From: Terry Reilly
Sent: Tuesday, September 18, 2018 5:54:05 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 09/18/18
PDF attached
· Frost and freezes may eventually develop in the northern most Midwest and a part of the northern Plains in late September.
· The upper US Midwest will see rain bias mid-week (eastern South Dakota, northern Iowa, Minnesota, and areas in Wisconsin).
· Lingering showers will occur in Texas this week.
· Canada’s Prairies will be cool and wet this week, delaying harvesting efforts.
· Additional cold weather could occur across eastern Australia this week.
· Australia’s precipitation will remain limited this week.
· Russia’s Volga River Basin could see additional rain will fall this week.
· Europe will see limited rainfall through Thursday.
· Xinjiang China will see frost and light freezes Wednesday morning in the far northeast.
· Brazil will see good rain this week from Mato Grosso do Sul and Paraguay to southern Minas Gerais, Parana, Santa Catarina and Parana.
· Argentina will see a mixture of rain and sunshine.
SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS
WEST CORN BELT EAST CORN BELT
Wed 25% cvg of up to 0.75”
and local amts to 1.35”;
wettest north
Tdy-Thu 80% cvg of 0.40-2.0”
and local amts to 3.50”
from east S.D. and NE
Neb. to central and
north Ia. and west Wisc.
with up to 0.65” and
local amts to 1.20”
elsewhere; far south
driest
Thu-Fri 70% cvg of up to 0.35”
and local amts to 0.80”
Fri-Sat 15% cvg of up to 0.75”
and local amts to 1.50”;
far south wettest
Sat-Sun 20% cvg of up to 0.50”
and local amts to 1.10”;
wettest south
Sun 20% cvg of up to 0.50”
and local amts to 1.10”;
NW and far SE wettest
Mon-Sep 25 85% cvg of up to 0.75” 85% cvg of up to 0.75”
and local amts to 1.75”; and local amts to 1.50”
far NW driest
Sep 26-27 Up to 20% daily cvg of
up to 0.20” and locally
more each day; some
days may be dry
Sep 26-28 Up to 20% daily cvg of
up to 0.20” and locally
more each day; some
days may be dry
Sep 28-29 60% cvg of up to 0.60”
and local amts to 1.25”
Sep 29-30 60% cvg of up to 0.40”
and local amts to 1.0”
Sep 30-Oct 2 65% cvg of up to 0.70”
and locally more
Oct 1-3 70% cvg of up to 0.70”
and locally more
U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS
Tdy-Thu Up to 20% daily cvg of
up to 0.30” and locally
more each day; some
days may be dry
Wed Mostly dry with a few
insignificant showers
Thu-Sun 5-20% daily cvg of up
to 0.30” and locally
more each day
Fri-Sat 50% cvg of up to 0.65”
and local amts to 1.30”;
wettest north
Sun-Sep 25 80% cvg of up to 0.75”
and local amts to 1.50”
Mon-Sep 26 80% cvg of up to 0.75”
and local amts to 1.75”
Sep 26-28 5-20% daily cvg of up
to 0.30” and locally
more each day
Sep 27-29 15-35% daily cvg of
up to 0.50” and locally
more each day
Sep 29-Oct 2 Up to 20% daily cvg of
up to 0.25” and locally
more each day
Sep 30-Oct 2 5-20% daily cvg of up
to 0.30” and locally
more each day
Source: World Weather and FI
Bloomberg weekly agenda
WEDNESDAY, SEPT. 19:
- EIA U.S. weekly ethanol inventories, output, 10:30am
- USDA milk production data for August, 3pm
- Malaysian Palm Oil Council (MPOC) holds Intl Palm Oil Sustainability Conference in Kota Kinabalu, Malaysia, Sept. 19-20; Executives from FAO, Nestle, Olam, Sime Darby, MPOB expected to attend
- INTL FCStone holds agribusiness conference in Sao Paulo, with Finance Minister Eduardo Guardia and BRF CEO Pedro Parente due to speak
THURSDAY, SEPT. 20:
- Intertek and AmSpec release their respective data on Malaysia’s Sept. 1-20 palm oil exports, 11pm ET Wednesday (11am Kuala Lumpur Thursday)
- SGS data for same period, 3am ET Thursday (3pm Kuala Lumpur Thursday)
- USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
- USDA red meat production for August, 3pm
- 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
- Intl Palm Oil Sustainability Conference in Kota Kinabalu, final day
FRIDAY, SEPT. 21:
- Ghana public holiday
- 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)
- USDA cattle-on-feed report for August, 3pm
- CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
US area estimates:
Informa reportedly put out the following US area in million acres:
