FI Morning Grain Comments 09/08/20

PDF attached

 

Morning. 

 

USDA
reported private exporters sold:

Export
sales of 400,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year; and

Export
sales of 264,000 metric tons of soybeans received during the reporting period for delivery to China during the 2020/2021 marketing year;

Export
sales of 101,600 MT of corn for delivery to unknown destinations during the 2020/2021 marketing year.

 

Good
rains fell across much of the Midwest the last couple of days. This was good for lessoning crop losses and boosting soil moisture for the SRW wheat crop areas ahead of plantings.  Crude oil is down sharply as the Suadi’s have said they will cut oil prices
and the USD is stronger today. Managed money continued to add to length in the soy complex last week with beans now estimated to be long 177k, oil long 79k and meal long 25k. Wheat is long 15k and the corn net long about 19K. Turkey seeks 500,000 tons of wheat. 

 

 

Weather
and Crop Progress

 

 

 

MORNING
WEATHER MODEL COMMENTS

KEY
ISSUES OF THE DAY

• U.S.
  northern Plains and Canada’s Prairies experience freezes this morning
• Some
  damage to immature crops resulted

 

• Freezes
  will occur Wednesday morning from Manitoba and far northern Minnesota through North Dakota to Montana and from Wyoming to western Nebraska and eastern Colorado
• Damage
  to dry edible beans and sugarbeets are expected along with some immature summer crops in the west-central Plains

 

• Livestock
  stress will be high in eastern Colorado and some immediate neighboring areas today and Wednesday due to cold rain and wet snow

 

• Remnants
  of Typhoon Haishen have produced more heavy rain in northeastern China where the ground is already too wet and flooded from Typhoon Maysak that moved through the region last week

 

• Western
  Argentina remains too dry with little change likely, although rain will fall in southern and northeastern Argentina over the coming week

 

• Dryness
  in Europe will continue from France to Ukraine this week which will be good for summer crop maturation and harvesting and for planting of some winter crops

 

• Drought
  remains a concern for France, the middle and lower Danube River Basin, central and eastern Ukraine, Russia’s Southern Region and western Kazakhstan – little relief expected this week

 

• Flooding
  remains a concern for northeastern China’s corn and soybean country; the region must dry out for summer crop harvest – some damage to crops has likely occurred

 

• Australia
  still needs significant rain to support reproduction in Queensland, northern New South Wales and northern parts of Western Australia

 

• Mexico
  and Central America have trended much wetter recently and the trend will continue; relief from dryness in Honduras and Nicaragua is becoming more complete

 

• West-central
  Africa remains too dry especially in Ghana and eastern coffee and cocoa production areas of Ivory Coast

 

• Rain
  in South Africa during the weekend was good for wheat, barley and canola, but much more was needed

 

 

MORE
DETAILS FOR THE WORLD

 

• North
  America Cold Surge Overnight Stresses Livestock And Damages Crops
• Unseasonable
  cold settled through the Canadian Prairies and into the northern U.S. Plains overnight inducing some crop damage and more is expected tonight
• Extreme
  lows slipped to the 20s Fahrenheit in Montana and parts of Canada’s Prairies with a few upper teens noted as well.
  
• Freezes
  will occur Wednesday and parts of Montana to northern Minnesota and from Wyoming into western South Dakota, western Nebraska and northeastern Colorado
  
• Damage
  is expected to dry edible beans, sugarbeets, potatoes and some heavily irrigated late season crops
  
• Dryland
  crops will not be as seriously impacted because of heat and dryness in recent weeks has already advanced crops to maturity at the potential expense of yield
• Damage
  in Canada will include some flax, corn and soybeans as well as a few late season canola crops in Saskatchewan and Manitoba
• Livestock
  stress will be greatest from Montana to western Kansas and eastern Colorado due to falling temperatures, high wind speeds, cold rain and heavy wet snow
• The
  moisture will be good in easing long term dryness, although more rain will still be needed
• Winter
  wheat planting may improve in early seeding areas due to the moisture boost expected

 

