From: Terry Reilly
Sent: Friday, July 06, 2018 4:56:30 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 07/06/18
Commitment of Traders are delayed until Monday
much rain fell across the US Midwest Thursday into Friday. The central Great Plains and upper northwestern Corn Belt saw rain.
is expected from the Dakotas into northern Minnesota Sunday with rainfall of 0.20 to 1.00 inch and local totals to 1.60 inches.
will occur Wednesday into Friday in the northwestern half of the Corn Belt with 0.30 to 0.80 inch and local totals to 1.50 inches.
Midwest weather will trend wetter July 14-20. One frontal system is expected July 14-17 producing 0.30 to 0.90 inch and local totals to 1.50 inches. Another frontal system is expected July 19-21 with 0.25 to 0.75 inch and local totals to 1.25 inches.
high pressure across the Midwest will shifting to the west today, then shift back east resulting in the warm temperatures Sunday through mid-week.
Victoria and South Australia has an opportunity for rain today and Friday.
Europe will continue to see net drying through at least July 11.
Ukraine to Kazakhstan will experience slightly less threatening weather over the coming week to ten days.
World Weather Inc. and FI
CORN BELT EAST CORN BELT
10% cvg of up to 0.25” 20% cvg of up to 0.35”
and locally more; SE and local amts to 0.60”;
Mo. and east S.D. wettest south
10% cvg of up to 0.20” Mostly dry with a few
and locally more; insignificant showers
mostly far NW
20% cvg of up to 0.65”
and local amts to 1.40”;
wettest NW and in
60% cvg of up to 0.50”
local amts to 1.10”;
south and east wettest
5-15% daily cvg of up
0.25” and locally
13 Up to 20% daily cvg of
to 0.20” and locally
each day; some
may be dry
50% cvg of up to 0.75”
and local amts to 1.50”;
13 20% cvg of up to 0.50”
and locally more
14-16 65% cvg of up to 0.65” 70% cvg of up to 0.65”
and local amts to 1.50”; and local amts to 1.50”
17-20 10-25% daily cvg of 5-20% daily cvg of up
up to 0.35” and locally up to 0.30” and locally
more each day more each day
85% cvg of 0.35-1.0” 80% cvg of up to 0.75”
and local amts to 1.75” and local amts to 2.0”
south with up to 0.35”
and local amts to 0.85”
15-35% daily cvg of
up to 0.75” and locally
more each day;
15-35% daily cvg of
to 0.50” and locally
40-60% daily cvg of
up to 0.75” and locally
more each day
13-15 10-25% daily cvg of 10-25% daily cvg of
to 0.40” and locally up to 0.60” and locally
more each day more each day
16-17 60% cvg of up to 0.50”
and locally more;
16-18 60% cvg of up to 0.60”
and locally more
18-20 5-20% daily cvg of up
0.30” and locally
19-20 10-25% daily cvg of
up to 0.40” and locally
more each day
on Independence Day holiday
weekly corn, soybean, wheat export inspections, 11am
commitments of traders weekly report for period ending July 3 on positions for various U.S. futures and options, 3:30pm (report delayed from Friday because of July 4 holiday)
weekly crop progress report, 4pm
Fisheries and Aquaculture report
publishes grains and oilseeds trade data
Coast weekly cocoa arrivals
surveyors Intertek and AmSpec release their respective data on Malaysia’s July 1-10 palm oil exports, 11pm ET Monday (11am Kuala Lumpur Tuesday); SGS data during same period, 3am ET Tuesday (3pm local time Tuesday)
crop agency Conab releases soy, corn output for July, 8am ET (9am Sao Paulo), along with 2017-18 grain and oilseed crop report
bi-weekly data on Brazil Center-South sugar production, 9am ET (10am Sao Paulo)
Palm Oil Board (MPOB) data on stockpiles, exports, production for June, 12:30am ET (12:30pm Kuala Lumpur)
