From: Terry Reilly
Sent: Thursday, September 06, 2018 8:09:45 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 09/06/18

PDF attached


Weather and crop conditions


Selected World Weather bullet points:

  • The tropical storm that impacted the southern US shifted more east than thought. Delta producers in the west may have the opportunity to harvest later this week.
  • U.S. Midwest flooding will raise concern over crop conditions from Kansas and southeastern Nebraska to southern Michigan and northern Ohio.
  • Drought continues in western CIS, but relief is likely for central and southeastern Ukraine Thursday into the weekend with daily showers expected.
  • Drought in Canada’s Prairies will prevail through the next ten days
  • Eastern Australia will get some additional rainfall in the coming week
  • Western Australia will dry out over the next ten days
  • Brazil weather will be drier this week until the weekend and early next week when rain returns to the south
  • Argentina weather will stay dry into Saturday this week and then may get some light showers Sunday into Tuesday of next week

Source: World Weather and FI



                        WEST CORN BELT              EAST CORN BELT  

       -Thu                                                                               90% cvg of up to 0.75”

                                                                                                and local amts to 1.50”;

                                                                                                wettest west

Thu                        20% cvg of up to 0.75”

                                and local amts to 2.0”;

                                SE Mo. wettest

Fri-Sat                   20% cvg of 0.75-2.0”

                                and local amts over 3.50”

                                from central to east Mo.

                                with up to 0.75” and

                                locally more elsewhere

Fri-Sun                                                                                  80% cvg of 0.75-3.0”

                                                                                                and local amts over 4.50”

                                                                                                from west-central and

                                                                                                SW Il. to east Oh. with

                                                                                                up to 0.75” and locally

                                                                                                more elsewhere; driest


Sun-Tue               15-30% daily cvg of

                                up to 0.50” and locally                   

                                more each day;

                                wettest NW

Mon                                                                                      15% cvg of up to 0.60”

                                                                                                and locally more;

                                                                                                wettest SE

Tue-Sep 14                                                                         Up to 20% daily cvg of

                                                                                                up to 0.25” and locally   

                                                                                                more each day; some

                                                                                                days may be dry

Sep 12-13            10-25% daily cvg of

                                up to 0.60” and locally                   

                                more each day;

                                wettest NW

Sep 14-16            60% cvg of up to 0.50”

                                and locally more

Sep 15-17                                                                            60% cvg of up to 0.40”

                                                                                                and locally more

Sep 17-19            5-20% daily cvg of up

                                to 0.35” and locally                         

                                more each day

Sep 18-19                                                                            5-20% daily cvg of up

                                                                                                to 0.30” and locally         

                                                                                                more each day



                        DELTA                                   SOUTHEAST

        -Thu                                                                               40% cvg of up to 0.75”

                                                                                                and local amts to 1.50”

                                                                                                with some 1.50-4.0”

                                                                                                amts from central to SE

                                                                                                Ms. and SW Ala.

Tdy-Fri                  100% cvg of 0.75-3.0”                    

                                and local amts over 4.0”               

                                with lighter rain in a

                                few southern locations

Fri-Sat                                                                                   10-25% daily cvg of

                                                                                                up to 0.40” and locally

                                                                                                more each day

Sat-Mon              90-100% cvg of 0.15-0.85”

                                and local amts over 2.0”

Sun-Tue                                                                               75% cvg of up to 0.75”

                                                                                                and local amts to 2.0”;

                                                                                                wettest west

Tue-Sep 15         10-25% daily cvg of

                                up to 0.35” and locally

                                more each day

Sep 12-15                                                                            10-25% daily cvg of

                                                                                                up to 0.35” and locally

                                                                                                more each day

Sep 16-19            Up to 20% daily cvg of                    5-20% daily cvg of up     

