FI Morning Grain Comments 09/16/20

PDF attached

 

Morning. 

 

Higher
trade soybean complex and grains.  US weather is favorable.  The track of the hurricane shifted southeast. Lowest offer for Egypt seeking wheat is $228.43/ton.  USD was down 20 points earlier and WTI crude oil up about $0.84. 
Malaysia
is on holiday.  APK-Inform sees 2020-21 sunflower oil exports at 6.17 million tons, down from 6.63MMT in 2019-20.  Production of sunflower seed was projected at 15.53 million tons, down from 16.10 million in 2019.  South Korea’s KOCOPIA passed on 60,000 tons
of corn.  Taiwan’s MFIG bought 65,000 tons of corn from Brazil. Turkey bought around 444,000 tons of wheat. 

 

 

 

 

 

 

 

 

 

Weather
and Crop Progress

 

TROPICAL
COMMENTS

• Hurricane
  Sally was moving inland this morning and was expected to produce more flooding rain, strong wind speeds and damage to crops and property
• Rain
  totals have already ranged from 16 to more than 20 inches over the past two days from Fort Walton Beach, Florida to the Mobile Bay
• Wind
  speeds have reached 92 mph near the naval station southeast of Oyster Bay, Alabama and 81 mph at Pine Forest High School in the same region
• Peak
  speeds of 55 to 81 mph have common from Fort Walton, Beach, Florida to Mobile, Alabama
• Tropical
  storm force wind was occurring in southern Alabama as well
• Coastal
  flooding from both the storm surge and two days of rainfall has been significant across many of these same areas
• At
  0800 CDT, the center of the sally was located near 30.5 north, 87.6 west or 20 miles north northeast of Gulf Shores, Alabama with peak wind speeds near the center of the storm of 90 mph and movement north northeasterly at 3 mph
• Hurricane
  Sally will is still expected to slowly accelerate to the northeast over the next two days reaching southeastern North Carolina Saturday
• In
  the storm’s wake will be 4.00 to 10.00 inches of additional rain from western parts of the Florida Panhandle through central and interior southeastern Alabama to northern Georgia and 3.00  to 6.00 inches in portions of the Carolinas
  
• Flooding
  is expected in many areas, but it will be most serious from central through southern Alabama and in the Florida Panhandle
• Wind
  speeds will continue to reach damaging levels this morning from western parts of the Florida Panhandle into south-central Alabama and then gradually lighten as the storm moves farther north this afternoon and tonight
• Damage
  to crops will be greatest in Alabama and Florida’s Panhandle with cotton suffering the greatest losses
• Hurricane
  Paulette, Hurricane Teddy and Tropical Storm Vicky are over open water in the Atlantic Ocean and posing no threat to land
• Teddy
  will become a major hurricane later today and Thursday and will eventually impact Bermuda early next week as a weaker storm once again
• Vicky
  will likely dissipate by the weekend over open water in the central Atlantic Ocean
• Paulette
  will lose its tropical characteristics over the next few days, but remain a viable mid-latitude storm system over the north-central Atlantic
  
• Tropical
  wave west of Africa still has potential to develop into a tropical cyclone later this week and it will move toward the northern Leeward Islands over the coming week
• This
  system will need to be closely monitored for possible influence on North America and the Caribbean Islands next week, although there is plenty of time for the system’s potential to change
• Tropical
  disturbance in the southwestern Gulf of Mexico will be wandering around off the coast of eastern Mexico the next few days and has some potential for becoming better organized over time
• Most
  likely this system will produce repetitive rainfall in eastern Mexico and in the southernmost tip of Texas for a while
• The
  system is showing signs of better organization and there will be support for development later this week
• Tropical
  Storm Noul has formed west of the Philippines in the South China Sea and has produced some beneficial rainfall in parts of the Philippines recently
• The
  storm has potential to become a weak typhoon as it moves west northwesterly across the South China Sea the next few days with landfall possible in central Vietnam Friday
• Flooding
  rainfall and strong wind speeds may impact central and northern parts of Vietnam from this storm
• Central
  Highlands crop areas will be impacted by the storm, but the most damaging properties of Noul will be to the north of the region
• Tropical
  Storm Karina remains well west of Mexico and posing no threat to land; the system will dissipate over open water this weekend

 

