FW: FI Evening Grain Comments 09/25/18

PDF attached

 

Weather and crop conditions

 

·         Weather outlook was a little greater than that of Monday for the US.

·         Frequent showers will occur in the Delta this week.

·         The Midwest will also be active which should slow harvesting before a couple more days of net drying occurs outside the Ohio River Valley region.

·         HRW wheat areas will see a mixture of sunshine and rain.

·         Improving weather across Europe and the CIS is bearish for wheat.

·         SA weather looks good.

·         Canada is seeing too much precipitation in form of snow and rain, and temperatures will remain cool.

 

SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS

                                WEST CORN BELT                             EAST CORN BELT              

Wed                                                                                      15% cvg of up to 0.20”

                                                                                                and locally more;

                                                                                                wettest SE

Wed-Thu             35% cvg of up to 0.20”

                                and locally more;

                                driest south

Thu                                                                                        Mostly dry with a few

                                                                                                insignificant showers

Fri-Sat                   40% cvg of up to 0.65”                    35% cvg of up to 0.65”

                                and local amts to 1.25”;                 and local amts to 1.20”;

                                Ia. wettest                                          north Il. to Mi. wettest

Sun                                                                                        20% cvg of up to 0.20”

                                                                                                and locally more;

                                                                                                north and west wettest

Sun-Mon             70% cvg of up to 0.75”

                                and local amts to 1.50”;

                                wettest NE

Mon-Oct 2                                                                          80% cvg of up to 0.75”   

                                                                                                and local amts to 1.50”

Oct 2-4                  75% cvg of up to 0.75”

                                and local amts to 2.0”;

                                far NW driest

Oct 3-4                                                                                  80% cvg of up to 0.75”

                                                                                                and local amts to 2.0”

Oct 5-9                  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                                  more each day                 

 

U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS

                                DELTA                                                   SOUTHEAST

         -Wed             85% cvg of 0.30-1.10”                    

                                with lighter rain in a few

                                areas and local amts over

                                2.0”; driest north                             

Tdy-Thu                                                                               90-100% cvg of 0.15-1.10”

                                                                                                and local amts to 2.0”

                                                                                                with some 2.0-3.50”

                                                                                                amts in the west;

                                                                                                driest SE

Thu-Sat                10-25% daily cvg of

                                up to 0.35” and locally

                                more each day;

                                wettest south

Fri-Sat                                                                                   20-40% daily cvg of

                                                                                                up to 0.60” and locally

                                                                                                more each day

Sun-Oct 2            5-20% daily cvg of up                      5-20% daily cvg of up

                                to 0.20” and locally                          to 0.20” and locally

                                more each day;                                 more each day

                                wettest north

Oct 3-4                  80% cvg of up to 0.65”                    70% cvg of up to 0.65”

                                and local amts to 1.40”                   and local amts to 1.40”

Oct 5-9                  Up to 20% daily cvg of                    5-20% daily cvg of up

                                up to 0.25” and locally                    to 0.25” and locally         

                                more each day                                  more each day

Source: World Weather Inc. and FI

 

Bloomberg weekly agenda

WEDNESDAY, SEPT. 26:

• EIA U.S. weekly ethanol inventories, output, 10:30am
• FOMC rate decision, 2pm; analysts expect the Fed to raise U.S. interest rates by 25 basis points
• South African crop estimates
• Globoil international vegetable oil conference in Mumbai, Sept. 26-28
  • Commerce Minister Suresh Prabhu and Food Minister Ram Vilas Paswan are expected to attend, along with Oil World Executive Director Thomas Mielke, Godrej Director Dorab Mistry, Sunvin CEO Sandeep Bajoria
• S&P Platts Kingsman sugar conference in Miami, final day, with speakers from Bonsucro, ALESA, Indian Sugar Exim Corp., Central American Sugar Assoc., Avenzza

THURSDAY, SEPT. 27:

• USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
• USDA hogs & pigs inventory for 3Q, 3pm
• USDA agriculture prices received for August, 3pm
• International Grains Council monthly report
• 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
• Globoil vegetable oil conference in Mumbai, 2nd day of 3
• EARNINGS: Cargill

FRIDAY, SEPT. 28:

• USDA grain stockpiles for 3Q, including corn, soy, wheat, barley, noon
• USDA wheat production report for September, noon
• Polish crop estimates
• FranceAgriMer weekly updates on French crop conditions
• Globoil vegetable oil conference in Mumbai, final day
• 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

 

 

 

 

 

Macros.

·         Brent crude is at a 4-year high.

·         US Consumer Confidence Sep: 138.4 (est 132.0; prev R 134.7)

·         US Monthly Home Price (M/M) Jul: 0.2% (R prev 0.3%)

–          –          Monthly Home Price (Y/Y) Jul: 6.4% (prev 6.5%)

–          –          Monthly Home Price Index Jul: 265.0 (prev 264.4)

·         Governor Of Argentina’s Central Bank Has Presented His Resignation

 

Corn.

• December corn rallied for the 5^th consecutive day reaching its highest level since September 12.
• A rally in soybeans and higher energy prices along with additional US corn sales to Mexico supported corn. Brent crude traded at a four-year high. There were over 1000 December corn TAS trades at +25.
• Funds bought an estimated 10,000 corn contracts. This is the 5^th consecutive day they were net buyers.
• APK-Inform reported Ukraine exported 426,500 tons of grain to China so far this season versus 720,700 tons in 2017-18. Exports of barley are down to 257,500 tons compared with 563,200 tons in July-August 2017.
• China’s AgMin ordered states to be supplied with sufficient amounts of pork.  that Beijing must be supplied with sufficient amounts of pork. He asked Hebei leaders to strengthen supervision of transporting live animals.
• Serbia’s corn production was estimated by the states stats office at 6.965 million tons in 2018, up 73.3% over the previous year.
• South Africa’s CEC is due to update corn production on Wednesday and a Reuters trade average is 13.002 million tons, down from 13.207 million estimated by CEC in August.
• A Bloomberg survey calls for weekly US ethanol production to decline to 1.027 million barrels per day from 1.051 million last week, and stocks to decline to 22.700 million from 22.746 million week earlier.

