FW: FI Evening Grain Comments 09/07/18

PDF attached

 

Weather and crop conditions

 

Selected World Weather bullet points:

• Frequent rain will occur in the Delta through Monday with much of the Southeast.
• U.S. Midwest flooding will raise concern over crop conditions from Kansas and southeastern Nebraska to southern Michigan and northern Ohio. A drier weather pattern is still expected to begin Sunday in the west and Monday in the east.
• Drought continues in western CIS, but relief is likely for central and southeastern Ukraine Thursday into the weekend with daily showers expected.
• 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

 

SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS

                        WEST CORN BELT              EAST CORN BELT  

Tdy-Sat                 20% cvg of 1.50-4.0”

                                and local amts over 6.0”

                                from central to NE and

                                east-central Mo. with up

                                to 0.75” and locally

                                more elsewhere

Tdy-Sun                                                                               85% cvg of 2.0-5.0”

                                                                                                and local amts over 7.0”

                                                                                                from west-central Il. to

                                                                                                central and north Oh.

                                                                                                with up to 0.75” and

                                                                                                locally    more elsewhere;

                                                                                                driest NW

Sun-Sep 14         10-25% daily cvg of

                                up to 0.50” and locally                   

                                more each day;

                                wettest NW

Mon                                                                                      15% cvg of up to 0.75”

                                                                                                and locally more;

                                                                                                wettest east

Tue-Wed                                                                             5-15% daily cvg of up

                                                                                                to 0.25” and locally         

                                                                                                more each day;

                                                                                                wettest SE

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

                                                                                                to 0.35” and locally         

                                                                                                more each day

Sep 15-16            40% cvg of up to 0.40”

                                and local amts to 1.0”;

                                wettest north

Sep 17-19            60% cvg of up to 0.75”

                                and locally more

Sep 18-20                                                                            60% cvg of up to 0.75”

                                                                                                and locally more

Sep 20-21            5-20% daily cvg of up

                                to 0.25” and locally                         

                                more each day

 

U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS

                        DELTA                                   SOUTHEAST

Sat-Sun                90-100% cvg of 0.20-1.0”               70% cvg of up to 0.75”

                                and local amts to 1.60”;                 and local amts to 1.50”;

                                wettest south                                   west and north wettest

 

Mon-Tue             20% cvg of up to 0.50”

                                and local amts to 1.10”;

                                mostly south

Mon-Wed                                                                           75% cvg of up to 0.75”

                                                                                                and local amts to 2.0”;

                                                                                                west and north wettest

Wed-Sep 14       5-20% daily cvg of up

                                to 0.35” and locally

                                more each day;

                                wettest south

Thu-Sep 17                                                                         10-25% daily cvg of

                                                                                                up to 0.35” and locally

                                                                                                more each day; Greater

                                                                                                rain may result from

                                                                                                Hurricane Florence

Sep 15-18            10-25% daily cvg of

                                up to 0.35” and locally

                                more each day

Sep 18-21                                                                            15-35% daily cvg of

                                                                                                up to 0.50” and locally

                                                                                                more each day

Sep 19-21            Up to 20% daily cvg of                                   

                                up to 0.30” and locally                    

                                more each day                                 

Source: World Weather and FI

 

Bloomberg weekly agenda

SATURDAY, SEPT. 8:

• 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

MONDAY, SEPT. 10:

• Malaysia on public holidays through Sept. 11; Palm oil futures trading closed in Kuala Lumpur during holidays
• Intertek and AmSpec release their respective data on Malaysia’s Sept. 1-10 palm oil exports, 11pm ET Sunday (11am Kuala Lumpur Monday)
• EU weekly grain, oilseed import and export data, 10am ET (3pm London)
• USDA weekly corn, soybean, wheat export inspections, 11am
• USDA weekly crop progress report, 4pm
• AB Foods trading update
• Ivory Coast weekly cocoa arrivals

TUESDAY, SEPT. 11:

• Indonesia, Malaysia on public holidays
• Brazil’s crop agency Conab releases latest figures on 2017-18 corn, soybean production, 8am ET (9am Sao Paulo)
• Unica’s bi-weekly report on Brazil Center-South sugar output, 9am ET (10am Sao Paulo)
• Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) releases crop outlook report
• French Agriculture Ministry publishes crop forecasts
• UN releases The State of Food Security and Nutrition in the World report

WEDNESDAY, SEPT. 12:

• Malaysian Palm Oil Board (MPOB) data on stockpiles, exports, production for August, 12:30am ET (12:30pm Kuala Lumpur)
• Cargo surveyor SGS data on Malaysia’s Sept. 1-10 palm oil exports, 3am ET (3pm Kuala Lumpur)
• EIA U.S. weekly ethanol inventories, output, 10:30am
• USDA releases monthly World Agricultural Supply and Demand Estimates (WASDE) report, noon
• FranceAgriMer updates estimates for grain crops

