FI Morning Grain Comments 09/02/20

PDF attached

 

Morning. 

 

Soybeans,
corn and wheat are under pressure from a reversal in the USD and improvement in overnight rainfall for the heart of the US.

 

Rains
last night reached a little further north and east than the trade had anticipated, starting prices lower this morning. The WCB continues to get missed though. Yesterday’s crush report for July came in better than expected with a 184.5MM bu crush and oil stocks
were slightly less than expected at 2124. 100 oil receipts were cancelled last night by Bunge Decatur and Solae Gibson City, 50 each. 360 meal were recirculated last night.

 

 

 

 

 

 

 

 

 

 

 

Weather
and Crop Progress

 

 

MORNING
WEATHER MODEL COMMENTS

NORTH
AMERICA

• Cooling
  advertised for next week was much less aggressive today relative to Tuesday’s forecast model runs and the change seems to have been needed
• Sunday
  will bring some frost to Alberta and northwestern Saskatchewan Canada
• Monday
  will generate similar conditions in northeastern Saskatchewan and northern Manitoba with a few light freezes possible in the northernmost crop areas
• Tuesday
  will bring frost and freezes to the eastern Canada Prairies possible ending the growing season for some areas and possibly pushing some frosty conditions into the northwestern Plains
• Wednesday
  of next week will bring some frost potential to western Nebraska and immediate neighboring areas as well as a few areas in the eastern Dakotas into Minnesota. A few freezes cannot be ruled out for the eastern Dakotas, the northwest half of Minnesota and possibly
  in a couple of western Nebraska locations, but most other temperatures will be above the damage threshold
• Most
  of today’s models are quick in bringing back warmer air to North America late next week and into the following weekend
• Rainfall
  was increased from eastern Kansas through Missouri to the Michigan and southern Wisconsin early next week ahead of the mid-week cold
• Some
  of this increase was overdone
• The
  06z GFS model reduced rainfall in the central Plains for Tuesday and some reduction was needed
• Rain
  was also increased in western Tennessee and Kentucky for mid-week next week while some of the heavy rain suggested for northeastern Texas over the next several days was reduced
  
• The
  increase was overdone, but less rain in Texas was needed
• Rain
  was increased from eastern Iowa to Wisconsin during mid-week next week
• The
  increase was overdone
• Rain
  was increased in southern Alberta and central Montana Sep 12-14
• This
  was overdone
• Rain
  from Mississippi, Alabama and Georgia to Pennsylvania and New England was shifted farther to the east Sep 12-14
• The
  change was needed
• Showers
  were increased in the northern Plains and parts of Canada’s Prairies Sep 15-16
• The
  increase was overdone
• Rain
  in the interior southeastern states was reduced Sep. 15-16
• The
  change was needed

 

World
Weather, Inc. would not be surprised to see a second shot of cool air put back into the models for a little later next week. It seems that the cold episode ends too quickly given the environment in which it evolves from.  The rainfall increase in the Midwest
early to mid-week next week may be a little overdone, although some increase in rainfall was needed relative to yesterday’s forecasts.  Too much moisture was returned to the northern Plains and Canada’s Prairies during the second week of the outlook.

 

SOUTH
AMERICA

• 06z
  GFS model run reduced rain from Cordoba and southern Santa Fe into La Pampa and Buenos Aires Sep 13-14; Rain was also reduced in Entre Rios Sep 15
• This
  change was badly needed as the previous model run was much too wet
• Rain
  was reduced in Minas Gerais, Espirito Santo and Rio de Janeiro for Sep 12-15
• The
  reduction was needed and the models may still be too wet for this area
• Some
  reduction in rainfall was suggested for far southern Brazil Sep. 15-16
• The
  change was needed

 

Not
a lot of change was suggested during the first tend days of the outlook today relative to that of Tuesday for both Argentina and Brazil. Rain in the following five days was increased in southern Argentina and there is some potential for verification, but the
00z model run was much too wet and the 06z run was a little better. Brazil’s wetter bias will remain along the coast and in far southern parts of the nation which should prove to be correct.