OTHER
WORLD WEATHER ISSUES

• Argentina
  rainfall will remain limited over the next ten days with very little potential for relief from drought conditions in the west
• Dryness
  in southeastern Europe will prevail for the next week to ten days supporting good summer crop maturation and harvest conditions, but threatening winter crop planting and emergence
• Some
  relief is possible late this month and better weather is expected in October
• All
  of eastern Europe, as well as Germany and including Ukraine will be included in this dry bias
• France,
  the U.K., Spain and Portugal will all get some welcome rainfall beginning this weekend and continuing through all of next week
• Improved
  soil moisture will occur for better winter crop planting and emergence conditions later this autumn will result
• Some
  slowing of summer crop maturation and harvesting is expected
• Rain
  will also reach into Italy and the Adriatic Sea region early to mid-week next week, but Germany is no longer advertised to get rain during this period
• Dryness
  remains a concern in central and eastern Ukraine, parts of Russia’s Southern region and portions of Kazakhstan
• Very
  little rain will fall in these areas through the next ten days to two weeks
• Northern
  Russia will receive periods of rain and experience mild to cool temperatures at times over the next two weeks
• Western
  Australia rainfall will be limited to the far southwest over the next ten days to two weeks where crop conditions will stay good
• Dryness
  in other Western Australia crop areas will raise concern over reproductive conditions if greater rain does not fall soon
• Northern
  crops in Western Australia will be reproducing through the end of this month
  
• Eastern
  Australia will receive significant rain later this week
• South
  Australia will get rain today into Friday with 0.60 to 2.00 inches possible in some winter crop areas
• New
  South Wales, Queensland and Victoria will receive rain Thursday into Saturday with 0.50 to 2.00 inches from northern New South Wales into Queensland
  
• Rainfall
  of 0.60 to 1.75 inches will also occur in Victoria
• Some
  lingering rain may reach into eastern Queensland and northeastern New South Wales during early to mid-week next week
• The
  precipitation will be extremely helpful in raising soil moisture for winter and spring crops, although wheat and barley in Queensland may be a little too far advanced to fully benefit
• Center
  West and southern parts of center south Brazil are advertised to receive scattered showers and thunderstorms Sep. 20-23 with some follow up rain periodically into the end of this month
• The
  precipitation might eventually help lift topsoil moisture for some early season soybean planting, but much more rain will be needed
• Coffee
  and citrus flowering “may” occur in a few areas from Sao Paulo into southern Minas Gerais and Rio de Janeiro while sugarcane and early corn experience a moisture boost to improve crop development; however, most of the region will fail to get quite enough moisture
  to make big changes in crop or soil conditions without follow up moisture
• Southern
  Brazil rice, corn and wheat areas will get periodic rainfall through the next two weeks
• Crop
  and field conditions will either improve or continue good through the end of this month
• China
  rainfall Tuesday was most significant from the northern parts of the North China Plain into interior eastern Inner Mongolia
• Rain
  totals varied from 1.00 to nearly 3.50 inches and maintained excessively wet conditions for some of the crops in this region
• Rain
  also fell in the Yangtze River Basin with amounts of 1.00 to 4.00 inches and local totals to 5.82 inches
• Rainfall
  elsewhere was more sporadic and light with needed dry conditions in much of the northeast provinces and some other areas
• China
  weather over the next two weeks
• Rain
  will return to Heilongjiang and Jilin today and it may occur frequently over the next week to ten days especially in Heilongjiang where summer crop maturation and harvest delays will occur through the balance of this month
• Net
  drying in the middle and lower Yellow River Basin and portions of the North China Plain should improve summer crop maturation and harvest conditions while improving future wheat planting potentials
• Rain
  will fall frequently in the Yangtze River Basin and southern coastal provinces as well as Yunnan and Guangxi during the next two weeks to maintain soggy field conditions
• Much
  of eastern China needs to dry down in support of summer crop maturation and harvesting as well as support for winter crop planting that occurs from late this month through October and into November
• India
  weather over the next two weeks will continue wettest in central, southern and far eastern parts of the nation while net drying occurs in the north
• Monsoonal
  precipitation will continue without much withdrawal through early next week, but a more significant withdrawing trend is expected in the last week of September and early October improving crop maturation conditions in central parts of the nation
  
• Weather
  conditions in most of India are still favorable, but drying is needed in Gujarat and that may not come for another week
• U.S.
  weather over the next ten days
• Favorable
  summer crop maturation and harvest weather is expected due to restricted rainfall and mild to warm temperatures for the next ten days including the Midwest Corn and Soybean Belt
• Southeastern
  U.S. rainfall will be excessive over the balance of this week due to Hurricane Sally, but after that some improved weather is expected; including net drying conditions
• U.S.
  hard red winter wheat areas will receive limited rainfall which may be good for summer crop maturation and harvest progress
• Wheat
  planting and emergence will continue, although there is need for greater rain to induce better emergence and establishment in the driest areas
• The
  bulk of additional planting will occur in October
• West
  Texas rainfall will be limited enough to support favorable crop maturation
  
