From: Terry Reilly
Sent: Wednesday, October 03, 2018 4:22:36 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 10/03/18
PDF attached
Weather and crop conditions
· Rain overnight was heavy across lower WI and far northern IL.
· 6-12 inches of rain could fall across the heart of the US over the next several days, according to the European model.
· New Zealand’s National Institute of Water and Atmospheric Research predicted a 68% chance of El Nino developing during the October-December and 71% during the April–June 2019 period.
· Additional showers will fall across the northern areas of the US Midwest Wednesday and showers appear across the central areas Thursday, and northwestern areas Friday into Saturday. The Plains will see follow up rain in the northern areas Thur-Fri.
· The Midwest will be wet Thursday into mid-next week, bias WCB. The rain will delay harvesting efforts and raise concerns over quality for corn and soybeans. There will be an important period of drier weather October 10-15, which will be needed for producers.
· This week the Delta will be on the drier side. Showers will fall in the lower Midwest and Tennessee River Basin. Overall fieldwork activity across the Delta should improve.
· Rain will fall from the southwestern desert areas through the northern Plains early to mid-week this week.
· The Canada Prairies will be cold this week.
· Brazil will see rain in the central and southern growing areas (MG, MGDS, Goias, Parana) this week while Argentina will be dry through Saturday.
SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS
WEST CORN BELT EAST CORN BELT
Tdy-Thu 80% cvg of up to 0.55”
and local amts to 1.10”;
wettest west
Thu-Sat 80% cvg of 0.50-2.0”
and local amts to 3.50”
from Ks. to central and
south Wi. with up to
0.75” and locally more
elsewhere; S.D. and NE
Neb. driest
Fri-Sun 80% cvg of up to 0.75”
and local amts to 2.0”;
west and north Il. to
west Mi. wettest;
driest SE
Sun-Tue 85% cvg of 0.50-1.50”
and local amts over 3.0”
in east Ks. and nearby
areas with up to 0.75”
and local amts to 2.0”
elsewhere
Mon 15% cvg of up to 0.25”
and locally more
Tue-Oct 10 80% cvg of up to 0.75”
and local amts to 2.0”;
wettest west; driest SE
Oct 10-12 75% cvg of up to 0.75”
and local amts to 2.0”
Oct 11-13 70% cvg of up to 0.75”
and local amts to 1.50”
Oct 13-17 Up to 20% daily cvg of
up to 0.25” and locally
more each day
Oct 14-17 Up to 20% daily cvg of
up to 0.25” and locally
more each day
U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS
DELTA SOUTHEAST
Tdy-Thu Up to 20% daily cvg of
up to 0.20” and locally
more each day; some
days may be dry
Tdy-Fri Up to 15% daily cvg of
up to 0.20” and locally
more each day; some
days may be dry
Sat 50% cvg of up to 0.35”
and local amts to 0.60”
Fri-Sun 5-20% daily cvg of up
to 0.40” and locally
more each day
Sun-Oct 11 5-20% daily cvg of up
to 0.30” and locally
more each day
Mon-Oct 11 15-35% daily cvg of
up to 0.40” and locally
more each day
Oct 12-13 40% cvg of up to 0.30”
and locally more
Oct 12-14 50% cvg of up to 0.50”
and local amts to 1.10”
Oct 14-17 Up to 20% daily cvg of
up to 0.20” and locally
more each day
Oct 15-17 Up to 20% daily cvg of
up to 0.20” and locally
more each day
Source: World Weather Inc. and FI
- FAO food index for September, 4am ET (9am London)
- USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
- 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
FRIDAY, OCT. 5:
- 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)
- CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
· US ADP National Employment (Sep): 230K (est 185K, prev R 168K)
· US Markit Services PMI Sep F: 53.5 (est 53.0; prev 52.9)
– – Markit Composite PMI Sep F: 53.9 (prev 53.4)
· US ISM Non-Mfg PMI Sep: 61.6 (est 58.0; prev 58.5)
– – ISM Non-Mfg Business Activity Sep: 65.2 (est 60.3; prev 60.7)
– – ISM Non-Mfg Employment Index Sep: 62.4 (prev 56.7)
– – ISM Non-Mfg New Orders Index Sep: 61.6 (prev 60.4)
– – ISM Non-Mfg Prices Paid Sep: 64.2 (prev 62.8)
Corn.
- Corn futures ended 1.75-2.75 cents lower on lightly profit taking, lack of direction, and weaker wheat prices. The US dollar was higher.
- Funds sold an estimated 9,000 corn contracts.
