FI Morning Grain Comments 11/12/20

PDF attached

 

Morning.

 

Lower
trade all around on lack of bullish news.  EIA data will be released later today and USDA Export Sales on Friday.

 

 

 

Weather
and Crop Progress

 

MOST
IMPORTANT WEATHER IN THE WORLD

• Western
  and southern parts of Russia’s Southern Region will receive snow and rain late Sunday into Wednesday of next week
• Moisture
  totals will vary from 0.20 to 0.70 inch with a few amounts over 1.00 inch and several inches of snow will fall near and immediately to the east of Ukraine
• Crops
  will not respond well to the moisture, although some root and tiller development will improve as time moves along and the snow melts
  
• There
  is no frost in the ground which should eventually allow the moisture into the soil
  
• Tropical
  Storm Eta was located near Gainesville, Florida this morning was will race to the northeast passing through the Jacksonville area of Florida and then out to sea
• The
  storm has already lost most of its convection and wind speeds are non-threatening
• No
  crop damage has occurred or will occur
• Wind
  speeds of 20 to 44 mph were noted overnight in association with the storm and rainfall ranged from 3.00 to more than 6.00 inches in west-central parts of the Florida Peninsula
• Heavy
  rain also fell in parts of Virginia and North Carolina Wednesday and early today with 2.00 to 4.00 inches and local totals over 6.00 inches noted
• Some
  local flooding may have resulted and more of that will occur today as additional heavy rainfall evolves
• Another
  1.00 to 3.00 inches of rain is possible today
• Tropical
  Storm Theta remains a minimal threat to land in the eastern Atlantic Ocean
• The
  storm center was 740 miles southwest of the Azores
• The
  system will lose tropical characteristics and merge with a mid-latitude frontal system late in the weekend and more likely early next week
  
• Moisture
  from the system will enhance rain in the United Kingdom next week
• Tropical
  disturbance in the Caribbean Sea will become a tropical depression in the next day or two
  
• The
  system has potential to become Tropical Storm Iota during the weekend and will move toward Nicaragua and Honduras with landfall possible early next week
• Brazil
  rainfall Wednesday scattered from southern Mato Grosso do Sul and Goias through central and southern Minas Gerais and northeastern Sao Paulo with rainfall of 0.05 to 0.75 inch common and local totals to 1.00 to 2.40 inches
• The
  rain was welcome and beneficial, but net drying occurred in many areas to the south and northeast
• Most
  of Brazil excepting the far northeast and extreme south will get rain at one time or another during the next ten days to two weeks
• The
  precipitation will be greatest from Mato Grosso through Goias to Minas Gerais through early next week and most erratic and light from Rio Grande do Sul to southern Paraguay and southwestern Parana
• The
  south half of Brazil will be dry late next week through the following weekend making this coming week’s rainfall very important
• Argentina
  rainfall Wednesday was minimal with showers occurring in the far south and extreme north
• High
  temperatures were in the 70s and 80s south and the 80s and lower 90s north suggesting an acceleration in net drying is under way raising crop stress and bringing more worry over future crop development
• Portions
  of western and northern Argentina will get rain over the coming ten days while central and eastern Argentina remains dry or mostly dry
• Crop
  stress will continue to rise and worry over crop emergence and establishment will continue rising from Santa Fe into Entre Rios, Corrientes and parts of northeastern Buenos Aires
• South
  Africa rainfall will continue concentrated on central and southeastern crop areas over the next several days maintaining a very good outlook for summer coarse grain, oilseed and cotton planting and establishment
• Greater
  rain may be needed in western summer crop areas soon and possibly in Limpopo as well
• Winter
  wheat, barley and canola maturation and harvesting are advancing around the periodic rainfall
• India
  rainfall will continue most significant in the south and periodically in the far eastern states during the next ten days
• Late
  season summer crop development, maturation and harvesting will advance around the precipitation
• Winter
  crop planting will also continue to advance most significantly in the central and northern parts of the nation where winter crop establishment has been good thus far
  