 

EUROPE

• No
  significant changes were noted during the coming ten days

RUSSIA
NEW LANDS

• No
  significant changes were noted during the coming ten days

 

Rain
still falls too frequently in the far eastern New Lands where some concern over spring wheat and sunseed conditions remains and where some harvest delay is likely

 

CHINA

• Not
  much change in the models today – it is all about the tropical cyclones in northeastern China
• Northeastern
  China will get excessive rain from Typhoon Maysak later today into Friday with flooding likely
• Northeastern
  China will also be impacted by Typhoon Haishen that will arrive late Sunday and continue into Tuesday bringing excessive rain and flooding once again
  
• If
  both storms impact northeastern China some crop damage will come to the region because of excessive moisture and flooding
• Delays
  in crop maturation and harvesting will also be a serious threat
• Some
  serious property damage and crop impact is possible
• The
  Korean Peninsula will be inundated by excessive rain, flooding and strong wind today and early Thursday and again late Saturday into Monday
• South
  Korea will be most impacted, but both North and South Korea will experience serious flooding and considerable crop and property damage
• These
  areas have been flooded frequently in recent weeks and damage to personal property and agriculture will be extensive especially in South Korea where excessive wind is also expected and notable storm surges will come to the south coast in both events (today
  and Sunday)
• Western
  Japan will also be impacted by Typhoon Haishen with damaging wind, severe flooding and a notable storm surge resulting in serious property damage for Kyushu
• East-central
  and interior southeastern China will experience a favorable drying environment over the coming week to ten days
  

INDIA

• No
  changes overnight
• Northern
  India will be rainy through the weekend and then trend drier next week
• Some
  concern over cotton quality will remain in the north through the weekend and then conditions will improve
• Gujarat,
  western Rajasthan and central and southern Pakistan will be drying out in the coming week
• Monsoonal
  rains will begin drawing in the north next week while rain falls frequently in the south and east

AUSTRALIA

• No
  change
• Rain
  will continue mostly confined to the south coast and lower east coast
• Some
  increase in rainfall occurred in southwestern Western Australia late next week, but it was likely overdone
• Queensland
  drought will remain a threat to reproduction
• Rain
  is still needed in South Australia and northern Western Australia as well

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

WEDNESDAY,
SEPT. 2:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• UkrAgroConsult’s
  Black Sea Grain Conference in Kyiv (Sept. 2-3)
• Russia’s
  Agriculture Ministry holds annual conference to discuss production and the industry
• HOLIDAY:
  Vietnam

THURSDAY,
SEPT. 3:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• FAO
  World Food Price Index
• Port
  of Rouen data on French grain exports
• New
  Zealand commodity price

FRIDAY,
SEPT. 4:

• 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
• CNGOIC’s
  monthly supply-demand report on Chinese feed grains and oilseeds
• FranceAgriMer
  weekly update on crop conditions
• Statcan’s
  data on Canada wheat, barley, soy, canola and durum stocks
• HOLIDAY:
  Thailand

Source:
Bloomberg and FI

 

 

 

 

 

Macros

Canadian
Labour Productivity (Q/Q) Q2: 9.8% (est 6.5%; prevR 4.5%; prev 3.4%)

 

 

Corn.

• December
  corn futures are
  lower in a risk off session.  Lack of news is a feature and the US weather outlook looks a tad less threatening. 
  
• Rainfall
  was increased from eastern Kansas through Missouri to the Michigan and southern Wisconsin early next week ahead of the mid-week cold. 
  
• Brazil
  exported 6.48 million tons of corn during the month of August, up from 7.3 million tons a year ago. 
  
• A
  Bloomberg poll looks for weekly US ethanol production to be unchanged at 931,000 barrels (918-945 range) from the previous week and stocks to increase 239,000 barrels to 20.648 million.