• Northern
  Plains will receive restricted rainfall and experience warm temperatures favoring a good crop maturation and harvest environment
• U.S.
  temperatures will slip to the frost and freeze threshold in the upper Midwest and northern Great Lakes region late this week with lows in the 30s Fahrenheit and with a few colder readings near the Canada border
• Some
  extreme lows in the upper 20s will occur in northern Minnesota, but key crop areas in the Midwest will not experience temperatures nearly as cold
• Overall
  temperatures in the coming week will be warmer than usual from the central and northwestern Great Plains through most of the western states while near to below average farther to the east
• The
  coolest conditions relative to normal this week will be in the eastern Midwest through the northeastern states
• Temperatures
  next week will be similar to those of this week, although a little warmer in the eastern Midwest and a little milder in the central Plains
• Some
  cooling is also expected in the Pacific Northwest and Rocky Mountain region
• West-central
  Africa will continue to experience periodic showers and thunderstorms over the next couple of weeks
• Additional
  improvement is expected to coffee, cocoa, rice and sugarcane production areas after rain fell significantly during the weekend
• The
  next wave of greatest rain will occur next week
• Cotton
  areas will also continue to receive some rain for a while longer
• All
  crops receiving rain will likely benefit from the moisture
• South
  Africa weather will continue mostly dry over the next seven days with only a few showers in the far east and near the south coast expected
• East
  central Africa rainfall has been and will continue to be erratic and mostly beneficial over the next ten days
• Canada
  Prairies will experience some weekend rain, but good harvest weather is expected prior to and after that period of time for a few days
• Additional
  rainfall is expected in the last week of this month
• Harvesting
  and crop maturation should advance relatively well during the period with only a few delays likely
• Xinjiang,
  China weather will continue favorable for cotton and other crop maturation and early harvest progress
• Alternating
  periods of warm and cool weather will occur through the next ten days with restricted rainfall expected
• The
  environment will support crop maturation, leaf defoliation and early harvesting
• Mainland
  areas of Southeast Asia will experience periodic showers and thunderstorms over the next couple of weeks
  
• Late
  season moisture boosting is extremely important since water supply has not been fully restored from last year’s low levels
• Philippines
  rainfall increased the past two days from Tropical Storm Noul, but more rain is still needed in the Visayan Islands
• Improving
  rainfall in Indonesia and Malaysia is expected over the next two weeks with some heavy rain possible in random locations
• Ontario
  and Quebec rainfall will occur periodically over the next ten days alternating with periods of rain and sunshine
• Net
  drying is expected over the coming week
• Temperatures
  will be seasonable to slightly cooler than usual
• New
  Zealand rainfall will be above average on the west coast of South Island and below average elsewhere; temperatures will be near to below average
• Southern
  Oscillation Index was +10.00 today and it will stay significantly positive this week

 

Source:
World Weather Inc. 

 

 

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

Macros

 

US
Retail Sales (M/M) Aug 0.6% (est 1.0%; prevR 0.9%; prev 1.2%)

-US
Retail Sales Ex. Auto (M/M) Aug 0.7% (est 0.9%; prevR 1.3%; prev 1.9%)

-US
Retail Sales Ex. Auto & Gas (M/M) Aug 0.7% (est 0.9%; prevR 1.1%; prev 1.5%)

-US
Retail Sales Control Group (M/M) Aug -0.1% (est 0.5%; prevR 0.9%; prev 1.4%)

7:34:04
AM livesquawk Canada CPI (M/M) Aug -0.1% (est 0.1%; prev 0.0%)

-Canada
CPI (Y/Y) Aug 0.1% (est 0.4%; prev 0.1%)

7:34:06
AM livesquawk Canada CPI Median (Y/Y) 1.9% (est 1.9%; prev 1.9%)

-Canada
CPI Common (Y/Y) 1.5% (est 1.4%; prev 1.3%)

-Canada
CPI Trim (Y/Y) 1.7% (est 1.8%; prev 1.7%)

 

Corn.

