FI Morning Grain Comments 09/15/20

PDF attached

 

Morning. 

 

USDA
announced additional sales

two
more…WASHINGTON, September 15, 2020–Private exporters reported to the U.S. Department of Agriculture the following activity:

–Export
sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year;

–Export
sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year; and

–Export
sales of 120,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.

 

Hurricane
Sally is expected to make landfall soon across FL and AL.  Higher start to the day for the US soybean complex on follow through buying amid China demand and US crop conditions.  Grains are lower on light harvesting pressure for corn and planting progress for
US winter wheat.  US crop conditions fell 2 points for soybeans and one point for corn.  Trade was looking for unchanged for both.  USD was down 26 points earlier and WTI crude oil up about $0.53. 
Malaysian
palm was up again by roughly 48MYR and cash up $2.50/ton.  SGS Sep 1-15 palm oil shipments 745,565 ton, up 12.2% from previous month.  Japan seeks 104,870 tons of milling wheat.  Taiwan’s MFIG seeks corn while South Korea’s SPC seeks 38,000 tons of US and/or
Canadian wheat.  Ethiopia is in for 200,000 tons of wheat.  Turkey saw offers for 500,000 tons of wheat and Pakistan got offers for 170,000 tons of wheat.  Argentina’s coop association booked a large 883,000 tons of Argentina’s export licenses overnight, busiest
day since August 25.  China’s August pig herd was up 31% from year ago. 
US
temperatures will be drier and warmer this week, facilitating harvesting progress. 

 

 

 

Weather
and Crop Progress

 

 

 

Hurricane
Sally continues to slowly advance towards far southeastern Louisiana, southeastern Mississippi, and southwestern Alabama. The center of the storm will likely make landfall near the Mississippi and Alabama border late Tuesday or early Wednesday morning. The
system will be at least a Category 2 hurricane based on the Saffir-Simpson Scale. It may briefly become a Category 3 though (max sustained winds of at least 111 mph) before landfall occurs. Personal property damage and some crop damage will occur as a result
of the wind, storm surge, and associated flooding rainfall near and where the system makes landfall. Remnant heavy rain from the system will then be mostly limited to the southeastern states through Thursday where fieldwork delays will occur as a result. Concern
remains over open boll cotton quality in the southeastern states due to the associated heavy rain as well.

Source:
World Weather Inc. 

 

 

 

Bloomberg
Ag Calendar

TUESDAY,
Sept. 15:

• Australia’s
  Abares releases quarterly agricultural commodities report
• Malaysia
  palm oil export data for Sept. 1-15
• France’s
  agriculture ministry to publish crop estimates
• World
  Agri-Tech Innovation Summit, Sept. 15-16
• New
  Zealand global dairy trade auction
• HOLIDAYS:
  El Salvador, Guatemala, Honduras, Nicaragua

WEDNESDAY,
Sept. 16:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• FranceAgriMer
  supply and demand estimates
• Future
  Food-Tech conference, Sept. 17-18
• HOLIDAYS:
  Malaysia, Mexico

THURSDAY,
Sept. 17:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• USDA
  total milk production for August, 3pm
• Port
  of Rouen data on French grain exports
• Biosev
  SA 1Q 2021 earnings

FRIDAY,
Sept. 18:

• 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

Source:
Bloomberg and FI

 

 

OI
is off a touch due to Sep dropping off

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
637,226         versus   450000-700000  range

Corn             
878,907         versus   500000-900000  range

Soybeans   
1,283,936     versus   800000-1500000                range

 

Macros

US
Import Price Index (M/M) Aug: 0.9% (exp 0.5%; prev 0.7%)

–        
Import Price Index (Y/Y) Aug: -1.4% (exp -2.1%; prev -3.3%)

–        
Export Price Index (Y/Y) Aug: -2.8% (exp -3.2%; prev -4.4%)

Canadian
Manufacturing Sales (M/M) Jul: 7.0% (exp 9.0%; prev 20.7%)

 

 

Corn.

• CBOT
  corn was
  lower early on an increase in Argentina corn registrations and lower wheat.   US weather is non-threatening this week and harvest progress is expected to advance throughout the country, with exception of parts of the lower Delta and Southeast where heavy rain
  will occur.  
• USD
  was down 12 points earlier and WTI crude oil up about $0.45. 
• Argentina’s
  coop association booked a large 883,000 tons of Argentina’s export licenses overnight, busiest day since August 25.  Yesterday Argentina offers were up 3 cents. 
  
