FI Morning Grain Comments 09/21/20

PDF attached

 

Morning. 

 

Soybean
complex and grains are mostly lower on favorable US weather and projected rain for southern Brazil that will allow for soybean plantings starting this week.  The USD was about 33 higher earlier this morning and WTI down $0.80.  US equities are rolling over
with DOW down about 500 points.  Malaysian palm fell more than 2 percent while China vegetable oil prices were higher.  Ukraine Black Sea sunflower oil was up $65-$110/ton over the past week to $1000-$1050 per APK-Inform.  The CME Platts SA soybean contract
starts trading today. China corn futures were up overnight near a 5-year high.  Taiwan, Algeria and Pakistan floated wheat import tenders. Saudi Arabia bought 540,000 tons of feed barley. 

 

 

 

 

 

 

 

 

Weather
and Crop Progress

 

 

MARKET
WEATHER MENTALITY FOR CORN AND SOYBEANS:  Showers and thunderstorms in parts of Brazil and Argentina in the next two weeks will help improve topsoil moisture – at least temporarily – for some early season spring planting. China and India weather will remain
a little more tenuous for another week due to periods of rain but drying next week should improve crop maturation and future harvest conditions.

            U.S.
crop weather will be mostly very good for the next two weeks with a few disrupting showers and thunderstorms in the Midwest. Rain delays will occur to harvesting in the Delta and southeastern states later this week due to remnants of Tropical Storm Beta.

            Australia’s
canola production areas are going to benefit from periodic rainfall during the next few weeks and yield potentials will be favorable. Western Australia will have the greatest need for rain soon.

            Canada’s
harvest of canola, corn, flax and soybeans will advance well over the next two weeks, although some crop damage occurred from early month frost and freezes in Manitoba and Saskatchewan. Freezes also occurred this past weekend in southeastern Canada, but that
was not harmful to unharvested crops.

            Europe
and the western CIS summer grain and oilseed crops are being sped to maturity by dry and warm weather, but rain falling in Western Europe this week will reverse that trend temporarily slowing harvest progress.

            Overall,
weather will have a bearish bias on market mentality.

 

MARKET
WEATHER MENTALITY FOR WHEAT AND OTHER SMALL GRAINS:  Soil moisture in the central and southwestern Great Plains will be decreasing over the next two weeks and that might be good for planting, but rain will soon be needed to induce germination, emergence and
establishment.

            Rain
in western and central Europe this week will prove beneficial to raising soil moisture for wheat, barley and rye planting and establishment. Dryness in southwestern Russia, Ukraine, Moldova, southeastern Europe, Ukraine, Russia’s Southern Region and Kazakhstan
over the next two weeks will be of great concern due to drought and a huge need for planting moisture. Improved rainfall will come to some of these drier areas next month.

            China
early winter crop planting prospects are looking very good and the same is true for India.

            Argentina’s
rainfall later this week will benefit winter crops, although for some areas in Cordoba the rain will be falling too late to seriously improve production potentials. Brazil’s wheat crop is expected to continue developing well over the next couple of weeks.

            Southeastern
Canada’s wheat region is favorably moist for winter wheat planting and fieldwork will increase over the next couple of weeks, although some rain will occur periodically.

            Overall,
weather today will likely maintain a neutral to slightly bearish bias to market mentality.

 

MARKET
WEATHER MENTALITY FOR COTTON: Additional rain in the Delta this week will delay cotton harvesting and could raise a little concern over fiber quality. Some rain late this week in the southeastern states will return rain to areas recovering from Tropical Storm
Sally and may further raise the risk of boll rot. West Texas, however, will be dry as will most of the far western U.S. crop areas.

            Rain
in Spain during the weekend may have briefly disrupted crop maturation and harvesting, but some improving weather is forthcoming.

            Cotton
maturation and harvesting is advancing well in Central Asia, Pakistan and northern India. Some crop defoliation and harvesting are occurring in Xinjiang, China, as well and weather conditions will likely remain favorable, despite some coming frost in the northeast
late this week.

            Cotton
in eastern China needs greater drying, but seasonal rainfall is diminishing and weather in October will be much better for harvesting.

