FI Morning Grain Comments 11/03/20

PDF attached

 

Morning.
–
US election day

 

US
winter wheat improved two points, less than expected and remain near a multiyear low for this time of year.  Winter wheat crop conditions came in two points below expectations and harvesting progress was slightly below expectations.  US corn and soybean yields
are expected to be lower when updated by USDA later this month. 

 

November
soybean and December corn futures are higher on fund buying ahead of the US election results and rally in the outside markets.  The US corn for ethanol use during the month of September came in slightly above trade expectations.  There were no major surprises
in the US soybean crush report.  Reuters reported that a shipment of 38,000 tons of U.S. soybeans is bound for Brazil out of the Gulf.  China was quiet on Monday for the US but may have bought one Brazilian cargo for March shipment.  November soybean deliveries
were 501 and registrations were up 220.  Offshore values this morning were leading CBOT soybean oil 99 higher and meal $3.20 higher.  Malaysian palm futures were higher on expectations for supplies to tighten in October at 1.6 million tons and demand up 5.5
percent from the previous month.  Today the USDA seeks 240 tons of packaged vegetable oil under the PL 480 program for Dec 1-31 shipment, on November 3.  Wheat futures are higher following strength in soybeans and higher outside markets.   Australia/China
political tensions are high. The South China Morning Post reported a list of products (barley, sugar, wine, timber, coal, lobster, copper) will be blocked starting Friday and Australian wheat will be blocked later.  Several more wheat import tenders popped
up this week.  Tunisia bought 50,000 tons of optional origin soft wheat and 50,000 tons of feed barley for Dec shipment.  Pakistan and Jordan are in for wheat today. 

 

 

 

Weather
and Crop Progress

 

 

Source: 
World Weather Inc. 

 

Bloomberg
Ag Calendar

Tuesday,
Nov. 3:

• U.S.
  Purdue Agriculture Sentiment, 9:30am
• New
  Zealand global dairy trade auction
• FT
  Global Food Systems conference
• EARNINGS:
  Andersons, AB Foods
• HOLIDAY:
  Japan

Wednesday,
Nov. 4:

• EIA
  U.S. weekly ethanol inventories, production, 10:30am
• New
  Zealand Commodity Price

Thursday,
Nov. 5:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• China’s
  CNGOIC to publish monthly soybean and corn reports
• FAO
  World Food Price Index
• Guatemala
  October coffee exports
• Port
  of Rouen data on French grain exports
• Malaysian
  Nov. 1-5 palm oil export data

Friday,
Nov. 6:

• 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:
  Argentina

Saturday,
Nov. 7

• China’s
  trade data on soybeans and meat imports

Source:
Bloomberg and FI

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat         
287,059         versus   300000-500000  range

Corn             
721,623         versus   600000-1100000                range

Soybeans   
2,082,741     versus   1500000-2500000             range

 

StoneX
US yield/production estimates

Corn
November 178.9/14.762; October 179.0/14.942

Soybeans
November 52.1/4.291; October 52.4/4.351

 

Macros

 

Corn.

• December
  corn futures are higher on lower outlooks for US November corn and soybean yields, fund buying ahead of the US election results and rally in the outside markets. 
  
• WTI
  was up $1.28 and USD 57 points lower. 
• EU
  and other country lockdown concerns could continue to crush commodity prices post US election and weakening economies keep energy prices under pressure. 
  
• China
  corn futures fell on fund selling after prices hit a record late last week. 
  
• Brazilian
  corn prices appreciated 29 percent during the month of October. 
• Germany
  ASF: 114 cases since September 10. 
• The
  US corn for ethanol use during the month of September came in slightly above trade expectations. 
  
• USDA
  US corn export inspections as of October 29, 2020 were 721,623 tons, within a range of trade expectations, above 680,823 tons previous week and compares to 283,704 tons year ago. Major countries included China Main for 330,341 tons, Mexico for 208,150 tons,
  and Colombia for 105,108 tons.

 

Corn
Export Developments

• None
  reported

 

 

 

Soybean
complex.  

