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
· 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.;
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;
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”;
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
U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS
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;
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
FRIDAY, JULY 20:
- 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)
- Corn prices traded firmer on positive NAFTA comments out of Mexico’s EconMin Guajardo saying talks to restart July 26 and can announce an agreement in principle before September.
- Good USDA export sales underpinned prices. Note the USDA initially reported corn sales to Argentina. They later said it was an error.
- EPA reported lower ethanol (D6) blending credits for June at 1.26 BLN from 1.30 BLN in May.
- Funds bought an estimated net 12,000 corn contracts.
- Buenos Aries Grain Exchange lowered Argentina 2017/18 corn production to 31 MMT from 32 MMT. Harvest is 76% complete up from 70.6% last week
- There is talk Japan has been slowing corn commitments for the Oct-Dec period because of a weakening Yen.
· Hog prices traded higher on renewed ideas NAFTA talks are improving.
- Soybeans rose for the fourth consecutive day on technical buying. Fear over US/China trade relations weigh on the market still but with the positive comments around NAFTA, buyers are gaining confidence.
· 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.
- 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.
· Funds today bought an estimated net 6,000 SRW wheat contracts.
- 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.
- Japan bought 57,914 tons of US food wheat for September loading.
Details are as follows (in tons):
COUNTRY TYPE QUANTITY
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.
Senior Commodity Analyst – Grain and Oilseeds
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ICE IM: treilly1
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