            Eastern
Australia still needs rain, despite some moisture occurring during the weekend and a little more coming up.

            India’s
harvest will improve over the next few weeks as the annual dry season includes a larger part of the production region. Recent harvest weather was mostly good in far northern India and Pakistan.

            Drying
is needed in west-central Africa cotton areas and some of that should come in the next few weeks.

           
Argentina planting will slowly increase over the coming week as more of the region gets rain and then experiences drier weather. The same is expected in some center south Brazil cotton production areas.

            Planting
in South Africa begins late next month and greater rain will soon be needed.

            Overall,
weather today will likely produce a mixed influence on market mentality.

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

 

 

CFTC
Commitment of Traders

 

There
were no record net long fund positions posted in this week’s report, but managed money F&O for soybeans is nearing their record long position of 253,889 contracts going home Friday.

 

SUPPLEMENTAL     
Non-Comm               Indexes                  Comm

                       
Net        Chg        Net        Chg        Net        Chg

Corn               
29,929     32,392    339,180      2,469   -306,024    -24,936

Soybeans          
153,226     21,373    192,996      5,866   -329,058    -20,935

Soyoil             
76,039     10,949    114,377      2,063   -208,945    -13,411

CBOT
wheat         -13,484    -11,686    139,404      1,825   -106,869      9,967

KCBT
wheat             392        919     59,307       -754    -60,596      1,671

=================================================================================

 

FUTURES
+ OPTS     Managed                 Swaps              Producer

                       
Net        Chg        Net        Chg        Net        Chg

Corn               
58,556     25,062    173,222     -4,480   -263,837    -22,952

Soybeans          
191,774     17,868    118,964      8,555   -324,798    -22,233

Soymeal            
43,697     11,578     76,571       -767   -165,156    -10,532

Soyoil             
94,564      9,264     92,017        378   -224,445    -12,588

CBOT
wheat          15,112     -8,062     97,793      3,264   -105,520      8,191

KCBT
wheat          10,192      1,268     45,264     -1,016    -59,071      2,089

MGEX
wheat          -3,008      1,913      2,159        -79        121     -1,186

                
———- ———- ———- ———- ———- ———-

Total
wheat         22,296     -4,881    145,216      2,169   -164,470      9,094

 

 

 

 

Macros

 

Corn.

• Corn
  is lower on a weather forecast promoting corn harvesting this week for the US. 
  
• Rain
  delays will occur to harvesting in the Delta and southeastern states later this week due to remnants of Tropical Storm Beta.
  
• The
  USD was about 46 higher earlier this morning and WTI down $1.00.  US equities are rolling over with DOW down about 630 points.  The passing of Supreme court justice Ruth Bader Ginsburg has markets in fear that a nomination to replace her with be looked as
  a potentially detrimental action by the current President.
• Corn
  open interest was up 17,026 contracts on Friday. 
• Ukraine
  grain stocks as of September 1 were 17.2 million tons, 4 million less than the same period year ago. 
  
• German
  breeding piglet prices are down sharply since the discovery of ASF.  They went from 40 euros/piglet to around 27. 
  

 

Corn
Export Developments

• None
  reported

 

Source:
Trade News Service. 

 

Soybean
complex.

• Soybean
  complex is mostly lower, down from a 28-month high, on favorable US weather and forecast for rain for southern Brazil that will allow for soybean plantings starting this week.  Malaysian palm fell more than 2 percent while China vegetable oil prices were higher. 
  US producer selling was large last week. 
• CBOT
  soybean open interest was up 10,543 contracts to 973,788 lots.
• Ukraine
  Black Sea sunflower oil was up $65-$110/ton over the past week to $1000-$1050 per APK-Inform. 
  
• The
  Platts SA soybean contract starts trading today.  Here is the link for the new contract.
  https://www.cmegroup.com/trading/agricultural/south-american-soybeans.html
  
• Brazil
  soybean plantings are expected to start next week in the far southern areas ahead heavy rain forecast for Parana, Rio Grande do Sul and Santa Catarina during the September 26-28 period.  Other areas will see rain by early October. 
  