Agriculture Ministry publishes crop areas, production forecasts
bi-annual food outlook report, which includes food import bill
Ethanol Focus conference in Singapore, 1st day of 2
U.S. weekly ethanol inventories, output, 10:30am
weekly crop net-export sales for corn, wheat, soy, cotton, 8:30am
updates cereals balance sheets
Ethanol Focus conference in Singapore, final day
weekly net-export sales for corn, wheat, soy, cotton, 8:30am
National Weather Service’s Climate Prediction Center will release its latest forecast for El Nino, 9am
monthly World Agricultural Supply and Demand Estimates (WASDE) report for July, noon
coffee exporters group Cecafe releases data on shipments in June and the prospect for exports in 2018-19 crop
Grains publishes monthly EU grains report
of Rouen data on French grain exports
Aires Grain Exchange weekly crop report
weekly survey of analysts’ expectations on grain, sugar prices
General Administration of Customs releases preliminary commodity trade data for June, including soy and palm oil, 10pm ET Thursday (10am Beijing Friday)
Futures Europe commitments of traders weekly report on coffee, cocoa, sugar positions, ~1:30pm ET (~6:30pm London)
commitments of traders weekly report for period ending July 10 on positions for various U.S. futures and options, 3:30pm
weekly updates on French crop conditions
Bloomberg and FI
is due out July 10. Bloomberg survey:
Summary of |——-Survey Results——–|Conab
Results: | Average | Low | High | June | 2016-17
area (M| | | | |
| 35.0| 34.7| 35.2| 35.1| 33.9
| | | | |
(M | | | | |
| 118.5| 117.4| 119.2| 118.1| 114.1
yield | | | | |
Kg/Ha) | 3.38| 3.35| 3.43| 3.36| 3.36
area | | | | |
(M Ha) | 16.7| 16.0| 17.0| 16.7| 17.6
production| | | | |
Tons) | 82.1| 79.0| 84.7| 85.0| 97.8
Yield (k | | | | |
| 4.93| 4.79| 5.09| 5.10| 5.56
Corn, Soy, Wheat Inventory Survey Before USDA WASDE Report
2018-19 Crop: | Avg | Low | High | June
| 1,725| 1,455| 2,022| 1,577
| 498| 380| 797| 385
| 985| 924| 1,084| 946
2017-18 Crop: |
| 2,115| 2,058| 2,200| 2,102
| 512| 478| 631| 505
Corn, Soybean Production Survey Before USDA WASDE Report
Crop: | Avg | Low | High | 2017-18
| 14,304| 14,045| 14,683| 14,040
Yield | 175.1| 172.6| 179.5| 174.0
| 4,324| 4,220| 4,430| 4,280
Yield | 48.7| 47.5| 50.0| 48.5
2018 Wheat Production Survey Before USDA WASDE Report
2018 Crop: | Avg | Low | High | June
Wheat | 1,860| 1,769| 1,923| 1,827
Winter | | | |
| 1,199| 1,178| 1,224| 1,198
| 652| 634| 675| 650
| 316| 305| 334| 316
Winter | 230| 202| 244| 232
| 74| 60| 83|n/a
Spring | 600| 568| 646|n/a
Corn, Soybeans, Wheat Survey Before USDA WASDE Report
Ending | | | |
Stocks: | Avg | Low | High | June
| 155.7| 151.0| 163.0| 154.7
| 88.7| 85.6| 92.0| 87.0
| 263.7| 256.0| 268.0| 266.2
| 191.6| 188.0| 193.7| 192.7
| 92.0| 89.0| 94.0| 92.5
| 272.2| 270.4| 274.5| 272.4
Argentina Corn and Soy Survey Before USDA WASDE Report
2017-18 crop: | Avg | Low | High | June
– Argentina | 32.7| 32.0| 33.0| 33.0
– Brazil | 83.2| 79.2| 85.5| 85.0
– | | | |
| 36.7| 35.5| 37.5| 37.0
– Brazil | 118.9| 117.0| 120.0| 119.0
Bloomberg and FI
Wheat: Bullish: 10 Bearish: 0 Neutral: 4
Corn: Bullish: 10 Bearish: 2 Neutral: 3
Soybeans: Bullish: 5 Bearish: 2 Neutral: 8
Raw sugar: Bullish: 2 Bearish: 5 Neutral: 2
White sugar: Bullish: 2 Bearish: 5 Neutral: 2
White-sugar premium: Widen: 3 Narrow: 2 Neutral: 4
Reuters and FI
34 billion USD of trade tariffs against China were confirmed. President Trump warned more will be added, possibly up to $550 billion. China responded by slapping on $34 billion, including 25 percent on soybeans.
