FI Morning Grain Comments 10/14/20

PDF attached

 

Morning.

 

US
crop conditions declined one point in corn and soybeans and harvesting progress is near its respected average for both commodities. Winter wheat plantings are also near average despite the slow seedings across the southern Great Plains.  Texas is only at 55
percent and Oklahoma at 69 percent.  Soybeans are higher on follow through buying and talk China bought 5-6 cargoes of US soybeans for Nov-Dec shipment.  China also picked up at least one new crop Brazilian cargo.  Palm oil snapped their 7 day winning streak. 
Indonesia’s Energy and Mineral Resources Ministry warned biodiesel consumption could end up 10 to 15 percent below its target. 

 

Corn
and wheat are lower despite a slightly lower USD.  About half of Russia’s dry wheat area could see rain be end of next week.  Late this week into the weekend Russia’s Central Region and Ukraine will see rain. 

 

Results
are awaited on Jordan in for wheat, Ethiopia for 400,000 tons of wheat and Pakistan for 300,000 tons of wheat.  Thailand passed on feed wheat and feed barley.  Algeria seeks 30,000 tons of feed corn and 25,000 tons of feed barley.  Japan seeks feed wheat and
feed barley. They are also in for milling wheat later this week.  Algeria bought an estimated net 510,000 tons of milling wheat.  South Korea’s KFA bought 60,000 tons of South American corn.  Taiwan bought a cargo of Brazilian corn. 

 

 

 

 

 

 

 

 

Weather
and Crop Progress

 

 

 

 

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

Wednesday,
Oct. 14:

• Leman
  China Swine Conference, Chongqing, day 1
• FranceAgriMer
  monthly crops report
• Global
  Food Forum, Australia, day 1
• Malaysia
  3Q cocoa grinding figures

Thursday,
Oct. 15:

• NOPA
  Crush
• Malaysia
  Oct. 1-15 palm oil export data
• Port
  of Rouen data on French grain exports
• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• Global
  Food Forum, Australia, day 2
• Leman
  China Swine Conference, Chongqing, day 2
• European
  Cocoa Association grindings

Friday,
Oct. 16:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• 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
• Asia
  3Q cocoa grinds
• Cocoa
  Association of Asia’s webinar on Asian cocoa demand
• Leman
  China Swine Conference, Chongqing, day 3

Source:
Bloomberg and FI

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
514,086         versus   400000-650000  range

Corn             
632,184         versus   650000-900000  range

Soybeans   
2,157,012     versus   1200000-2200000             range

 

Macros

US
Mortgage Applications Oct 9 -0.7% (prev 4.6%)

-US
30-Year Mortgage Rate Oct 9 3.00%

Bank
Of America Q3 Earnings –

Q3
EPS $ 0.51 ($0.53)

-Q3
Provision For Credit Losses $1.39 Bln (est $1.86 Bln)

Goldman
Sachs Q3 Earnings

-Q3
EPS $9.68

-Q3
Net Revenue $10.78 Bln (est $9.40 Bln)

-Q3
Investment Banking Revenue $1.97 Bln (est $1.75 Bln)

-Q3
Trading Revenue $2.05 Bln (est $4.41 Bln)

Wells
Fargo Q3 Earnings

-Q3
EPS $0.42 ($0.47)

-Q3
Revenue $18.9 Bln ($17.79 Bln)

-Q3
Net Interest Income $9.4 Bln (est $9.7 Bln)

 

Education:

·        
EIA:  Handbook of Energy Modeling Methods

https://www.eia.gov/analysis/handbook/?src=email

·        
USDA: Farm use of futures, options and marketing contracts

https://www.ers.usda.gov/webdocs/publications/99518/eib-219.pdf?v=4500.1

 

Corn.

• Corn
  is lower despite a weaker USD and US corn conditions declining one point.   SK and Taiwan bought corn from South America.  Lower wheat, US harvest pressure and rain forecast for parts of South America also might be weighing on prices.  
  
• Meanwhile
  China corn futures hit a record high of 2,595 yuan per ton ($385.14/ton).
• US
  corn crop conditions were reported by USDA at 61 percent for the combined good and excellent categories, down 1 from previous week and compares to 55 year ago and 66 for the 5-year average.  A Reuters trade average was looking for 62 percent.
• US
  corn harvest progress was reported at 41 percent complete, up from 25 percent last week and compares to 20 year ago and 32 average.   94 percent of the corn crop is mature. 
  
• Germany
  ASF: 65 cases since September 10 
• USDA
  US corn export inspections as of October 08, 2020 were 632,184 tons, below a range of trade expectations, below 884,157 tons previous week and compares to 480,647 tons year ago. Major countries included Mexico for 271,626 tons, Korea Rep for 120,520 tons,
  and China Main for 66,365 tons.

 

 

Corn
Export Developments

• USDA
  announced private exporters sold: 420,000 tons of corn for delivery to China during the 2020/2021 marketing year

• South
  Korea’s KFA bought 60,000 tons of South American corn at $247.69/ton for arrival around Jan 20. 
  

• Taiwan’s
  MFIG bought 65,000 tons of Brazilian corn at 219.90 cents per bu over the March contract for Dec/Jan shipment. 
  