• North
  America Cold Surge Will Not Seriously Harm U.S. Midwest Corn Or Soybeans
• Low
  temperatures this morning in the eastern Dakotas, Minnesota and northwestern Iowa were not low enough to cause harm to summer crops
  
• Wednesday
  low temperatures will fall to the 30s in the eastern Dakotas and  western and northern Minnesota
  
• Most
  freezes and frost will occur in northern and western Minnesota and eastern North Dakota with very few temperatures below 30 Fahrenheit
• Some
  crop damage is expected, but no serious production cut will result
• Crop
  quality issues will be possible
• Cloud
  cover will be widespread in western Midwest Wednesday except northwestern Minnesota and North Dakota – which holds temperatures up
• Cold
  air will be moderating by Thursday, but cloud cover will still be abundant in western Corn Belt except northern Minnesota, North Dakota and a few immediate neighboring areas which will prevent frost and freezes once again
  
• Clouds
  will still be present Friday when most lows in the western Midwest will be in the 40s
  

 

• None
  of North America threatening cold will reach into eastern Midwest, Delta or southeastern U.S.

 

• Southwest
  U.S. Plains And West Texas Will Experience No Freezes
• Rain
  and cloudiness will accompany cold air into southwest U.S. Plains helping to hold temperatures up above the damage threshold
  
• Rain
  falls today through Thursday with some showers Friday in the southwestern Plains bolstering soil moisture for better wheat planting and emergence conditions and improving soil moisture in sorghum, cotton, peanut and corn production areas
• Cotton
  boll lock is possible in some of the production areas of West Texas and areas north into southwestern Kansas because of High temperatures Wednesday and Thursday in the 50s and 60s with a few 40s and lows in the upper 30s and 40s Wednesday and Thursday with
  40s continuing Friday
• Frost
  may be avoided because of cloudiness throughout the cold period
• Warming
  will return late this week and into the weekend with highs back into the 70s and 80s throughout the southwestern Plains and lows in the 50s and lower 60s

 

• Heavy
  wet snow from Colorado to Wyoming may bring trees and powerlines down tonight into Wednesday morning
• Many
  deciduous trees have not lost their leaves yet
• Notable
  transportation delays are expected, although the snow will melt relatively quickly after falling on streets and highways
• Substantial
  early season snowfall is expected in the mountains of Wyoming and Colorado

 

• U.S.
  hard red winter wheat areas will get a general soaking of rain this workweek (with snow in Colorado during mid-week) that will dramatically improve soil moisture for future wheat planting and establishment
• Moisture
  totals of 0.60 to 1.50 inches west and 1.00 to 2.50 inches east with a few greater amounts possible in Oklahoma and south-central Kansas
• Drier
  weather will evolve this weekend and last through most of next week
• Temperatures
  will trend colder this workweek and then warmer this weekend through next week with temperatures back above average next week.
  

 

• Western
  U.S. Corn Belt will get some needed rain to ease long term dryness in Iowa and neighboring areas this week
• Rainfall
  of 0.40 to 1.50 inches will occur in the far northwest while 1.00 to 3.00 inches and a few totals over 6.00 inches from the eastern Texas Panhandle into south-central Kansas
  
• Northeastern
  North Dakota and parts of northern Minnesota rainfall will be minimal this week while rain falls in most other western Corn Belt locations with totals of 0.50 to 1.50 inches resulting
• Rainfall
  will be much more limited this weekend into next week with only one frontal system and associated rain occurring Sep. 18-19
• Moisture
  comes too late for a serious increase in late season crop yields, but the moisture will stop the decline in crop conditions

 

• Lower
  Eastern U.S. Midwest and northern Delta rainfall will be restricted next ten days with less than 0.50 inch of moisture expected which will lead to net drying

 

• Rainfall
  in Great Lakes region will vary from 0.60 to 1.50 inches and locally more over the coming ten days

 

• U.S.
  lower Delta and southeastern states will experience routinely occurring rainfall over the next ten days with the southeastern states wettest
• The
  lower Delta will not get much rain until this weekend and then a daily occurrence is possible next week