US stocks ended higher, USD lower, WTI crude higher, and gold lower.
China’s Commerce Min: Lodges a Case Against US At WTO
US Non Farm Pay Rolls June: 213k (est 195k prev 223k)
US Unemployment Rate June: 4.0% (est 3.8% prev 3.8%)
US Average Hourly Earnings June M/M: 0.2% (est 0.3% prev 0.3%)
US Average Hourly Earnings June Y/Y: 2.7% (est 2.8% prev 2.7%)
US Change In Manufacturing Payrolls June: 36k (est 15k prev R 19k)
US Change In Private Payrolls June: 202k (est 190k prev R 239k)
US Labor Force Participation Rate June: 62.9% (est 62.7% prev 62.7%)
US Trade Balance May: -43.1B (est -$43.7B prev R $46.1B)
traded higher from the start on light technical buying, later propelled by sharply higher soybeans and a turnaround in wheat futures.
futures started hitting intraday highs about an hour before the close, and rallied again into the close.
corn finished 8.0 cents higher at $3.6025. Funds bought 16,000 contracts.
China, they do not import a large amount of corn from the US, so focus today was on soybeans.
US pork producers are likely going to take a financial hit from Chinese import tariffs, and a harder hit if Mexico adds them.
corn export sales for 2017-18 of 440,800 tons were on the lower end of expectations. New-crop sales were 232,100 tons, well off from last week but above a year ago. New-crop commitments are running well about the previous year, above its 10-year average, but
below the recent high for this time of year for the 2016-17 season.
China sold 814,003 tons of corn out of state reserves, at an average price of 1423 yuan per ton ($213.97/ton), 21 percent of the corn offered. Yesterday China sold 1.088 million tons of corn out of state reserves,
at an average price of 1529 yuan per ton ($230.47/ton), 27 percent of the corn offered.
China sold about 50-51 million tons of corn this season. China will offer more corn on July 12 & 13.
Export Sales Highlights
Net sales of 440,700 MT for 2017/2018 were down 48 percent from the previous week and 37 percent from the prior 4-week average. Increases were reported for Mexico (144,800 MT, including decreases of 3,600 MT), Egypt (109,200 MT, including 111,000 MT switched
from Spain and decreases of 1,800 MT), Vietnam (75,100 MT, including 68,000 MT switched from unknown destinations), Colombia (74,200 MT, including 29,000 MT switched from unknown destinations and decreases of 2,200 MT), and Saudi Arabia (71,900 MT). Reductions
were primarily for unknown destinations (228,800 MT), Spain (52,100 MT), and France (20,500 MT). For 2018/2019, net sales of 232,100 MT were reported for Guatemala (91,100 MT), Mexico (45,700 MT), Japan (31,000 MT), and unknown destinations (25,400 MT).
Exports of 1,514,800 MT were up 2 percent from the previous week, but down 1 percent from the prior 4-week average. The destinations were primarily to Mexico (394,300 MT), Japan (200,200 MT), Taiwan (155,400 MT), South Korea (138,400 MT), and Egypt (127,200
MT). Optional Origin Sales: For 2017/2018, options were exercised to export 70,000 MT to Saudi Arabia from the United States. Decreases of 10,000 MT were reported for Egypt. The current optional origin outstanding balance of 337,000 MT is for South Korea
(206,000 MT), unknown destinations (91,000 MT), and Egypt (40,000 MT). For 2018/2019, new optional origin sales of 50,000 MT were reported for unknown destinations. The current outstanding balance of 188,000 MT is for Saudi Arabia (70,000 MT), South Korea
(68,000 MT), and unknown destinations (50,000 MT).
No net sales were reported for the week. Exports of 1,400 MT were to Japan (1,200 MT) and Taiwan (200 MT).
