From: Terry Reilly
Sent: Thursday, July 19, 2018 4:49:52 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 07/19/18

PDF attached




Weather and crop conditions

·         We are already thinking of a 1-2 decrease in spring wheat conditions this week after hot and dry weather set in across the PNW. Note the drought monitor shows drought conditions expanding across the Pacific Northwest. 

·         G/E US corn conditions could decline 2 and soybeans down one.

·         There were no major changes to the 2-week US weather outlook for the Midwest as of Thursday morning.

·         1-5 day suggests rainfall of 0.20 to 0.75 inch will impact the southwestern Corn Belt while 0.50 to 1.50 inches occurs in many other areas.

·         Stress to crops is likely to increase in the drier parts of Delta again when rain becomes restricted Friday into next week. 

·         The U.S. Pacific northwest and northwestern U.S. Plains will be dry or mostly dry during the next ten days

·         Net drying will continue across the southwestern Corn Belt and the southern Plains.

·         The Canada Prairies will see net drying across the southern crop areas. Western and northern Alberta will be wettest.

·         East-central China will continue to see net drying this week but the Northeast Provinces will improve with rain.

·         Frequent rain will fall from eastern Europe through the western CIS.

·         Western Europe is improving.

·         Southern Brazil and Argentina will receive widespread rain during the balance of this workweek.

Source: World Weather Inc. and FI


                     WEST CORN BELT                                                                  EAST CORN BELT               

Tdy-Fri         75% cvg of up to 0.75” and local amts to 1.25”

       with some bands of 1.25-2.75” from SE and

       east-central N.D. to east-central Ia. and south Wi.;

       driest SW   

Tdy-Sat                                                                                                          90% cvg of 0.30-1.30” and local amts to 2.0”

                                                                                                                        with a few bands of 2.0-3.25” and lighter

                                                                                                                rain in few areas; west-central Il. driest

Sat                15% cvg of up to 0.20” and locally more;                                

       Wisc. Wettest

Sun-Mon     40% cvg of up to 0.50” and local amts to 1.10”;          25-45% daily cvg of up to 0.65” and locally

       wettest NW                                                                             more each day; driest west

Tue-Wed     5-20% daily cvg of up to 0.30” and locally                     65% cvg of up to 0.75” and local amts to 1.50”;

       more each day                                                                        driest west

Jul 26                                                                                                              15% cvg of up to 0.25” and locally more

Jul 26-27     35% cvg of up to 0.75” and local amts to 1.50”;

       west-central areas wettest

Jul 27-28                                                                                                                        50% cvg of up to 0.75” and local amts to 1.50”;

                                                                                                     driest north

Aug 28-29    5-20% daily cvg of up to 0.30” and locally more each day                             

Aug 29-30                                                                                                      5-20% daily cvg of up to 0.30” and locally                

                                                                                                        more each day

Jul 30-Aug 1 45% cvg of up to 0.60” and locally more          

Jul 31-Aug 2 50% cvg of up to 0.60” and locally more  



                     DELTA                                                                       SOUTHEAST

Fri                  15% cvg of up to 0.65” and locally more;

                         far north wettest

Fri-Sun                                                                                                           85% cvg of up to 0.75” and local amts to 1.50”

                                                                                                                        with some 1.50-3.0” bands; driest SW

Sat-Mon       Up to 15% daily cvg of up to 0.20” and locally

        more each day; some days may be dry

Mon-Tue                                                                                                       50-75% daily cvg of up to 0.75” and locally

                                                                                                                        more each day; driest west       

Tue                20% cvg of up to 0.20” and locally more;

        wettest north

Wed-Jul 26   15-35% daily cvg of up to 0.50” and locally

         more each day   

Wed-Jul 27                                                                                                    80% cvg of up to 0.75” and local amts over 2.0”

Jul 27-28       65% cvg of up to 0.75” and local amts to 1.50”        

Jul 28-30                                                                                                        80% cvg of up to 0.75” and local amts over 2.0”

Jul 29-31       5-20% daily cvg of up to 0.25” and locally

         more each day

Jul 31-Aug 2                                                                                                  15-35% daily cvg of up to 0.50” and locally

                                                                                                                        more each day

Aug 1-2          10-25% daily cvg of up to 0.30” and locally

          more each day   

Source: World Weather Inc. and FI


Bloomberg weekly agenda


  • Colombia on holiday
  • Cocoa Association of Asia is set to release 2Q cocoa grind data
  • ICE Futures Europe commitments of traders weekly report on coffee, cocoa, sugar positions, ~1:30pm ET (~6:30pm London)
  • USDA milk production for June, 3pm
  • USDA cattle on feed for June, 3pm
  • CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
  • FranceAgriMer weekly updates on French crop conditions

Source: Bloomberg and FI


USDA export sales for both old and new-crop corn and soybean export sales were good.

