FI Morning Grain Comments 08/19/20

Aug 19, 2020







PDF attached

 

Morning. 

 

USDA-132k
soybean were sold to China. Malaysian palm futures were up 26MYR and cash rose $12.00/ton.  China vegetable oil prices were up 0.6-0.8% while soybean in China were down 23 CNY.  Offshore values are favoring a higher trade in oil and meal.  The soybean complex
is mostly higher led by soybean oil, with September reaching its highest level since February 14.  Corn is lower after
 Pro
Farmer for the second day reported very good pod counts and corn yields.  IA will be surveyed on Thursday.  US wheat is higher following strength in EU wheat and Algeria’s purchase of about 560,000 tons of milling wheat.  Results are awaited on Pakistan in
for wheat.  Japan seeks milling and feed wheat.  President Trump postponed the trade talks with China, but we are under the opinion they will be revisited.  A Bloomberg poll looks for weekly US ethanol production to be up 1,000 at 919,000 barrels (898-945
range) from the previous week and stocks to decrease 444,000 barrels to 19.706 million.  We look for a very large new-crop export sales figure for soybeans at between 2.6 to 3.1 million tons.  If figures fall short for soybeans, then we speculate some of the
sales last week were recorded in the previous week report.  Funds are still short over 100k corn so don’t discount a two-sided trade if soybeans rally today. 

 

 

 

Weather
and Crop Progress

UNITED
STATES

  • The
    tropics continue to become more lively and that is influencing the forecast models
    • The
      GFS model continues to bounce around like normal with Tuesday’s wetter forecasts giving way to a drier bias today which is much more likely to verify
    • Limited
      rainfall in the heart of the Midwest is still expected for a while because of the trough of low pressure that is going to be anchored over the southeastern states for a while and the tropical activity that is increasing
  • Tropical
    wave number one in the eastern Caribbean Sea is still expected to move across the Yucatan Peninsula as a tropical depression of weak tropical storm this weekend and then into northeastern Mexico south of the Texas border early next week
  • Tropical
    wave number two will move over or very near to the Greater Antilles which will interfere with the storm’s organization and intensification keeping it somewhat weak, but it will become a tropical depression or weak tropical storm as it moves from the northern
    Leeward Islands Friday and Saturday through Hispaniola and Cuba during the weekend and then to the eastern Gulf of Mexico early next week
    • If
      this system slows its forward speed as it comes into the Gulf of Mexico (as expected) it will strengthen into a better developed tropical cyclone and landfall might occur between New Orleans, Louisiana and Crestview, Florida during the middle part of next
      week
      • This
        tropical wave needs to be most closely monitored because of its low confidence longer range outlook for its intensity and land falling potential
  • Precipitation
    will occur frequently and most significantly in the southeastern U.S. during the coming ten days while moisture in the Midwest, Great Plains and far western U.S. is more limited and net drying is expected for many areas
  • Rain
    will impact the northernmost Midwest and from the Ohio River Valley southeast to the Tennessee River Valley and southeastern states most often in the next ten days with net drying expected in most other Midwestern locations and throughout much of the Great
    Plains

 

EUROPE/BLACK
SEA

Little
change overnight

  • Good
    model agreement was noted overnight
  • Scattered
    showers and thunderstorms will occur in many areas of Europe during the next ten days
  • Rainfall
    will be most frequent and significant in the United Kingdom, Scandinavia and from the Alps to Belarus, western Ukraine, Serbia and northwestern Bulgaria
    • Sufficient
      rain in these areas will support good ongoing crop development
  • Net
    drying will continue from eastern and southern Ukraine to southeastern Romania and eastern Bulgaria over the coming ten days as well as in Russia’s Southern Region
  • Temperatures
    will be near to above average throughout the continent

 

RUSSIA
NEW LANDS

Rain
is still expected in most of the Russian New Lands during the coming week. Sufficient amounts will occur to bolster soil moisture in those areas that have been drier biased in recent weeks

  • Some
    increased soil moisture has already occurred in the past week
  • A
    little too much rain may impact a part of the central New Lands where the ground is already plenty moist
    • This
      region could fall vulnerable to some crop quality declines if the wet weather prevails too long
  • Temperatures
    will be seasonable to slightly cooler biased in the New Lands
  • “Some”
    needed drying will occur in the last days of August and early September, although not in all areas

 

CHINA

Alternating
periods of rain and sunshine will occur over the next ten days to two weeks

  • All
    areas will receive rain at one time or another and many will receive sufficient amounts to maintain moisture abundance in crop areas
    • The
      precipitation may begin to threaten some of the early season maturation and harvesting, but the bulk of corn, soybeans, groundnuts, cotton, rice and sorghum will continue to develop well
    • Concern
      over spring wheat quality may rise until dry weather evolves

 

AUSTRALIA

A
more restricted rainfall pattern is still advertised over the next week to ten days in interior crop areas

  • Rain
    will fall in coastal areas frequently enough to maintain good soil conditions for winter crop development
    • Victoria
      will be wettest
  • Queensland
    and South Australia still need significant rain
    • Early
      season reproduction of winter crops begins soon in Queensland and crops there need greater rain
  • Temperatures
    will be seasonable except in the southeast where readings will be cooler than usual

 

SOUTH
AMERICA

Rain
chances are improving for a brief bout of rain in the middle to latter part of next week

  • Argentina’s
    drought will continue without change over the next week
  • There
    is potential for rain during the middle to latter part of next week in a portion of Argentina
    • No
      general soaking is expected, but a short period of relief from recent dryness is possible
    • Much
      more rain will be needed