FI Morning Grain Comments 10/06/20

PDF attached

 

Morning.

 

USDA
announced sales of 154,400 tons of soybeans to unknown for 2020-21 delivery.  Soybeans are up sharply on technical buying despite rapid US harvesting progress and an unchanged good/excellent condition.  Corn conditions improved one point and one quarter of
the crop had been cut.  Malaysian palm oil appreciated over 3.5 percent overnight, up 97 MRY to 2818, in part to a report that palm oil prices will be higher amid lower production from La Nina effects.  Offshore values this morning were leading CBOT soybean
oil 15 lower and meal $2.10 higher.  IMEA
projected Brazil’s Mato Grosso soybean production at 35.87 million tons, up 700,000 from previous.  Japan is in for 118,428 tons of food wheat.  More than 50 percent of the US wheat crop had been planted (52 vs. 47 average). 

 

USDA
trade estimates attached

 

 

 

 

 

 

 

 

 

Weather
and Crop Progress

 

 

All
figures in percent:

Category	Analyst average	Analyst range	USDA last week	USDA this week
Corn harvested	26	23-28	15	25
Corn condition*	61	61-61	61	62
Soybeans harvested	36	32-40	20	38
Soybean condition*	64	63-64	64	64
Winter wheat planted	50	46-53	35	52
*Percent good/excellent

(Reporting
by Julie Ingwersen in Chicago
Editing by Matthew Lewis and Richard Pullin)

 

FEW
CHANGES OF SIGNIFICANCE OVERNIGHT

• Hurricane
  Delta will have a greater impact on the lower U.S. Mississippi River Basin than previously expected.
• Torrential
  rainfall is expected from Louisiana to Tennessee from Thursday into Saturday resulting in some flooding, but more importantly causing some crop damage
• Sugarcane
  in Louisiana will be damaged by high wind speeds unless some aggressive harvesting can occur in the next few days
• Cotton
  damage is also possible with new crop losses possible because of high wind speeds and heavy rain either blowing or stringing cotton out of open bolls
• Losses
  will be greatest where boll rot has evolved
• Cotton
  quality declines are expected      
• Harvest
  delays for all crops in the Delta are expected
• Rain
  from the storm will move through Kentucky and Tennessee before curving toward the middle Atlantic coastal states later in the weekend and Monday
• Tropical
  Storm Gamma dissipated over the Yucatan Peninsula overnight, but the storm’s remnants will continue to generate frequent rain and some flooding
• Center
  west and center south Brazil are advertised drier again at the end of next week and into the following weekend and if that verified it will be a great opportunity for aggressive fieldwork after showers scatter frequently Sunday through mid-week next week
• Tropical
  Storm Chan-Hom will threaten Japan Friday into the weekend with some heavy rain and potential flooding; the storm may become a weak typhoon as it approaches Japan
• Tropical
  disturbance near lower Vietnam coast will generate frequent rain through Wednesday as it moves inland through the Central Highlands coffee areas
• This
  disturbance may reach the Bay of Bengal during the weekend and will contribute to greater rain in India next week
• Disturbed
  tropical weather in the Philippines will generate greater rainfall over the next several days and a tropical cyclone “may” evolve near the country and move toward Vietnam early next week

 

BIGGEST
WEATHER ISSUES OF THE DAY

• Russia’s
  Southern Region remains too dry with and no significant relief for at least ten days and probably two weeks
• Kazakhstan
  remains too dry and no relief is expected for two weeks
• U.S.
  west-central and southwestern hard red winter wheat areas in the Plains will be hot and dry this week and may cool down this weekend into next week
• Northwestern
  U.S. Plains remain quite dry and winter crops are not establishing well; there is a chance for “some” showers briefly this weekend, but they will be light
• No
  change in Argentina dryness is expected from central and northern Cordoba and parts of central Santa Fe to northwestern parts of the nation maintaining worry over winter and spring crops
• Brazil
  heat and dryness will last through Friday and then some relief is expected during the weekend and especially early to mid-week next week in center west and center south crop areas
• Drying
  may return to center west and center south crop areas at the end of next week and into the following weekend
• Western
  Australia is still too dry, although some showers will occur in the far south part of the state late Wednesday into Thursday
• Queensland,
  Australia still needs significant rain for summer crop planting; some rain is possible late next week and more likely in the following weekend
• China
  will experience a bitter mix of rain and sunshine this week and next week; including the water logged northeast
• Central
  India will trend wetter again next week after this week’s rain is greatest in the south and far eastern states
• South
  Africa weather is slowly improving with rain in the south and east
• Southeastern
  Canada and the U.S. Great Lakes region will experience a better mix of weather over the next week to ten days after frequent precipitation
• U.S.
  harvest weather in the Midwest and Great Plains will be good through Saturday
• Rain
  is expected in the northern Plains and upper Midwest late this weekend into early next week
• Some
  rain from Hurricane Delta may reach into the lower eastern Midwest this weekend causing delays to fieldwork
• U.S
  Midwest and Great Plains weather next week will be mostly good with only a brief period in which rain is expected to occur in association with frontal systems
• U.S.
  southeastern states harvest will advance well through mid-week, but late week and weekend weather will deteriorate with rain and scattered thunderstorms expected
  
