FI Morning Grain Comments 08/18/20

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Morning. 

 

USD
was down 53 points earlier and WTI off 35 points.

 

USDA
24-hour: Private exporters sold 195,000 of corn to China for 2020-21 delivery and 130,000 tons of corn to unknown for 2020-21.  Private exporters also sold 130,000 of soybeans to unknown for 2020-21 delivery. 

 

Monday
ended a busy day with lower than expected decline in the national US corn condition.  Then Pro Farmer reported very good pod counts and corn yield for Ohio and South Dakota. Traders await Egypt’s vegoil import tender-lowest offer was $789.50/ton for soybean
oil and 788.00/ton for sunflower.  Offshore values this morning was leading CBOT soybean oil 11 higher and meal $2.30 lower.  China vegetable oils were firmer overnight and palm futures rallied 32 MYR with cash appreciating $3.50/ton. Australia is appealing
China’s decision to slap prohibitive tariffs on Ausi barley imports.  DBV farmer’s association estimated Germany’s 2020 grain harvest at 42.4 million tons, down from 44.3 million tons a year earlier, and about 5% below average.  Winter wheat was projected
at 21.1 million tons, down from 22.8 million tons last year. DBV farmer’s association estimated Germany’s 2020 winter rapeseed crop at 3.3 million tons from 2.8 million tons in 2019.  Japan is in for milling wheat. 

 

The
Pro Farmer crop tour:

• Ohio
  – 167.69 vs. 154.35 for 2019 and 166.18 average
• Ohio
  – 1155.68 pods vs. 764.01 for 2019 and 1039.74 average
• South
  Dakota – 179.24 vs. 154.08 for 2019 and 160.02 average
• South
  Dakota – 1250.86 pods vs. 832.85 for 2019 and 919.04 average

 

 

 

 

Weather
and Crop Progress

 

 

 

Bloomberg
Ag Calendar

TUESDAY,
August 18:

• New
  Zealand global dairy trade auction

WEDNESDAY,
August 19:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• ISO
  online conference on Sugar and Health
• USDA
  total milk production

THURSDAY,
August 20:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Brazil
  Conab sugar, cane and ethanol production
• Port
  of Rouen data on French grain exports
• China
  International Cereals and Oils Industry Summit
• USDA
  red meat production, 3pm
• HOLIDAY:
  Malaysia
• EARNINGS:
  Cherkizovo

FRIDAY,
August 21:

• 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
• China
  International Cereals and Oils Industry Summit, day 2
• Malaysia
  palm oil export data for August 1-20
• U.S.
  cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
461,699         versus   400000-600000  range

Corn             
1,036,985     versus   800000-1100000                range

Soybeans   
785,075         versus   425000-800000  range

 

Macros

US
Building Permits Jul 1.495 Mln (est 1.326 Mln; prevR 1.258 Mln; prev 1.241 Mln)

-US
Building Permits (M/M) Jul 18.8% (est 5.4%; prevR 3.5%; prev 2.1%)

US
Housing Starts Jul 1.496 Mln (est 1.245 Mln; prevR 1.220 Mln; prev 1.186 Mln)

-US
Housing Starts (M/M) Jul 22.6% (est 5.0%; prevR 17.5%; prev 17.3%)

 

 

Corn.

• Look
  for a two-sided trade. 
• Corn
  futures were
  easing earlier on a less than expected decline in the US crop condition, good yields reported by day one of the Pro Farmer crop tour and increasing trade tensions between the US and China over the Huawei Technologies situation.  Losses are limited on a sharply
  lower USD.
• USDA
  24-hour:  Private exporters sold 195,000 of corn to China for 2020-21 delivery and 130,000 tons of corn to unknown for 2020-21. 
  
• The
  Pro Farmer crop tour:
• Ohio
  – 167.69 vs. 154.35 for 2019 and 166.18 average
• Ohio
  – 1155.68 pods vs. 764.01 for 2019 and 1039.74 average
• South
  Dakota – 179.24 vs. 154.08 for 2019 and 160.02 average
• South
  Dakota – 1250.86 pods vs. 832.85 for 2019 and 919.04 average
• US
  corn crop condition for the combined good and excellent conditions fell only 2 points from the previous week to 69 percent.  The trade was looking for a three-point decline.  The US corn condition declined less than what we expected.  IA was down 10 points
  and ND fell 5 points. IL fell 3 points.  MI increased 4 points and CO was up 6.  NC increased 9 points. 
  
• USDA
  will collect updated planted data for IA for the September Crop Production report. 
  
• The
  US will be mostly dry this week bias western Corn Belt.  Some rain is seen for Ohio and southeastern Michigan.  The western US will cool down a touch and east will be briefly hot for the eastern US.  Net drying will continue in the Plains and southwestern
  Corn Belt through much of this week.   
• USD
  was trading 52 points lower earlier. 
• China
  is a step closer to develop an effective ASF vaccine.  They are expanding clinical trials. 
  
• Nigeria
  corn production was projected to increase 25 percent to 25 million tons-Maize Association of Nigeria. 
  

