FW: FI Evening Grain Comments 08/22/19

PDF attached

 

Weather and Conditions

·         Additional rain fell across the US Midwest over the past day, bias IA and northern IL. 

·         US Midwest weather will remain well mixed, although the northeastern Corn Belt will be a little low on rainfall in the coming week.

·         For the longer-term forecast, the US Midwest is drier for early September.

·         The US southern Plains will get a few showers and thunderstorms in the coming week, but the moisture will not be well distributed.  West Texas rainfall potentials will be greatest late this week, but the precipitation will be erratic and light limiting the benefit to unirrigated crop areas. 

·         U.S. southeastern states will see periodic showers and thunderstorms through the next week.

·         U.S. hard red winter wheat areas will experience frequent showers and thunderstorms over the next week.

·         Canada will remain favorable mixed.

·         South America needs rain ahead of planting season. 

Source: World Weather Inc. and FI

 

 

One day precipitation

 

5-day outlook

 

Bloomberg Ag Calendar

THURSDAY, AUG. 22:

• Brazilian crop agency Conab’s report on sugarcane crop, ~8am ET (~9am Sao Paulo)
• USDA weekly crop net-export sales for corn, soybeans, wheat, 8:30am
• Asia Palm Oil Conference, Day 1, Pattaya

FRIDAY, AUG. 23:

• Asia Palm Oil Conference, Day 2

Source: Bloomberg and FI

 

 

 

 

Weekly Bloomberg Bull/Bear survey: taken Wed

·         Corn: Bullish: 4 Bearish: 7 Neutral: 8

·         Soybeans: Bullish: 4 Bearish: 6 Neutral: 9

·         Wheat: Bullish: 3 Bearish: 5 Neutral: 11

·         Raw sugar: Bullish: 4 Bearish: 3 Neutral: 4

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

·         White-sugar premium: Bullish: 1 Bearish: 4 Neutral: 6

 

Corn.

·         US corn futures ended moderately higher in a two-sided trade.  Lack of direction was noted. The crop tour across the heart of the Midwest showed yields varied in IA and MN. 

·         Funds were a net buyers of an estimated net 2,000 corn futures.

·         USDA export sales for corn, when combining old and new crop commitment, were near the lower end of expectations. 

·         US new-crop corn commitments of 4.68 million tons for this time of year are running at their lowest level since the 2005-06 season. 

·         The Pro Farmer Midwest Crop Tour:

https://twitter.com/commodityweek/lists/pro-farmer-crop-tour?lang=en   

• Day four will be released later.
• IA first day legs for corn ranged from 184.88-192.71 bu/ac, above 3-year average.
• IL corn averaged 171.17 vs. 192.63 in 2018 and 3-year average of 188.95. 
• IN corn averaged 161.45 vs. 182.33 in 2018 and 3-year average of 175.66. 
• NE corn averaged 172.55 vs. 179.17 in 2018 and 3-year average of 167.73. 
• Ohio corn averaged 154.35 vs. 179.57 in 2018 and 3-year average of 164.38. 
• SD corn averaged 154.08 vs. 178.01 in 2018 and 3-year average of 158.59. 

·         The US EPA/Biofuel debate rages on. 

o   President Trump plans to meet with the USDA Secretary and EPA’s chief on Thursday.

o   In a Bloomberg article today mentioned the USDA recommended rescinding some of the oil refinery exemptions, despite the power the EPA has in determining what applications are final in the decisions. The Agriculture Department recommended increasing “biofuel quotas to make up for the exemptions, a move that would effectively boost the burden for larger refineries that are not eligible to win waivers.”

·          Ukraine reported a case of ASF at a large hog producer operation (100k culled). 

 

Export Developments

• Taiwan bought 65,000 tons of Brazil corn overnight at 165.50 cents premium over the March of Brazil origin what appears to be November shipment. 
• China auctioned off 442,626 tons of corn, or 11.1 percent of what was offered, at an average price of 1,680 yuan per ton. 
• China sold about 19.7 million tons of corn since the start of year’s reserve sale campaign. CNGOIC estimates about 50 million tons will be sold this season.

 

 

Updated 8/12/19

Sentiment bearish for short -term for soybeans, meal, corn, and wheat.  SBO neutral

• Our Dec corn trading range is $3.45 and $4.20

 

Soybean complex.