 

USDA
NASS reported the July corn for ethanol grind at 424 million bushels, well above a Bloomberg trade guess of 408 million bushels, higher than 379 million for June and 451 million during July 2019. 

 

 

Corn
Export Developments

• None
  reported. 

 

Soybean
complex.

• CBOT
  November soybeans and soybean meal are under pressure from lack of Chinese buying (24-hour).  We heard China bought one cargo of US soybeans out of the Gulf on Tuesday for November shipment.
  

• Brazil
  exported 6.2 million tons of soybeans during the month of August, up from 5 million tons a year ago.  Brazil’s 2020-21 soybean crop is seen unchanged by StoneX from their previous estimate at 132.6 million tons with a planted area of 38 million tons.  Anec
  estimated 2020 Brazil soybean exports at 82 million tons and corn between 31 and 33 million tons. 
  
• Offshore
  values this morning were leading CBOT soybean oil 11 lower and meal $2.20
  higher. 
• Rotterdam
  soybean oil values were higher, rapeseed oil near unchanged in the benchmark positions, and Rotterdam meal mostly lower from this time yesterday morning. 
  
• China
  cash crush margins as of this morning, using our calculation, were 81 cents per bushel (83 previous) and compares to 90 cents a week ago and 72 cents around this time last year.
  

• SGS:
  Malaysian palm exports for August fell 13.7 percent to 1.443 MMT from previous month. 
  
• Malaysian
  palm oil: 

• Manitoba,
  Canada, was only 7 percent harvested for canola compared to 47 percent for the 3-year average.  Dry bean and canola desiccation or swathing is occurring in much of the Eastern, Central and Southwest regions, according to a weekly AgMin report. 
  
• USDA
  Nass reported the July crush at 184.5 million bushels, 1.5 million above a Reuters trade guess and above 179.4 million above July 2019.  End of July soybean oil stocks came in at 2.124 billion pounds, 7 million below an average trade guess, below 2.271 billion
  from previous month and above 2.040 billion year earlier.  The soybean oil yield was 11.50 pounds per bushel, up from 11.48 for June.  

 

 

Oilseeds
Export Developments

• None
  reported.
• Results
  awaited: Algeria seeks 30,000 tons of soybean meal for shipment by September 25, optional origin. 
  

 

Wheat

• Wheat
  is lower in Chicago and KC from a lower USD while Minneapolis is higher on Canadian crop concerns from upcoming frost/freeze events.   This Sunday some frost may occur to Alberta and northwestern Saskatchewan Canada and on Monday similar conditions could be
  seen in northeastern Saskatchewan and northern Manitoba. 
• Yesterday
  there was talk China bought US hard red winter wheat out of the PNW. 
• US
  Great Plains remains too dry ahead of winter wheat plantings.  Argentina’s rainfall this week will not occur in the driest wheat areas.  More than a million acres of wheat in Argentina could be affected by drought.  Dryness remains in Queensland, Australia. 
  
• Ukraine’s
  UGA estimated the 2020 wheat crop at 26.6 million tons and corn at 35.3 million tons.
• Paris
  December wheat was down 0.25 at 187.25 euros. 

 

Export
Developments.

• Received
  no offers: Jordan was in for 120,0,00 tons of wheat set to close Sep 2.  They will be back in Sept. 9. 
  
• Japan
  seeks 100,000 tons of barley and 80,000 tons of feed wheat pm September 9 for arrival by end of Feb. 
  
• Results
  awaited: Algeria seeks wheat on Sep 2 for October shipment. 
• Results
  awaited: Syria looks to sell and export 100,000 tons of feed barley with offers by Sep 1. 
  
• Japan
  bought 106,937 tons of food wheat later this week for arrival by December 31. Original tender as follows.
  

 

• 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

·        
Syria is in for 39,400 tons of white rice on September 30.