• The
  US soybean complex is strong this morning on US election day.  Parts of Brazil may not see adequate rain over the short term for the states of Parana, Santa Catarina and RGDS.  Also, Argentina will turn drier.  
  
• USDA
  September NASS crush report showed a decline in the soybean meal stocks to 341,000 short tons from 421,000 short tons at the end of August and compares to 402,000 short tons year earlier.  Soybean oil stocks were near expectations at 1.849 billion pounds,
  above 1.775 billion at the end of 2018-19.  US crushers used 171.0 million soybean bushels, 0.3 below an average trade guess, down from 174.7 million in August and up from 162.3 million during September 2019. 
  
• Reuters
  reported that a shipment of 38,000 tons of U.S. soybeans is bound for Brazil out of the Gulf.

• China
  was quiet on Monday for the US but may have bought one Brazilian cargo for March shipment. 
  

• November
  soybean deliveries were 118 and registrations were unchanged. 

• Offshore
  values this morning were leading CBOT soybean oil 99 higher and meal $3.20 higher. 
  
• Rotterdam
  soybean oil values were about 5 higher, rapeseed oil 3 euros higher, and Rotterdam meal 1-4 euros higher from this time previous session. 
  
• China
  cash crush margins were 132 cents on out our calculation (138 previous) compared to 139 last week and 155 year ago. 
  

• Malaysian
  palm futures were higher on expectations for supplies to tighten in October at 1.6 million tons and demand up 5.5 percent from the previous month. 
  

• USDA
  US soybean export inspections as of October 29, 2020 were 2,082,741 tons, within a range of trade expectations, below 2,818,734 tons previous week and compares to 1,483,653 tons year ago. Major countries included China Main for 1,491,291 tons, China T for
  113,426 tons, and Mexico for 108,221 tons.

 

 

Oilseeds
Export Developments

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

 

 

Wheat

• Wheat
  futures are higher following strength in soybeans and higher outside markets.  US winter wheat improved two points, less than expected and remain near a multiyear low for this time of year.  US planting progress of winter wheat came in slightly below expectations.
  
• US
  wheat futures Paris (Matif) December wheat was up 1.50 euros at 206.50 euros. 
  
• Australia/China
  political tensions are high. The South China Morning Post reported a list of products (barley, sugar, wine, timber, coal, lobster, copper) will be blocked starting Friday and Australian wheat will be blocked later. The AAP reported China strikes already spread
  to timber and barley. 
• Soft
  wheat exports from the European Union and Britain in the 2020-21 season that started on July 1 had reached 6.89 million tons by Nov. 1, official EU data showed on Tuesday.  That was 29% below last year.
• Ukraine’s
  grain harvest is 88 percent complete and winter wheat was planted on 92 percent of the intended area. 
  

• USDA
  US all-wheat export inspections as of October 29, 2020 were 287,059 tons, below a range of trade expectations, below 399,645 tons previous week and compares to 293,971 tons year ago. Major countries included Korea Rep for 82,602 tons, Japan for 65,919 tons,
  and Nigeria for 58,302 tons.

 

Export
Developments.

• Tunisia
  bought 50,000 tons of optional origin soft wheat and 50,000 tons of feed barley for Dec shipment.  The wheat was bought in two 25,000-tonne consignments at $274.38 a ton c&f.  The barley included 25,000 tons at $234.18 a ton c&f and 25,000 tons at $234.21
  a ton c&f.
• Lowest
  offer $286.20/ton:  Pakistan seeks 320,000 tons of wheat 3 for arrival by November 3 for arrival by the end of January. 
  
• Jordan
  got 4 participants for 120,000 tons of barley. 
• Jordan
  seeks 120,000 tons of wheat on Wednesday for March and April 2021 shipment. 
  
• Japan
  seeks 91,612 tons of milling wheat this week from the US, Canada and Australia. 
  
• Syria
  seeks 150,000 tons of wheat on November 9.  They were in on October 28 for 200,000 tons. 
  
• Turkey
  seeks 550,000 tons of wheat on November 11 for Nov 24 and Dec 18 shipment. 
  

 

Rice/Other

·        
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.