FI Morning Grain Comments 08/25/20

PDF attached

 

Morning. 

 

Larger
than expected decline in corn and soybean conditions sent respective futures higher overnight.  Corn hit a 6-week high.  Wheat was higher as well.  Oil share is giving back gains from Monday’s upward swing. 

 

We
heard China’s Sinograin bought up to 12 cargoes of US beans out of the US Gulf and PNW for shipments between December and January.  China imported 8.18 million tons of Brazilian soybeans in July out of the 10.09-million-ton total.  Malaysian palm oil fell
to a 4-week low. 

 

Tender
update:  Algeria seeks 30,000 tons of soybean meal on Wednesday for shipment by September 25, optional origin.  Egypt is in for wheat.  Jordan seeks 120,000 tons of wheat on Wednesday for October through December shipment.  Taiwan seeks 100,645 tons of US
wheat on Aug 27 for Oct/Nov shipment.  Results are awaited on Turkey in for wheat.  Pakistan initially bought 210,000 tons of wheat for their import tender for up to 1.5 million tons of wheat.  They paid around $233.85/ton C&F.  Japan seeks 100,952 tons of
food wheat. 

 

 

 

Weather
and Crop Progress

 

 

 

 

 

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

TUESDAY,
August 25:

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

WEDNESDAY,
August 26:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am

THURSDAY,
August 27:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• International
  Grains Council monthly report
• Port
  of Rouen data on French grain exports
• EARNINGS:
  Sime Darby Plantation

FRIDAY,
August 28:

• 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
• U.S.
  agricultural prices paid, received, 3pm

Source:
Bloomberg and FI

 

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
569,593         versus   400000-600000  range

Corn             
892,031         versus   800000-1150000                range

Soybeans   
1,150,832     versus   600000-1250000                range

 

Macros

 

 

Corn.

• December
  corn futures reached a high overnight of $3.5175, level not seen since July 10. 
  
• USD
  was down 14 points and WTI crude up 32 cents as of around 7:32 AM CT. 
• Two
  tropical storms for the US Gulf this week are expected to delay grain loadings. 
  
• US
  corn conditions decreased a large 5 points from the previous week to 64 percent, compared to 57 points a year ago and 66 average.  Traders were looking for US corn conditions to be down 2 points.  88 percent of the corn crop is in the dough phase, above 82
  percent average.  44 percent of the corn crop is dented, above 39 average. 
  
• State
  highlights:
• Iowa
  corn dn 9 to 50% G/E vs 72% 5yr avg
• Michigan
  corn dn 11 to 54% G/E vs 55% 5yr avg

• USDA
  US corn export inspections as of August 20, 2020 were 892,031 tons, within a range of trade expectations, below 1,075,251 tons previous week and compares to 646,439 tons year ago. Major countries included Mexico for 243,557 tons, Japan for 227,600 tons, and
  Colombia for 217,576 tons.
• A
  Reuters poll for South Africa’s corn production came in at 15.386 million tons for 2019-20, down from 15.545 estimated by the CEC in July.  That includes 8.954MMT white and 6.432 million tons of yellow. 
  
• US
  frozen pork inventories at the end of July came in at a nine year low of 458.902 million pounds (pork – including ribs, loins and hams), down from 460.173 million in June and 611.692 million a year earlier.  China has been stepping up imports recently. 
  

 

IA
corn still in better shape than TX, CO, PN, & OH.

 

Corn
Export Developments

• None
  reported

 

 

Soybean
complex.

• Soybeans
  and meal are higher from a drop in US crop conditions.  Oil share is giving back gains from Monday’s upward swing from lower soybean oil prices that followed palm oil.  Note the 7-day weather forecast calls for a larger coverage of rain for the US, extending
  westward, including parts of IA. 
• US/China
  trade talks held Monday apparently went well. 
• We
  heard China’s Sinograin bought up to 12 cargoes of US beans out of the US Gulf and PNW for shipments between December and January. 
  
