last month.  Conab sees 2020 wheat
imports at 6.7 for 2020, down from 7.3 million tons from July and compares to 7 million tons in 2019. 

 

Pre
report day.  CBOT prices are tracking USDA crop progress changes and light global import developments for grains.  We heard China bought up to 5 US Oct/Nov soybean cargoes out of the Gulf and one from the PNW, along with up to 6 Q1 2021 Brazilian soybeans.
USD was 37 lower earlier, WTI 82 cents higher, and equities mostly higher.  US crop progress showed corn at 71, down one & one below trade average; soybeans 74, down one & two above trade average; and spring wheat 69, down 4 & four below trade average. The
third month palm futures contract fell 66 points and cash was down $11.50/ton.  China vegetable oil prices were up 0.2-0.5 percent, meal unchanged and soybeans up 16 yuan or 0.3%.  Israel seeks on July 20 seeks about 200,000 tons of corn and 350,000 tons of
soybean meal.  Taiwan’s MFIG on August 13 seeks up to 65,000 tons of optional origin corn for October 28-Nov 16 shipment.  Egypt is in for wheat.  The World Food Program plans to send 50,000 tons of wheat to Lebanon. 

 

 

 

Weather
and Crop Progress

 

Source:
World Weather Inc. 

 

 

7
Day Precipitation Outlook

 

Bloomberg
Ag Calendar

TUESDAY,
August 11:

• Brazil
  Conab releases area, production and yield data for corn, soybeans
• EARNINGS:
  Wilmar

WEDNESDAY,
August 12:

• USDA’s
  monthly World Agricultural Supply and Demand (Wasde) report, noon
• China
  CASDE monthly crop supply and demand report
• Vietnam
  data on coffee, rice and rubber exports in July
• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• U.S.
  soybean, corn acreage, noon
• EARNINGS:
  BRF, Marfrig
• HOLIDAY:
  Thailand

THURSDAY,
August 13:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• New
  Zealand Food Prices
• EARNINGS:
  JBS, Olam

FRIDAY,
August 14:

• 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
• EARNINGS:
  Golden Agri-Resources

SATURDAY,
August 15:

• Malaysia
  palm oil export data for Aug 1-15 from AmSpec

Source:
Bloomberg and FI

 

 

 

 

 

USDA
inspections versus Futures International trade range                                                        

Wheat         
379,949         versus   450000-650000  range

Corn             
1,150,979     versus   700000-950000  range

Soybeans   
635,665         versus   400000-600000  range

 

 

Macros

Canadian
Housing Starts Jul: 245.6K (est 205K; prevR 212.1K; prev 211.7K)

US
PPI Final Demand (M/M) Jul: 0.6% (est 0.3%; prev -0.2%)

US
PPI Ex Food, Energy (M/M) Jul: 0.5% (est 0.1%; prev -0.3%)

US
PPI Ex Food, Energy, Trade (M/M) Jul: 0.3% (est 0.2%; prev 0.3%)

US
PPI Final Demand (Y/Y) Jul: -0.4% (est -0.7%; prev -0.8%)

US
PPI Ex Food, Energy (Y/Y) Jul: 0.3% (est 0.0%; prev 0.1%)

US
PPI Ex Food, Energy, Trade (Y/Y) Jul: 0.1% (est 0.1%; prev -0.1%)

 

 

Corn.

• Pre
  report day.  CBOT prices are tracking USDA crop progress changes and light global import developments for grains.  Corn could see a two-sided trade after Brazil upward revised 2019-20 supplies. 
  
• Some
  silos / processing plants across IA through northern IN took some damage from high winds across on Monday.  Winds topped 85 MPH across northern IL after Monday’s close.  We are starting to hear crop damage to soybeans and corn for some fields.  For storage,
  on farm silos are most vulnerable, in our opinion, as they are smaller in size. 
  Some are calling the derecho as the worst weather event for the US so far for 2020.  Some pictures can be found on Twitter via keywords….

https://twitter.com/search?q=corn%20derecho&src=typeahead_click

• Conab
  Brazil corn production was upward revised 1.6 million tons to 102.1 million, with the second corn crop seen at 74.9MMT, up from 73.5MMT last month and compares to 73.2 million tons for 2018-19.  The corn yield was revised up slightly to 5.520 tons/hectare
  from 5.453 last month. 
• AgriPac
  sees the new-crop Argentina corn area at 6.3-6.4 million hectares, up from their forecast for 6.0 million for 2019-20.  Argentina will start corn plantings next month.  Another analyst sees 6.3 million hectares, according to a Reuters story. 
  
• Third
  day of the “Goldman Roll.”
• USD
  was 37 points lower as of 7:42 am CT and WTI up just over 80 cents. 
• USDA
  reported US corn crop conditions at 71 percent, one point below the previous week.  Traders were looking for unchanged.  The five-year average is 66.  Ahead of the USDA report, we will not change US production estimates for the major commodities. 
  
• USDA
  US corn export inspections as of August 06, 2020 were 1,150,979 tons, above a range of our (FI) expectations, above 726,657 tons previous week and compares to 731,186 tons year ago. Major countries included China Main for 264,007 tons, Mexico for 240,195 tons,
  and Japan for 168,852 tons.

 

Corn
Export Developments

·        
Israel seeks on July 20 seeks about 200,000 tons of corn and 350,000 tons of soybean meal.

·        
Taiwan’s MFIG on August 13 seeks up to 65,000 tons of optional origin corn for October 28-Nov 16 shipment.  Egypt is in for wheat. 