• U.S.
  Delta faces torrential rain, flooding and strong wind speeds late Thursday through Saturday as Hurricane Delta impacts the region
• Rain
  totals of 3.00 to 8.00 inches will impact Louisiana, southeastern Arkansas and much of Mississippi with 2.00 to 5.00 inches and locally more in Kentucky and Tennessee
• Local
  rain totals over 10.00 inches will occur in Louisiana
• Wind
  speeds will be well over hurricane force in southeastern Louisiana Friday as Hurricane Delta arrives
• Wind
  speeds of 30 to 50 mph will occur into southwestern Mississippi and northeastern Louisiana while speeds of 20 to 40 mph occur northward into central Mississippi
• Drier
  weather will occur Sunday into early next week and then a frontal system is expected later next week that may generate additional rain
• U.S.
  temperatures will trend warmer this week until the late weekend frontal system arrives in the Plains and eventually moves through the Midwest next week
• Highs
  in the Midwest will rise to the 70s and lower 80s through the weekend with gradual cooling expected next week as a series of cool fronts move through the region
• High
  temperatures in the Plains will be in the upper 70s and 80s during much of this week with 90s in some southern locations
• Cooling
  will occur late this weekend and especially next week with a more seasonable range of temperatures expected over time
• Cooling
  is expected in the Pacific Northwest late this week and during the weekend after several more very warm days through Friday
• No
  threatening cold nighttime temperatures are expected in any part of the U.S. through the next ten days
• Central
  and western Ukraine and portions of southeastern Europe will receive waves of rain later this week through most of next week
• Sufficient
  rain will fall to relieve some of the driest areas from dryness
• Rainfall
  of 0.75 to 2.50 inches and local totals over 4.00 inches may occur by the end of next week
• Temperatures
  will be warmer than usual in much of the forecast period
• Eastern
  Ukraine, like Russia’s Southern Region and Kazakhstan, will get little to no rain for the next ten days and possibly two weeks
• Europe
  will continue to experience waves of rain over the next two weeks, but the intensity in western areas will be much less than that of this past weekend
  
• Spain
  and Portugal will be driest in this first ten days of the outlook with some areas in the Iberian Peninsula getting rain after Oct. 18.
• Temperatures
  in western Europe will  be near normal while those in the east are warmer than usual
• Western
  Australia and parts of Queensland will remain too dry
• Rain
  will fall from eastern South Australia through Victoria and western and southern portions of New South Wales over the next few days and the drier for a while
• Temperatures
  will be seasonable
• India
  will experience frequent rain in the east and south over the next week with central areas trending wetter again next week as well
• Some
  crop maturation and harvest disruption is expected
• Northern
  India will continue to be mostly dry favoring summer crop maturation and harvest progress and some winter crop planting
• Brazil
  weather will be dry biased in center west and center south crop areas through Saturday
• Scattered
  showers develop Sunday and continue daily through the middle part of next week
• Daily
  rainfall will vary from 0.20 to 0.75 inch with a few 1.00 to 2.00-inch totals
• The
  greatest rain is expected in Minas Gerais, southern Espirito Santo, Rio de Janeiro and areas south into northeastern Parana
• A
  few locations in Mato Grosso could also receive a few daily rain totals over 1.00 inch
• Improved
  soil moisture should support at least some improved topsoil moisture for better soybean and corn planting
• Some
  improved coffee flowering and pollinating conditions will also occur
• Citrus
  will flower additionally
• Sugarcane
  development will become more aggressive as topsoil moisture improves
• Some
  drier weather is now advertised to return to center west and center south Brazil for the end of next week and into the following weekend
• Argentina
  rainfall is expected to be limited over the coming week to ten days with rain most likely in Buenos Aires infrequently, but often enough to maintain favorable soil and crop conditions
• Crop
  moisture stress will continue in the driest areas of Cordoba, Santa Fe, Santiago del Estero, western Chaco and areas northwest to Salta
• South
  America temperatures will be very warm to hot in center west and center south Brazil this week and then cooler next week
• Argentina
  temperatures will be seasonable during both weeks
• Southeast
  Asia rainfall over the next ten days will be erratic, but most areas will be impacted multiple times in the next two weeks supporting most crop needs
• Mexico
  precipitation will be most significant in the far south  of the nation over the coming week to ten days
• Central
  America will be wetter biased over the next ten days to two weeks further easing long term dryness and possibly delaying early season crop maturation.
  