 

• Tropical
  Storm Paulette was over open water in the central Atlantic Ocean and will stay over open water through the next week posing no threat to land
• Paulette
  was located 1250 miles west of Cabo Verde Islands or 1330 miles east of the Northern Leeward Islands at 18.1 north, 42.8 west at 0500 EDT today moving northwesterly at 6 mph
  
• Tropical
  storm force wind was noted out 70 miles from the storm center
• The
  storm will intensify, but stay a minimal threat to land

 

• Tropical
  Storm Rene formed Monday and was 55 miles southwest of Santo Antao, Cabo Verde Islands this morning at 16.5 north, 25.7 west moving west northwesterly at 15 mph and producing maximum sustained wind speeds of 40 mph.
  
• The
  storm will slowly strengthen as it moves away from the Cabo Verde Islands today through the end of this week
• The
  storm will remain over open water in the Atlantic Ocean posing no threat of any other landmass
  
• The
  storm may become a Hurricane later in the week

 

• Tropical
  Wave southwest of Bermuda may move to the U.S. Carolina Coast Thursday
• Some
  development is possible into a tropical depression, although confidence is low for now

 

• Tropical
  Storm Haishen reached northeastern China Monday and moved inland through eastern South Korea earlier in the weekend before reaching China
• The
  storm reached South Korea as a Category Two storm, but may have been a little less impactful than Typhoon Maysak was earlier last week
• Nevertheless,
  heavy rain  was noted and storm strong wind and the additional moisture over already saturated and flooded land may have caused more damage to crops and property
• Rainfall
  through dawn today ranged from 1.00 to 6.00 inches in northeastern China and additional rainfall of 1.00 to 3.00 inches and locally more will occur through Wednesday causing greater flooding and more potential crop damage

 

• Canada
  Prairies rainfall during weekend was greatest in southern and northeastern Prairies with up to 1.00 inch in southern Alberta and up to 0.62 inch in northern Manitoba and 0.43 inch northeastern Saskatchewan
• Some
  harvest delay occurred because of rain, but other areas were dry and fieldwork advanced well
• Weekend
  temperatures were very warm initially with highest readings in the 80s and lower 90s, but much cooler conditions occurred today with afternoon temperatures struggling to stay in the 40s and 50s Fahrenheit

 

• Canada
  Prairies will experience dry and warmer weather the remainder of this week after overnight damaging cold
• Some
  additional frost and light freezes will occur tonight in Manitoba
• Harvest
  progress will accelerate

 

• China
  rainfall late last week was greatest in eastern Inner Mongolia where rainfall of 1.50 to nearly 5.00 inches resulted from the remnants of Typhoon Maysak
• Northern
  Heilongjiang also reported rainfall of 0.60 to more than 4.00 inches from the same storm Friday
• Rainfall
  in northeastern China during the weekend was greatest in Hebei and western Liaoning where up to 2.60 inches resulted, but rainfall Monday ranged from 1.00 to more than 6.00 inches as the remnants of Tropical Storm Haishen impacted the region
• Weekend
  rain was more significant in southwestern China where Guizhou and Hunan reported 3.50 inches to nearly 5.00 inches with one location in Hunan reporting 8.40 inches. Rain also fell in the southern coastal provinces of Guangdong and Fujian where amounts varied
  from 1.34 to 4.20 inches with one location reporting nearly 9.69 inches
• Net
  drying occurred in east-central China where temperatures reached into the lower and a few middle 90s Fahrenheit inducing aggressive drying

 

• East-central
  China will continue dry over the next ten days especially in central Yellow River Basin
  
• Rain
  is expected periodically to the northeast and in the southwest
• Rainfall
  in the southwest will vary from 3.00 to more than 10.00 inches resulting in some flooding from southern Sichuan, Guizhou and Yunnan to Guangdong and Fujian
• Rainfall
  in the northeast part of the nation occurs mostly into Wednesday from the dissipating Tropical Storm Haishen
  
• Additional
  rainfall of 1.00 to 3.00 inches and locally more will occur perpetuating flood conditions

