FI Morning Grain Comments 10/02/20

PDF attached

 

China
bought 264k soybeans.

 

Volatile
trade expected.  Lower start to the day in agriculture, energy and equity markets while the USD increased after President Trump and the first lady tested positive for coronavirus. 

 

The
soybean complex is sharply lower led by sharply lower SBO.  Argentina cut export taxes on soybeans and products and also mining products to entice producer selling.  There were no CBOT deliveries posted.  Bunge cancelled 32 soybean meal receipts and there
were no changes to soybean oil registrations.  Malaysian palm oil settled at 2708, down 81 MYR from the previous day.  Cash fell 2.2% or $15.50/ton to $694.50.  Offshore values this morning were leading CBOT soybean oil flat (33 lower for the week to date)
and meal $5.10 lower.  Rotterdam soybean oil values were down about 6-7 euros, rapeseed oil 12 lower in the benchmark positions, and Rotterdam meal mostly unchanged from this time previous session. 

 

CBOT
corn is setting back from multi month highs from the higher USD and decay in the soybean complex.  French corn crop ratings were unavailable due to a delay in reporting. 

 

Wheat
is lower from improving weather conditions for Russia and Australia were rain is forecast to fall.  Russian export prospects for 2020-21 are improving as crop production estimates are starting to increase.  SovEcon increased their forecast for Russian grain
exports by 2.5 million tons to 49.1 million tons for 2020-21, and wheat by 1.7MMT to 38.9MMT.  For 2019-20, grin exports were seen at 45.1MMT and wheat exports at 34.8MMT.  The Ukrainian Bakers Association warned domestic wheat prices had increased 40% this
year, including a 25% rise in September, and that sugar prices jumped by 30% last week and sunoil prices are up 50% this year.  They warned bread prices will be sharply higher this year. 

 

 

 

Weather
and Crop Progress

 

 

 

 

 

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

MONDAY,
Oct. 5:

• 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
• U.K.
  wheat and barley production estimates
• Ivory
  Coast cocoa arrivals
• Malaysia
  Oct. 1-5 palm oil export data
• ANZ
  Commodity Price
• HOLIDAY:
  China, some states of Australia

TUESDAY,
Oct. 6:

• Purdue
  Agriculture Sentiment
• New
  Zealand global dairy trade auction
• HOLIDAY:
  China

WEDNESDAY,
Oct. 7:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• HOLIDAY:
  China

THURSDAY,
Oct. 8:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• UN
  FAO World Food Price Index
• India
  SEA-Globoil webinar with Dorab Mistry, Thomas Mielke and James Fry
• Brazil’s
  Conab releases first report on 2020-21 planted area, output and yield of soy and corn
• Port
  of Rouen data on French grain exports
• EARNINGS:
  Suedzucker, Agrana
• HOLIDAY:
  China

FRIDAY,
Oct. 9:

• USDA’s
  WASDE report with world supply/demand crops update, stockpiles noon
• 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’s
  CNGOIC to publish monthly soy and corn reports
• China
  agriculture ministry (CASDE) to release its monthly data on supply and demand
• FranceAgriMer
  weekly update on crop conditions
• Brazil
  Unica cane crush, sugar production (tentative)
• HOLIDAY:
  Korea

Source:
Bloomberg and FI

 

 

 

 

 

StoneX
October update (lower production)

U.S.
2020 corn yield 179.0 versus late August 179.6 and 182.4 early August

Corn
production 14.942 versus 15.085 billion late August and 15.320 billion previously

U.S.
2020 soybean yield 52.4 versus 52.9 late August and 54.2 early August

Soybean
production 4.351 versus 4.388 billion late August and 4.496 billion previously

 

 

Macros

US
Aide: Tsy Sec Mnuchin Tests Negative For Covid-19

Trump
And The First Lady Have Tested Positive For Coronavirus

House
Democrats Pass $2.2T Stimulus Republicans Reject

US
Change In Nonfarm Payrolls Sep: 661K (est 850K; prevR 1489K; prev 1371K)

US
Unemployment Rate Sep: 7.9% (est 8.2%; prev 8.4%)

US
Average Hourly Earnings (M/M) Sep: 0.1% (est 0.2%; prevR 0.3%; prev 0.4%)

US
Average Hourly Earnings (Y/Y) Sep: 4.7% (est 4.8%; prevR 4.6%; prev 4.7%)

 

 

Corn.

