FI Morning Grain Comments 09/09/20

PDF attached

 

Morning. 

 

Oil
share is giving back some ground this morning while soybeans were higher as of 7:45 am from the slowdown in deteriorating US crop conditions.  SBO deliveries were 453 where CHS stopped 325, Bunge stopped 127, and customer JP issued 453.  Bunge cancelled 34
meal receipts.  Malaysian palm oil fell 57 MYR and cash was down $15.00/ton.  China’s soybean futures complex was lower.  Offshore values were leading CBOT sharply lower by 88 points and meal $0.80 lower.  USD was up 7 points earlier and WTI crude oil up nearly
$0.70.  China booked 13.53 million tons of U.S. soybeans through Aug. 27, for delivery in 2020-21, which started Sept. 1. Another 1.1 million tons have been booked since then.  Overnight we heard they bought 9-11 cargoes (private and state)
on Tuesday.  CBOT corn and wheat are lower.  Thailand bought 25,000 tons of feed barley.  Japan received no offers for feed wheat.  Apparently, President Trump directed the EPA to deny dozens of refiner requests for retroactive waivers from concerns the issue
was costing him politically, according to three sources via a Reuters article. RIN prices are expected to trade higher today. 

 

 

 

Weather
and Crop Progress

 

 

 

 

 

 

 

 

Bloomberg
Ag Calendar

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:

• Brazil
  Unica cane crush, sugar production (tentative)

THURSDAY,
Sept. 10:

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

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

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
695,741         versus   450000-700000  range

Corn             
781,838         versus   500000-800000  range

Soybeans   
1,295,462     versus   650000-1100000                range

 

Macros

Canadian
Housing Starts Aug: 262.4K (exp 217.5K; prev 245.6K)

 

Corn.

• CBOT
  corn was lower before the electronic pause on as expected US crop ratings and wet weather for the Midwest.   
  
• Apparently,
  President Trump directed the EPA to deny dozens of refiner requests for retroactive waivers from concerns the issue was costing him politically, according to three sources via a Reuters article. E20 RINs were up to 55 vs. 47 yesterday. 
  
• US
  corn crop conditions dropped one point.  The trade was looking for a two-point drop.
  
• China
  cash corn prices bias northeastern region increased by nearly 30 percent from the start of the year to 2,355 yuan (HK$2,661) per ton at the beginning of August, before falling slightly to 2,274 yuan per ton at month’s end, according to the National Bureau
  of Statistics data via Reuters article.  Heavy flooding from three typhoons have supported prices and likely lowered production. 
  
• Europe
  will see restricted rainfall this week and temperatures will be above normal. 
  
• USDA
  US corn export inspections as of September 03, 2020 were 781,838 tons, within a range of trade expectations, above 423,765 tons previous week and compares to 612,065 tons year ago. Major countries included Mexico for 216,657 tons, China Main for 204,407 tons,
  and Japan for 165,826 tons.
• BB
  – AstraZeneca Plc stopped giving shots of its experimental coronavirus vaccine after a person participating in one of the company’s studies got sick, a potential adverse reaction that could delay or derail efforts to speed an immunization against Covid-19.

 

Corn
Export Developments

• None
  reported

 

 

Soybean
complex.

• CBOT
  November soybeans
  were slightly higher on Chinese demand but a smaller than expected decline in US crop ratings are limiting gains.   
  
• Soybean
  conditions for the combined good and excellent categories fell one point, as expected.   
  

• ICE
  canola was very firm yesterday. November canola was up $7.20 to $510.90 per ton and during the Tuesday session. It rose as high as $514.90, highest price since June 2018. 
  
• Ukraine
  sunflower oil prices are up by $70-$90/ton so far in Sep to $945-$950 per ton, according to APK-Inform.  During August they climbed $45-$55 per ton.  Higher demand and expected 8.5 percent decrease in production to 14.00 MMT from 15.3 MMT have underpinned
  prices.  Oil World is at 15.8 million tons for Ukraine.  China has been a good buyer of sunflower oil recently.  Oil World noted Northwest Europe sunflower prices are at a 5-year high, and now above cash rapeseed oil. 
  
• Offshore
  values this morning were leading CBOT soybean oil 88 lower and meal $0.80
  lower. 
• Rotterdam
  soybean oil values were about 7 euros lower, rapeseed oil 6 lower in the benchmark positions, and Rotterdam meal mostly 2-6 euros lower from this time previous session. 
  
• We
  heard China bought 9-11 cargoes of US soybeans on Tuesday. 
• China
  cash crush margins as of this morning, using our calculation, were 88 cents per bushel (98 previous) and compares to 80 cents a week ago and 77 cents around this time last year.
  

• Malaysian
  palm oil

• USDA
  US soybean export inspections as of September 03, 2020 were 1,295,462 tons, above a range of trade expectations, above 808,656 tons previous week and compares to 977,914 tons year ago. Major countries included China Main for 827,612 tons, Mexico for 59,977
  tons, and Bangladesh for 52,856 tons.
• 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

• Results
  awaited: Algeria seeks up to 30,000 tons of soybean meal on September 9 for first half October shipment. 
  

 

Wheat

• Wheat
  is trading lower to mixed for the 5^th day on lack of US export interest and improving North American weather ahead of winter sowing season. 
  
• US
  harvest progress for the spring wheat crop came in at 82 percent, one point below expectations, and winter wheat plantings was 5 percent, one point above expectations. 
  
• India
  monsoon rains were 30 percent below average for the week ending September 9. 
  
• Paris
  December wheat was down 0.25 at 188.50 euros.
• Russian
  wheat exports were 15.0 million tons in the first seven months of 2020 from 13.6 million tons a year ago, according to official customs. 
  
• Ukraine
  shipped about 203,000 tons of wheat to Pakistan in August, noted UkrAgroConsult. That’s the first shipment since 2014, according to UN trade data (Bloomberg). 
  
• Kazakhstan
  was 70 percent harvested as of Sep 9 from 11.1 million hectares, well up from 35 percent at this time last year.  17.9MMT of grain will be produced this year-AgMin. 
  
• EU
  wheat exports are down 44 percent (July-Sep. 6) to 2.94 million tons.   
  
• Keep
  an eye on frost/freeze events for the unharvested spring wheat crops across Canada and the US. 
  
• USDA
  US all-wheat export inspections as of September 03, 2020 were 695,741 tons, within a range of trade expectations, above 534,135 tons previous week and compares to 413,606 tons year ago. Major countries included Vietnam for 96,795 tons, China Main for 90,106
  tons, and Mexico for 63,063 tons.
• Egypt
  will set up a commodities exchange for wheat, rice, and vegetable oils beginning FH 2021. 
  

 

Schnitkey,
G., C. Zulauf and K. Swanson. “Expected Returns for Wheat in 2021: Wheat-Double-Crop Soybeans Competitive with Corn.”
farmdoc daily (10):162, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, September 8, 2020.

https://farmdocdaily.illinois.edu/2020/09/expected-returns-for-wheat-in-2021-wheat-double-crop-soybeans-competitive-with-corn.html?utm_source=farmdoc+daily+and+Farm+Policy+News+Updates&utm_campaign=30de355bc6-FDD_RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_2caf2f9764-30de355bc6-173649469

 

Export
Developments.

• Japan
  received no offers for 80,000 tons of feed wheat and 100,000 tons of feed barley for arrival by Feb 25. 
  
• Thailand
  bought 25,000 tons of barley at $209.50/ton c&f for October shipment. 
• Jordan:
  2 participants for 120,000 tons of wheat for OND shipment. 
• Ethiopia
  seeks 400,000 tons of wheat by October 13.
• 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.