· 2019 corn 93.0 vs. 89.10 in 2018 (USDA Sep 89.129)
· 2019 soybeans 82.3 vs. 88.97 in 2018 (USDA Sep 89.557)
· 2019 winter wheat 34.1 vs. 32.3 in 2018 (USDA Aug 32.7)
· 2019 all wheat 50.1 vs. 47.6 in 2018 (USDA Aug 47.8)
· President Trump will impose new tariffs on about $200 billion in Chinese products and threatened to add more. 10% was set to take affect September 24 and will rise to 25% at the end of the year
· China To Impose 10% Tariffs On US Goods It Previously Listed For A 25% Tariff Rate
– To Impose 10% Tariffs On US Goods It Previously Listed For A 20% Tariff Rate
– To Impose 5% Tariffs On US Goods It Previously Listed For A 10% Tariff Rate
· Chinese Filed Complaint To WTO On Latest US Tariff Measures
– Complaint Is On Planned US Tariffs on $200Bln Worth Of Chinese Goods
· Canadian Manufacturing Sales (M/M) Jul: 0.9% (exp 0.6%; R prev 1.3%)
Corn.
- Corn futures traded lower on large US crop prospects and harvesting pressure. Futures fell 3.50-4.75 cents with nearby December at $3.4325, a contract low.
- We are hearing US corn yields are large just about everywhere, aside from the small percentage grown in the areas affected by Hurricane Florence. Some harvesting delays from remnants from this storm will briefly disrupt harvesting, along with heavy rain in the northern Great Plains, then later this week across the heart of the western WCB.
· Funds sold an estimated net 17,000 corn contracts.
· A Bloomberg survey calls for US ethanol production to increased 10,000 barrels per day to 1.03 million from 1.020 million last week, and stocks to increase to 22.919 million from 22.894 million last week.
Export Developments
· Taiwan Sugar bought a combined 15,000 tons of US corn.
· South Korea’s FLC bought 68,000 tons of corn from the US at $204.14/ton, c&f, for arrival around February 20, 2019.
· South Korea’s NOFI bought 66,000 tons of corn at $202.55/ton, c&f, for shipment in early 2019.
· China will sell another 8 million tons of corn later this week.
· China sold about 80 million tons of corn out of reserves this season.
· December corn may now trade in a $3.35-$3.80 range.
· March corn in a $3.15-$4.15 range.
· The soybean complex traded lower on US/China trade fears despite a one-point decline in US soybean crop conditions (G/E). November soybean futures fell 9.50 cents to $8.14/bu, to a contract low and on a rolling basis is near a December 2008 level. We don’t rule out nearby soybean prices falling below $8.00. US harvest progress has just begun and US Gulf basis continues to weaken.
· We lowered our November/December price ranges for the CBOT soybean complex.
· Funds sold 6,000 soybeans, sold 3,000 meal and sold 3,000 soybean oil.
· The funds were net sellers of soybeans in five out of the last six sessions.
· Soybean meal broke below $300/short ton but ended a half dollar above that level. The low soybean meal prices may attract overseas end user buying. Higher crude oil limited losses early in soybean oil but futures settled 31-39 points lower.
· Argentina lawyers drafted two articles for the Budget Law 2019 that may grant power to the Executive arm of the government the right to raise export taxes on agriculture commodities up to 33 percent.
· China is now sending a low-level aid to Washington for trade talks. There was talk China may increase the US soybean import tariff. A move like this would stop ideas of China importing US soybeans anytime soon. After asking around today, we could not find any evidence this will happen.
· Malaysia is back from holiday and November palm oil fell 44MYR in part to China/US trade concerns, rising palm oil production, and currency fluctuations.
· Cargo surveyor SGS reported month to date September 15 Malaysian palm exports at 777,049 tons, 373,187 tons above the same period a month ago or up 92%, and 124,699 tons above the same period a year ago or up 19%.
· Brazil boosted #biodiesel output by 26% in Jan/July 2018. Record volume produced in July. https://www.oilworld.biz/
· Brazil’s Parana AgMin, Deral, estimated soybean plantings at 9 percent, above only 1 percent a year ago. Weather in Brazil and Argentina is favorable for early fieldwork progress.
