FI Morning Grain Comments 08/12/20

PDF attached

 

Report
day.  Trade estimates are below.  CBOT prices are near unchanged in soybeans and corn and mostly lower for wheat.  Note a year ago corn traded limit lower on USDA Aug report day.  Note on crop damage: check out this picture of IA damage via twitter…
https://twitter.com/kennedyclouds/status/1293262701934895110?s=21

 

 

Weather
and Crop Progress

 

Source:
World Weather Inc. 

 

 

7
Day Precipitation Outlook

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Macros

US
CPI (M/M) Jul: 0.6% (est 0.3%; prev 0.6%)

US
CPI Ex Food, Energy (M/M) Jul: 0.6% (est 0.2%; prev 0.2%)

US
CPI (Y/Y) Jul: 1.0% (est 0.7%; prev 0.6%)

US
CPI Ex Food, Energy (Y/Y) Jul: 1.6% (est 1.1%; prev 1.2%)

US
Real Avg Weekly Earnings (Y/Y) Jul: 4.3% (prevR 4.7%)

US
Real Avg Hourly Earnings (Y/Y) Jul: 3.7% (prevR 4.1%)

 

 

Corn.

• Happy
  USDA report day.  Corn futures were slightly lower on positioning and lower wheat. 
  
• Fourth
  day of the “Goldman Roll.”
• USD
  was 21 points lower as of 7:57 am CT and WTI up 89 cents. 
• China’s
  National Meteorological Center warned of heavy rainstorms for parts of China’s northwest, north, northeast, southwest and southeastern coastal areas until Thursday. 
  
• A
  Bloomberg poll looks for weekly ethanol production to increase 14,000 barrels to 945 million previous week (915-968 range), and stocks to increase 77,000 barrels to 20.423 million. 
  
• Ukraine
  grain traders union UGA decreased their production estimate for Ukraine corn to 36.4 million tons from a previous estimate of 38.9 million tons, citing dry weather.  Ukraine harvested 35.9 million tons of corn in 2019.
  
• The
  European Union re-introduced their import duty for corn, increasing their levy to 5.48 euros ($6.42) per ton.
• Bloomberg
  Economics: China’s shortfall in meeting its phase-one commitments. It found that “purchases fell substantially short in agriculture, where staying on track to hit the target over the first six months of 2020 implied exports of almost $17 billion; actual purchases
  came in at just $6.5 billion.” “U.S. energy exports reached only about a fifth of their target.” 
  
• Yesterday
  there was talk upward to 400 million bushels of corn could be lost and another analyst warned the national yield could slip 2.5 bu/ac or more.  We think the US harvest area will decline in October but don’t think the yield will decline that much if the producer
  claims insurance and takes the acres out of production. 
• Argentina
  is in talks with China to sell pork. 

 

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.

• Soybeans
  and meal were mixed at the electronic close while soybean oil was higher following palm futures. 
  
• We
  heard China bought up to 5 US Q4 soybean cargoes out of the Gulf and PNW on Tuesday. 
  
• US
  and China officials will meet soon to discuss the Phase One trade deal.
• In
  its monthly CASDE update, China increased its soybean import projection and corn consumption for 2019-20.  China looks for 96 million tons of soybeans to be imported this crop year, up 2 million tons from previous. 
  
• China’s
  Sinograin will see 24,611 tons of domestic soybean reserves on Thursday.
• The
  third month palm futures contract rebounded overnight to end up 40 points and cash was up $2.00/ton on Indonesia production data.  China vegetable oil prices were down 1.1-2.4 percent, meal slightly lower and soybeans down 44 yuan or 0.3%. 
  
• Gapki
  estimated Indonesia palm oil stocks at the end of June increased 12% to 3.95MMT from 3.53 million tons in May.  June palm production rose 13.6% to 4.51 million tons from 3.97 million tons a month earlier.
  
• SGS:
  Malaysian palm Aug 1-10 palm exports fell 19.4 percent to 372,067 tons from 461,806 tons month ago. 
  
• Paraguay,
  Argentina, and Brazil co-own the Itaipu and Yacyreta dams along the Parana River.  They released water from the dams today, second time this year, that will allow 115,000 tons of Paraguayan grains to set sail down river for export and allow upriver transportation
  of fertilizer and petroleum products.  They had to discharge water in May from low water levels. 
  
• Rotterdam
  values this morning showed soybean oil for the Sep/Oct position was down 5 euros from this time previous session, rapeseed oil down 6 in the nearby, and soybean meal when imported from South America unchanged to 1 euro lower.  
  

• Offshore
  values this morning was leading CBOT soybean oil 7 lower and meal $0.40
  lower. 
• China
  cash crush margins as of this morning, using our calculation, were 114 cents per bushel (128 previous), and compares to 132 cents a week ago and 81 cents around this time last year.
  

·        
Palm oil

 

Oilseeds
Export Developments

·        
Under the 24-hour reporting system, private exporters reported:

–Export
sales of 258,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year

–Export
sales of 120,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year

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

 

Wheat

• US
  wheat futures
  are lower on positioning ahead of the USDA report and prospects for a large Australian wheat crop.  
  
• Australia
  will see rain through Saturday for New South Wales and Victoria, and parts of southern Queensland, eastern South Australia, and southwestern Western Australia. 
  
• Agritel
  increased their production outlook for Russian wheat to 80.5 million tons from 77.5 million tons in late June. 
  
• StoneX
  sees a 26.9 million-ton Australia wheat production, above ABARES’s 26.61-million-ton latest estimate. 
  
• Jordan
  received three offers for 120,000 tons of wheat. 
• Lebanon
  said they have enough wheat to meet four months of consumption after accounting for existing stocks and expected imports. 
  
• Ukraine
  grain traders union UGA decreased their production estimate for Ukraine corn to 36.4 million tons from a previous estimate of 38.9 million tons, citing dry weather.  Ukraine harvested 35.9 million tons of corn in 2019. 
  
• Paris
  December wheat was down 0.75 euro at 177.50.  

 

Export
Developments.

• Jordan
  passed on 120,000 tons of optional origin wheat for Nov-Dec shipment. 
• Yesterday
  Egypt bought 120,000 tons of Russian wheat for Sep 25-Oct 5 shipment at $205.50/ton plus $14.10 freight.  Payment will be at sight. 
  
• Syria
  seeks 200,000 tons of soft wheat from EU/Russia on Sept. 9 and 200,000 tons of 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 July rice exports increased 6.5 percent from June to 479,633 tons, bringing year to date exports to 4 million tons, up 0.6 percent. 

·        
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.