PDF attached

 

Morning.

 

Today
we get September 1 stocks and weekly ethanol production/stocks.  USDA export sales will be out Thursday and Friday we will find out if funds liquidated more long positions than what the trade expected. 

 

Today
we wake up to market uncertainty in the outside markets as it seemed everyone, politicians and voters alike, lost the US debate last night.  Soybeans and corn are under pressure from ongoing harvesting pressure and lead from the outside markets.  Wheat is
finding strength from Black Sea weather problems.  USD was up 16, WTI down $0.02, gold $1.60 lower and US equities mixed.  There were only 54 meal deliveries and zero soybean oil.  China cash margins are softer from yesterday.  China soybean oil and palm oil
futures were down 2.1% and 2.5%, respectively. We heard China bought at least one December Gulf soybean cargo and Cofco bought two Jan/Feb PNW shipments.  Offshore values this morning were leading CBOT soybean oil 2 points higher and meal $3.40 higher.  Malaysian
palm oil futures were down 63 and cash off $14.00.  AmSpec reported September Malaysian palm oil shipments at 1.631 million tons, up 10.5 percent from August (1.476MMT).  Japan bought 5,375 tons of feed wheat.  Ukraine’s ministry lowered their estimate for
the 2021 winter wheat planted area by 9 percent to 6.1 million hectares from around 6.7 million in September.  Ukraine weather forecasters called weather conditions are the worst in 10 years and only 10% to 15% of Ukraine’s arable land was suitable for sowing
winter crops for the 2021.  Russia’s AgMin raised their estimate for the 2020-21 grain crop to more than 125 million tons with no less than 82 million tons of wheat, above their previous grain crop estimate of 122.5 million tons (75MMT wheat).  US weather
remains great for harvesting.  There could be frosts events across the northwestern Corn Belt Thursday and Friday, potentially ending the growing season. Canada’s Manitoba canola harvest is nearly complete. 

 

 

 

 

 

 

Weather
and Crop Progress

 

ARGENTINA

Past
Weather

  • Tuesday
    was mostly dry and high temperatures were in the upper 70s to the lower 90s Fahrenheit with some middle and upper 90s in the north and some lower to middle 70s in the south.

Forecast,
crop impacts, and other notable events

·        
A contrast in soil moisture will continue through the next two weeks with dry soils from interior southern to northern Cordoba and central Santa Fe to most of Santiago del Estero while most other areas see additional rain and
have favorable soil moisture.

o  
The drier areas need rain to improve soil moisture for winter wheat as well as for summer crops with dryness likely returning to southern Cordoba, northeastern La Pampa, northwestern Buenos Aires, and southern Santa Fe during
the first two weeks in October as this region is disfavored for significant rain.

o  
A few light showers will occur in central and northern Entre Rios today.

o  
Rain will increase Thursday into Saturday from northern Santa Fe and nearby Santiago del Estero to central and southern Corrientes and northern Entre Rios where most areas will receive 0.40-1.50″ and locally more with southern
Corrientes wettest and lighter rain in Santiago del Estero.

o  
Southern Argentina will see increases in rain Saturday into Sunday.

§ 
Most areas from central and southern La Pampa into central, southern and eastern Buenos Aires will see enough rain to restore some of the topsoil moisture lost to evaporation this week and soil moisture should remain favorable
for winter wheat and for summer crop planting.

 

 

COMMONWEALTH
OF INDEPENDENT STATES

Past
Weather

  • Welcome
    rain returned to Ukraine Tuesday into early this morning. However, dry weather prevailed in the eastern portions of the nation.
    • Moisture
      totals varied from 0.65 to 1.81 inches in western Ukraine and 0.15 to 0.70 inch in central Ukraine. Local totals in central Ukraine reached up to 1.50 inches.
  • Otherwise,
    mostly dry weather occurred. 
  • Highs
    varied in the 60s and 70s from Ukraine through Russia’s Southern Region and lower Volga Basin into northwestern Kazakhstan. Elsewhere highs varied in the 50s and 60s in the western CIS and 40s and 50s in the New Lands.
    • Frost
      and freezes were suspected in the New Lands back. Elsewhere lows were no cooler than the upper 30s and 40s.

 

Forecast
and Impacts

  • Additional
    rain will impact Ukraine and surrounding areas of Russia’s Southern Region near the Black Sea today into Friday and return Tuesday into next Wednesday and enough rain will occur to support planting of wheat, barley, rye and rapeseed.  Improved establishment
    is expected in those areas already planted and a much-improved winter production outlook will result. With that said, additional follow up rain will be needed throughout October to ensure moisture deficits are significantly eased and dryness does not return.
       
    • Rain
      totals by this time next week will range from 0.40 to 1.20 inches and local totals up to 2.50 inches.
      • Also
        portions of eastern Ukraine will remain driest and many locations will receive no more than 0.30 inch and dryness will prevail.
  • Otherwise,
    mostly dry weather will occur throughout the remainder of the western CIS through this weekend.
    • A
      few showers in Belarus and surrounding areas of western Russia will increase this weekend, but daily totals will rarely exceed 0.40 inch.
    • Rain
      will increase next workweek over Belarus, the Baltic States into northwestern Russia.
      • Moisture
        totals Monday through next Friday, October 9 will range from 0.30 to 1.00 inch and local totals up to 2.00 inches.
    • Drying
      will occur from the Volga Basin into northwestern Kazakhstan through October 9.
  • Additional
    precipitation will occur October 10-13 from western Ukraine and Belarus into the Baltic States and northern Russia. The rain will continue to provide adequate moisture for the soil.
    •  IN
      contrast the dry region will continue to expand from eastern Ukraine and Russia’s Southern Region, lower Volga Basin and northwestern Kazakhstan into the middle Volga Basin.

