FW: FI Morning Grain Comments 07/18/18

PDF attached

 

Under the 24-hour announcement system, US exporters reported the sales of 199,500 tons of soybeans for delivery to Pakistan during the 2018/2019 marketing year.

 

Weather and crop conditions

·         Several waves of rain are forecast across the northern and central Plains, Midwest, Delta and southeastern states through July 31.

·         The U.S. Pacific northwest and northwestern U.S. Plains will be dry or mostly dry during the next ten days

·         Net drying will continue across the southwestern Corn Belt and the southern Plains.

·         The Delta and southeastern states will see a mix of rain and sunshine.

·         The northwestern Plains will see an increase of net drying.

·         We are hearing lack of corn tasseling across WI. Feedback is welcome.

·         The Canada Prairies will see net drying across the southern crop areas. Western and northern Alberta will be wettest.

·         East-central China will continue to see net drying this week but the Northeast Provinces will improve with rain.

·         Frequent rain will fall from eastern Europe through the western CIS this week.

·         Western Europe will trend wetter this week.

Source: World Weather Inc. and FI

 

 

 

SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS

                                WEST CORN BELT                             EAST CORN BELT              

       -Wed                                                         Up to 15% daily cvg of

                                                                        up to 0.20” and locally

                                                                        more each day; wettest

                                                                        east; some days may be

                                                                        dry      

Wed-Fri           85% cvg of up to 0.75”

                        and local amts to 1.50”

                        with a few bands of

                        1.50-3.30”; far SE and

                        far NW driest                                                               

Thu-Sat                                                            90% cvg of up to 0.75”

                                                                        and local amts over 2.0”;

                                                                        driest SW

Sat                   15% cvg of up to 0.15”

                        and locally more; east                         

                        Wisc. wettest

Sun-Mon          55% cvg of up to 0.50”           15-35% daily cvg of

                        and local amts to 1.10”;           up to 0.35” and locally

                        wettest NW                              more each day;

                                                                        wettest east 

Jul 24-25         5-15% daily cvg of up             40% cvg of up to 0.30”

                        to 0.20” and locally                 and locally more;

                        more each day                         north and east wettest

Jul 26                                                               15% cvg of up to 0.20”

                                                                        and locally more

Jul 26-28         55% cvg of up to 0.50”          

                        and locally more

Jul 27-29                                                         60% cvg of up to 0.50”

                                                                        and locally more 

Jul 29-31         5-20% daily cvg of up

                        to 0.25” and locally

                        more each day

Jul 30-31                                                         10-25% daily cvg of

                                                                        up to 0.25” and locally

                                                                        more each day

 

U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS

                         DELTA                                                    SOUTHEAST

      -Wed         65% cvg of up to 0.35”           55% cvg of up to 0.75”

                        and local amts to 0.75”;           and local amts to 2.0”;

                        far north and far south             wettest south

                        driest                                       

Thu                                                                  30% cvg of up to 0.75”

                                                                        and local amts to 2.0”;

                                                                        wettest SE

Thu-Fri            5-20% daily cvg of up

                        to 0.25” and locally

                        more each day;

                        wettest north

Fri-Sat                                                              75% cvg of up to 0.75”

                                                                        and local amts to 1.75”

Sat-Mon           Up to 15% daily cvg of

                        up to 0.20” and locally

                        more each day; some

                        days may be dry

Sun-Mon                                                          10-25% daily cvg of

                                                                        up to 0.35” and locally

                                                                        more each day; Va.

                                                                        and Carolinas wettest  

Jul 24-25         40% cvg of up to 0.40”          

                        and local amts to 1.0”

Jul 24-26                                                         60% cvg of up to 0.75”

                                                                        and local amts to 1.50”;

                                                                        wettest NE                              

Jul 26               15% cvg of up to 0.25”          

                        and locally more

Jul 27-31         10-25% daily cvg of                15-35% daily cvg of

                        up to 0.35” and locally            up to 0.60” and locally

                        more each day                         more each day

Source: World Weather Inc. and FI

 

Source: World Weather Inc. and FI

 

Bloomberg weekly agenda

WEDNESDAY, JULY 18:

• EIA U.S. weekly ethanol inventories, output, 10:30am

THURSDAY, JULY 19:

• Nicaragua on holiday
• USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
• USDA red meat production for June, 3pm
• National Confectioners Association North America 2Q cocoa grind, ~4pm
• 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, JULY 20:

• Colombia on holiday
• Cocoa Association of Asia is set to release 2Q cocoa grind data
• ICE Futures Europe commitments of traders weekly report on coffee, cocoa, sugar positions, ~1:30pm ET (~6:30pm London)
• USDA milk production for June, 3pm
• USDA cattle on feed for June, 3pm
• CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer weekly updates on French crop conditions

Source: Bloomberg and FI

 

Registrations

·         Soybeans down 86 to 1001 (86 out of Utica)

·         Corn down 22 to 1151 (Ottawa, IL – ADM)

·         Rice down 129 to 85 (125 out of Jonesboro and 4 out of Otwell)

·         KC Wheat down 20 to 274 (Wichita – Gav.)