• US
  corn conditions fell 1 point to 60 percent, 5 points below a 5-year average.  Trade was looking for unchanged.  We estimate the US corn yield at 177.5 bushels per acre, 1.0 bushel below USDA.  Our harvested area is 55,000 acres below USDA, resulting in a production
  of 14.807 billion bushels, 93 million below USDA’s September estimate.  
  
• Soybean
  and Corn Advisory: 2020 U.S. Corn Estimate Unchanged at 176.0 bu/ac
• U.S.
  Grains Council said global ethanol production is expected to be 20% lower this year due to COVID-19 and the recovery in production back to pre-pandemic levels will not be realized until 2022.  About 23 billion liters of ethanol production has been lost in
  2020, which has shuttered more than 250 ethanol plants across the globe.  U.S. ethanol production is currently 10% lower compared with the levels for Aug. 16, 2019, according to Reuters citing a conference. 
  
• China’s
  August pig herd was up 31.3% from year ago and sow herd up 37%. Note ASF began in August 2018.
• USDA
  US corn export inspections as of September 10, 2020 were 878,907 tons, within a range of trade expectations, below 887,889 tons previous week and compares to 423,129 tons year ago. Major countries included Mexico for 211,035 tons, China Main for 210,815 tons,
  and Korea Rep for 138,582 tons.
• (Reuters)
  – More dead wild boar have been discovered in the German state of Brandenburg, public broadcaster rbb reported on Tuesday, after the state reported its first case of African swine fever (ASF) last week.

 

Corn
Export Developments

• Taiwan
  seeks up to 65,000 tons of corn from the US, Brazil, Argentina, and/or South Africa, on Sep 16 for Nov-Dec shipment.
  

 

 

Soybean
complex.

• Higher
  start to the day for the US soybean complex on follow through buying amid China demand and US crop conditions.
  
• CBOT
  November soybeans remains above the $10 mark.  The contract may trade around that level over the next couple of weeks, dipping below $10 time to time, if China slows Q4 purchases.  Support in Nov soybeans is seen at $9.86, then $9.68. 
  
• Soybean
  oil is higher in part to higher WTI crude oil and Malaysian palm futures. 
  
• Safras
  sees 2020 soybean exports steady at 82.5 million tons and crush at 45.5 million tons. 
  
• Traders
  are looking for NOPA to report the Aug crush at 169.5 million bushels, down from 172.8 million in July. 
  
• US
  soybean conditions fell 2 points to 63 percent, same as the 5-year average.  Trade was looking for unchanged.  We are using a 51.5-bushel yield, 0.4 below USDA September.  We think USDA will eventually lower its US soybean harvested area by 225,000 acres to
  82.795 million based on resurvey of the IA area in the upcoming October report.  Our US soybean production is 4.264 billion bushels, 49 million below USDA September. 
  
• Soybean
  and Corn Advisory: 2020
  U.S. Soybean Estimate Unchanged at 51.0 bu/ac
• USDA
  US soybean export inspections as of September 10, 2020 were 1,283,936 tons, within a range of trade expectations, below 1,396,077 tons previous week and compares to 668,496 tons year ago. Major countries included China Main for 832,200 tons, Egypt for 93,774
  tons, and Mexico for 82,320 tons.

• Offshore
  values this morning were leading CBOT soybean oil 19 lower and meal $2.30
  higher. 
• Rotterdam
  soybean oil values were about up 3-5 euros, rapeseed oil 2 lower in the benchmark positions, and Rotterdam meal mostly 2-3 euros lower from this time previous session. 
  
• China
  cash crush margins as of this morning, using our calculation, were 102 cents per bushel (97 previous) and compares to 84 cents a week ago and 96 cents around this time last year.
  

• AmSpec
  reported Malaysian palm Sep 1-15 palm exports at 780,305 tons, up 12.4 percent from the same period a month ago.  ITS reported 12.2% increase to 779,160 tons.  SGS Sep 1-15 palm oil shipments 745,565 ton, up 12.2% from previous month. 
  