THURSDAY, SEPT. 13:

• USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
• U.S. National Weather Service’s Climate Prediction Center updates its monthly forecast for El Nino, 9am
• Strategie Grains monthly report on European market outlook
• 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
• EARNINGS: Fonterra Co-operative Group

FRIDAY, SEPT. 14:

• 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
• FranceAgriMer weekly updates on French crop conditions
• Malaysia to announce crude palm oil export tax for October

Source: Bloomberg and FI

 

 

 

 

Bloomberg estimates for September USDA reports

US supply

                |———-Survey Results———–|USDA

2018-19 Crop:  |    Avg    |    Low    |   High    |   Aug.

Corn            |     14,516|     14,225|     14,750|     14,586

Corn Yield      |      177.6|      174.0|      180.0|      178.4

Soybeans        |      4,643|      4,523|      4,781|      4,586

Soybean Yield   |       52.3|       50.9|       53.8|       51.6

         Analyst         |——-Corn——–|Soybean

       Estimates:        |  Output  | Yield  |  Output  | Yield

Futures Int’l            |    14,351|   175.5|     4,523|   50.9

 

US ending stocks

                 |———-Survey Results———–|USDA

  2018-19 Crop:  |    Avg    |    Low    |   High    |   Aug.

Corn             |      1,614|      1,210|      1,785|     1,684

Soybeans         |        828|        722|      1,000|       785

Wheat            |        949|        885|      1,077|       935

  2017-18 Crop:  |

Corn             |      2,022|      1,953|      2,154|     2,027

Soybeans         |        426|        397|        506|       430

                    |                  2018-19|2017-18

Analyst Estimates: | Corn  | Soybeans |Wheat | Corn |Soybeans |

Futures Int’l       |  1,538|       722|   910| 2,024|      400|

 

World stocks

                 |———-Survey Results———–|USDA

2018-19 Ending  |           |           |           |

     Stocks:     |    Avg    |    Low    |   High    |   Aug.

Corn             |      154.3|      152.0|      159.0|     155.5

Soybeans         |      107.3|      104.0|      111.1|     105.9

Wheat            |      257.4|      252.0|      261.4|     259.0

2017-18 Ending  |

     Stocks:     |

Corn             |      192.0|      188.0|      193.8|     193.3

Soybeans         |       95.5|       94.0|       97.2|      95.6

 

       Analyst       |                  2018-19|2017-18

     Estimates:      | Corn  | Soybean | Wheat | Corn  |Soybean

Futures Int’l        |  152.5|    104.0|  256.0|  193.0|    96.5

Source: Bloomberg and FI

 

 

 

 

Macros.

·         US Nonfarm Payrolls Aug: 201K (est 191K; prev R 147K)

 

Commitment of Traders

Funds over the shortened week due to holiday sold more contracts in all the major agriculture commodities. Traditional funds were 18,500 contracts less long than expected in corn, 24,100 contract more in soybeans, 8,300 less long in Chicago wheat, 8,500 less long in soybean meal and 4,500 contracts less long in soybean oil. 

 

 

 

 

 

Corn.

• Corn prices settled higher in a two-sided trade. News was light. USDA export sales were ok.
• Oats settled moderately higher.
• Funds bought an estimated net 6,000 contracts.
• FAO warned African swine fever will spread in Asia.

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

 

USDA Export Sales Text

·         Corn: Net sales of 30,100 MT for 2017/2018–a marketing-year low–were down 83 percent from the previous week and 90 percent from the prior 4-week average.  Increases were reported for Mexico (133,400 MT, including 26,000 MT switched from unknown destinations and decreases of 7,000 MT), Saudi Arabia (70,100 MT, including 65,000 MT switched from unknown destinations), South Korea (64,700 MT, including 69,000 MT switched from unknown destinations and decreases of 4,300 MT), Japan (61,200 MT, including 67,300 MT switched from unknown destinations and decreases of 6,100 MT), and Israel (49,400 MT, including 50,000 MT switched from unknown destinations and decreases of 600 MT).  Reductions were primarily for unknown destinations (433,300 MT).  For 2018/2019, net sales of 1,032,900 MT were reported for Mexico (346,200 MT), unknown destinations (298,800 MT), and Japan (104,600 MT).  Exports of 1,208,400 MT were down 10 percent from the previous week and 8 percent from the prior 4-week average.  The destinations were primarily to Mexico (436,200 MT), Japan (244,300 MT), Taiwan (87,900 MT), Saudi Arabia (70,100 MT), and South Korea (68,900 MT). Optional Origin Sales:    For 2018/2019, the current outstanding balance of 965,000 MT is for South Korea (412,000 MT), unknown destinations (298,000 MT), Vietnam (130,000 MT), Saudi Arabia (70,000 MT), and Malaysia (55,000 MT).

