From: Terry Reilly
Sent: Tuesday, October 02, 2018 7:10:28 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 10/02/18

PDF attached


Weather and crop conditions

·         Forecast for the US is mainly unchanged.

·         Additional showers will fall across the northern areas of the US Midwest today into Wednesday and showers appear across the central areas Thursday, and northwestern areas Friday into Saturday. The Plains will see follow up rain in the northern areas Thur-Fri.

·         US crop conditions were unchanged in soybeans and corn, down one in sorghum, and up 3 for cotton. Corn harvest progress was up 10 points to 26, at trade expectations. Soybean harvest were 23 percent, up 9 points, and 4 points below expectations. Winter wheat plantings were 15 percent, one point below trade expectations.

·         The Midwest will be wet Thursday into mid-next week, bias WCB. The rain will delay harvesting efforts and raise concerns over quality for corn and soybeans. There will be an importance period of drier weather October 10-15, which will be needed for producers.

·         This week the Delta will be on the drier side. Showers will fall in the lower Midwest and Tennessee River Basin. Overall fieldwork activity across the Delta should improve.

·         Rain will fall from the southwestern desert areas through the northern Plains early to mid-week this week.

·         The Canada Prairies will be cold this week.

·         Brazil will see rain in the central and southern growing areas (MG, MGDS, Goias, Parana) this week while Argentina will be dry through Saturday.



                        WEST CORN BELT              EAST CORN BELT  

    -Tue                                                           65% cvg of up to 0.70”

                                                                        and local amts to 1.20”;

                                                                        wettest north; south and

                                                                        west-central Il. to

                                                                        central In. driest

Tue-Wed          55% cvg of up to 0.50”           

                        and local amts to 1.10”;          

                        far SW and north


Wed-Thu                                                         70% cvg of up to 0.60”

                                                                        and local amts to 1.15”;

                                                                        far south driest

Thu-Sat            80% cvg of up to 0.75”

                        and local amts to 2.0”

                        with some bands of

                        2.0-3.50” and locally

                        more in the south;

                        S.D. driest

Fri-Sun                                                             80% cvg of up to 0.75”

                                                                        and local amts to 2.0”;

                                                                        driest SE

Sun-Oct 9        80% cvg of up to 0.75”          

                        and local amts over 2.0”

                        with a few bands of

                        2.0-3.50” and locally


Oct 8-10                                                          80% cvg of up to 0.75”

                                                                        and local amts to 2.0”;

                                                                        driest SE

Oct 10-15        5-20% daily cvg of up

                        to 0.25” and locally 

                        more each day

Oct 11-15                                                        5-20% daily cvg of up

                                                                        to 0.25” and locally         

                                                                        more each day



                        DELTA                                   SOUTHEAST

      -Tue           5-20% daily cvg of up             10-20% daily cvg of

                        to 0.30” and locally                 up to 0.40” and locally

                        more each day                         more each day; west

                                                                        and south wettest        

Wed-Fri           Up to 20% daily cvg of           Up to 20% daily cvg of

                        up to 0.20” and locally            up to 0.20” and locally

                        more each day; some               more each day; some

                        days may be dry                      days may be dry                     

Sat                   75% cvg of up to 0.75”

                        and local amts to 1.50”;

                        wettest south

Sat-Oct 9                                                          5-20% daily cvg of up

                                                                        to 0.30” and locally

                                                                        more each day

Sun-Oct 8        5-20% daily cvg of up

                        to 0.30” and locally

                        more each day

Oct 9-10          80% cvg of up to 0.50”

                        and local amts to 1.10”

Oct 10-11                                                        55% cvg of up to 0.35”

                                                                        and local amts to 0.60”

Oct 11-15        Up to 20% daily cvg of

                        up to 0.20” and locally

                        more each day

Oct 12-15                                                        Up to 20% daily cvg of

                                                                        up to 0.20” and locally           

                                                                        more each day

Source: World Weather Inc. and FI



Bloomberg weekly agenda


  • New Zealand dairy auction on Global Dairy Trade online market starts ~7am ET (~noon London, ~11pm Wellington)
  • EARNINGS: PepsiCo


  • EIA U.S. weekly ethanol inventories, output, 10:30am


  • FAO food index for September, 4am ET (9am London)
  • USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
  • 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


  • FranceAgriMer weekly updates on French crop conditions
  • 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

Source: Bloomberg and FI



·         No changes



SBM 208– no apparent commercial stoppers

SBO 180 – no apparent commercial stoppers




·         US stocks are lower, USD higher, WTI crude slightly higher, and gold higher, at the time this was written. (6:45 am CT)



·         FC Stone estimated the corn crop at 14.940 billion bushels (+408 previous month) and yield at 182.7 (+5.0 bu/ac p/m).  USDA is at 14.827 and 181.3.

·         Soybean and Corn Advisory left his 2018 U.S. corn estimate unchanged at 182.0 bu/ac.




USDA NASS corn for ethanol grind for August was 479 million bushels, 4 million below our estimate, 2 million below July and 1 million below August 2017.

  • 2017-18 corn for ethanol use ended up at 5.601 billion bushels, only one million above USDA’s official forecast.
  • Sorghum use was unchanged from the previous month at 6.2 million bushels. 
  • DDGS production increased to 2.162 million short tons from 2.109 million in July.
  • Earlier today we raised our 2018-19 estimate for corn for ethanol use by 25 million bushels to 5.750 billion, 150 million above USDA, and compares to 5.601 million (revised 10/1/18) we are using for the 2017-18. 



