FI Morning Grain Comments 09/23/20

PDF attached

 

Morning.

 

US
weather outlook mainly unchanged.  USDA announced additional soybean sales to China and unknown.   Global vegetable oil prices are sharply lower and CBOT meal finding strength from oil share selling, in part to the slowdown in Argentina crush. 

 

 

 

Weather
and Crop Progress

 

MORNING
WEATHER MODEL COMMENTS

NORTH
AMERICA

• Not
  much change of significance was noted overnight
• Remnants
  of Tropical Depression Beta will move from eastern Texas through the heart of the Delta into Friday where rainfall will range from 1.50 to 4.00 inches and locally more
• A
  small disturbance will also move across the Great Lakes region today and Thursday
• Eastern
  Midwest will get some showers this weekend along with the southeastern states
• Good
  crop maturation, harvest and planting weather will occur in the Great Plains and western and central Corn Belt over the coming week
• Most
  of the Plains and western Corn Belt will continue dry into the second week of the outlook
• Showery
  and cool weather will occur next week in the Great Lakes region and far eastern Midwest
  
• Temperatures
  will be warmer than usual in most of the north and western U.S. over the next week
• Cooling
  is expected next week in the eastern half of the nation

 

The
bottom line does not contain any big changes relative to Tuesday’s outlook. The biggest change after the remnants of Tropical Depression Beta abates from the Delta and southeastern states will be good harvest weather until next week when colder air moves through
the eastern U.S. and brings on unsettled conditions in the Great Lakes region and eastern Midwest. Most of the Great Plains and western U.S. will stay quite dry and warm.

 

SOUTH
AMERICA

• No
  significant changes were noted in Argentina
• Brazil’s
  center west and center south crop areas have less rain advertised over the next few days and the balance of the coming two weeks is drier than usual
• Far
  southern Brazil and southern and eastern Argentina will get significant rainfall late this week and into the weekend
• La
  Pampa, Buenos Aires, southern Cordoba, southern and eastern Santa Fe, Entre Rios and Corrientes will get rain along with Uruguay, Rio Grande do Sul and neighboring areas

 

Market
concerns over dryness in Brazil delaying the onset of early season soybean planting have already begun and rightly so.  Seasonal rains will come at the end of October and early November and then become significant, but for the next few weeks pre-monsoonal
showers and thunderstorms will be more restricted than usual limiting early soybean and corn planting while southern Brazil and parts of Argentina trend briefly wetter.

 

EUROPE/BLACK
SEA REGION

• No
  significant changes were noted overnight
• Rain
  will fall in most of western and central Europe over the coming week to ten days
• Far
  southeastern Europe will not receive much rain
• Eastern
  Ukraine will get some rain next week, but more will be needed
• Kazakhstan.
  The middle and lower Volga River Basin and Russia’s Southern Region will continue very dry

 

RUSSIA
NEW LANDS

• Not
  significant changes were noted overnight, although the western New Lands were drier after the evening model last night increased rainfall in the latter part of the second week
• Favorable
  drying conditions will occur in many of the eastern New Lands harvest areas

 

CHINA

• No
  general theme changes noted overnight
• Northeastern
  China may not get rain every day, but its frequency will still be high enough along with seasonably milder temperatures to slow the region’s needed drying and further delaying some of the region’s summer crop maturation and harvest progress
• A
  good mix of rain and sunshine in the Yellow River Basin and North China Plain will be perfect for wheat planting, germination and emergence while allowing some of the region’s summer crops to mature and be harvested
• Frequent
  rain near and south of the Yangtze River will slow farming activity and maintain some concern over crop conditions

 

China
still needs drier weather in most areas in the nation to promote summer crop maturation and harvesting and to support early season wheat and other winter crop planting. The northeastern Provinces are still much too wet, although the region has seen a little
less frequent and less significant rainfall recently.

 

 

INDIA

• No
  general theme changes were noted overnight
• Scattered
  showers and thunderstorms will continue over most of the central, south and east for several more days, but monsoonal precipitation will slowly diminish from central areas this weekend next week

 

 

AUSTRALIA

• No
  big changes were noted overnight in the coming ten days
• Rain
  will fall in the southeastern corner of the nation through Friday maintaining wet field conditions
• Southwestern
  Western Australia will get some weekend rain while other areas in the state remain dry
• Another
  wave of rain will move through southeastern Australia early to mid-week next week
• GFS
  model increased rain in Western Australia October 3-5
• This
  change was likely overdone and may not verify, although if it did it would be boon for the state’s winter crops which are drying down a little too much

 

Greater
rain is still needed in Queensland and Western Australia to bolster soil moisture for crop use. Soil moisture will be plentiful from New South Wales to South Australia and Victoria through the next ten days. Crops in northern Western Australia may reproduce
and fill with restricted soil moisture.