• Crude
  IL soybean oil for IL was about 75 over, East 100 over, West 50 over and Gulf 400 over.  Argentina was about 275 over and Brazil 450 over fob. 
  
• Argentina
  crushed 3.508 million tons of soybeans during the month of July, down from 3.656 million tons during June and below 4.457 million tons during July 2019.  April through July Argentina soybean crush was 14.871 million tons, below 16.562 million tons during the
  same period a year ago, or down 10 percent. 

• Offshore
  values this morning were leading CBOT soybean oil 31 points lower and meal
  $4.30
  lower. 
• Rotterdam
  soybean oil values were about up 2-3 euros, rapeseed oil 10 lower in the benchmark positions, and Rotterdam meal 3-6 euros higher from this time previous session. 
  
• China
  cash crush margins as of this morning, using our calculation, were 79 cents per bushel and compares to 97 cents a week ago and 111 cents around this time last year.
  

• Cargo
  surveyor ITS reported Malaysian palm oil shipments during the September -20 period at 1.035 million tons, up 9.4 percent from 946,338 tons shipped during the same period in August. Palm oil shipments to China increased 43% month-on-month. 
  
• AmSpec
  reported 12.4 percent higher at 1.040MMT. 
• Indonesia
  exported 3.13 million tons of palm oil during the month of July, according to GAPKI, from 2.92 million tons a year earlier and compares to 2.77 million tons in June.   Indonesia produced 4.23 million tons of crude palm and palm kernel oils in July stocks were
  reported at 3.62 million tons.
• Malaysia
  palm oil  

 

Oilseeds
Export Developments

• The
  CCC last week seeks 4,000 tons of soybean meal on September 22 for October 15-30 shipment for Georgia. 
  
• The
  CCC bought 720 tons of soybean oil packaged soybean oil.  Included in the total were 440 tons in 4-liter cans, priced in a range from $1,260.94 to $1,380.20 per ton, 240 tons in 4-liter plastic bottles at $1,117.31 per ton and 40 tons in 20-liter pails priced
  at $1,471.04 per ton.  (TNS)

 

Major
vegetable oil industrial usage could increase 2.2MMT, or 5 percent in 2021-22 from 2020-21. Palm oil could represent 56% of world industrial consumption out of 4 major oils, followed by soyoil @ 24%, rape oil 18%, and sun oil 2%.  For 2020-21, USDA looks for
industrial vegetable oil use to increase 1.4 percent from 2019-21 where projected to decrease 2.2 percent.  

 

 

Wheat

• Wheat
  is trading lower on pressure from the outside markets.  Taiwan, Thailand, Algeria and Pakistan floated wheat import tenders.
  
• Paris
  (Matif) December wheat was down 0.25 at 194.25 euros.
• CBOT
  Chicago wheat open interest was up 13,356 contracts on Friday.
• Ukraine
  is seeing its driest autumn in nine years, which is delaying winter grain/oilseed plantings.
  
• APK-Inform
  – Ukraine 12.5% protein milling wheat 2020 export prices were $9 per ton higher over the last week to $228-$231/ton. 
  
• IKAR
  – Russian 12.5% wheat Black Sea export prices increased $11/ton to $235/ton. 
  
• SovEcon
  is estimating Russian September grain exports at 5.65MMT, up from 5.10MMT in August. 
  
• US
  Wheat Associates price report https://www.uswheat.org/wp-content/uploads/2020/09/PR-200918.pdf
  

 

Export
Developments.

• Algeria’s
  OAIC seeks 50,000 tons of animal feed barley on September 22, valid until September 23  in two 25,000 ton consignments for shipment between Nov. 1-15 and Nov. 16-30.
• Pakistan
  seeks 300,000 tons of optional origin wheat on September 23 for arrival in Pakistan by Jan. 31, 2021.
• Taiwan
  seeks 91,300 tons of US wheat on Sep 23 for Nov/Dec shipment. 
• Thailand
  seeks 60,000 tons of feed wheat on September 21 for shipment between Dec and April. 
  
• Saudi
  Arabia bought 540,000 tons of barley at an average price of $225.34/ton C&F for Nov-Dec arrival. 
  

• 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.