 

 

Macros.

·         US stocks are mixed, USD higher, WTI crude lower, and gold higher, at the time this was written.

 

Corn.

• Corn prices are trading higher on follow through buying. 
• Baltic Dry Index was 33 points lower to 1,688, or 1.9%.
• The French corn crop could start harvest season a couple week earlier this year (mid-Aug).

·         A Bloomberg survey calls for weekly ethanol production to increase 16k/barrels per day and stocks to decline 74,000.

·         The USDA Cattle on Feed report will be released on Friday.

 

Export Developments

·         South Korea’s KOCOPIA Group bought 60,000 tons if US corn at $211.47/ton c&f for arrival around November 20.

·         China sold about 52-53 million tons of corn out of reserves this season.

 

 

 

Soybean complex.

·         Soybean prices continued to rebound after nearly hitting a decade low. Meal and oil are higher on technical buying.

• Under the 24-hour announcement system, US exporters reported the sales of 199,500 tons of soybeans for delivery to Pakistan during the 2018/2019 marketing year.

·         China September soybean futures decreased 2 yuan per ton or 0.1%, September meal was up 6 or 0.2%, China soybean oil up 14 (0.3%) and China September palm up 10 (0.2%).

·         September China cash crush margins were last running at 41 cents, up from 40 previous session, and compares to 39 cents last week and 78 a year ago.

·         Rotterdam vegetable oils were higher and SA soybean meal lower when supplied from SA, as of early morning CT time.

·         It’s starting to get a little too dry across SE Asian palm growing regions.

·         September Malaysian palm was 40 higher at MYR2211, a one-week high, and cash up $5.00 at $572.50/ton. 

·         Offshore values were leading soybean oil 4 points lower and meal $1.10/short ton lower.

 

Export Developments

• Under the 24-hour announcement system, US exporters reported the sales of 199,500 tons of soybeans for delivery to Pakistan during the 2018/2019 marketing year.
• China sold 140,068 of 2013 soybeans at an average price of 2993 yuan per ton, or $446.57/ton, 28 percent of the total.

·         China sold 972,370 tons of soybeans out of reserves so far, this season.

·         China failed to sell 56,611 tons of soybean oil out of state reserves.

• The CCC seeks 12,500 tons of soybean meal for Honduras, opened until July 18, for early October shipment.
• Results awaited: Iran seeks 30,000 tons of sunflower oil on July 10.
• Results awaited: Iran seeks 30,000 tons of palm olein oils on July 10. 
• Iran seeks 30,000 tons of soybean oil on August 1.
• South Korea seeks 1,500 tons of non-GMO soybeans on July 25 for September-December delivery.

 

Wheat. 

·         All three US wheat markets were higher in early trading. Chicago wheat futures hit the $5.05/bu mark for the first time since July 10, before pairing gains.

·         Egypt approved to import 120,000 tons of wheat from AOS and Union, two main supplies, bypassing the GASC. This might be in effort to make up for cargoes that were previous rejected/cancelled. Details were lacking.

·         German farming association DBV lowered its estimate of the German winter barley crop by 700,000 tons to 7.3 million tons from early July, down from 9.0 million tons harvested in 2017. Yields were forecast at 6 tons/hectare versus 7.4 tons in 2017. The association could not determine winter rapeseed or winter wheat production as information lacked, but noted the harvest started 2-3 weeks early because of dry conditions, and crop sizes will be significantly lower.

·         Australia will see another round of net drying in eastern Australia, threatening crop establishment. Longer-term, traders are worried El Nino will yield negatively impact crops in the eastern regions. Rain is badly needed.

• December Paris wheat was corn 0.25 euros to 188.50 euros during early US trading hours. 

 

Export Developments.

·         Egypt approved to import 120,000 tons of wheat from AOS and Union, two main supplies, bypassing the GASC. This might be in effort to make up for cargoes that were previous rejected/cancelled. Details were lacking.

• Bahrain Flour Mills seeks 17,000 tons of semi-hard wheat and 8,000 tons of hard wheat, on July 24, valid until July 25, for shipment in late Aug/early Sept.  Origins include Australia, Baltics, & Canada.
• Japan in a SBS import tender passed on 120,000 tons of feed wheat and 200,000 tons of barley for arrival by December 28. 
• Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on July 25 for arrival by December 28. 
• China sold 6858 tons of 2013 imported wheat from state reserves at auction at an average price of 2235 yuan/per ton or $332.90/ton, 0.4 percent of what was offered.
• Japan seeks 57,914 tons of US food wheat on Thursday for September loading.

·         Jordan seeks 120,000 tons of wheat on July 19 for Oct-Nov shipment.

• Bangladesh seeks 50,000 tons of optional origin milling wheat on July 25 for shipment within 40 days of contract signing.

 

Rice/Other

• Egypt plans to import 500,000-700,000 tons of rice paddy over the next year.
• Results awaited: Thailand seeks to sell 120,000 tons of raw sugar on July 18.

·         Results awaited: Mauritius seeks 6,000 tons of white rice for Sep 1-Nov 30 shipment.