                                up to 0.30” and locally                    to 0.30” and locally

                                more each day                                  more each day

Source: World Weather and FI




Bloomberg weekly agenda


  • Trump administration awaits Sept. 6 end of public comment period before it potentially proceeds with next round of tariffs on $200b Chinese goods; China expected to retaliate
  • EIA U.S. weekly ethanol inventories, output, 11am (delayed from Wednesday because of Labor Day holiday)
  • Statistics Canada’s domestic crop stockpile report for July, 8:30am ET
  • FAO Food Price Index for August, 4am
  • The Russian Grain Union hosts conference in Moscow
    • Agriculture Ministry’s director for food markets Anatoly Kutsenko, director of crop department Pyotr Chekmarev expected to attend
  • Port of Rouen data on French grain exports
  • Buenos Aires Grain Exchange weekly crop report
  • Bloomberg weekly survey of analysts’ expectations on grain, sugar prices
  • UN Climate Change Conference in Bangkok, Day 3
  • Kingsman Asia Sugar Conference in New Delhi, final day
  • Intl Rubber Glove Conference in Kuala Lumpur, final day


  • Brazil on public holiday
  • USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am (delayed from Thursday because of Labor Day holiday)
  • Guatemala’s National Coffee Association’s export data for August
  • FranceAgriMer weekly updates on French crop conditions
  • UN Climate Change Conference in Bangkok, Day 4
  • ICE Futures Europe commitments of traders weekly report on coffee, cocoa, sugar positions, ~1:30pm ET (~6:30pm London)
  • CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm


  • China’s General Administration of Customs releases agricultural commodity trade data for August (preliminary), including soybean imports
  • UN Climate Change Conference in Bangkok, Day 5

Source: Bloomberg and FI






Selected crop estimates:

·         Allendale Inc. survey: 177.7 / 14.529 corn; 52.2 / 4.636 soybeans

·         FC Stone: 177.7 / 14.532 corn; 53.8 / 4.782 soybeans

·         FI: 175.5 / 14.355 corn; 50.9 / 4.517 soybeans

·         Informa may release updated figures on Thursday

·         Informa AUGUST: 176.0 / 14.392 corn; 49.8 / 4.445 soybeans

·         USDA @ 178.4 / 14.586 corn; 51.6 / 4.586 soybeans


Statistics Canada July 31 Canada stocks

·         Not much lead may come from the results of the StatsCan report as trade estimate didn’t deviate much from July 31 stocks reported this morning. There were revisions to last year but they were minor.



·         US stocks are higher, USD lower, WTI crude higher, and gold higher, at the time this was written.

·         US ADP Employment Change Aug: 163K (est 190K; prev R 217K)



·         Baltic Dry Index is last 1,484, up 7 points or 0.5% from last session.

·         Look for US harvest progress to slow this week especially across the Delta and lower Midwest.

·         On Monday the USDA will update US corn harvest progress. We look for 3 percent complete, about in line with average.

·         Up 10. China reported three more outbreaks of African swine fever in Jiamusi city in Heilongjiang in China’s northeast, and in the cities of Wuhu and Xuancheng in the eastern province of Anhui. These cities had reported previous outbreaks.

·         A Bloomberg survey calls for US ethanol production to come in at 1.074 million barrels, up 4,000 from the previous week and stocks at 23.016 million, down from 23.061 million last week (-45).

Source: Reuters News and FI


Source: Reuters News and FI


Export Developments

·         China sold 2,986,997 tons of corn out of auction, at an average price of 1570 yuan per ton ($229.65/ton), 75 percent of what was offered.

·         China sold about 74 million tons of corn out of reserves this season. Another 4 million tons of China corn reserves will be offered on Friday.



Soybean complex.

·         Malaysia futures traded 14 lower and cash was down $2.50/ton. The lower trade is associated with expectations for rising palm production over the next few months.

·         MPOB is due out September 12.  Reuters poll estimated August end-stocks may increase 9 percent month-on-month to 2.41 million tons and production rising 9.9 percent to 1.65 million tons. August exports are seen up 2.3 percent to 1.23 million tons from the previous month.

·         Rotterdam oils were mixed and SA soybean meal when imported into Rotterdam $2.00.500/ton lower. 