 

• Flooding
  in northeastern China has become a concern for summer crop maturation and harvesting and drying is needed immediately to protect crops from additional potential damage
• Rain
  will fall into Wednesday from the remnants of Haishen and then a few days of drying occurs before an upper level low pressure center pushes across the region next week generating multiple days of rainfall
  

 

• Argentina
  weather the past few days was mostly dry, although up to 1.14 inches occurred in northeastern La Pampa through dawn today
  

 

• Southern
  Argentina will receive a few more light showers during mid- to late week this week, but the impact on soil moisture and crop conditions will be low
• Moisture
  totals will vary from 0.05 to 0.35 inch except near the Buenos Aires south coast where rainfall may range from 0.50 to 1.50 inches
• Northeastern
  Argentina will get some rain late this week benefiting a few grain and cotton areas with follow up rain in the same area during mid- to late-week next week
• There
  is still no relief expected for the drought areas of western Argentina during the coming ten days

 

• Brazil
  weekend rainfall was minimal except in Rio Grande do Sul and Santa Catarina where moisture totals of 0.68 to 1.34 inches resulted
• Temperatures
  were hot in center west crop areas with readings in the middle 90s to 104 degrees Fahrenheit

 

• Brazil
  rainfall will continue greatest in the far south of the nation for at least the next ten days
• Rain
  is advertised from Parana to southern Minas Gerais Sep 21-23, but the event is too far out in time to have much confidence
• The
  moisture would reach into some citrus, sugarcane and coffee production areas and might be good for early corn, but early indications suggest only light rain
• Center
  west Brazil looks to be dry and very warm to hot through Sep. 23

 

• South
  Africa weekend rainfall was scattered lightly in the central and west benefiting some wheat, barley and canola areas, although more rain is needed
• Amounts
  were greatest from southeastern Northern Cape into north-central Eastern Cape where 0.72 to 1.57 inches resulted
• Most
  rain totals were under 0.40 inch
• All
  of it was welcome more was needed

 

• South
  Africa will be mostly dry this week except in a few coastal areas
• More
  rain is needed to support winter crop development and improve soil moisture for spring and summer crop planting next month

 

• West-central
  Africa rainfall was erratic during the weekend
• Western
  parts of Ivory Coast received 0.30 to 3.46 inches, but all other coffee and cocoa production areas from eastern Ivory Coast through Ghana were left dry
• Erratic
  rainfall is expected to continue in these areas for a while, but as the middle of September arrives the precipitation should increase
• Rain
  is needed in both nations, but probably more so in Ghana

 

• Western
  CIS precipitation during the weekend was limited to western Russia, Belarus, the Baltic States  and the eastern most New Lands where moisture totals varied from 0.50 to 1.34 inches with a few amounts in western Russia getting up to 1.77 inches

 

• Eastern
  Russia New Lands will dry down briefly late this week and into the weekend, but more rain is expected next week
• The
  break from frequent rain will be welcome, but possibly not long enough to get aggressive harvesting to take place
• A
  little concern over spring wheat quality remains in West Siberia and

 

• Western
  Russia precipitation will occur frequently this week along with the Baltic States, parts of Belarus and the Ural Mountains region (later this week)
• The
  moisture will slow crop maturation and may delay fieldwork in a few areas, but some harvest progress is expected
• Early
  season planting of winter crops is advancing favorably

 

• Dryness
  is prevailing from eastern Ukraine into Kazakhstan and very little change is expected for at least ten days

 

• Northern
  India will be dry this week while rain falls in central, southern and eastern parts of the nation
• Cotton
  conditions will improve after being too wet earlier this month

 

• India
  reported scattered showers and thunderstorms during the weekend with many areas getting only light amounts of rain which led to some net drying
• Crop
  conditions are mostly good or improving

 

• Improved
  rainfall occurred in Indonesia and Malaysia during the weekend
• Greater
  rain fell in central and northern Sumatra and across Kalimantan to eastern Malaysia
• Sulawesi
  also reported significant rain
• More
  precipitation is needed in Sumatra and western Java where it has been driest in recent months
• Some
  erratic rainfall is expected over the next ten days with many areas getting additional moisture