- News related to corn was extremely light. Traders are awaiting heavy rain expected to fall across the US over the next week, followed by a 4-6 day period of drier weather. Producers are scrambling this week to get as much corn out of the ground that they can.
- The USDA Broiler Report showed eggs set in the US down slightly and chicks placed up slightly. Cumulative placements from the week ending January 6, 2018 through September 29, 2018 for the United States were 7.16 billion. Cumulative placements were up 1 percent from the same period a year earlier.
- China reported a case of bird flu https://www.globalmeatnews.com/Article/2018/10/02/China-hit-with-avian-flu
- Brazil’s Conab will release supply estimates next week and we look for the combined soybean and corn area in Brazil to expand 3.8% from the previous season, in part to a recovery in the corn area. Conab’s first estimate for new-crop will be on October 11, 9h Brasilia time.
· Under the 24-hour announcement system, US exporters reported the sale of 230,000 tons of corn for delivery to Japan during the 2018-19 marketing year.
· China will sell 8 million tons of corn for the week ending October 5.
· China sold about 85.5 million tons of corn out of reserves this season and some are predicting up to 100 million tons will be sold by the end of the marketing season.
· December corn may trade in a $3.50-$3.80 range; March $3.25-$4.00
· The soybean complex rallied early on short covering and US harvest delays but meal and soybeans ended lower. The USD was higher.
· At about 1 pm CT, 7,000 SX/SF traded @ -14. The spread narrowed 0.25 cent today.
· Soybean oil found follow through strength from higher palm oil and fund buying along with product spreading.
· We see resistance in Dec soybean oil at 30 cents.
· Funds sold an estimated 4,000 soybean contracts, sold 3,000 soybean meal and bought 3,000 soybean oil.
· Rain overnight was heavy across lower WI and far northern IL.
· 6-12 inches of rain could fall across the heart of the US over the next several days, according to the European model.
· China is on holiday all week.
· November soybeans are seen in a $8.05-$8.85 range, March $7.85-$9.15
· December soybean meal $305-$340 range; March $295-$400
· December soybean oil 27.80-30.50; March 28.60-31.50
· US wheat futures traded and ended lower after Russian authorities said they will not suspend some companies from exporting wheat.
· Chicago wheat traded through the top end of our trading range of $5.25/bu, but ended below that level.
- Funds sold 4,000 SRW wheat contracts.
· Russia’s agriculture quality control government arm (Rosselkhoznadzor) came out today and said they have no plans to suspend wheat exports. However some firms have 1-2 weeks to correct phytosanitary violations. Yesterday newswires picked up they could temporary suspend 30 grain loading points in two of Russia’s top grain exporting regions of Krasnodar and Rostov over violation of phytosanitary rules, lasting up to 90 days.
- France will see rain by the end of the week into next week. Eastern Australia may see some rain across NSW and southern Queensland this week. Traders should monitor a potential significant rain event in far southern Brazil Saturday into Sunday which could negatively impact wheat conditions.
- Egypt seeks wheat for Dec 1-10 shipment.
- Tunisia bought optional origin wheat.
- 25,000 tons of soft wheat at $249.11 per ton c&f.
- 50,000 tons of feed barley at $262.67 per ton c&f
- 75,000 tons of durum at $270.73-$274.29 per ton c&f
- Japan in a SBS import tender bought 22,730 tons of feed wheat and 41,460 tons of barley for arrival by late February.
- Turkey bought 138,000 tons of barley. Lowest price was $250/ton. Details are lacking.
- Libya seeks 1 million tons of Russian wheat.
- Bahrain seeks 25,000 tons of wheat on October 2 for Nov shipment.
- Jordan retendered for another 100,000 tons of feed barley on October 3.
- Bangladesh seeks 50,000 tons of 12.5 percent wheat on October 9, optional origin.
- Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on October 10 for arrival by late February.
- Postponed: UAE seeks 60,000 tons of wheat for Oct/Nov shipment.
Rice/Other
· Thailand seeks to sell 120,000 tons of sugar on October 3.
· The Philippines seek 250,000 tons of rice on October 18 for arrival by late November.
· Mauritius seeks 9,000 tons of rice for delivery between Nov. 15, 2018, and March 31, 2019, set to close is Sept. 27.
10/3/18. Trading ranges:
- December Chicago wheat $5.05-$5.40; March $5.10-$5.90.
- December KC $5.00-$5.35; March $5.00-$6.00. (remain tight with Chicago)
- December MN $5.60-$6.25 range; March $5.75-$7.00
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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