FI Morning Grain Comments 10/07/20

PDF attached

 

Morning.

 

Follow
through buying is pulling US agriculture futures higher.  Benchmark soybean complex and wheat contracts didn’t test their intraday highs from yesterday, but December corn did.  Malaysian palm oil prices appreciated for the third straight day, up 54 ringgit
or nearly 2% to 2,872/ton.  Traders are looking for Sep MPOB palm production to increase 3.1% from Aug. SK’s NOFI bought 59,000 tons of soybean meal at $451.49/ton c&f for Dec shipment and 206,000 tons of corn, expected to be from South America, at $239.80/ton
c&f for LH No/FH Dec shipment.  Brazil’s Parana state soybean plantings have seen their slowest start in five years.  Russia plans to introduce grain export quotas for the January through June period.  Jordan saw at least one offer for up to 120,000 tons of
wheat but ended up passing.  China bought $10.7 billion of US agriculture and related products during the first eight months of 2020. A Bloomberg poll looks for weekly US ethanol production to be up 14,000 at 895,000 barrels (885-915 range) from the previous
week and stocks down to 42,000 barrels to 19.649 million. The Philippines seek 300,000 tons of rice, a day after reports they were mulling over ideas to curb imports to prop up domestic prices. 

 

 

 

 

Weather
and Crop Progress

 

 

 

NORTH
AMERICA

• GFS
  model removed much of the rain previously advertised from hard red winter wheat country during the next ten days, although a few showers remained
• Some
  of the reduction was needed
• European
  model has greater rain in northern and eastern portions of hard red winter wheat areas, as well as eastern Colorado leaving the southwest half of the region mostly dry
• European
  model is a little too wet in Colorado, Nebraska and northwestern Kansas
• European
  model has greater rain for the western and central Midwest next week while the GFS has limited rainfall in the region
• The
  lighter and more limited rainfall outlook is correct, although the region may not be completely dry
• GFS
  model rain was increased in the lower and eastern Midwest mostly from the Ohio River Valley because of Hurricane Delta
• This
  change was needed
• European
  model run was wetter over a larger part of the central and eastern Midwest from the hurricane and a mid-latitude frontal system that follows
• The
  model is too wet

 

Overall,
the bottom line today is rain in hard red winter wheat is expected to be restricted during the next ten days to two weeks as was the official World Weather earlier this week. The models have been periodically overdoing rainfall in the region and today’s GFS
model run is preferred, although additional changes are probable. The European model is too wet for the Midwest over the next ten days, but World Weather, Inc. agrees with bringing moisture from Hurricane Delta farther north into the lower Midwest than advertised
Tuesday.

 

SOUTH
AMERICA

• GFS
  model outlook has not changed greatly for center west into center south Brazil for next week with rain expected in many areas
• Restricted
  rainfall occurs in Mato Grosso do Sul, western Parana and western Sao Paulo, although a little more rain falls in these areas than advertised Tuesday morning
• Rain
  in Brazil’s center south and center west crop areas is restricted from Friday of next week through October 21, although a few sporadic showers are expected – net drying is expected
• Far
  southern Brazil is still advertised to see a good mix of rain and sunshine during the next ten days to two weeks favoring crops and fieldwork
• No
  changes were noted in Argentina for the first ten days of the outlook with Buenos Aires and eastern La Pampa getting most of the nation’s significant rain – most of which occurs Saturday into Sunday of this week
• Argentina
  rainfall was advertised to increase Oct. 18-21, but the latest model run reduced rain in San Luis, La Pampa and western Cordoba relative to the 00z model run
  
• Some
  of this reduction was needed

 

The
generalities of the South America outlook have not changed much today relative to the previous model run or the overall outlook suggested Tuesday. Argentina is not likely to see much rain for ten days except in Buenos Aires and eastern La Pampa where some
rain will fall this weekend to maintain a good outlook for crops in that region. In Brazil, a period of beneficial moisture will impact center west and center south crop areas next week; although portions of Mato Grosso do Sul and western and northern Parana
as well as western Sao Paulo may not get much rain and will need more soon.

 

EUROPE/BLACK
SEA REGION

• Some
  rain fell in western Ukraine overnight with amounts to 0.75 and local totals to 1.34 inches, but this moisture did not reach into eastern areas
• No
  significant theme changes occurred overnight
• Rain
  will fall in most of Europe over the coming week to ten days to two weeks
• Areas
  from the Adriatic Sea region to southeastern Germany, western and southern Poland and parts of western Europe will be wettest
• Eastern
  Ukraine will continue to receive little to no
• Kazakhstan.
  The middle and lower Volga River Basin and Russia’s Southern Region will continue very dry