Net sales of 37,200 MT, for 2017/2018 resulted as increases for Mexico (38,000 MT) and South Africa (9,200 MT, switched from unknown destinations), were partially offset by reductions for unknown destinations (10,000 MT). Exports of 9,200 MT were to South
September corn may trade in a large $3.60-$4.10 range. December corn is seen in a $3.30-4.50 range. If the US good/excellent US corn condition hold over through July, look for December corn to possibly test the $3.00 level.
Friday marked day one of the US import tariffs tiff. $34 billion were implemented on both sides. CBOT soybeans briefly hit fresh contract lows overnight. Yet soybeans traded roughly 40 cents higher during
the trading session after a soft opening. About 10 of those cents came near the end of the trading session.
ended 38.25-39.00 cents higher, August meal $11.70 higher and August soybean oil 45 higher. Funds bought an estimated net 17,000 soybean contracts, bought 6,000 meal and bought 3,000 soybean oil.
There was no significant weakness in soybean prices on Friday after it became official China slapped on a 25 percent import tariff on US soybeans. That signaled the market had already worked in trade tariffs
before July 6, and with soybeans trading it contract lows, the timing may have been perceived as perfect for longs to get back into action, especially with no weather premium built in. The low US prices also attracted other major importer buying interest.
Some traders labeled today’s action as a classic “sell the rumor and buy the fact.” We think there were other moving parts to the strength in CBOT soybean futures.
First, the GS commodity report earlier this week had some commodity experts already excited to get back into agriculture markets, so the rally today may have triggered buying by large funds.
Second, US soybean old-crop export sales were positive. Traders didn’t see as many cancellations as they were looking for, which may have resulted in negative export sales, and new-crop US sales continue to
The USDA Export Sales report showed US soybean commitments above expectations for both old and new-crop. Soybean meal export sales were within expectations, but shipments were positive at 250,900 tons. Soybean
oil export commitments were good and shipments were supportive at 34,200 tons.
Traders were looking for large soybean cancellations by China. At least 366,000 for China were reduced this week. The remainder of old-crop soybeans on the books will likely be switched or cancelled. Look
for a large carryover to new-crop from the current year.
Just over 293 million bushels of US new-crop soybeans have been committed (2018-19 shipment period), about in line with a 10-year average for this time of year and well above last year. China makes up for
17 percent of the new-crop total (known + unknown – optional origin) and “unknown” sales make up for 49 percent. This tells me that Chinese importers were, or may still be, optimistic US soybeans will set sail during the 2018-19 marketing year.
For long traders, we like adding positions to soybeans and products at these levels. Or consider long soybeans/short corn to limit risk. The USDA export sales report showed net increases for the week ending
June 28, an indication that without China, US soybeans are attractive to alternative destinations.
China’s Ministry of Agriculture and Rural Affairs published a document on exploring ways to reduce the use of soybean meal in animal feed. Details are lacking but facto remains, if Brazil is unable to supply
soybeans for export during the late October through early January period, China will need to figure out a way to stretch supplies during this period, or take soybeans from the US. The real problems from this tariff will come around in late 2018, so not knowing
how long the tariff will last, will leave the trade guessing upcoming global trade flows.
Reuters shows Brazil soybeans at a $1.60/bu premium over US but prices need to widen to $2.00/bu in order to attract China to buy US soybeans. This should attract buying interest from several importers. Feedback
is always welcome.
For those who are following, the latest US ship to set sail from the US to arrive in China just before the 25-percent tariff Kicked in, missed the deadline by about 5 hours. Peak Pegasus’s journey on Friday
gained more attention on a social media site (Sina Weibo) than the World Cup.
India June oilseed meal exports fell 34 percent to 166,833 tons.
Argentina is closed for holiday on Monday.
seeks 30,000 tons of sunflower oil on July 10.
seeks 30,000 tons of palm olein oils on July 10.
seeks 30,000 tons of soybean oil on August 1.
China sold 660,524 tons of soybeans out of reserves so far, this season.
