FI Morning Grain Comments 09/18/20

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Morning. 

 

USDA
announced sales of soybean, meal and corn.  Soybean futures are surging higher again on heavy fund buying amid Chinese buying that seems not to be slowing down.  Chicago soybeans hit their highest level since May 2018.  Bunge cancelled 8 SBO registrations. 
President Trump announced $13 billion of US farm aid yesterday while visiting Wisconsin.  Back in April $19 billion relief was announced, including $16 billion in direct payment.  $28 billion of trade aid was handed out in 2018 and 2019.  US corn is higher
following the soybean strength.  China Dalian corn hit a fresh five-year high with January gaining 55 yuan (about 8.14 U.S. dollars) at 2,484 yuan per ton.  China’s currency is strong.  French corn ratings declined to 59 percent good to very good as of September
14 from 60 percent previous week.  4% of the corn crop had been collected.  Ukraine grain exports are running 10.2 percent below year ago level (July-June season) at 10.33 million tons (11.5MMT year ago), according to the economy ministry, including 612,000
tons of corn (1.9MMT year earlier).  La Nina like conditions with dry areas across the southern US winter wheat belt is a supportive feature for wheat. 

 

 

 

Weather
and Crop Progress

 

 

A
tropical disturbance in the southwestern Gulf of Mexico is becoming better organized and has recently been upgraded to Tropical Depression Twenty-Two. The system’s center is between the southern tip of Texas and the Yucatan Peninsula. The system’s movement
will likely be slow and erratic the next several days as it meanders in the western Gulf of Mexico. Confidence is low of a direct landfall in southern Texas; however, it could get close enough early next week to promote significant bands of rain in the region,
especially near the coast. The European Model suggests the system then moves towards the Delta after this; though, this will depend on a variety of factors including its strength and land interaction. This will become a tropical storm and possibly a hurricane.

           
The most significant precipitation in the second week of the outlook in this evening’s GFS model run was the increase in the Hard Red Winter Wheat Region, West Texas, and eastern half of New Mexico Sep. 30 – Oct. 2. The increase was due to a slow-moving upper-level
weather disturbance and moisture from a tropical disturbance suggested near Baja California Sur. The model was out of line with this rainfall scenario and suggested way too much moisture. Changes are expected in future model runs.

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

MONDAY,
Sept. 21:

• USDA
  weekly corn, soybean, wheat export inspections, 11am
• U.S.
  crop conditions, harvesting progress for soybeans, corn, cotton, 4pm
• EU
  weekly grain, oilseed import and export data
• Ivory
  Coast cocoa arrivals
• Malaysia
  Sept. 1-20 palm oil export data
• HOLIDAY:
  Japan

TUESDAY,
Sept. 22:

• U.S.
  cold storage data – pork, beef, poultry, 3pm
• HOLIDAY:
  Japan

WEDNESDAY,
Sept. 23:

• China
  customs publishes data on imports of corn, wheat, sugar and cotton
• EIA
  U.S. weekly ethanol inventories, production, 10:30am

THURSDAY,
Sept. 24:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• Brazil’s
  Unica to release cane crush and sugar output data during the week (tentative)
• USDA
  data on hogs and pigs inventory, red meat production, poultry slaughter, 3pm
• International
  Grains Council monthly report

FRIDAY,
Sept. 25:

• 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
• China
  customs publishes country-wise soybean and pork import data
• S&P
  Platts Sugar and Ethanol Conference, Sao Paulo
• FranceAgriMer
  weekly update on crop conditions
• Malaysia
  palm oil export data for Sept. 1-25
• U.S.
  cattle on feed, 3pm

Source:
Bloomberg and FI

 

 

 

 

 

 

Macros

Canadian
Wholesale Trade Sales (M/M) Jul: 4.3% (exp 3.5%; prev 18.5%)

Canadian
Retail Sales (M/M) Jul: 0.6% (exp 1.0%; prev 23.7%)

–        
Retail Sales Ex Auto (M/M) Jul: -0.4% (exp 0.5%; prev 15.7%)

Canadian
Teranet/National Bank HPI (M/M) Aug: 0.6% (prev 0.3%)

–        
Teranet/National Bank HPI (Y/Y) Aug: 5.7% (prev 5.5%)

 

 

Corn.