 

Export Developments

·         Under the 24-hour announcement system, US exporters sold 239,630 tons of corn to Mexico for the 2018-19 marketing year.

·         China will sell another 8 million tons of corn for the week ending September 28.

·         China sold nearly 84 million tons of corn out of reserves this season.

 

 

 

Soybean complex.

·         November soybeans traded lower but found support after bouncing off its 20-day MA. Prices rallied by a good amount but gave up most of its gains before the close. November hit a 4-week high. Both products were higher. Volume was above average.

·         China soybean meal futures were up sharply early on Tuesday.

·         Funds bought an estimated 5,000 soybean contracts, bought 3,000 soybean meal and bought 1,000 soybean oil.

·         Argentina crushers near Rosario went on a one-day strike, part of a larger national strike. More crushers may follow in coming days.

·         The Governor of Argentina’s Central Bank resigned, reminding people Argentina’s economy remains in turmoil. If it were not for positive crush margins, Argentina may not be importing soybeans from the US. China is thought to have secured Argentina soybeans during the September through January period, but no more than 2 million tons are expected to be exported to China after drought cut production in 2018. Argentina producers are also likely to hang onto their soybeans as a hedge against inflation, allowing the carryout at the end of February to exceed 5 million tons, unless the government forces them to sell.

·         Soybean planting progress just started in Mato Grosso but more rain may be needed in October, according to the local AgMin, Imea.

·         Brazil’s Agribrasil calculated 1.0 million tons of soybeans will be imported from the US to make up for insufficient supplies. They have Brazil exports at 80 million tons (68MMT last year), and crush at 41.5 MMT (41.8 last year). 

·         Canola harvest progress in Manitoba, Canada, are about 85 percent harvested and soybeans are 30 percent complete.

·         Malaysia palm oil was higher early Tuesday. Stronger Brent and WTI oil supported palm oil futures. Cargo surveyor SGS reported month to date September 25 Malaysian palm exports at 1,359,870 tons, 572,923 tons above the same period a month ago or up 73%, and 254,315 tons above the same period a year ago or up 23%. AmSpec shows a 61.5% increase and ITS a 64.2% rise in palm exports.

 

Export Developments

• Egypt’s GASC bought 30,000 tons of soyoil and 21,500 tons of sunflower oil for arrival between Oct. 25 and Nov. Soybean oil was bought at $698.70/ton. Sunflower oil was bought at $719/ton.
• Results awaited: Iran seeks 30,000 tons of sunflower oil on September 24.
• China sold about 2.38 MMT of soybeans out of reserves this season.

 

Wheat. 

·         US wheat ended lower on advancing Northern Hemisphere harvest of spring wheat crops and improving weather across the CIS.

• Funds sold 6,000 SRW wheat contracts.

·         EU wheat closed lower by 2.00 euros to 201.00.

·         Serbia’s 2018 wheat production was pegged by the stats office at 2.942MMT, up 29.3% on the year. The harvested area increased to 648,083 hectares in 2018.

·         Kazakhstan’s harvested 13.950 million tons of grain as of September 24, 38.7% down from last year, from the planned 72.1% of the total areas under crops. Kazakhstan’s grain harvest is forecast at 20 million tons this year.

·         Indonesia’s imports of wheat for flour are expected to reach 8.5 million tons this year, according to a Reuters article citing an industry body said, up from 8 million tons in 2017. Indonesia saw a 9 percent drop in the value of the rupiah against the U.S. dollar and wheat prices are high due to weather problems, making imports more expensive.

 

Export Developments.

• Taiwan seeks 110,000 tons of US wheat on October 2 for Nov-Dec shipment.
• China sold 6,255 tons of imported 2013 wheat at auction of state reserves at an average price of 2,157 yuan ($313.96) per ton, 0.66 percent of total wheat available at the auction.
• Japan seeks 109,150 tons of food wheat on Thursday. Original details as follows.

• Bangladesh seeks 50,000 tons of 12.5 percent wheat on October 9, optional origin.
• Results awaited: UAE seeks 60,000 tons of wheat on September 24 for Oct/Nov shipment.
• Results awaited: Ethiopia seeks 200,000 tons of milling wheat for shipment two months after contract signing. Ethiopia got offers from 7 firms. Lowest offer was for 100,000 tons at $272.05/ton, c&f.

·         Results awaited: 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 in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on September 26 for arrival by late February. 
• Jordan seeks 120,000 tons of feed barley, optional origin, on September 26.
• Jordan seeks 120,000 tons of feed wheat, optional origin, on September 27.
• Canadian wheat is the lowest offer in Iraq’s import tender. Lowest was $337/ton. 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.
• Bahrain seeks 25,000 tons of wheat on October 2 for Nov shipment.

 

 

Rice/Other

·         China failed to sell any of its 244,979 tons of rice at auction.

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

·         Iraq seeks 30,000 tons of rice optional origin on October 1, valid until October 7. 

·         Iraq seeks 30,000 tons of rice from India on October 9 for LH October / FH November shipment.