• CBOT
  corn is setting back from multi month highs from the higher USD and decay in the soybean complex.  The contract reached its highest level since March yesterday.
  
• News
  was light for the corn market.  US export developments are slow. 
• French
  corn crop ratings were unavailable due to a delay in reporting. 
• Germany
  ASF:  6 new cases; 46 cases since September 10 
• Argentina
  corn export licenses jumped to 334,000 tons overnight, more than three times is average over the past ten days, according to AgriCensus. 
  
• Argentina
  corn plantings are at about 15 percent of the 6.3-million-hectare projected area, below about 20 percent a year ago.  
  
• 411
  million corn bushels were used to make ethanol during August, less than expected.  Note for the first time in recent memory, USDA did not report sorghum for ethanol use.  Our estimate is below.
  

 

Corn
Export Developments

• Syria
  seeks 50,000 tons of soybean meal and 50,000 tons of corn on October 26 for delivery within four months of contract. 
  

 

 

Soybean
complex.  

• The
  soybean complex is under pressure led by soybean oil in large part to outside market movement. 
  
• NASS
  soybean crush for August was 0.9 bu below expectations and soybean oil stocks 45 million pounds below expectations.  The report is friendly for soybean oil.  
  
• The
  Argentina government plans to temporarily cut soybean, soybean oil and soymeal export taxes by 3 points to 30% to entice producer selling, and last through the end of the year.  We hear Argentina producers are sitting on about 16 million tons of soybeans. 
  Producer selling should increase but only if the producer is in dire need to raise money.  Some are not as optimistic the plan will significantly boost producer sales.  Either way you look at it, many Argentine producers consider soybeans to be the most reliable
  currency around.  The producer selling may end up heaviest on the back end (December) before the tax rate reverts back to 33 percent.  Some producers groups think the cut in taxes was not enough. 
  
• Argentine
  farmers have sold 32.2 million tons of soybeans from the 2019-20 season, about 60% of the harvest and 4.4 million less than sales registered at the same point in the previous year.
• Offshore
  values this morning were leading CBOT soybean oil flat (33 lower for the week to date) and meal
  $5.10
  lower. 
• Rotterdam
  soybean oil values were down about 6-7 euros, rapeseed oil 12 lower in the benchmark positions, and Rotterdam meal mostly unchanged from this time previous session. 
  
• There
  is talk the US may ban a second Malaysian plantation over labor practices. 
  
• Malaysian
  palm oil – down more than 2 percent

 

 

Oilseeds
Export Developments

• Under
  the 24-hour reporting system, US exporters reported the following:
• Private
  exporters reported to the U.S. Department of Agriculture export sales of 264,000 tons of soybeans for delivery to China during the 2020/2021 marketing year.
• Syria
  seeks 50,000 tons of soybean meal and 50,000 tons of corn on October 26 for delivery within four months of contract. 
  

 

Wheat

• Wheat
  is lower from improving weather conditions for Russia and Australia were rain is forecast to fall.  Rainfall of 10-50mm is expected across cropping areas of Victoria and South Australia, and parts of southern New South Wales.
  
• Russian
  export prospects for 2020-21 are improving as crop production estimates are starting to increase. 
  
• SovEcon
  increased their forecast for Russian grain exports by 2.5 million tons to 49.1 million tons for 2020-21, and wheat by 1.7MMT to 38.9MMT.  For 2019-20, grin exports were seen at 45.1MMT and wheat exports at 34.8MMT. 
  
• The
  Ukrainian Bakers Association warned domestic wheat prices had increased 40% this year, including a 25% rise in September, and that sugar prices jumped by 30% last week and sunoil prices are up 50% this year.  They warned bread prices will be sharply higher
  this year. 

• Paris
  (Matif) December wheat was down 2.50 at 194.50 euros.

 

Export
Developments.

• Results
  awaited: Ethiopia seeks about 80,000 tons of milling wheat on Sept. 30.
• Jordan
  issued a new import tender for 120,000 tons of wheat on October 7, optional origin. 
  
• 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.