• Malaysian
  palm was up again (reached 8-month high) by roughly 48MYR and cash up $2.50/ton. 
  Traders
  expect end-stocks in September to remain unchanged from a month earlier. 

 

 

Oilseeds
Export Developments

• Under
  the 24-hour announcement system, US exporters sold 132,000 tons of soybeans to China. 
  
• USDA
  CCC seeks 40,750 tons of soybean meal for export to Indonesia and Cambodia on Sep 16 for Nov 10-20 shipment. 
  
• USDA
  CCC seeks 3,000 tons of vegetable oils on Sep 17 for October 16-31 shipment. 
  

 

 

Third
month rolling palm oil

Source:
Eikon and FI

 

Wheat

• Wheat
  this
  morning was lower from the good start to US winter wheat seedings and upward revision to Kazakhstan’s grain crop.  Technically, wheat futures price resistance levels have little impact on recent movement.  Wheat prices are higher than a year ago, attractive
  for producer taking crop insurance. 
• Japan
  seeks 104,870 tons of milling wheat.  Taiwan’s MFIG seeks corn while South Korea’s SPC seeks 38,000 tons of US and/or Canadian wheat.  Ethiopia is in for 200,000 tons of wheat. 
  
• Paris
  (Matif) December wheat was down 0.50 at 188.25 euros.
• Rain
  will be restricted for the EU this week and temperatures will be warmer than normal. 
  
• France’s
  AgMin sees the wheat crop at 29.5 million tons, down from the 29.7 million estimated last month and 39.6 million in 2019.  That’s a 25 percent decrease from 2019. 
  
• Kazakhstan’s
  Ministry of Agriculture increased the 2020 grain harvest forecast by 0.5% to 18 million tons, up from 17.4 million tons of grains in clean weight in 2019.  This marketing year the republic plans to export 7.5-8 million tons of grain.
• Russian
  grain exports are off to a slow start for the season, but September shipments could end up a record, according to JSC Rusagrotrans.  Exports were estimated at nearly 5.85 million tons, including around 5.2 million tons of wheat.
  
• US
  winter plantings for now remain on course, but some producers are deciding to wait for rains to press further. US winter wheat planting progress advanced 5 points to 10 percent complete, above a 5-year average of 8 percent but 3 points below a trade guess. 
  Spring wheat harvesting progress was reported at 92 percent, one point above a trade average and same as a 5-year average. 
  
• USDA
  US all-wheat export inspections as of September 10, 2020 were 637,226 tons, within a range of trade expectations, below 699,310 tons previous week and compares to 517,966 tons year ago. Major countries included Indonesia for 89,165 tons, Philippines for 76,559
  tons, and Japan for 66,645 tons.

 

Export
Developments.

• Turkey
  saw offers for 500,000 tons of wheat with prices coming in around $240.49/ton c&f for Sep 23-Oct 16 shipment. 
  
• Pakistan
  got offers for 170,000 tons of wheat with lowest offer around $274/ton c&f.
  
• South
  Korea’s SPC group seeks 38,000 tons of US and/or Canadian wheat for LF Jan shipment. 
  
• Japan
  is in for 104,870 tons of food wheat this week. 
• Jordan
  seeks 120,000 tons of wheat on Sep 16 for LH October shipment.
• Iran
  seeks to export 700,000 tons of barley by Friday. 
• Ethiopia
  seeks about 80,000 tons of milling wheat on Sept. 30.
• Ethiopia
  seeks 400,000 tons of wheat by October 13.
• (new
  9/15) Ethiopia seeks about 200,000 tons of milling wheat on October 15.

 

Rice/Other

·        
US RICE – 72 PCT CONDITION GOOD/EXCELLENT VS 78 PCT WK AGO (69 PCT YR AGO) -USDA

·        
US RICE – 34 PCT HARVESTED VS 26 PCT WK AGO (47 PCT 5-YR AVG) -USDA

·        
US COTTON – 45 PCT CONDITION GOOD/EXCELLENT VS 45 PCT WK AGO (41 PCT YR AGO) -USDA

·        
US COTTON – 6 PCT HARVESTED (8 PCT YR) (8 PCT 5-YR AVG) -USDA

·        
US COTTON – 47 PCT BOLLS OPENING VS 37 PCT WK AGO (45 PCT 5-YR AVG) -USDA

·        
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.