FW: FI Evening Grain Comments 08/28/18

PDF attached

Soybean complex.

·         Soybeans traded in a narrow two-sided range this morning on easing trade concerns now that a deal with Mexico was completed on Monday.  But at the open prices eroded quickly due to the looming large U.S. soy crop and the fact that a China trade deal has been pushed to the back-burner as the Mexico and Canada negotiations move forward.

·         USDA yesterday unveiled their trade damage payment plan for producers, and soybean and pork farmers appear will benefit most from the program. We are hearing US producers don’t have to sell their crop to collect a check under the aid program, just complete harvest.  Also, payments are limited to $125,000 per individual

·         USDA reported soybean meal was sold to Mexico.

·         Soybean meal traded lower today led by the nearby contracts. December meal hit its lowest level since September 14 while SMU8 and SMK9 hit contract lows.  Weighing on the market is the worry over lower demand due to the outbreaks of African swine fever in the Chinese herd.

·         Soybean oil ended higher on strength in WTI and unwinding of meal/oil spreading.

·         Funds sold 9,000 soybeans, sold 6,000 soybean meal and sold 3,000 soybean oil.

·         Brazil’s internal freight issues along the U.S./China trade war nearing its peak, the recent gains on Brazilian soy prices may be short-lived.

·         Some producers in the Delta are harvesting soybeans in the Delta. No word on yield yet.

·         Note First Notice Deliveries are on Friday. There are only 12 soybean registrations, zero meal and 3,719 soybean oil.  Look for no meal, no soybeans, and 1500-2000 soybean oil.

·         US weather forecast remains favorable. 

·         Oil World lowered the Malaysian palm oil production estimate for 2018 to 19.8 million tons. This compares to 19.92 million past year. They put 2019 at 20.4 million tons. Futures price target was set at 2500MYR.

·         November Malaysian palm increased 33MYR to 2232 to a one-week high. The Brazilian real was under pressure.

Source: Profit X and FI

 

Export Developments

·         Under the 24-hour reporting system, private exporters sold 198,862 tons of soybean meal for delivery to Mexico. Of the total 146,781 tons is for delivery during the 2018-19 marketing year and 52,081 tons is for delivery during the 2019-20 marketing year.

·         Argentina is loading a China-bound 29,000 ton cargo of soybean oil today in Timbues, along the Parana River.  This is the first Argentine SBO cargo in three years.  According to the vessel line-up published by NABSA there are two more due to load the first week of September and a fourth cargo may set sail after additional two cargoes.

·         Egypt’s GASC seeks at least 30,000 tons of soyoil and 10,000 tons of sunflower oil on Wednesday for arrival Oct 1-15.

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

·         The CCC seeks 15,610 tons of crude degummed soybean oil on August 29 for export to Pakistan. Shipment was for Sep 27 to Oct 7.

• USDA seeks 5,000 tons of refined oil for the export program on September 5 for October shipment.
• During the week ending August 31, China plans to sell 301,200 tons of 2013 soybeans, 60,100 tons of 2011-2013 rapeseed oil, and 53,800 tons of imported 2011 soybean oil.
• China sold nearly 1.3MMT of soybeans out of reserves this season.
• Iran seeks 30,000 tons of sunflower oil on September 24.

 

 

Wheat. 

·         US wheat futures mixed with Chicago SRW firming on profit-taking following a six-session selloff which pushed futures for WZ8 intraday below its 200-day moving average at $5.2325, coincidentally where we settled today.

·         Kansas City HRW and Minneapolis Spring Wheat both finished lower. 

·         Funds were net even on Chicago wheat futures contacts.

·         Egypt’s GASC bought 350,000 tons of optional origin wheat for October 11-20 shipment.

• December Paris wheat settled down 0.75 to 198.25 euros.
• IKAR lower its Russia wheat production forecast to 69.6MMT from 70.8 million tons. Grain exports were lowered to 39.8 from 41MMT, and grain production lowered to 110.0MMT from 112.8MMT. 
• US spring wheat harvest progress increased 17 points to 77 percent, near expectations.

 

Export Developments.

·         Egypt’s GASC bought 350,000 tons of optional origin wheat for October 11-20 shipment.

o   60,000 tons of Ukrainian wheat at $223.50 FOB and $17.90 freight, equating to $241.40 C&F

o   55,000 tons of Russian wheat at $221.51 FOB and $18.26 freight, equating to $239.77 C&F

o   55,000 tons of Russian wheat at $223.51 FOB and $18.26 freight, equating to $241.77 C&F

o   60,000 tons of Russian wheat at $225.50 FOB and $17.10 freight, equating to $242.60 C&F

o   60,000 tons of Russian wheat at $225.50 FOB and $15.23 freight, equating to $240.73 C&F

o   60,000 tons of Russian wheat at $225.50 FOB and $16.00 freight, equating to $241.50 C&F

·         China sold 3,500 tons of 2013 imported wheat at 2,393 yuan per ton ($348.12/ton), 0.22 percent of what was offered.

·         Jordan bought about 60,000 tons of feed barley at $263/ton c&f for shipment in the first half of October.

·         Jordan seeks 120,000 tons of hard milling wheat on Aug 29 for Nov/Dec shipment.

• Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on August 29 for arrival by January 31. 

·         Taiwan seeks 110,500 tons of US milling wheat from the US on August 31 fir October/November shipment.

 

Rice/Other

·         China sold 141,670 tons of rice from reserves at 2,442 yuan per ton ($355.25/ton), 8 percent of what was offered.

·         The Philippines will imports 132,000 tons of rice soon.

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

    TONNES(M/T)    GRAIN TYPE      ARRIVAL/PORT

    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

·         Results awaited: Egypt’s ESIIC seeks 100,000 tons (150k previously) of raw sugar for shipment within the first half of September and two 50,000-ton shipments from September 15-Oct 15.

·         Results awaited: Thailand plans to sell 120k tons of raw sugar on Aug. 22.