FX versus CBOT soybeans
Reuters and FI
Export Sales Highlights
Net sales of 561,600 MT for 2017/2018 were up 57 percent from the previous week and 78 percent from the prior 4-week average. Increases were reported for the Netherlands (162,100 MT, including 132,000 MT switched from unknown destinations), Pakistan (134,700,
including 65,000 MT switched from unknown destinations, 60,000 MT switched from China, and decreases of 300 MT), Bangladesh (109,300 MT, including 60,000 MT switched from China, 55,000 MT switched from unknown destinations, and decreases of 6,700 MT), Japan
(80,400 MT, including 65,100 MT switched from unknown destinations and decreases of 200 MT), and Germany (79,600 MT). Reductions were for China (366,000 MT). For 2018/2019, net sales of 458,700 MT reported for Mexico (193,600 MT), unknown destinations (187,500
MT), Vietnam (60,500 MT), and Thailand (35,100 MT), were partially offset by reductions for China (66,000 MT). Exports of 937,800 MT were up 87 percent from the previous week and 49 percent from the prior 4-week average. The destinations included the Netherlands
(162,100 MT), Mexico (154,500 MT), Pakistan (137,700 MT), Bangladesh (108,300 MT), and Japan (104,700 MT). Optional Origin Sales: For 2018/2019, the current optional origin outstanding balance of 228,000 MT is for China (165,000 MT) and unknown destinations
(63,000 MT). Export for Own Account: New exports for own account totaling 29,800 MT were reported to Canada. The current outstanding balance of 101,200 MT is for Canada. Export Adjustment: Accumulated exports of soybeans to the Netherlands were adjusted
down 79,601 MT for week ending June 4th. The correct destination is Germany and is included in this week’s report.
Cake and Meal: Net sales of 132,800 MT for 2017/2018 were down 9 percent from the previous week, but up 14 percent from the prior 4-week average. Increases were reported for the Philippines (31,600 MT), Ecuador (30,800 MT), Portugal (27,500 MT, including
28,000 MT switched from unknown destinations and decreases of 500 MT), Mexico (17,100 MT, including decreases of 100 MT), and Colombia (10,300 MT, including decreases of 900 MT). Reductions were reported for unknown destinations (25,000 MT). For 2018/2019,
net sales of 61,600 MT were primarily for Guatemala (44,200 MT) and Mexico (8,100 MT). Exports of 250,900 MT were down 8 percent from the previous week, but up 1 percent from the prior 4-week average. The primary destinations were the Philippines (49,500
MT), Venezuela (30,000 MT), Portugal (27,500 MT), Mexico (20,900 MT), and Canada (19,100 MT).
Oil: Net sales of 36,600 MT for 2017/2018 were up 20 percent from the previous week and up noticeably from the prior 4-week average. Increases were primarily for South Korea (13,000 MT), unknown destinations (12,300 MT), Venezuela (5,000 MT), Guatemala (3,000
MT), and Mexico (1,400 MT). For 2018/2019, net sales of 3,800 MT were reported for Mexico. Exports of 34,200 MT were up noticeably from the previous week and up 48 percent from the prior 4-week average. The primary destinations were South Korea (15,300
MT), Guatemala (6,600 MT), the Dominican Republic (4,200 MT), Jamaica (3,500 MT), and Colombia (2,500 MT). Export Adjustment: Accumulated exports of soybean oil to Colombia were adjusted down 3,000 MT for week ending May 24th. This export was reported in
long traders, we like adding positions to soybeans and products at these levels. Or consider long soybeans/short corn to limit risk. The USDA export sales report showed net increases for the week ending June 28, an indication that without China, US soybeans
are attractive to alternative destinations.
August soybean meal $310-360 range; December $280-$400 range.
August soybean oil 28.00-30.00 range; December 27.00-30.50 range.
US wheat futures attempted to trade the day lower but selling dried. Chicago September broke above a $5.0975 resistance level. KC September traded at a two-week higher and September MN ended higher for the
third consecutive day, after closing lower for the previous seven consecutive sessions. Wheat prices appear to be staging a short and medium-term rebound, largely derived from smaller production prospects for the EU, Black Sea region and Australia. Larger
US all-wheat production estimates and Favorable weather in Argentina for wheat seedings could limit gains going forward. Traders should monitor US exports over the next few weeks, especially for higher protein type wheat.