· Taiwan Sugar bought about 15,000 tons of US soybeans.
· South Korea’s NOFI bought 60,000 tons of corn at $391.80/ton, c&f, for shipment in early 2019.
· Results awaited: The CCC seeks 1540 tons of fully refined vegetable oil on September 18 for carious countries for Oct/Nov delivery.
- Iran seeks 30,000 tons of sunflower oil on September 24.
- China sold about 2.29 MMT of soybeans out of reserves this season.
· November soybeans are seen in a $7.80-$8.50 range
· December soybean meal $285-320 range
· December soybean oil 26.80-28.20
· US wheat ended higher on speculation export demand could increase out of the Northern Hemisphere from shortfalls in Argentina and Argentina supplies, and depleting Black Sea inventories by March from the rapid export pace. ABARES lower their export outlook for Australian wheat exports.
· Funds bought an estimated net 5,000 Chicago wheat contracts.
· December Paris wheat increased 1.25 euros to 199.25 euros.
· Australia lowered its wheat export projection to 12.95 million tons, down from 15.2 million tons in June and compares to 15.5 million a year earlier. If realized that will be the lowest since 2007-08.
· France’s port lineup shows wheat cargoes are readying wheat shipments to Algeria.
· Russian cash prices appreciated over the past week.
· There were unfounded rumors Russia may limit wheat exports. Another rumor surfaced that Russia asked one or some of their customers (major importing countries) to lower wheat import tariffs. Details were lacking.
· Egypt’s GASC bought 180,000 tons of wheat for shipment over Nov. 1-10 and another 295,000 tons for Nov. 11-20 shipment.
For shipment Nov. 1-10
– 60,000 tons of Russian wheat at $226 FOB and $17.10 freight, equating to $243.10 C&F.
– 60,000 tons of Russian wheat at $227.50 FOB and $17.10 freight, equating to $244.60 C&F.
– 60,000 tons of Ukrainian wheat at $227.73 FOB and $16.87 freight, equating to $244.60 C&F.
For shipment Nov. 11-20
– 60,000 tons of Russian wheat at $225.95 FOB and $17.10 freight, equating to $243.05 C&F.
– 60,000 tons of Russian wheat at $227.50 FOB and $17.10 freight, equating to $244.60 C&F.
– 60,000 tons of Russian wheat at $228.65 FOB and $16.35 freight, equating to $245.00 C&F.
– 60,000 tons of Russian wheat at $227.85 FOB and $17.10 freight, equating to $244.95 C&F.
– 55,000 tons of Russian wheat at $227.50 FOB and $17.56 freight, equating to $245.06 C&F.
· Turkey seeks a total of 252,000 tons of red milling wheat for October 2-22 loading. It closes on September 22. The depreciation of the lira sent importers seeking Turkish wheat flour, causing them to restrict exports. But countries like Iraq that heavily depend on flour from Turkey may have to import from other countries.
· Japan seeks 149,586 tons of wheat on Thursday.
· China sold 3,649 tons of imported 2013 wheat at auction from state reserves at an average price of 2,171 yuan ($316.21) per ton, 0.37 percent of total wheat available at the auction.
- Jordan passed on 120,000 tons of feed barley, optional origin.
- Results awaited: 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.
- Algeria seeks 75,000 tons of feed barley on Wednesday for November shipment.
- Jordan seeks 120,000 tons of feed wheat, optional origin, on September 19.
- Ethiopia seeks 200,000 tons of milling wheat on September 18 for shipment two months after contract signing.
- Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on September 19 for arrival by late February.
- Iraq seeks 50,000 tons of wheat on September 23, with offers valid until September 27. Iraq needs wheat for four after Turkey restricted flour shipments.
- Morocco seeks 336,364 tons of US durum wheat on September 28 for arrival by December 31.
Rice/Other
· China sold 46,022 tons of rice at auction from state reserves at average price of 2,130 yuan ($310.44) per ton, 4.5 percent of total rice available for the auction.
· Iraq seeks 30,000 tons of rice from India on October 9 for LH October / FH November shipment.
- December Chicago wheat $4.90-$5.45 range.
- December KC $4.90-$5.55 range.
- December MN $5.45-$6.00 range.
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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Evecom-FI091818.pdf