·         Barley:    Net sales of 400 MT for 2018/2019 were for South Korea.  Exports of 600 MT were to Japan (300 MT) and Taiwan (300 MT). 

·         Sorghum:    Net sales reductions of 2,300 MT for 2017/2018 were for Burma.  For 2018/2019, net sales of 10,200 MT were reported for Japan.  Exports of 1,000 MT were to Mexico.

·         Beef: Net sales of 23,900 MT for 2018 were up 16 percent from the previous week and 23 percent from the prior 4-week average.  Increases were primarily for Hong Kong (11,100 MT, including decreases of 200 MT), Japan (4,800 MT, including decreases of 1,000 MT), South Korea (3,100 MT, including decreases of 400 MT), Taiwan (1,700 MT, including decreases of 100 MT), and Mexico (1,300 MT, including decreases of 300 MT).  For 2019, net sales of 100 MT were primarily for Japan.  Exports of 17,200 MT were down 4 percent from the previous week and 2 percent from the prior 4-week average.  The primary destinations were Japan (5,200 MT), South Korea (4,600 MT), Hong Kong (1,900 MT), Mexico (1,800 MT), and Taiwan (1,200 MT).

·         Pork: Net sales of 19,200 MT for 2018 were down 34 percent from the previous week and 29 percent from the prior 4-week average.  Increases were reported for Mexico (4,000 MT), South Korea (2,600 MT), Canada (2,600 MT), Hong Kong (2,600 MT), and Colombia (2,200 MT).  For 2019, net sales of 2,700 MT were primarily reported for Australia.  Exports of 21,300 MT were down 3 percent from the previous week, but up 12 percent from the prior 4-week average.  The primary destinations were Mexico (7,900 MT), Japan (3,300 MT), South Korea (2,200 MT), Hong Kong (2,000 MT), and Canada (1,600 MT).

 

Export Developments

·         South Korea bought 60,000 tons of US corn at $213.65/ton for December 20 delivery.

·         China sold 1,299,500 tons of corn out of auction, at an average price of 1,453 yuan per ton ($212.45/ton), 33 percent of what was offered. Yesterday 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 75.3 million tons of corn out of reserves this season. China will sell another 8 million tons of corn September 13 and 14.

 

Soybean complex.

• Soybeans traded lower early in part to weak CIF values and harvesting efforts across the eastern portion of the US Delta. Scattered field reports are indicating extremely high yields here and there.  We don’t see US soybean cargo cancellations over the next week or two but there has been talk of it.
• Prices rebounded on strength in soybean meal. The higher trade eroded CBOT crush prices. Soybean oil fell on growing US supplies and slow export demand. Lower Malaysian values

·         Funds bought 4,000 soybeans, bought 3,000 soybean meal and sold,000 soybean oil.

• USDA export sales were poor for soybean oil, ok for meal and ok for soybeans. Meal and soybeans sales slowed from the previous week.

·         India imported 227,939 tons of oilseed meal in August, down 13 percent from the previous year.

Source: SEA and FI

·         China approved to import soybeans from Ethiopia. When inquiring about Ethiopia soybeans in USDA PSD database, there is no data available.

·         USDA export inspections during to 2017-18 to China:

·         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.

 

USDA Export Sales Text

·         Soybeans:    Net sales of 600 MT for 2017/2018 were down 100 percent from the previous week and from the prior 4-week average.   Increases were reported for Iran (140,800 MT, including 125,000 MT switched from unknown destinations), Spain (70,500 MT, including 65,000 MT switched from unknown destinations), Pakistan (69,400 MT, including 66,000 MT switched from unknown destinations), the United Kingdom (66,900 MT, including 60,900 MT switched from unknown destinations), and Argentina (35,000 MT, including 40,000 MT switched from unknown destinations and decreases of 5,000 MT).  Reductions were for unknown destinations (354,400 MT), Mexico (79,400 MT), Portugal (25,000 MT), and Canada (20,400 MT).  For 2018/2019, net sales of 672,600 MT reported for unknown destinations (423,500 MT), Thailand (115,600 MT), Argentina (60,000 MT), and Mexico (33,700 MT), were partially offset by reductions for China (66,000 MT).    Exports of 723,400 MT were down 26 percent from the previous week and 7 percent from the prior 4-week average.  The destinations included Iran (140,800 MT), Spain (120,500 MT), Taiwan (72,500 MT), Pakistan (69,400 MT), and the United Kingdom (66,900 MT). Optional Origin Sales: For 2018/2019, the current outstanding balance of 63,000 MT is for unknown destinations. Export for Own Account:    The current exports for own account outstanding balance is 130,900 MT, all Canada.