 

• Mainland
  areas of Southeast Asia continued to report erratic rainfall during the weekend
• Northern
  Vietnam, northern Laos and one location in southern Laos received up to 4.43 inches of rain
• Crop
  conditions are rated favorably, but greater rain is needed to ensure good water supply over the dry season
• Water
  supply has not been replenished very well this year and greater rain is needed
  

 

• Rain
  was greatest in northern Luzon Island during the weekend while most other areas in the Philippines experienced net drying
• Philippines
  rainfall should increase during the coming week

 

• Europe
  weather during the weekend occurred from northern Italy to Poland and the Baltic States during the weekend
  
• Moisture
  totals varied from 0.30 to 1.36 inches
• Mostly
  dry weather occurred elsewhere
• Temperatures
  were mild in the north and warm in the south

 

• Europe
  precipitation will be restricted this week leaving France, parts of Germany and the middle and lower Danube River Basin quite dry and in need of significant rain
• Western
  Europe may trend wetter next week
• Temperatures
  will be warmer than usual this week

 

• Australia
  weather during the weekend included rain in southwestern parts of Western Australia and in east-central New South Wales
  
• Moisture
  totals varied from 0.05 to 0.35 inch with local totals of 1.00 to 2.00 inches near the coast in the far southwest
  

 

• Australia
  weather over the coming ten days will include some light rainfall over some of the nation’s winter crop region, but most of the rain will be a little too light to seriously bolster soil moisture
  
• Some
  forecast models are increasing rain for New South Wales, Queensland and Victoria after Sep. 18, but confidence is low
• Pakistan
  weather is improving after flooding in late August
• Central
  and southern Pakistan was dry during the weekend
• Very
  little rain will fall over the next ten days
• Central
  America and western and southern Mexico will continue to experience periodic rainfall through the next two weeks supporting many crops
• Wet
  weather during the weekend bolstered soil moisture in many areas
• Rain
  is expected to be abundant during the next two weeks with some needed moisture eventually falling in northeastern Mexico and southern Texas
• Ontario
  and Quebec will experience a good mix of rain and sunshine over the next two weeks; some drying will be needed thereafter to induce better crop maturation and harvest conditions
• New
  Zealand rainfall will be erratically distributed for a while and temperatures will be a little cooler biased
• Southern
  Oscillation Index was +9.35 today and it will stay strongly positive this week

Source:
World Weather Inc. 

 

 

Bloomberg
Ag Calendar

MONDAY,
Sept. 7:

• China
  trade data on soybean and meat imports
• International
  Grains Council secretariat briefing on trade
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• AB
  Foods trading update
• HOLIDAY:
  U.S., Brazil, Canada, Thailand

TUESDAY,
Sept. 8:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• U.S.
  crop condition, harvesting progress for soybeans, corn, cotton, 4pm
• Malaysian
  Palm Oil Council webinar on Middle East, North Africa palm trade
• Abares
  Australian crop report

WEDNESDAY,
Sept. 9:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• Brazil
  Unica cane crush, sugar production (tentative)

THURSDAY,
Sept. 10:

• Malaysian
  Palm Oil Board’s end-Aug. palm oil stockpiles, production, export data
• Malaysia
  palm oil export data for Sept. 1-10
• Conab’s
  data on production, area and yield of soybeans and corn in Brazil

FRIDAY,
Sept. 11:

• USDA’s
  monthly World Agricultural Supply and Demand (Wasde) report, noon
• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• 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
  agriculture ministry’s (CASDE) monthly report on supply and demand
• New
  Zealand food prices

Source:
Bloomberg and FI

 

 

 

 

 

 

 

Macros

 

Corn.

• Choppy
  session so far overnight and morning but volume was heavy for corn and soybeans. 
  