Source:
World Weather Inc. 

 

Bloomberg
Ag Calendar

WEDNESDAY,
Sept. 30:

  • EIA
    U.S. weekly ethanol inventories, production, 10:30am
  • USDA
    quarterly corn, soybean, wheat, sorghum, barley and oat stocks
  • U.S.
    wheat production for Sept.
  • Roundtable
    on Sustainable Palm Oil virtual discussion on seasonal haze
  • Malaysia
    Sept. 1-30 palm oil export data
  • U.S
    agricultural prices paid, received for Aug., 3pm
  • Poland
    to release grains output data
  • HOLIDAY:
    Korea

THURSDAY,
Oct. 1:

  • USDA
    weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
  • Port
    of Rouen data on French grain exports
  • USDA
    soybean crush, DDGS output, corn for ethanol, 3pm
  • Australia
    commodity index for Sept.
  • Webinar
    on the effects of climate change on coffee production in Southeast Asia
  • Honduras,
    Costa Rica coffee exports monthly stats
  • International
    Cotton Advisory Committee releases monthly world outlook
  • HOLIDAY:
    China, Hong Kong, Korea

FRIDAY,
Oct. 2:

  • 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
  • HOLIDAY:
    China, Hong Kong, India, Korea

Source:
Bloomberg and FI

 

 

Note
Reuters polled for 2019 corn production.  We think it will be unchanged.  Reuters average was 13.607 billion bu versus 13.617 USDA, so others also not looking for change (range 13.427-13.750 billion for those looking for a change). 

Average
estimates for 2019-20 ending stocks for September 1 don’t deviate much from USDA

USDA
Aug 2019-20 corn carry 2.253 (ave. est. 3 bushels below USDA)

USDA
Aug 2019-20 soy carry 0.575 (ave. est. 1 bushel above USDA)

 

Macros

 

Corn.

https://www.cmegroup.com/media-room/press-releases/2020/9/29/cme_group_to_launchporkcutoutfuturesandoptionsonnovember9.html

  • A
    Bloomberg poll looks for weekly US ethanol production to be up 6,000 at 912,000 barrels (890-931 range) from the previous week and stocks to increase 139,000 barrels to 20.136 million.

 

Corn
Export Developments

 

 

 

 

 

Soybean
complex
.
 

  • Canada’s
    Manitoba canola harvest is nearly complete. 
  • AmSpec
    reported September Malaysian palm oil shipments at 1.631 million tons, up 10.5 percent from August (1.476MMT). 
    ITS:
    Malaysian palm rose 7.4 percent to 1,600,981 tons from 1,491,422 tons shipped during August.
  • Malaysian
    palm oil futures were down 63, lowest in a month, and cash off $14.00. 
  • China
    is projected to import 620,000 tons of palm oil in October, the same amount as in September. 
  • US
    harvesting of soybeans this week could advance 16 points to around 36 percent if weather remains very good.  Some producers will be very busy collecting corn and soybeans across the WCB where frost may occur Thursday and Friday. 

 

Oilseeds
Export Developments

 

 

 

 

Wheat

  • Wheat
    is higher today on unfavorable Black Sea conditions and slow planting pace across the southern Great Plains were rain is badly needed.  OK, TX and NE winter wheat plantings are running behind normal.     
  • Ukraine’s
    ministry lowered their estimate for the 2021 winter wheat planted area by 9 percent to 6.1 million hectares from around 6.7 million in September.  Ukraine weather forecasters called weather conditions are the worst in 10 years and only 10% to 15% of Ukraine’s
    arable land was suitable for sowing winter crops for the 2021. 
  • Ukraine’s
    Ministry reported planting progress at around 25 percent, down sharply from the previous year. 
  • Ukraine
    exported 11.8 million tons of grain since June 1, 1.48 million less than year earlier, and includes 8.24 million tons wheat.  630,000 tons of corn were exported vs. 1.32 million year ago. 
  • Russia’s
    AgMin raised their estimate for the 2020-21 grain crop to more than 125 million tons with no less than 82 million tons of wheat, above their previous grain crop estimate of 122.5 million tons (75MMT wheat).  At least 122.5 million tons have been harvested. 
  • India
    monsoon rains were down 23 percent from average for the week ending September 30. 
  • Japan
    bought 5,375 tons of feed wheat.  

  • Paris
    (Matif) December wheat was up 1.75 at 194.00 euros.

 

Export
Developments.

  • Japan
    bought 5,375 tons of feed wheat and passed on barley. 
  • Jordan
    issued a new import tender for 120,000 tons of wheat on October 7, optional origin. 
  • Thailand
    bought over 70,000 tons of feed wheat.  They were in for 213,000 tons of feed wheat on for Nov-Jan shipment.  Origins sought were for the Black Sea region, European Union, Canada, South America and Australia. 
  • Results
    awaited: Ethiopia seeks about 80,000 tons of milling wheat on Sept. 30.
  • Pakistan
    may have bought 200,000 tons of wheat from Russia.  Earlier it was reported Pakistan seeks 300,000 tons of wheat on October 5 for arrival by mid-Jan. 
  • Turkey
    seeks 135,000 tons of 12.5% and 13.5% wheat on October 9 for oct 16 and Nov 2 shipment. 
  • 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

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

 

Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International │190 S LaSalle St., Suite 410│Chicago, IL  60603

W: 312.604.1366

treilly@futures-int.com

AIM: fi_treilly

ICE IM: 
treilly1

Skype: fi.treilly

 

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