FI Morning Grain Comments 08/24/20

PDF attached

 

Morning. 

 

Higher
traded on a lower USD, higher WTI crude oil, and unfavorable US weather.  The tropical storm expected to impact the lower Delta will not favor rice harvesting progress.  Dryness and crop stress will continue to build across Iowa, northern Illinois, and northern
Indiana this week.  Argentina’s wheat crop remains under threat from poor weather conditions.  Pro Farmer’s corn yield came in below expectations. 

 

 

 

Weather
and Crop Progress

 

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS:  U.S. weather over the next two weeks will become less threatening to late season crops, like soybeans. Some flooding rain from tropical cyclones will impact a few areas, but the greatest threat will likely occur outside
of key grain and oilseed production areas.

           
Southern Canada’s Prairies and the northwestern U.S. Plains will likely continue drier biased stressing some late season coarse grain and oilseed crops. Ontario and Quebec corn and soybeans are in good condition.

           
Not much change was noted for Europe during the weekend or for the coming ten days, but dryness will prevail in central and eastern Ukraine, the lower Danube River Basin and Russia’s Southern Region. Improving weather will occur in Russia’s New Lands protecting
some of the sunseed crop.

           
China weather will trend drier in some east-central areas, but a possible tropical cyclone in the northeastern provinces later this week could induce some flood and wind damage.

           
India’s excessive rain in northwestern peanut, sorghum and soybean production areas could damage some crops, but the losses should be low.

           
Australia is drying out in the west where canola will soon need some moisture. Canola elsewhere in the nation remains in favorable condition.

           
Brazil freezes late last week and into the weekend may have damaged some early corn, but there is plenty of time for replanting.

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

 

MARKET
WEATHER MENTALITY WHEAT AND OTHER SMALL GRAINS:  Dry weather in Canada’s southern Prairies and the northern U.S. Plains has helped small grain harvesting advance swiftly. Good harvest weather is also occurring in parts of Europe, but there will be some rain
induced disruption for some areas in the coming week.

           
Eastern Russia’s New Lands will dry down in the coming week to the benefit of crop maturation and harvesting after abundant rain fell recently.

           
Australia’s winter crops are still poised to perform well this spring during reproduction, but Queensland needs rain immediately to maintain that outlook. Western Australia is also drying out and will need some timely rain soon.

           
Eastern South Africa needs some rain and that which is coming this week may be a little too far east to benefit key production areas.

           
Argentina will experience some temporary relief from drought this week, but there is not much follow up moisture and that may leave some concern about the long term outlook for the nation’s small grains.

           
Greater rain may be needed in U.S. hard red winter wheat areas soon to support early planting in early September.

           
Overall, weather today will provide a mixed influence on market mentality.

 

MARKET
WEATHER MENTALITY FOR COTTON:  Tropical Storm Laura could bring some damaging wind and rain to western parts of the Delta, but if the storm takes the western track advertised today much of the storm’s fury will be spent to the west of key production areas.
Hurricane Marco is not likely to have serious impact on cotton areas in the lower Delta.

           
Rain will fall frequently in the southeastern U.S. and some drier weather will soon be needed to protect fiber quality. 

           
Worry over cotton in northern India will be rising especially after heavy rain fell in parts of Madhya Pradesh during the weekend and it will move into Gujarat and southern Rajasthan early this week. Far northern India, where cotton is in the open boll stage
of development, could be negatively impacted by rain expected next week.

           
China’s cotton conditions will remain mostly unchanged during the next two weeks. Africa’s cotton is also suspected of being in favorable condition with little change likely. Temperatures have been a little milder than usual in West Africa this summer.

           
Brazil’s late harvest has gone well with little change likely. Argentina’s drought could induce delays in early season planting, but there is still time for improved rainfall and soil moisture before planting begins.

           
Overall, weather today will likely bring on a bullish bias.

 

Source:
World Weather Inc. 

 

 

 

Bloomberg
Ag Calendar

MONDAY,
August 24:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• U.S.
  crop conditions for soybeans, corn, cotton; wheat harvesting progress, 4pm
• Monthly
  MARS bulletin on crop conditions in Europe
• EU
  weekly grain, oilseed import and export data
• Brazil
  Unica sugar production, cane crush (tentative)
• U.S.
  cold storage data for pork and beef, poultry slaughter, 3pm
• Ivory
  Coast cocoa arrivals
• EARNINGS:
  IOI Corp, FGV

TUESDAY,
August 25:

• China
  customs publishes country-wise soybean and pork import data
• Malaysia
  palm oil export data for August 1-25