·         Soybeans were lower despite good US soybean export sales and an average trade guess for the Canadian canola production in Canada to end up lower than last year.   StatsCan is due out August 28.  Trade estimates are above the corn section. 

·         The products ended lower.

·         Funds were net sellers of 5,000 soybeans, sellers of 2,000 soymeal, and sold 3,000 soyoil.

·         USDA export sales of 25,900 tons old crop and 792,600 tons new-crop were good, and a cargo was new-crop soybeans was booked for China.  That cargo may have been already in the works before the government told importers to stop buying US soybeans.  Soybean meal and oil export sales and shipments were poor. 

·         US new-crop soybean commitments of 5.26 million tons for this time of year are running at their lowest level since the 2006-07 season. 

·         The Pro Farmer Midwest Crop Tour started Monday. 

• Day four will be released later.
• IA first day legs for soybeans ranged from 1095.93-1221.13, below 3-year average.
• IL soybean pod count averaged 997.68 vs. 1,328.91 in 2018 and 3-year average of 1,292.59
• IN soybean pod count averaged 923.94 vs. 1,311.87 in 2018 and 3-year average of 1,219.69
• NE soybean pod count averaged 1,210.83 vs. 1,299.08 in 2018 and 3-year average of 1,217.72
• Ohio soybean pod count averaged 764.01 vs. 1,248.20 in 2018 and 3-year average of 1,136.75
• SD soybean pod count averaged 832.85 vs. 1,024.72 in 2018 and 3-year average of 964.96

·         China bought at least nine cargos of SA soybeans overnight for mostly October and some November shipment even through the landed import price of soybeans continues to rise to multi-month highs.  Brazil, Argentina and Uruguay were origin. 

·         CNGOIC reported weekly stocks and soybean oil apparently fell to a 6-month low. 

·         We look for the China 2018-19 crush of soybeans to fall 5 percent from 2017-19, and then decline another 3 percent in 2019-20.  We attached China S&D table/graphs after the text. 

·         Canadian canola exports were expected to more than double to Europe in 2019-20 to between 1.3-2.0 million tons, accord to a Reuters article citing a Canadian merchant.  During July 2018 and June 2019, Canada exported 527,000 tons of canola to the EU. 

·         Malaysian palm markets:  Hit a 5-month high on talk of lower palm output. 

 

 

Oilseeds Export Developments

·         Egypt bought 12,000 tons of sunflower oil at $758.00/ton for October 10-30 arrival.  There were in for 30,000 tons of soybean oil and 10,000 tons of sunflower. 

 

Malaysian palm oil – third month rolling contract

Source: Reuters and FI

 

Updated 8/12/19

Sentiment bearish for short -term for soybeans, meal, corn, and wheat.  SBO neutral

• Nov soybeans are seen in a $8.50-$9.00 range;
• Dec soybean meal $285-$310 range
• Dec soybean oil 29.00-32.00 range

 

Wheat

·         US wheat futures ended higher om Chicago and KC but lower in MN.  Lack of bullish news was noted other than the strong USDA export sales. 

·         Funds bought an estimated net 4,000 SRW wheat.

·         USDA export sales were 594,600 tons, above a range of estimates.  By class export sales were good for HRW and HRS.

·         Global import demand increased this week. 

 

 

 

Export Developments.

• Tunisia bought 92k soft milling wheat between $210.48 and $213.39/ton.  Shipment periods are for September 15 through October 25. 
• South Korea bought 30,000 tons of US wheat for Nov/Dec delivery. 
• Saudi Arabia seeks 780,000 tons of feed barley on Friday for October through December delivery. 

·         Japan bought 110,057 tons of food wheat.  Original details as follows: 

• Japan is back in for 120k wheat and 200k barley on August 28 for arrival by the end of January.

·         Jordan is back in for 120,000 tons of wheat on August 28.

·         Morocco’s ONICL seeks 576,000 tons of milling wheat and 345,455 tons of durum wheat from the US on September 5, under a preferential tariff quota, for arrival by December 31. 

 

Rice/Other

·         None reported. 

 

Updated 8/12/19

Sentiment bearish for short -term for soybeans, meal, corn, and wheat.  SBO neutral

·        Chicago Dec wheat is seen in a $4.40-$4.90 range

·        KC Dec wheat is seen in a $3.75-$4.25 range

·        MN Dec wheat is seen in a $4.85-$5.40 range