• Corn
  is at a six-month high. US corn is higher following the soybean strength. 
  
• China
  Dalian corn hit a fresh five-year high with January gaining 55 yuan (about 8.14 U.S. dollars) at 2,484 yuan per ton.  China’s currency is strong.
  
• French
  corn ratings declined to 59 percent good to very good as of September 14 from 60 percent previous week (year ago 59 percent).  4% of the corn crop had been collected. 
  
• Ukraine
  grain exports are running 10.2 percent below year ago level (July-June season) at 10.33 million tons (11.5MMT year ago), according to the economy ministry, including 612,000 tons of corn (1.9MMT year earlier). 
  
• USD
  was down 7 points and WTI crude oil down $0.26 as of 7:39 PM CT. 
• China
  Dalian corn hit a fresh five-year high.
• The
  Philippine Association of Feed Millers (Pafmi) said it was buying more local corn as reports of bumper crop from the ongoing harvest boosted its confidence in the availability of yellow corn. (Bloomberg)
  
• Yesterday
  Germany confirmed one more ASF case from a wild boar.  Pork prices plunged last Friday but stabilized this week. 
  

 

Corn
Export Developments

• Under
  the 24-hour announcement system, USDA announced private exporters sold:
• Export
  sales of 210,000 metric tons of corn received during the reporting period for delivery to China during the 2020/2021 marketing year

 

 

Soybean
complex.

• Soybean
  futures are surging higher again on heavy fund buying amid Chinese buying that seems not to be slowing down.  Chicago soybeans hit their highest level since May 2018.  Products are higher on strength in Asia oils and Rotterdam meal. 
  
• Bunge
  cancelled 8 SBO registrations. 
• President
  Trump announced $13 billion of US farm aid yesterday while visiting Wisconsin.  Back in April $19 billion relief was announced, including $16 billion in direct payment.  $28 billion of trade aid was handed out in 2018 and 2019. 
  
• We
  heard China bought a couple US Gulf shipments yesterday and Cofco sold at least two Brazilian shipments (already bought Q4) to private buyers. 
  

• Offshore
  values this morning were leading CBOT soybean oil 31 points higher (72 higher for the week to date) and meal
  $2.10
  higher (0.90 higher for the week). 
• Rotterdam
  soybean oil values were about down 1-2 euros, rapeseed oil 5 lower in the benchmark positions, and Rotterdam meal 15-17 euros higher from this time previous session. 
  
• China
  cash crush margins as of this morning, using our calculation, were 97 cents per bushel (85 previous) and compares to 84 cents a week ago and 96 cents around this time last year.
  
• China
  palm and soybean oil futures were up 2 percent on Friday. 
• Malaysia
  palm oil gained 9.6 percent this week, with a 3% rise on Friday. 

 

Oilseeds
Export Developments

• Under
  the 24-hour announcement system, USDA announced private exporters sold:
• Export
  sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year
• Export
  sales of 100,000 metric tons of soybean meal for delivery to unknown destinations during the 2020/2021 marketing year

 

Wheat

• Wheat
  is trading higher. 
• Net
  drying (La Nina like conditions) over the next ten days for the US winter wheat areas and Black Sea dryness are supportive. Look for US WW planted area to increase 2.4-2.6 percent from 100+ year low for 2019-20
• Paris
  (Matif) December wheat was up 1.00 at 192.75 euros.
• Black
  Sea markets remain firm, in part to short covering.
• Traders
  are still trying to figure out if Algeria will buy Russian wheat after they opened that market up earlier this week. 
  
• Ukraine
  barley prices are 20 percent higher this season at $177-$189/ton in part to Chinese buying, according to APK-Inform. 
  

 

Export
Developments.

• Tunisia bought around 50,000 tons of durum wheat and 75,000
  tons of animal feed barley, optional origin. They passed on 42,000 tons of soft wheat. Lowest offer soft wheat – $257.35/ton. 
  
• Results awaited: Saudi Arabia seeks 540,000 tons of barley
  on Sep 18 for Nov-Dec arrival. 
• Iran seeks to export 700,000 tons of barley by today. 
  
• Jordan seeks 120,000 tons of wheat on September 23 for shipment
  sometime during Dec or Jan. 
• 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

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

·        
Results awaited: 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.