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

Corn.

• December
  corn was 2.50 cents lower at the electronic pause on favorable weather but persistent dryness in Ukraine (for winter crops and short corn 2020 output) and uncertainty over the China production may limit downside risk. 
  
• China’s
  Minister of Agriculture and Rural Affairs said that recent typhoons could reduce corn production, but the since maturity of the crop at that time when typhoons arrived would have limited impact on output, and mainly increase the difficulty and cost of harvesting. 
  Corn in northern China was showing “better than usual” growth.  (Reuters)
• Ukraine
  exported 10.77 million tons of grain so far this year, down from 12.19 million tons year earlier, including 619,000 tons of corn (1.93MMT year earlier). 
  
• Germany
  confirmed another 9 cases of African Swine Fever in wild boar in the eastern German state of Brandenburg.  German pig prices are hanging in there after taking an initial dive from the first reported case. 
  
• China
  plans to buy 7,700 tons of beef and mutton for state reserves on September 24. 
  

• China
  will auction off 20,000 tons of pork from reserves on Sep 25, taking the amount to 590,000 if all of it sold. 
  

• Reuters
  poll for South Africa’s Sep 29th crop year 2020 corn crop: 15.271MMT (8.877 white & 6.493 yellow) vs. 15.537 by CEC in August and compares to 11.275MMT in 2019. 
  
• A
  Bloomberg poll looks for weekly US ethanol production to be down 2,000 at 924,000 barrels (890-943 range) from the previous week and stocks to increase 218,000 barrels to 20.016 million.
  

 

Corn
Export Developments

• South
  Korea’s MFG bought 69,000 tons of SA corn at $227.49/ton for Dec/Jan arrival. 
  

 

 

 

Soybean
complex.  

• Soybeans
  are lower on favorable US harvesting weather and sharply lower soybean oil.  Meal is higher on follow through buying over slowing Argentina crushings.  Palm oil and China vegetable oils were sharply lower.  We heard China bought 4-6 cargoes of Jan/Feb soybeans
  yesterday. 
• Argentina’s
  CIARA-CEC estimates Argentina soybean crush will decline 9.5 percent this year. 
  
• We
  look for large soybean export sales on Thursday.  As of 9/10, there were 15.872 million tons of outstanding sales soybeans for China, up from 1.253 million tons at that time year earlier. 
  
• Latest
  Argentina rumor was that the government is looking into making a special Peso rate for farmers (idea somewhere between black and blue rate) in order to encourage farmers to put beans into system/raise capacity utilization. 
  

• Offshore
  values this morning were leading CBOT soybean oil 32 points higher and meal
  $0.50
  lower. 
• Rotterdam
  soybean oil values were about up 1 euro, rapeseed oil 10 lower in the benchmark positions, and Rotterdam meal 5-7 euros higher from this time previous session. 
  
• China
  cash crush margins as of this morning, using our calculation, were 85 cents per bushel (82 previous session) and compares to 97 cents a week ago and 111 cents around this time last year.
  

• Malaysia
  palm oil  

 

Oilseeds
Export Developments

• Under
  the 24-hour announcement system, 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 126,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.

 

Selected
vegoils

Source:
Reuters and FI

 

Wheat

• US
  wheat futures are lower on lack of bullish news. 
• Kansas
  and OK are in need of much needed precipitation.  Chances for La Nina conditions during the OND period are nearing 80 percent. 
  

• Paris
  (Matif) December wheat was down 0.75 at 194.00 euros.

 

Export
Developments.

• South
  Korea’s MFG bought 65,000 tons of US feed wheat at $254.98/ton for Jan shipment. 
  

• Taiwan
  bought 91,300 tons of US wheat on Sep 23 for Nov/Dec shipment. 
• Lowest
  offer $280.00/ton – Pakistan seeks 300,000 tons of optional origin wheat for arrival in Pakistan by Jan. 31, 2021.

• Postponed
  until Sep 28 – Jordan seeks 120,000 tons of wheat for shipment sometime during Dec or Jan. 
  
• Japan
  seeks 86,027 tons of food wheat later this week. 

• Japan
  also seeks 80,000 tons of feed wheat and 100,000 tons of barley for arrival by Feb on Sep 30. 
  
• 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.