• Eastern
  China weather is expected to remain mostly very good for the next two weeks
• Net
  drying through the weekend will promote summer crop harvesting and late season wheat and rapeseed planting
• Rain
  expected next week from east-central China into the North China Plain and Yellow River Basin will be extremely well timed for winter crop establishment
• Australia
  precipitation over the next ten days will be erratic and mostly too light to have a big impact on agriculture
• Dry
  conditions will be perfect maturing winter crops and supporting their harvest
• Dry
  conditions will also support additional summer crop planting
• Rain
  is needed for dryland summer crops and not much is expected for a while
• Most
  of western and northern Russia, western Ukraine, Belarus and the Baltic States will have had a favorable winter crop establishment season this year and production potentials are good for the spring
• Europe
  weather remains unusually tranquil because of a dominating high pressure ridge aloft that is keeping precipitation limited to northwestern parts of the continent
• Winter
  crops have established and some are trending dormancy
• Winter
  crops in Spain are being planted and should be establishing relatively well
• Some
  increasing precipitation is expected late next week and into the following weekend in western and some central parts of the continent
• North
  Africa is seeking greater rainfall to support the best possible wheat and barley planting this year
• Some
  planting is under way with late November and December most important for planting and establishment
• Rain
  fell Wednesday in northeastern Algeria with amounts of 0.30 to 0.90 inch and local totals to 1.57 inches; dry conditions occurred elsewhere
• U.S.
  Midwest crop weather will be mixed for a while
• No
  major storm systems are expected through the weekend
• Rain
  is expected this weekend into Monday with moisture totals of 0.20 to 0.80 inch in the lower and eastern Midwest and across a part of the Great Lakes region
• Additional
  rain and snow will occur Nov. 21-23
• Each
  of these disturbances will bring some delay to late season fieldwork, but the moisture will maintain a good outlook for winter crops
• U.S.
  hard red winter wheat areas will need more moisture especially in the west to ensure the best emergence and establishment
• A
  weak weather disturbance will produce rain from the southeastern Texas Panhandle into southeastern Kansas briefly Friday night into Saturday; otherwise, there is not much precipitation expected for a while
• U.S.
  Northern Plains have snow on the ground in Most of Montana, far western and extreme northern North Dakota and from southeastern South Dakota into a part of west-central Minnesota
• Precipitation
  is expected to be infrequent and light over the next ten days
• U.S.
  Delta weather will be good for fieldwork of all kinds during the next ten days
• Saturday
  is the only day expecting rain and amounts will be light
• U.S.
  Southeastern States will experience additional moderate to heavy rain today, but mostly in Virginia and the eastern Carolinas
• Drier
  weather is expected thereafter and that will translate into better crop and field conditions for late season harvesting and winter crop establishment
• Waves
  of precipitation are expected in the Pacific Northwest and Great Basin  during the next ten days with some rain in central and northern California as well
  
• The
  moisture will be welcome and should improve soil moisture for better winter crop establishment
• Mountain
  snowpack should increase for better runoff in the spring
• Some
  disruption to port activity is possible periodically in the Puget Sound
• Southeast
  Canada’s grain and oilseed areas will experience a little precipitation again Sunday into Monday; dry weather will occur most other days
• The
  environment will be good for harvesting
• Typhoon
  Vamco was located 520 miles east of Da Nang today moving west westerly and will  move across the South China Sea today and Friday
  
• Landfall
  is expected in central Vietnam during the late weekend as a tropical storm
  
• Rainfall
  of 4.00 to 10.00 inches will result from Da Nang northward to Vinh, Vietnam
• Damage
  to crops and property is expected  in both countries, although it may not be extensive
• Southern
  Oscillation Index was +2.01 this morning; the index will rise later this week
• Mexico
  precipitation will be quite limited over the coming week favoring summer crop maturation and harvesting
  
• Portions
  of Central America will remain wetter than usual into mid-month
• Rain
  will be greatest in Guatemala, El Salvador, Costa Rica, Honduras Nicaragua and Panama
  
• A
  new tropical cyclone will be responsible for heavy rain and flooding in Honduras and northern Nicaragua early next week

·        
West-central Africa will experience erratic rain through the next ten days favoring crop areas closest to the coast

• Daily
  rainfall is expected to be decreasing as time moves along which is normal for this time of year

·        
East-central Africa rain will be erratic and light over the coming week in Ethiopia while rain occurs frequently from Uganda and southwestern Kenya into Tanzania

• Ethiopia
  will be wetter next week while showers and thunderstorms continue elsewhere

·        
New Zealand rainfall will be below average in North Island and near to above average in South Island

• Temperatures
  will be near to below average

Source: 
World Weather Inc. 

 

 

 

Bloomberg
Ag Calendar

Thursday,
Nov. 12:

• Port
  of Rouen data on French grain exports
• Vietnam
  customs data on coffee, rice and rubber exports in October
• EIA
  U.S. weekly ethanol inventories, production
• EARNINGS:
  BayWa, Marfrig

Friday,
Nov. 13:

• 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)
  
• NOTE:
  CFTC Commitments of Traders report, usually released on Fridays, is scheduled for Monday, Nov. 16, due to U.S. federal holiday
• FranceAgriMer
  weekly update on crop conditions
• New
  Zealand Food Prices

Saturday,
Nov. 14:

• China
  Animal Agriculture Association summit on hog recovery, ASF vaccine progress

Source:
Bloomberg and FI

 

 

 

 

Macros

US
CPI (M/M) Oct 0.0% (est 0.1%; prev 0.2%)

-US
CPI (Y/Y) Oct 1.2% (est 1.3%; prev 1.4%)

-US
Core CPI (M/M) Oct 0.0% (est 0.2%; prev 0.2%)

-US
Core CPI (Y/Y) Oct 1.6% (est 1.8%; prev 1.7%)

US
Initial Jobless Claims Nov 7 709K (est 731K; prevR 757K; prev 751K)

-US
Continuing Claims Oct 31 6.786 Mln (est 6.825 Mln; prevR 7.222 Mln; prev 7.285 Mln)

US
Real Average Hourly Earnings (Y/Y) Oct 3.2% (prevR 3.2%; prev 3.3%)

-US
Real Average Weekly Earnings (Y/Y) Oct 4.4% (prevR 4.4%; prev 4.1%)

 

 

Corn.