·         Soybean Cake and Meal:    Net sales of 69,300 MT for 2017/2018 were up noticeably from the previous week, but down 45 percent from the prior 4-week average.  Increases were reported for Mexico (23,000 MT), Vietnam (20,000 MT), Canada (11,700 MT, including decreases of 600 MT), Colombia (10,800 MT, including 10,000 MT switched from unknown destinations and decreases of 1,500 MT), and the Philippines (9,000 MT).   Reductions were reported for Israel (16,000 MT) and unknown destinations (12,000 MT).  For 2018/2019, net sales of 289,500 MT were reported for Mexico (192,700 MT), Canada (37,600 MT), and Israel (16,000 MT).  Exports of 167,000 MT were down 34 percent from the previous week and 26 percent from the prior 4-week average.  The primary destinations were Morocco (32,800 MT), the Philippines (27,200 MT), Mexico (16,500 MT), Colombia (15,700 MT), and Canada (12,600 MT). 

·         Soybean Oil:    Net sales reductions of 3,700 MT for 2017/2018 were down noticeably from the previous week and from the prior 4-week average.  Increases reported for Mexico (2,100 MT) and Nicaragua (2,000 MT), were more than offset by reductions for Guatemala (5,000 MT) and Peru (3,000 MT).  For 2018/2019, net sales of 1,300 MT were reported for Honduras (1,000 MT) and Mexico (300 MT).  Exports of 42,700 MT were up noticeably from the previous week and from the prior 4-week average.  The primary destinations were Peru (18,300 MT), South Korea (15,000 MT), Mexico (5,000 MT), and Colombia (4,100 MT). 

 

Export Developments

·         South Korea bought 15,000 tons of non-GMO soybeans for Nov/Dec arrival.

TONNES(M/T)  PRICE($/T)  SUPPLIER            ORIGIN

        6,000   $594.77     Sinsong Food Corp   U.S.

        9,000   $619.00     Posco Daewoo Corp   China

• Iran seeks 30,000 tons of sunflower oil on September 24.

·         China sold 2,000 tons of rapeseed oil out of reserves at 6,000 yuan per ton ($677.64/ton)m 11 percent of what was available for auction.

·         China will sell 100,000 tons of soybeans September 12.

• China sold about 1.69 MMT of soybeans out of reserves this season.

 

Wheat. 

·         US wheat ended for the fourth consecutive session on slowing global demand and a slight decline in US export sales from the previous week.

·         News was light and volume was slow.

·         Funds in Chicago wheat sold an estimated net 3,000 contracts.

·         Paris wheat fell 0.50 euro to 197.75 euros.

·         The Black Sea region is forecast to get rain later this month which should aid winter grain/oilseed plantings.

 

USDA Export Sales Text

·         Wheat:  Net sales of 379,800 MT for 2018/2019 were down 8 percent from the previous week and 14 percent from the prior 4-week average.    Increases were reported for South Korea (124,000 MT, including 11,800 MT switched from unknown destinations), the Philippines (115,800 MT, including 44,100 MT switched from unknown destinations), Mexico (78,400 MT, including decreases of 5,400 MT), Thailand (50,000 MT), and Malaysia (39,100 MT, including 37,400 MT switched from unknown destinations and decreases of 400 MT).  Reductions were for unknown destinations (120,100 MT) and Japan (11,500 MT).  Exports of 287,000 MT were down 29 percent from the previous week and 31 percent from the prior 4-week average.  The destinations were primarily to the Philippines (110,800 MT), Mexico (54,300 MT), Malaysia (37,700 MT), South Korea (34,300 MT), and Belgium (21,300 MT). 

·         Rice:    Net sales of 26,300 MT for 2018/2019 were reported for Honduras (8,800 MT), Guatemala (5,000 MT), Mexico (3,100 MT, including decreases of 1,300 MT), Costa Rica (2,800 MT), and El Salvador (2,000 MT, including decreases of 300 MT).  Exports of 30,900 MT were primarily to Haiti (15,000 MT), Mexico (5,100 MT), El Salvador (3,500 MT), Canada (2,200 MT), and Saudi Arabia (2,000 MT).

 

Export Developments.

• Morocco seeks 336,364 tons of US durum wheat on September 28 for arrival by December 31.
• 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.

 

Rice/Other

·         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.

    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