Funds today bought an estimated net 5,000 SRW wheat contracts.
USDA export sales for all-wheat of 440,100 tons were not bad for the second week in a row. Higher quality wheat moving with potential for more as world prices rally. 133,100 tons was booked for White, 136,600
tons for HRW, and 83,600 tons for HRS.
French wheat and barley conditions declined from the previous week. Soft wheat conditions for the combined good/excellent categories were reported at 73 percent as of July 1, down one point from the previous
week. Conditions are much higher than 2016 when unfavorable weather cut high protein supplies. Winter barley conditions declined 3 points to 69 percent and spring barley was down 1 point to 76 percent. Corn ratings were unchanged at 74 percent.
Paris wheat fell 1.50 euros to 188.25 euros ($221.08/ton). Harvesting pressure was noted.
recent Reuters poll pegged the EU soft wheat production at 136 million tons, down from 141.8 million a year ago. One estimate was at 131.1 million tons.
bought 79,770 tons of food wheat. Original details of the tender as follows:
Arabia seeks 1.5 million tons of barley for Sep/Oct shipment.
sold 1,709 tons of 2013 imported wheat from state reserves at auction at an average price of 2380 yuan/per ton or $357.98/ton, 0.1 percent of what was offered.
awaited: Syria seeks 200,000 tons of wheat on July 2 for Aug 1-Sep 30 shipment. Origins include Russian, Romania and/or Bulgaria.
Jordan seeks 120,000 tons of wheat on July 8 for Oct-Nov shipment.
in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on July 11 for arrival by December 28.
Jordan seeks 120,000 tons of barley on July 11 for Oct/Nov shipment.
Korea seeks 102,800 tons of rice for September-February arrival on June 27.
GRAIN TYPE ARRIVAL/PORT
20,000 Brown Short Sept. 15, 2018/Incheon
20,000 Brown Short Sept. 15, 2018/Ulsan
20,000 Brown Short Sept. 15, 2018/Masan
10,000 Brown long Sept. 30, 2018/Mokpo
10,000 Brown long Sept. 30, 2018/Donghae
2,800 Milled Medium Dec. 1-31, 2018/Busan
10,000 Milled Medium Feb. 28, 2019/Busan
10,000 Milled Medium Feb. 28, 2019/Busan
awaited: Iran seeks 50,000 tons of rice from Thailand on July 3.
Reuters and FI
Export Sales Highlights
Net sales of 440,100 metric tons were reported for delivery in marketing year 2018/2019. Increases were primarily for Taiwan (97,600 MT), Mexico (88,300 MT, including decreases of 200 MT), Japan (53,200 MT), unknown destinations (49,200 MT), and Chile (40,000
MT). Reductions were reported for the United Kingdom (7,900 MT), Jamaica (1,700 MT), and Belize (700 MT). Exports of 387,100 MT were reported to South Korea (63,000 MT), Thailand (49,500 MT), the Philippines (49,500 MT), Taiwan (49,300 MT), and Mexico (45,900
Net sales of 27,100 MT for 2017/2018 were down 14 percent from the previous week and 50 percent from the prior 4-week average. Increases were reported for Colombia (17,500 MT), Honduras (4,400 MT), Canada (2,100 MT, including decreases of 400 MT), Jordan
(600 MT), and Guatemala (600 MT). For 2018/2019, net sales of 13,500 MT were reported for Venezuela. Exports of 37,300 MT were down 34 percent from the previous week and 53 percent from the prior 4-week average. The destinations were primarily to Mexico
(28,500 MT), Canada (2,600 MT), El Salvador (1,800 MT), Japan (1,300 MT), and Saudi Arabia (700 MT).
September Chicago wheat $4.75-$5.50
September KC $4.70-$5.40 range.
September MN $5.20-$6.10 range.
Senior Commodity Analyst – Grain and Oilseeds
Futures International │190 S LaSalle St., Suite 410│Chicago, IL 60603
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