• CBOT
  corn was slightly lower at the electronic pause on good rains across the Midwest over the long holiday weekend, thought to slow the decay or stabilize crop conditions.  USDA’s 24-hour corn and soybean announcements underpinned prices after the day session
  open. 
• We
  look for corn and soybean conditions to decline by one point each. 
• The
  commitment of traders reported showed managed money bought many more contracts than expected.  The trade really missed the estimate for the traditional fund corn position.  Traditional funds as of 9/1 were net long 61,300 contracts, instead of an estimated
  net short 3,400 contracts.  They trimmed their net short position and went long by adding net longs of 78,600 contracts in one week!  December corn was around $3.5450 on August 25.  On Tuesday (9/1) it settled at $3.58. 
  

 

 

Agritel
sees the Ukraine corn crop at 33.5 million tons, down 6.5 percent from 2019.  A smaller corn crop could boost US corn exports to China through July 2021. 

 

Corn
Export Developments

• Under
  the 24-hour system, USDA reported export sales of 101,600 MT of corn for delivery to unknown destinations during the 2020/2021 marketing year.

 

Soybean
complex.

• CBOT
  November soybeans
  were lower at the electronic pause on sharply lower crude oil and very strong USD.  USDA’s 24-hour corn and soybean announcements underpinned prices after the day session open.  The US weather forecast suggests a slow US harvest progress over the next seven
  days.  Soybean oil gained over meal.  Note typhoon Haishen will impact northeast China today. 
  
• We
  look for corn and soybean conditions for the combined good and excellent ratings to decline by one point each. 
  

• Indonesia
  looks to alter its palm export tax.  If palm prices appreciate, they will be able to collect more tax for the product.  Every increase of $25/ton would yield an increase in the levy by $5.00 percent ton. 
  
• Offshore
  values this morning were leading CBOT soybean oil 66 higher and meal $0.40
  higher. 
• Rotterdam
  soybean oil values were about 10-12 euros higher, rapeseed oil 1 lower in the benchmark positions, and Rotterdam meal mostly 3-7 euros higher from this time previous session. 
  
• China
  cash crush margins as of this morning, using our calculation, were 98 cents per bushel and compares to 80 cents a week ago and 77 cents around this time last year.
  

• Malaysian
  palm oil (two days of trading). 

• A
  Reuters poll calls for Malaysia’s palm oil end of August stocks to increase 5.4 percent from the previous month to 1.79 million tons.  Production is expected increase 2% to 1.84 million tons.  The Malaysian Palm Oil Board will release the official data on
  Sept. 10.

 

Oilseeds
Export Developments

• Under
  the 24-hour system, USDA reported:
• Export
  sales of 400,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year; and
  
• Export
  sales of 264,000 metric tons of soybeans received during the reporting period for delivery to China during the 2020/2021 marketing year. 
  

 

Wheat

• Wheat
  is trading lower despite Turkey issuing a 500,000 ton import tender.  Prices are likely lower after the US SRW wheat areas saw rain over the long holiday weekend and a sharply higher USD. 
  
• Paris
  December wheat was down 0.50 at 188.00 euros. 
• Australia’s
  ABARES increased their wheat production estimate for 2020-21 by 8.4% to 28.91 million tons, up from its June estimate of 26.67 million tons.  Increased production in New South Wales has accounted for 60% of the forecast increase.  Barley output during the
  2020-21 season will total 11.2 million tons, up from its estimate of 10.6 million tons in June.
• Keep
  an eye on frost/freeze events for the unharvested spring wheat crops across Canada and the US. 
  

 

Export
Developments.

• Turkey
  seeks 500,000 tons of milling wheat (min 12.5%) on September 15 for Sep 23-Oct 16 shipment. 
  
• Japan
  seeks 100,000 tons of barley and 80,000 tons of feed wheat pm September 9 for arrival by end of Feb. 
  
• Ethiopia
  seeks about 80,000 tons of milling wheat on Sept. 30.

 

Rice/Other

·        
South Korea’s Agro-Fisheries & Food Trade Corp. seeks 113,999 tons of rice on Sep 16 for arrival in South Korea between Jan. 31, 2021, and June 30, 2021.

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