FI Morning Grain Comments 10/28/20

PDF attached

 

Morning.

 

Sharply
lower trade in the agriculture markets.  The USD is up sharply.  Profit taking should be noted in a risk off session with outside markets sharply lower led by energies and US equities.  Brazil domestic corn prices hit an all-time high and Anec downward revises
Brazil’s October corn export projection.  Palm was down 14 MRY while China soybeans rallied more than 1 percent and China palm & SBO were down 0.5 percent. 

 

 

 

Weather
and Crop Progress

 

Significant
precipitation will continue tonight through Wednesday in West Texas and the southern half of the Hard Red Winter Wheat Region bringing needed relief from dryness. Some flooding may occur though from central Oklahoma into south-central Kansas where some of
the greatest rainfall is expected. The precipitation will involve freezing rain and sleet tonight which will lead to additional travel delays and livestock stress and then will be mainly rain Wednesday, with some wet snow in the Texas Panhandle. Warmer and
drier weather in the first week of November will then lead to better conditions for fieldwork to advance.

  
         Tropical Storm Zeta has entered the Gulf of Mexico and will likely become a hurricane again tonight. Landfall is likely in southeastern Louisiana Wednesday evening as a Category 1 storm based on the Saffir-Simpson scale. The remnants of the system
will move northeast through Virginia by Thursday; however, moisture related to it will combine with the system coming out of Texas. This will cause heavy rain across the Delta Wednesday and into Alabama, eastern Tennessee, and Virginia both Wednesday and Thursday.
Fieldwork delays will occur and some flooding; however, a lengthy period of dry-biased conditions after this will then lead to improvement in fieldwork progress.

 

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

Wednesday,
Oct. 28:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• Virtual
  Palm Oil Conference, day 2
• HOLIDAY:
  Indonesia

Thursday,
Oct. 29:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• Port
  of Rouen data on French grain exports
• Vietnam’s
  General Statistics Office releases commodity trade data for October
• International
  Grains Council monthly report
• EARNINGS:
  ADM
• HOLIDAY:
  Indonesia, Malaysia

Friday,
Oct. 30:

• 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
• U.S.
  agricultural prices paid, received, 3pm
• HOLIDAY:
  Indonesia

Source:
Bloomberg and FI

 

 

 

 

 

Macros

 

Corn.

• Corn
  futures are trading off a 14-month high on widespread commodity selling and lower US equity markets.  The USD was up 46 points as of 6:30 am CT. 
  
• Corn
  open interest was up 9,105 contracts. 
• Brazilian
  agricultural think tank reported late on Tuesday that domestic corn prices hit a fresh record, rising above the previous 2007 record, by hitting 81.48 reais ($14.49) per sack, up 28 percent so far in October alone.  
  
• Brazil
  October corn exports could end up at 4.95 million tons (down from 5.5 million tone projected last week), according to Anec, while October soybean exports could reach 2.38 million tons (up from 2.32 previous week). 
  
• Germany
  ASF: 94 cases since September 10 
• The
  US EPA is considering changes to gas pump labeling for E15 ethanol blend as the biofuel industry believes the current labels are discouraging use of the fuel. 
  
• A
  Bloomberg poll looks for weekly US ethanol production to be up 12,000 at 925,000 barrels (900-942 range) from the previous week and stocks up to 56,000 barrels to 19.777 million.
  

 

Corn
Export Developments

• South
  Korea’s KFA bought 60,000 tons of South American or South African corn at $264.99/ton c&f for shipment between December 16 and January 16.  Yesterday South Korea’s FLC bought 65,000 tons of corn, optional origin, at $264.41/ton c&f for arrival around February
  15 Abd NONFI bought 203,000 tons between $250.20 and $262.41 per ton. 
• Iran’s
  SLAL seeks 200,000 tons of corn and 200,000 tons of barley on October 28 for Nov-Jan shipment. 
  

 

 

Soybean
complex.  

• Lower
  trade in the soybean complex in a risk off session. 

• Soybean
  open interest was down 22,234 contracts. 

• We
  heard China bought 1 cargo of US soybeans for Dec/Jan out of the Gulf and at least one Brazil cargo for April shipment late Tuesday. 
  
• Brazil
  will see widespread precipitation starting October 29 that could hit nearly all the nation’s major crop areas over an eight-day period.  Mato Grosso sure needs the rain as plantings were running at only 25 percent as of October 23, down from 65 percent average. 
  

• China
  cash crush margins were 106 cents on out our calculation (101 previous session) compared to 95 last week and 151 year ago. 
  

• The
  Malaysian bourse will be closed on Thursday for a public holiday.
• Malaysian
  palm oil futures settled down 14 MYR to 3051, from mainly profit taking. 

 

• European
  Union rapeseed import licenses since July 1 were 2.057 million tons, down 22 percent from 2.632 million tons from the same period a year ago.
• The
  European Union reported soybean import licenses since July 1 at 4.468 million tons, above 4.283 million tons a year ago. European Union soybean meal import licenses are running at 5.617 million tons so far for 2020-21, below 6.407 million tons a year ago.
  EU palm oil import licenses are running at 1.953 million tons for 2020-21, above 1.889 million tons a year ago, or up 3 percent.

 

Oilseeds
Export Developments

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

• The
  USDA seeks 240 tons of packaged vegetable oil under the PL 480 program for Dec 1-31 shipment, on November 3. 
  

 

Wheat

• US
  wheat futures are sharply lower on improving US weather, profit taking and widespread commodity selling.  The USD is sharply higher. 
  

• Paris
  (Matif) December wheat was down 2.25 at 203.50 euros.
• Rains
  should favor far eastern Queensland, eastern and southern New South Wales, Victoria, and eastern South Australia through Saturday. 
  

• The
  European Union granted export licenses for 267,000 tons of soft wheat exports, bringing cumulative 2020-21 soft wheat export commitments to 6.442 MMT, well down from 9.261 million tons committed at this time last year, a 30 percent decrease.  Imports are up
  5 percent from year ago at 0.930 million tons. 

 

Export
Developments.

• South
  Korean flour mills bought an estimated 77,900 tons of milling wheat to be sourced from the United States and 27,900 tons of wheat from Canada for shipment in January and February 2021.
• Japan
  bought 16,225 tons of feed wheat out of 80,000 tons sought and passed on 100,000 tons of feed barley for arrival by Feb 25. 
  
• Syria
  seeks 200,000 tons of wheat from the Black Sea on October 28.
• 5
  participants:  Jordan seeks 120,000 tons of wheat on October 28 for Feb/Mar shipment. 
  
• Pakistan
  seeks 320,000 tons of wheat on November 3 for arrival by November 3 for arrival by the end of January. 
  

 

Rice/Other

·        
China’s rice crop in the northern growing areas look good.  Wholesale rice prices appreciated during the Covid crises but soon may decline after supplies increase. 

·        
Syria seeks 37,400 tons of white rice on November 23.  White Chinese/Egyptian short grain white rice of third or fourth class was sought. Shipment is sought within three months of order confirmation. 

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