• China
  imported 8.18 million tons of Brazilian soybeans in July out of the 10.09-million-ton total.  The 8.2 million tons compares to 6.42 million for July 2019 Brazil shipments to China and down from 10.51 million tons in June.  US July imports totaled 38,331 tons,
  down from 267,553 tons in June. 
• US
  soybean conditions dropped a more than expected 3 points from the previous week to 69 percent and compares to 55 percent year ago and 63 average.  Traders were looking for US soybean conditions to decline 2 points.  92 percent of the soybean crop is setting
  pods, above 87 percent average.  4 percent of the crop is dropping leaves.  State highlights:
• Iowa
  bean dn 6 to 56% G/E vs 70% 5-yr avg
• Michigan
  bean dn 10 to 63% G/E vs 57% 5-yr avg
• SD
  bean dn 10 to 72% G/E vs 60% 5yr avg

• USDA
  US soybean export inspections as of August 20, 2020 were 1,150,832 tons, above a range of trade expectations, above 924,486 tons previous week and compares to 965,913 tons year ago. Major countries included China Main for 689,557 tons, Egypt for 52,429 tons,
  and Mexico for 45,768 tons.

• Offshore
  values this morning were leading CBOT soybean oil 37 lower and meal $4.00
  higher. 
• Rotterdam
  soybean oil values were mixed, rapeseed oil unchanged in the benchmark position, and Rotterdam meal $2-$4 higher from this time yesterday morning. 
  
• China
  cash crush margins as of this morning, using our calculation, were 96 cents per bushel (87 previous) and compares to 116 cents a week ago and 85 cents around this time last year.
  

• Malaysian
  palm oil fell to a 4-week low after declining about 47 MYR/ton, and cash was off $10.50/ton. 
  
• ITS
  reported August 1-25 palm shipments off 16.2 percent (1-20 were down more than 20%), at 1.220 million tons from 1.455 million during the same period last month.  AmSpec showed a 14.3 percent decline at 1.220 million tons.
  

·        
Malaysian Palm oil:  4-week low

 

Oilseeds
Export Developments

• Algeria
  seeks 30,000 tons of soybean meal on Wednesday for shipment by September 25, optional origin. 
  
• Results
  awaited: Syria seeks 50,000 tons of soybean meal and 50,000 tons of corn on Aug 25 for delivery within four months of contract signing.

 

Wheat

• US
  wheat futures
  are higher from an increase in global import tenders and lower USD.  Higher corn is underpinning prices. 
  
• US
  spring wheat crop conditions increased one point to 71 percent and compares to 69 percent year ago and 63 average.  This was unexpected.  Traders were looking for a one-point decline in spring wheat conditions.  49 percent of the spring wheat crop had been
  harvested, up from 30 percent week ago, and compares to 62 percent average.  Winter wheat harvest progress advanced to 97 percent.  Traders were looking for 46 percent for spring wheat and 97 percent for winter wheat. 
  
• USDA
  US all-wheat export inspections as of August 20, 2020 were 569,593 tons, within a range of trade expectations, above 494,680 tons previous week and compares to 518,574 tons year ago. Major countries included China Main for 62,999 tons, China T for 59,848 tons,
  and Philippines for 58,652 tons.
• Kazakhstan
  looks for 2020-21 grain exports to reach 7.5-8.0 million tons. 
• Argentina
  will get some needed rain this week
• Paris
  December wheat was up 1.25 euros at 183.75. 

 

 

Export
Developments.

• Lowest
  offer $213/ton for 55k Russian:  Egypt seeks wheat for October 11-20 and/or October 21-31 shipment.  They last paid around $222-223/ton second week of August. 
  
• Pakistan
  initially bought 210,000 tons of wheat for their import tender for up to 1.5 million tons of wheat.  They paid around $233.85/ton C&F. 
  
• Results
  awaited: 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.
• Jordan
  seeks 120,000 tons of wheat on Wednesday for October through December shipment. 
  
• Japan
  seeks 80,000 tons of feed wheat and 100,000 tons of feed barley (SBS) on August 26 for November 30 loading. 
  
• Japan
  seeks 100,952 tons of food wheat this week. 

• Taiwan
  seeks 100,645 tons of US wheat on Aug 27 for Oct/Nov shipment. 
• 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.
• Results
  awaited: Pakistan seeks 1.5 million tons of wheat.  Lowest offer was $233.85/ton for 200,000 tons of milling wheat. 
  

 

Rice/Other

·        
The two tropical storms slated for the US Gulf will not be good for unharvested rice.  17 percent of the US rice crop had been harvested as of Sunday.