 

Corn
Export Developments

• USDA
  24-hour:  Private exporters sold 195,000 of corn to China for 2020-21 delivery and 130,000 tons of corn to unknown for 2020-21. 
  

 

 

Soybean
complex.

• Soybeans
  are lower on decent US crop conditions, technical selling and lack of bullish news this morning.  Soybean meal is lower while oil is higher.  Soybean oil spreads are under a large amount of pressure.
  
• The
  GFS model is little wetter for the second week of the US weather outlook but the European model remains a little drier. 
  
• The
  Pro Farmer crop tour:
• Ohio
  – 1155.68 pods vs. 764.01 for 2019 and 1039.74 average
• South
  Dakota – 1250.86 pods vs. 832.85 for 2019 and 919.04 average
• US
  soybean conditions fell 2 points from the previous week to 72 percent, at trade expectations. 
  
• CBOT
  soybean registrations were down 36 with Consolidated cancelling all at Utica, IL. 
  
• We
  heard China bought at least one soybean cargo out of the PNW for shipment sometime in Oct or Nov.  They were shopping for US Gulf soybeans out of the Gulf but no confirmed trades were noted.  China was also looking around for April-August Brazilian soybeans
  yesterday and bought at least one Jan/Feb cargo. 
• Rotterdam
  values this morning showed soybean oil for the Nov/Jan position was up 10 euros from this time previous session, rapeseed oil up 3 in the nearby, and soybean meal when imported from South America up 4-8 euros higher.  
  

• Offshore
  values this morning was leading CBOT soybean oil 11 higher and meal $2.30
  lower. 
• China
  cash crush margins as of this morning, using our calculation, were 122 cents per bushel (136 previous), and compares to 133 cents a week ago and 89 cents around this time last year.
  

·        
Palm oil:  Prices are down about 13 percent this year. 

• The
  daily July NOPA United States crush rate was little changed from June, with 5.5 million bushels crushed per day, up from 4.7 million in July 2019.  At 172.8 million bushels for the month of July, this was 0.8 million bushels above a Reuters trade guess and
  compares to 167.3 million in June and 168.1 million in July 2019.  Soybean oil stocks were 1.619 billion pounds, 70 million below trade expectations, and down sharply from 1.778 billion for the end of June but above 1.467 billion year earlier. 
  

 

 

Oilseeds
Export Developments

• USDA
  24-hour:  Private exporters sold 130,000 of soybeans to unknown for 2020-21 delivery.  
  

·        
Egypt’s GASC seeks at least 30,000 tons of soybean oil and 10,000 tons of sunflower oil for Oct 25-Nov 20 shipment.  Lowest offers:

o  
$788.00 for sunflower oil

o  
$789.50 for soybean oil

 

Early
2020 data show U.S. biodiesel production levels largely unchanged since 2019

https://www.eia.gov/todayinenergy/detail.php?id=44796&src=email

 

Wheat

• US
  wheat futures
  are lower on an improvement in US spring wheat conditions and technical selling.  
  
• Australia
  is appealing China’s decision to slap prohibitive tariffs on Ausi barley imports.  They placed the tariffs on in May.  China in the past took about 70 percent of Australian barely exports. 
  
• China
  announced an anti-dumping probe on Australian wine imports, increasing trade tensions between the two countries. 
  
• DBV
  farmer’s association estimated Germany’s 2020 grain harvest at 42.4 million tons, down from 44.3 million tons a year earlier, and about 5% below average.  Winter wheat was projected at 21.1 million tons, down from 22.8 million tons last year. DBV farmer’s
  association estimated Germany’s 2020 winter rapeseed crop at 3.3 million tons from 2.8 million tons in 2019.
• Russia’s
  wheat harvest progress is running above last years pace and yields are coming in above year ago (3.64 vs. 3.55). 
  
• US
  spring wheat conditions improved 1 point to 70 percent from the previous week.  Traders were looking for a one-point decrease.  Winter wheat harvest progress increased 3 points to 93 percent, 2 points below expectations and below an average of 96 percent. 
  Spring wheat harvest progress jumped 15 points to 30 percent, at trade expectations and compares to 43 percent average. 
  
• Paris
  December wheat was down 1.25 euros at 181.25.  

 

 

Export
Developments.

• Japan
  seeks 117,063 tons of milling wheat on August 20. 

 

• Results
  awaited: Algeria seeks at least 50,000 tons of milling wheat on August 18 for Sep shipment. 
  
• Results
  awaited: Pakistan seeks 1.5 million tons of wheat on August 18. 
• Turkey
  seeks 390,000 tons of red milling wheat and 110,000 tons of durum wheat on August 25.   They also seeks feed barley. 
  
• Red
  wheat shipment period is between Sep 4 and Oct 10
• Durum
  shipment period is between Sept. 15 and Oct. 10.
• Feed
  barley shipment period is between Sept. 11 and Sept. 25.
• Syria
  looks to sell and export 100,000 tons of feed barley with offers by Sep 1. 
  
• 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.

 

Rice/Other

·        
Results awaited: 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.