 

 

Soybean
complex.

• The
  soybean complex was mixed with pressure on soybean oil after palm futures shed another 2 percent overnight. Soybeans were near unchanged on an improvement in US ratings and additional Chinese import demand.  Under the 24-hour reporting system, private exporters
  reported 132,000 tons of soybeans for delivery to China for 2020-21 shipment.
  
• Conab
  reported the 2019-20 soybean production at 120.9 million tons, 100,000 tons above the previous month.  Exports were seen up 2 million tons to 82 million tons for 2020. 
  
• We
  heard China bought up to 5 US Oct/Nov soybean cargoes out of the Gulf and one from the PNW, along with up to 6 Q1 2021 Brazilian soybeans.
• The
  third month palm futures contract fell 66 points and cash was down $11.50/ton.  China vegetable oil prices were up 0.2-0.5 percent, meal unchanged and soybeans up 16 yuan or 0.3%. 
  
• USDA
  reported US soybean crop conditions at 74 percent G/E, up one point from the previous week.  Traders were looking for up 1 percentage point.  The five-year average is 63 percent.  
• Rotterdam
  values this morning showed soybean oil for the Sep/Oct position was down 2 euros from this time previous session, rapeseed oil down 2 in the nearby, and soybean meal when imported from South America 1-3 euros higher.  
  

• Offshore
  values this morning was leading CBOT soybean oil 4 higher and meal $0.60
  lower. 
• China
  cash crush margins as of this morning, using our calculation, were 128 cents per bushel (132 previous), and compares to 132 cents a week ago and 81 cents around this time last year.
  

·        
Palm oil:

• USDA
  US soybean export inspections as of August 06, 2020 were 635,665 tons, above a range of our (FI) expectations, above 557,607 tons previous week and compares to 944,872 tons year ago. Major countries included China Main for 140,340 tons, Mexico for 100,138
  tons, and Egypt for 49,577 tons.
• EU
  soybean imports from July 1 to August 9 totaled 1.74 million tons, 9% above the same period a year ago.  EU rapeseed imports for 2020-21 reached 216,000 tons, down 47% versus year earlier. 
  

 

Oilseeds
Export Developments

·        
Under the 24-hour reporting system, private exporters reported 132,000 tons of soybeans for delivery to China for 2020-21 shipment.

·        
Israel seeks on July 20 seeks about 200,000 tons of corn and 350,000 tons of soybean meal. 

 

Wheat

• US
  wheat futures
  are higher after USDA reported a decline in US spring wheat crop conditions and dry weather spreading across Argentina’s key wheat growing belt. 
  
• Rosario
  Board of Trade noted there are 480,000 hectares (1.2m acres) of the wheat area across Argentina’s Pampas crop belt in a poor or very poor condition.   The total wheat areas for Argentina was projected at 6.6 million hectares.  They said if it doesn’t rain
  in the next two weeks, yields may fall by as much as 30%. 
• Conab
  sees 2020 wheat imports at 6.7 for 2020, down from 7.3 million tons from July and compares to 7 million tons in 2019. 
  
• Egypt
  seeks wheat for September 24-Octobebr 5 shipment.  Russian wheat was lowest offered at $205.90/ton. 
  
• US
  spring wheat crop conditions were reported at 69 percent for the combined good/excellent categories, 4 points below expectations and compares to 63 average.  Traders were looking for unchanged. 
  
• USDA
  reported 15 percent of the US spring wheat crop had been harvested, one point above a trade average, up from 5 percent previous week and compares to 6 year ago and 25 average. 
  
• 90
  percent of the US winter wheat crop had been harvested, one point below expectations and up from 85 percent previous week. 
  
• Ukraine’s
  economy ministry left its forecast for 2020-21 wheat exports unchanged at 17.2 million tons.  Most analysts see it between 25 and 27 million tons. Ukraine to date (starting July 1) grain exported fell 31 percent from the same period year earlier to 3.5 million
  tons (5.1MMT year ago) as of August 10. 
• USDA
  US all-wheat export inspections as of August 06, 2020 were 379,949 tons, below a range of our (FI) expectations, below 556,154 tons previous week and compares to 710,709 tons year ago. Major countries included Japan for 85,978 tons, China Main for 62,999 tons,
  and Philippines for 55,767 tons.
• EU
  soft wheat exports from July 1 through August 9 reached 978,000 tons, 61% below the same period a year earlier.  Barley exports fell 51 percent to 440,000 tons and corn export dropped 49 percent to 1.34 million tons. 
  
• Paris
  December wheat was up 0.50 euro at 178.00.  

 

Export
Developments.

• Egypt
  seeks wheat for Sep 25-Oct 5 shipment.  Payment will be at sight.  Jordan seeks 120,000 tons of optional origin wheat on August 12 for Nov-Dec shipment.  Lowest offer was $205.90 for Russian wheat. 
  
• Syria
  seeks 200,000 tons of soft wheat from Russia on Sept. 14.

·        
The World Food Program plans to send 50,000 tons of wheat to Lebanon. 

• Pakistan
  seeks 1.5 million tons of wheat on August 18. 
• Syria
  looks to sell and export 100,000 tons of feed barley with offers by Sep 1. 
  

 

Rice/Other

·        
Vietnam exported 3.9 million tons of rice during the Jan-July period, 1.4% below same period year ago. 

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

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 60,556 tons of rice from Vietnam and other origins, on Aug. 19, for arrival in South Korea between Dec. 31, 2020, and February 28, 2021.