• Algeria
  seeks 30,000 tons of feed corn and 25,000 tons of feed barley on October 15. 
  

• Results
  awaited:  Iran seeks 200,000 tons of barley on October 14. 

 

 

 

 

Soybean
complex.  

• Soybeans
  are higher on follow through buying and talk China bought 5-6 cargoes of US soybeans for Nov-Dec shipment.  China also picked up at least one new crop Brazilian cargo.  Offshore values suggested a higher trade for soybean meal.  
  
• Soybean
  oil was lower from a lower lead in outside vegetable oil markets.  Palm oil snapped their 7 day winning streak.  Indonesia’s Energy and Mineral Resources Ministry warned biodiesel consumption could end up 10 to 15 percent below its target. 
  
• The
  September NOPA crush is due out tomorrow with estimates at 160.8 million bushels and oil stocks of 1.412 billion pounds as last month did see some maintenance downtimes across the industry.
  

• Argentina
  will continue to see rain late this weekend in the southwest and northeast early next week.  Brazil scattered showers will increase today and last through Friday. 
  

• US
  soybean crop conditions were reported by USDA at 62 percent for the combined good and excellent categories, down 1 from previous week and compares to 54 year ago and 64 for the 5-year average.  A Reuters trade average was looking for 64 percent.
• US
  soybean harvest progress was reported at 61 percent complete, up from 38 percent last week and compares to 23 year ago and 42 average.   Soybeans dropping leaves was reported at 93 percent.
  
• Oil
  World estimated Brazil will import 80,000 tons of soybean oil during October, up from 11,000 year earlier and 15,000 tons during September 2020. Jan-Oct Brazil soybean oil imports projected at 117,000 tons versus 29,000 tons year earlier. We wonder what NDJ
  imports will look like for Brazil.  Brazil October soybean imports were projected at 104,000 tons, up from 1,000 year ago and Jan-Oct projected at 632,000 tons, up from 125,000 tons year ago. 
  
• Argentina
  oilseed workers, led by the Argentina Federation of Oilseeds Workers, started an open-ended strike Tuesday afternoon.  The group represents some crush workers of the Rosario area, but not the northern area.  We don’t see significant impact on Argentina’s soybean
  and product export pace as October is typically slow and strikes are generally short lived.

• Offshore
  values this morning were leading CBOT soybean oil 67 lower and meal $1.20
  higher. 
• Rotterdam
  soybean oil values were around 2 euros lower, rapeseed oil near unchanged in the benchmark positions, and Rotterdam meal 4-7 euros higher from this time previous session. 
  
• China
  cash crush margins were 93 cents on out our calculation (99 previous) compared to 88 last week and 125 year ago. 
  

• Malaysian
  palm oil snapped a seven day winning streak  

• USDA
  US soybean export inspections as of October 08, 2020 were 2,157,012 tons, within a range of trade expectations, above 2,004,867 tons previous week and compares to 956,056 tons year ago. Major countries included China Main for 1,626,472 tons, Mexico for 182,517
  tons, and Indonesia for 90,478 tons.

 

Oilseeds
Export Developments

• USDA
  announced private exporters sold: 264,000 tons of soybeans for delivery to China during the 2020/2021 marketing year

• China
  resumed buying soybean cargoes this week, but daily amounts are lighter than the daily four week average leading up to their holiday.   Results awaited: Iran’s SLAL seeks 200,000 tons of soybean meal and 200,000 tons of barley on October 14 for OND 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 trading lower early this morning. The lower USD is likely limiting losses. About half of Russia’s dry wheat area could see rain be end of next week.  Late this week into the weekend Russia’s Central Region and Ukraine will see rain. 
  

• US
  winter wheat planting progress was reported at 68 percent complete, one point above trade expectations, up from 52 percent last week and compares to 61 year ago and 61 average.   41 percent of the US winter wheat crop is emerged. 
  

• USDA
  US all-wheat export inspections as of October 08, 2020 were 514,086 tons, within a range of trade expectations, below 678,715 tons previous week and compares to 497,468 tons year ago. Major countries included China Main for 182,382 tons, Nigeria for 96,900
  tons, and Ecuador for 56,662 tons.
• Paris
  (Matif) December wheat was 1.00 lower at 201.75 euros.

 

Export
Developments.

• Results
  are awaited on Jordan in for wheat, Ethiopia for 400,000 tons of wheat and Pakistan for 300,000 tons of wheat. 
  
• Thailand
  passed on feed wheat and feed barley, optional origin, for Nov – Mar shipment. 
  
• Algeria
  bought an estimated net 510,000 tons of milling wheat for Oct/Nov shipment at prices between $263.50 per ton and $264 with at least some of the wheat could originate from the Black Sea region. 
  
• Japan
  seeks 80,000 tons of feed wheat and 100,000 tons of feed barley on October 21 for arrival by February 25. 
  
• Japan
  seeks 87,110 tons of food wheat later this week from Canada (25k) and rest from the US. 
  
• Awaited:
  Offers around $284/ton – Pakistan seeks 300,000 tons of wheat on October 14 for arrival by end of January. 
  
• Awaited:
  2 offers – Jordan seeks 120,000 tons of wheat on October 14, optional origin, for Jan -late Feb shipment.
• Awaited:
  5 participants – 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.