• Corn
  is lower on lack of fresh news. 
• EIA
  data will be out later today proving some price direction.  Note ethanol production is running well below a year ago. 
  
• Today
  is day 5 of the GS roll, last day.  Traders should shift their focus on the March position.  Spreads are expected to remain active with pressure on December as the US may increase corn exports after the end of the year. 
  

• WTI
  was up $0.13 and USD 14 points lower at the time this was written. 
• The
  USDA Broiler report will be out after the close.

·        
A Bloomberg survey calls for weekly ethanol production to be up to 975 thousand barrels from 961 thousand from the previous week, and stocks to end up at 20.114 million barrels, up from 19.675 million. 

·        
Germany’s 2020 corn was projected to increase about 10% on the year to 4.03 million tons – Germany’s association of farm cooperatives.  This has not slowed EU’s appetite for feedgrains demand.

 

Corn
Export Developments

• South
  Korea’s KFA bought 64,000 tons of corn at $241.64/ton c&f for arrival around May 15. 
  
• Results
  awaited: Iranian state-owned animal feed importer SLAL seeks up to 60,000 tons of animal feed corn, 60,000 tons of feed barley and 60,000 tons of soymeal, on Wednesday, Nov. 11, for shipment in December 2020 and in January 2021.

 

 

Soybean
complex.  

• The
  soybean complex is lower in a risk off morning session.  World consumption of soybeans is expected to be greater than production for this crop year.  South American production will become increasingly important.  Palm futures were up 45 points to 3391, an
  eight-year high and cash increased $7.50/ton to $852.50. 
• SA
  weather improves with some rain in the forecast over the next few days bias La Pampa, including southwestern BA, through western Cordoba, and central and northern Brazil. 
  

• Offshore
  values this morning were leading CBOT soybean oil 61 lower and meal $0.70 lower. 
  
• Rotterdam
  soybean oil values were about 5 euros higher, rapeseed oil 8 euros higher, and Rotterdam meal mostly 2-7 euros higher from this time previous session. 
  
• China
  cash crush margins were 94 cents on out our calculation (94 previous), compared to 115 last week and 162 year ago. 
  

• Malaysian
  palm futures are traded at an 8-year high. 

 

Oilseeds
Export Developments

• Syria
  seeks 50,000 tons of soybean meal and 50,000 tons of corn on November 15. 
  
• Results
  awaited:  Iranian state agency the Government Trading Corporation (GTC) seeks 30,000 tons of soyoil and 30,000 tons of sunflower oil for shipment in December 2020 and in January 2021.
  

• The
  USDA seeks 180 tons of veg oil packaged in 4-liter cans on Nov 17 for use in the McGovern-Dole Food for Export program for shipment to Liberia. Shipment was scheduled for Dec 16-31 and Jan 1-15 (Jan 1-31 for plants at ports).
  

 

 

Wheat

• Wheat
  is
  lower on lack of fresh news but a pickup in global export development tender announcements may mitigate losses. 
  
• Paris
  (Matif) December wheat was 0.75 euro lower at 210.50 euros. 
• The Rosario Grains Exchange estimated wheat production at 16.7 million tons versus 17.0 million previously.  USDA is at 18 million tons. 
  
• Russia’s AgMin made an official statement on export quotas to be set from 15 Feb until June 30 for the volume of 15 million tons of all grains (mostly
  wheat).  That’s 45 days later than what we expected.  Some believe about 39 million tons of wheat exports will be completed by the end of the season.  Russian wheat exports are expected to be front loaded this season (Starting July) since Australia’s crop
  will end up cheaper on the back end. We also understand Australia’s wheat crop is larger than most predictions out there. 
  

 

Export
Developments.

• Iran bought may have bought 60,000 tons of milling wheat for shipment in December 2020 and in January 2021.
  
• Results awaited:  Algeria seeks 50,000 tons of wheat on November 12 for December and/or January shipment. 
  

• Saudi Grains Organization (SAGO) announced seeks 720,000 tons of feed barley on Friday for arrival during January – February 2021.
• Pakistan seeks 400,000 tons of wheat on November 18.
  
• Japan is in for 102,011 tons of food wheat. 
  

• In an SBS import tender, Japan seeks 80,000 tons of feed wheat and 100,000 tons of feed barley to be loaded by Jan. 31, 2021 and arrive in
  Japan by Feb. 25, on Nov. 18.

• Results awaited: Syria seeks 150,000 tons of wheat on November 9.  They were in on October 28 for 200,000 tons. 
  
• Jordan seeks 120,000 tons of feed barley on November 17 for Feb/Mar shipment. 
  
• Jordan seeks 120,000 tons of milling wheat on November 18 for LH Mar through FH May shipment. 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.  

·        
Syria seeks 25,000 tons of white rice on December 2.