Wheat sales were average. Old-crop corn sales positive along with shipments. Bean sales lag. Row crop shipment pace catching up. BRZ and ARG buying US grains.





Weekly Bloomberg Survey (taken Wed)

·         Wheat: Bullish: 11 Bearish: 2 Neutral: 7

·         Corn: Bullish: 12 Bearish: 5 Neutral: 3

·         Soybeans: Bullish: 9 Bearish: 5 Neutral: 6

·         Raw sugar: Bullish: 3 Bearish: 1 Neutral: 5

·         White sugar: Bullish: 2 Bearish: 3 Neutral: 4

·         White-sugar premium: Widen: 0 Narrow: 4 Neutral: 5



·         US Initial Jobless Claims (W/W) 14-Jul: 207K (est 220K; prev R 215K)

– Continuing Claims (W/W) 7-Jul: 1751K (est 1729K; prev R 1743K)

·         US Philadelphia Fed Business Outlook Jul: 25.7 (est 21.5; prev 19.9)

·         Canadian ADP Employment Report Jun: -10.5K (prev 2.9K)




·         The USDA Cattle on Feed report will be released on Friday. Estimates are below the export development section.

·         Hog prices traded higher on renewed ideas NAFTA talks are improving.



Soybean complex.

·         Soybeans are lower early on widespread commodity selling and higher USD. Soybean meal is slightly higher and soybean oil lower.

·         EPA reported lower biodiesel (D4) blending credits for June at 317 MLN from 350 MLN in May.

·         Funds bought an estimated net 3,000 soybean contracts, 3,000 meal and sold 3,000 soybean oil.

·         USDA export sales for old-crop were poor but new-crop were good for soybeans. Soybean meal and oil shipments were supportive, but commitments could have been better.

·         Uruguay’s soybean crop was downgraded by Oil World to 1.45 million tons, now down about 60 percent from last year, which limited exports to less than 800,000 tons during the April-June period.

·         China’s soybean meal inventories were down from the previous week on improved demand, by 10,000 tons to 1.3 million tons. 

·         United Oilseeds cut its est. for EU rapeseed output by 9.2% at the end of last month because of adverse weather (Bloomberg)

·         Indonesia’s energy minister asked the parliament to increase the biodiesel subsidy in 2019, to 2,500 rupiah per liter in 2019, from 500 rupiah per liter current.


Export Developments

  • South Korea seeks 1,500 tons of non-GMO soybeans on July 25 for September-December delivery.
  • Iran seeks 30,000 tons of soybean oil on August 1.



·         US wheat traded higher on continued concerns over Black Sea and EU dryness.

·         Funds today bought an estimated net 6,000 SRW wheat contracts.

·         USDA all-wheat export sales came in at the low end of expectations. Note the USDA initially reported wheat sales to Argentina. They later said it was an error.

  • China’s NBS estimated the wheat crop at 128.4 million tons, down 2.4 percent from the previous year, lowest since 2016.
  • December Paris wheat ended up 1.50 euros to 189.25 euros.  
  • BA Exchange reported wheat planting 92.5% complete vs 87.2% last week. 


Export Developments.

  • Japan bought 57,914 tons of US food wheat for September loading.

Details are as follows (in tons):


U.S.    Western White                              15,433     *

U.S.    Dark Northern Spring(protein minimum 14.0%) 13,146     *

U.S.    Hard Red Winter(Semi Hard)                 29,335     *

Shipments: * Loading between Sept. 1 and Sept. 30, 2018

·         The EU awarded 32,709 tons of wheat under import quotas.

  • China sold 1,978 tons of 2013 wheat from state reserves at auction at an average price of 2357 yuan/per ton or $348.75/ton, 0.11 percent of what was offered.

·         Jordan passed on 120,000 tons of wheat for Oct-Nov shipment.

·         Jordan seeks 120,000 tons of barley on July 24.

  • Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on July 25 for arrival by December 28. 
  • Bahrain Flour Mills seeks 17,000 tons of semi-hard wheat and 8,000 tons of hard wheat, on July 24, valid until July 25, for shipment in late Aug/early Sept.  Origins include Australia, Baltics, & Canada.
  • Bangladesh seeks 50,000 tons of optional origin milling wheat on July 25 for shipment within 40 days of contract signing.





Terry Reilly

Senior Commodity Analyst – Grain and Oilseeds

Futures International │190 S LaSalle St., Suite 410│Chicago, IL  60603

W: 312.604.1366

AIM: fi_treilly

ICE IM:  treilly1

Skype: fi.treilly


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