• CBOT
  corn was
  lower early following weakness in wheat and favorable harvesting conditions across much of the US but turned higher as soybeans appreciated back above the $10 mark basis November position.   December corn broke below a key $3.70 resistance level yesterday. 
  South Korea passed on their tender for 60k corn and Taiwan bot 65k Brazilian corn on their tender.
  
• FOMC
  meeting is later today and traders are looking for no change in US interest rates. 
  
• USD
  was down 10 points earlier and WTI crude oil up about $0.92. 
• A
  Bloomberg poll looks for weekly US ethanol production to be up 1,000 at 942,000 barrels (918-960 range) from the previous week and stocks to increase 345,000 barrels to 20.338 million. 
  
• China
  suspended imports from an OK Foods poultry plant in Fort Smith, Arkansas, because of coronavirus cases.  This is the second suspension after blocking imports from a Tyson Foods Inc TSN.N plant in June.
  

 

Corn
Export Developments

• Taiwan
  seeks bought 65,000 tons of corn from Brazil for Nov-Dec shipment at 189.63 cents over the March contract. 
  
• South
  Korea’s KOCOPIA rejected all offers for up to 60,000 tons of corn for arrival around Dec. 25.

 

 

Soybean
complex.

• CBOT
  November soybeans are back above the psychological $10 mark on talk of Chinese demand (24-hour sale) for US soybeans. 
  Today’s
  close may dictate price direction for the next week. 
• There
  has been some talk this am that Argentina is considering raising export taxes and that has provided support to the soybean complex this morning.
  
• Ukraine
  rapeseed exports fell to 1.27 million tons so far in the 2020-21 (July-June) from 1.81 million tons in the same period in 2019-20, a 30 percent decrease. 
  
• APK-Inform
  sees 2020-21 sunoil exports falling to 6.17 million tons from 6.63 million tons in 2019-20 due to a smaller sunflower harvest.  Rapeseed exports were seen falling to 2.45 MMT from 2.89 and soybeans to 2.2 MMT from 2.63 MMT. 
  

• Offshore
  values this morning were leading CBOT soybean oil and meal higher. 
  
• Rotterdam
  soybean oil values were about up 3-5 euros, rapeseed oil 5 higher 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 88 cents per bushel (102 previous) and compares to 84 cents a week ago and 96 cents around this time last year.
  

• Malaysia
  was on holiday. 

 

 

U.S.
August soybean crush dropped by more than expected 4.4 million bushels to 165.1 million bushels, lowest level in nine months (Nov) and well below 172.8 million during the month of July and compares to 168.1 million during August 2019.  The daily rate slowed
to 5.32 million bushels, lowest since September 2019 and down from 5.57 million (4.5 percent) last month and below 5.42 million during August 2019.  End of August soybean oil stocks were 1.519 billion pounds, only 4 million pounds above an average trade guess,
despite the 4.4-million-bushel crush miss by the trade and above 1.401 billion year earlier.  Soybean meal exports were a large 754,600 short tons, second highest for the month of August in history, down from 876,000 during July and above 699,000 short tons
from August 2019. 

 

Oilseeds
Export Developments

• Under
  the 24-hour announcement system, USDA announced private exporters sold:
• 327,000
  metric tons of soybeans for delivery to China during the 2020/2021 marketing year. 
  

• Today
  the USDA CCC seeks 40,750 tons of soybean meal for export to Indonesia and Cambodia for Nov 10-20 shipment. 
  
• USDA
  CCC seeks 3,000 tons of vegetable oils on Sep 17 for October 16-31 shipment. 
  

 

CBOT
December Oil Share

Source:
Eikon and FI

 

Wheat

• Wheat
  was
  weaker this morning on lack of US export demand but turned higher on strength in soybeans and lower USD.
  
• Lowest
  offer for Egypt’s wheat import tender was $228.43/ton for 60,000 tons of Polish wheat. 
  
• Paris
  (Matif) December wheat was unchanged at 186.75 euros.
• FranceAgriMer
  expected the soft wheat average protein content to be at 11.6%.  They also cut the non-EU soft wheat export outlook to 6.6 million tons from initial 7.75 million in July, 51 percent below the record 13.46 million tons exported during 2019-20. 
  

 

Export
Developments.

• Egypt announced they seek wheat for November 10-20 shipment. 
  
• Jordan bought 120,000 tons of wheat for FH November shipment at $254.50 and $254.90/ton c&f.
  
• Turkey bought 440,000 tons of wheat with prices around $240.49/ton c&f for Sep 23-Oct 16 shipment. 
  
• Yesterday 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. 
  

• 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

·        
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.