• South
  Africa will experience erratic rainfall over the next couple of weeks
• The
  precipitation will begin to improve topsoil moisture for spring planting and winter crop reproduction, but greater rain will still be needed

·        
West-central Africa will experience waves of rain through the next ten days favoring coffee, cocoa, sugarcane, rice and other crops

·        
East-central Africa rain will be erratic and light over the next couple of weeks, but most of Uganda, southwestern Kenya and portions of Ethiopia will be impacted while Tanzania is mostly dry

·        
Philippines rain will be widespread over the next ten days to two weeks maintaining a favorable outlook for crops

·        
New Zealand temperatures will be near to below average over the next seven days while precipitation is lighter than usual with the greatest amounts likely along the lower west coast of South Island

• Southern
  Oscillation Index was +9.92 today and it will stay significantly positive through the coming week

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

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

 

 

 

 

USDA
inspections estimates via Reuters              

USDA
inspections versus Reuters trade range                                                     

Wheat         
643,671         versus   400000-650000  range

Corn             
863,995         versus   650000-1100000                range

Soybeans   
1,667,068     versus   1050000-1550000             range

 

Macros

 

Corn.

• CBOT
  corn was higher this morning on strength in soybeans and concerns SA plantings are running behind normal for this time of year.   
  
• USD
  was 14 lower as of 7:30 am CT.  
• Germany
  ASF:  49 cases since September 10 
• USDA
  US corn export inspections as of October 01, 2020 were 863,995 tons, within a range of trade expectations, above 826,995 tons previous week and compares to 473,409 tons year ago. Major countries included China Main for 347,265 tons, Mexico for 229,375 tons,
  and Colombia for 136,464 tons.

 

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.  

• Slow
  South American soybean plantings and higher vegetable oils are leading the soybean complex higher.  AgRural reported 1.6 percent of Brazil’s soybean crop had been planted, below 3.1% last year and 4.5 percent average.  European vegetable oils are very strong
  bias soybean oil (up 6-20 euros per ton).  Second week of the US weather outlook was a little wetter for the Midwest but the Great Plains will remain drier bias. 
  
• USDA
  announced sales of 154,400 tons of soybeans to unknown for 2020-21 delivery. 
  
• Soybean
  open interest is near record.
• IMEA
  projected Brazil’s Mato Grosso soybean production at 35.87 million tons, up 700,000 from previous. 
  
• Offshore
  values this morning were leading CBOT soybean oil 15 lower and meal $2.10
  higher. 
• Rotterdam
  soybean oil values were up about 20 euros, rapeseed oil unchanged in the benchmark positions, and Rotterdam meal mostly 2-6 euros lower from this time previous session. 
  
• Malaysian
  palm oil – very strong overnight

• USDA
  US soybean export inspections as of October 01, 2020 were 1,667,068 tons, above a range of trade expectations, above 1,296,568 tons previous week and compares to 1,052,267 tons year ago. Major countries included China Main for 1,222,562 tons, Mexico for 103,069
  tons, and Korea Rep for 60,027 tons.

 

Oilseeds
Export Developments

• USDA
  announced sales of 154,400 tons of soybeans to unknown for 2020-21 delivery. 
  

• Lowest
  offer: $953.00/ton sunflower oil and $860/ton soybean oil:  Egypt’s GASC seeks 30,000 tons of soybean oil and 10,000 tons of sunflower oil for Nov 25-Dec 15 arrival . 
  
• Today
  USDA CCC seeks 22,000 tons of soybeans for Egypt and 4,000 tons of soybean meal for Georgia under the PL 480 program, for November 10-20 shipment. 
  
• 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

• US
  wheat futures are higher on the heals from higher soybeans and concerns over Black Sea winter grain plantings.  Ukraine did see some showers over the past couple of days.   
  

• Paris
  (Matif) December wheat was unchanged at 197.75 euros.

• USDA
  US all-wheat export inspections as of October 01, 2020 were 643,671 tons, within a range of trade expectations, above 586,916 tons previous week and compares to 479,335 tons year ago. Major countries included Philippines for 175,212 tons, Nigeria for 80,146
  tons, and Vietnam for 65,999 tons.

 

Export
Developments.

• Tunisia
  bought an unspecified amount of wheat (67,000 tons sought) for late Oct and Nov 25 shipment, at $263.42, $266.39, $263.27 and $263.50 per ton c&f.   
  
• Japan
  is in for food wheat, 118,000 tons, including 61,985 from the US, 25,790 tons from Canada and 30,653 ton from Australia. 
  
• Pakistan
  saw offers for 300,000 tons of wheat.  It may have closed at $278.50/ton c&f. 
  
• Jordan
  issued an import tender for 120,000 tons of wheat on October 7, optional origin. 
  
• Jordan
  seeks 120,000 tons of wheat on October 13, optional origin, for Jan -late Feb shipment.
• 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

·        
Mauritius seeks 5,500 tons of white rice on October 20 for Dec 15-Mar 15 2021 delivery.