·         China cash margins were last 95 cents/bu on our analysis, and compares to 85 cents late last week, and 92 cents last year.

·         China January soybean futures were down 3 yuan or 0.1%, meal down 19 or 0.6%, soybean oil down 8 or 0.1% and palm down 12 yuan (0.2%). 

·         Offshore values were suggesting a lower lead for US soybean meal by $2.00 and higher lead for soybean oil by 3 points.

·         Look for US harvest progress to slow this week especially across the Delta and lower Midwest.

·         Census reported July US soybean exports 6 million bushels higher than what we expected at 126 million bushels, above 119.6 million in June and well above 83.15 million in July 2017. We are using 2.128 billion bushels for 2017-18 US soybean exports. USDA is at 2.110 billion. 

·         July exports for soybean meal were a large 1.23 million short tons but they still came in 68,000 short tons below our estimate.

·         US July soybean oil exports were only 175 million pounds and weekly shipments for August are currently running roughly 75 percent of July shipments when eyeballing USDA export sales data. We lowered out soybean oil export figure for 2017-18 to 2.410 billion pounds, 40 million pounds less than USDA.

·         Brazil’s Abiove increased their 2018 soybean export forecast to record 76.1 million tons, up 3.5% from 73.5 million tons. They lowered ending stocks to 1.465 million tons from 3.865 million tons.  2018 production was seen at 118.8 million tons, 100,000 tons above their previous forecast.  The crush is expected at 43.6MMT.


Export Developments

·         Results awaited: South Korea seeks 15,000 tons of non-GMO soybeans on September 4 for Nov/Dec arrival.

  • Iran seeks 30,000 tons of sunflower oil on September 24.
  • China sold about 1.69 MMT of soybeans out of reserves this season.



·         US wheat futures are lower on lack of bullish news and slowing US exports. Prices are seen limited to the downside on tight global high protein wheat supplies.

  • December Matif wheat futures fell as Black Sea exporters are constantly selling wheat into Asia.

·         Russia’s AgMin on Thursday again said Russia had no plans to impose an export tax on wheat. We would be cautious of such statements. Changes in inflation could trigger policy changes at any moment by the government to help fight rising food prices. Traders should monitor any outbreaks of protests/demonstrations.

·         (MPI) Black sea wheat basis DEC settled +.50 yesterday at 246.00. The spread between Sep and Dec exploded out to $21.00. As a reference this spread was at $6.75 on 8/15. The Oct-Dec is out past $15.00 after touching $4.00 on that same date. Shows where the trade is putting the risk. Continued chatter of Russian curbs into yearend loom over the trade. Black sea wheat exports for July-Aug were reported at around 12 MMT compared to 8.6 MMT last year. This pace allows the chatter to continue and it makes sense to slow the roll into year end.

·         The European Union granted import licenses for 129,920 tons of reduced-tariff wheat and 10,000 tons of barley.


Export Developments.

  • Saudi Arabia seeks 1.02 million tons of barley for November/December delivery.
  • Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on September 12 for arrival by late February. 
  • Syria’s General Establishment for Cereal Processing and Trade (Hoboob) seeks 200,000 tons of soft bread wheat from Russia, Romania or Bulgaria, with shipment sought between Oct. 15 and Dec. 15. The deadline is Sept. 17 and requires payment in Syrian pounds.
  • Ethiopia seeks 200,000 tons of milling wheat on September 18 for shipment two months after contract signing.



·         The Philippines seeks an extra 250k tons of rice for Q4 and Q1 2019 shipment.

·         Results awaited: South Korea seeks 92,783 tons of rice on Aug. 31 for Nov/Dec arrival.


    10,000         Brown medium    Nov 30/Gwangyang

    10,000         Brown medium    Dec 31/Busan

    20,000         Brown medium    Dec 31/Gunsan

    20,000         Brown medium    Dec 31/Mokpo

    20,000         Brown medium    Dec 31/Donghae

    12,783         Brown long      Nov 30/Masan



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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