EIA monthly ethanol data was better than what we expected at 33.496 million barrels for the month of July, above 31.365 million a year earlier. Separately we raised our 2018-19 estimate for corn for ethanol use by 25 million bushels to 5.750 billion, 150 million above USDA, and compares to 5.603 million we are using for the 2017-18, which is subject to change later today when USDA NASS releases August corn for ethanol grind. 



Export Developments

·         China will sell 8 million tons of corn for the week ending October 5.

·         China sold about 85.5 million tons of corn out of reserves this season and some are predicting up to 100 million tons will be sold by the end of the marketing season.


Soybean complex.

·         The soybean complex is lower on light technical selling.

·         China is on holiday all week. 

·         Malaysia December palm oil was up 3 and leading SBO 29 points lower. Malaysian cash palm oil was down 1.25 at $553.75/ton.

·         Rotterdam oils were higher and SA soybean meal when imported into Rotterdam higher. 

·         Offshore values were suggesting a lower lead for US soybean meal by $1.70 and lower lead in SBO by 19 points.

·         FC Stone estimated the Brazil 2018-19 soybean crop at 119.35 million tons, up from prior 119.17 MMT. The soybean planted area was estimated at 35.892 million hectares from previous 35.855 million. Exports were estimated at 71.50 MMT with bulk of the share going to China. If Brazil can handle it, they can export more than that amount, in our opinion, and import US soybeans to crush. 

·         A Reuters poll calls for the soybean crop area in Brazil to average 36.14 million hectares (+2.8% yoy), and production at 120.4 million tons versus 119.76 million seen in August.

·         Other Brazil soybean crop estimates, like ours, are at 122 million tons. Planting progress in southern Brazil is very good and dry areas of MG should see rain later this month.

·         FC Stone estimated the soybean crop at 4.796 billion bushels (+14 previous month) and yield at 54.0 (+0.2 p/m).  IL soybeans were 67/bu and corn 213/bu.  USDA national is at 4.693 and 52.8.

·         Soybean and Corn Advisory left his 2018 U.S. soybean estimate unchanged at 53.0 bu/ac.



Export Developments


The USDA NASS crush report.

·         The August crush came in at 169.6 million bushels, putting September through August crush at 2.055 billion bushels, same as USDA WASDE. 

·         The crush was 1.3 million bushels higher than expectations.

·         Soybean oil stocks were 2.215 billion pounds, 42 million below the trade guess.

·         Soybean meal stocks fell to 401,000 short tons from 512,000 short tons on good demand and lower crush rate.



US production of biodiesel was 163 million gallons in July 2018, 7 million gallons higher than production in June 2018. There was a total of 1,260 million pounds of feedstocks used to produce biodiesel in July 2018, up from 1,145 million in June 2018 and 1,043 million in July 2017. Soybean oil remained the largest biodiesel feedstock during July 2018 with 671 million pounds consumed, 47 million higher than June, and 65 million above July 2017. The soybean oil use was much higher than our 635-million-pound projection.


We raised our soybean oil for biodiesel use for 2017-18 by 50 million pounds to 7.050 billion pounds, 50 million pounds above USDA. Our 2018-19 soybean oil for biodiesel use is 7.600 billion pounds. USDA is at 7.800 billion pounds for new-crop.




·         US wheat is mostly higher after eastern Australia saw its driest September on record. Earlier “Eastern Australian wheat futures +0.5% to A$442.50/ton” – Bloomberg

·         Algeria may soon buy Russian wheat, a monumental shift from traditional supplier Europe.

·         Paris wheat was mixed by 7:00 am CT.

·         Saudi Arabia will allow private importers to buy feed barley.


Export Developments.

  • Taiwan bought 110,000 tons of US wheat for Nov-Dec shipment.

o   The first consignment for shipment between Nov. 18 and Dec. 2 involved 26,980 tons of U.S. dark northern spring wheat of 14.5 percent protein content bought at $252.21 per ton FOB U.S. Pacific Northwest coast. Another 20,480 tons of hard red winter wheat of 12.5 percent protein content was bought at $248.14 a ton FOB and 7,540 tons of soft white wheat with 9 percent protein was bought at $231.49 a ton FOB.

o   The second consignment for shipment between Dec. 3 and Dec. 17 involved 30,595 tons of dark northern spring wheat of 14.5 percent protein content bought at $255.53 a ton FOB. The second consignment also included 18,430 tons of hard red winter wheat of 12.5 percent protein content bought at $249.71 a ton FOB and 5,975 tons of western white wheat with 9 percent protein bought at $229.73 a ton FOB. (Reuters)

  • Tunisia seeks optional origin 50,000 tons of durum wheat, 75,000 tons of soft wheat and 50,000 tons of feed barley, on Oct. 3.
  • The UN bought 50,000 tons of wheat for Yemen.
  • Libya seeks 1 million tons of Russian wheat.
  • There are no offers in Morocco’s import tender for 336,364 tons of US durum wheat for arrival by December 31.
  • Bahrain seeks 25,000 tons of wheat on October 2 for Nov shipment.
  • Jordan retendered for another 100,000 tons of feed barley on October 3.
  • Bangladesh seeks 50,000 tons of 12.5 percent wheat on October 9, optional origin.
  • Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on October 10 for arrival by late February. 
  • Postponed: UAE seeks 60,000 tons of wheat for Oct/Nov shipment.




·         Thailand seeks to sell 120,000 tons of sugar on October 3.

·         The Philippines seek 250,000 tons of rice on October 18 for arrival by late November.

·         Mauritius seeks 9,000 tons of rice for delivery between Nov. 15, 2018, and March 31, 2019, set to close is Sept. 27.



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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