FW: FI Morning Grain Comments 07/20/18

PDF attached

 

Weather and crop conditions

 

·         We are thinking of 2 point decrease in spring wheat conditions this week after hot and dry weather set in across the PNW. Note the drought monitor shows drought conditions expanding across the Pacific Northwest. 

·         G/E US corn conditions could decline 2 and soybeans down one.

·         The ridge of high pressure is expected to stay centered over the southwestern United States throughout much of the second week of the outlook, creating a northwesterly flow aloft in the central U.S., Northern Plains and Corn Belt.

·         There were no major changes to the 2-week US weather outlook for the Midwest as of Friday morning.

·         Stress to crops is likely to increase in the drier parts of Delta again when rain becomes restricted Friday into next week. 

·         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 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.

·         Western Europe is improving.

·         Southern Brazil and Argentina will receive widespread rain during the balance of this workweek.

Source: World Weather Inc. and FI

 

 

 

 

SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS

                     WEST CORN BELT                                                                  EAST CORN BELT              

      -Fri         75% cvg of up to 0.75” and local amts to 1.25”

       with some bands of 1.25-2.75” from SE and

       east-central N.D. to east-central Ia. and south Wi.;

       driest SW   

Tdy-Sat                                                                                                          90% cvg of 0.30-1.30” and local amts to 2.0”

                                                                                                                        with a few bands of 2.0-3.25” and lighter

                                                                                                                rain in few areas; west-central Il. driest

Sat                15% cvg of up to 0.20” and locally more;                                 

       Wisc. Wettest

Sun-Mon     40% cvg of up to 0.50” and local amts to 1.10”;          25-45% daily cvg of up to 0.65” and locally

       wettest NW                                                                             more each day; driest west

Tue-Wed     5-20% daily cvg of up to 0.30” and locally                     65% cvg of up to 0.75” and local amts to 1.50”;

       more each day                                                                        driest west

Jul 26                                                                                                              15% cvg of up to 0.25” and locally more

Jul 26-27     35% cvg of up to 0.75” and local amts to 1.50”;

       west-central areas wettest

Jul 27-28                                                                                                                        50% cvg of up to 0.75” and local amts to 1.50”;

                                                                                                     driest north

Aug 28-29    5-20% daily cvg of up to 0.30” and locally more each day                             

Aug 29-30                                                                                                      5-20% daily cvg of up to 0.30” and locally                

                                                                                                        more each day

Jul 30-Aug 1 45% cvg of up to 0.60” and locally more          

Jul 31-Aug 2 50% cvg of up to 0.60” and locally more  

 

U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS

                     DELTA                                                                       SOUTHEAST

Fri                  15% cvg of up to 0.65” and locally more;

                         far north wettest

Fri-Sun                                                                                                           85% cvg of up to 0.75” and local amts to 1.50”

                                                                                                                        with some 1.50-3.0” bands; driest SW

Sat-Mon       Up to 15% daily cvg of up to 0.20” and locally

        more each day; some days may be dry

Mon-Tue                                                                                                       50-75% daily cvg of up to 0.75” and locally

                                                                                                                        more each day; driest west       

Tue                20% cvg of up to 0.20” and locally more;

        wettest north

Wed-Jul 26   15-35% daily cvg of up to 0.50” and locally

         more each day   

Wed-Jul 27                                                                                                    80% cvg of up to 0.75” and local amts over 2.0”

Jul 27-28       65% cvg of up to 0.75” and local amts to 1.50”        

Jul 28-30                                                                                                        80% cvg of up to 0.75” and local amts over 2.0”

Jul 29-31       5-20% daily cvg of up to 0.25” and locally

         more each day

Jul 31-Aug 2                                                                                                  15-35% daily cvg of up to 0.50” and locally

                                                                                                                        more each day

Aug 1-2          10-25% daily cvg of up to 0.30” and locally

          more each day   

Source: World Weather Inc. and FI

 

Source: World Weather Inc. and FI

 

Bloomberg weekly agenda

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

MONDAY, JULY 23:

• China scheduled to release June commodities trade data, including imports of palm oil, cotton, corn, wheat, sugar, 2:30am ET (2:30pm Beijing)
  • NOTE: China will skip some data, including country breakdown details
• EU weekly grain, oilseed import and export data, 10am (3pm London)
• EU’s monthly (MARS) report on European crop progress and weather conditions, with scorching heat already ruining the grain harvest
• USDA weekly corn, soybean, wheat export inspections, 11am
• U.S. cold storage report for June, 3pm
• USDA weekly crop progress report, 4pm
• Ivory Coast weekly cocoa arrivals
• Datagro hosts Global Agribusiness Forum, Sao Paulo, 1st day of 2. Speakers include Brazilian Agriculture Minister Blairo Maggi, executives from Minerva, John Deere, Copersucar and Cofco

TUESDAY, JULY 24:

• Wheat Quality Council’s U.S. spring wheat crop tour begins in North Dakota, with final data expected Thursday
• Grain World crop tour in Canada hosted by FarmLink begins in Manitoba, Saskatchewan and Alberta, with final data for spring wheat, canola, durum and pulses expected Thursday
• Allendale holds webinar on weather outlook, 3pm ET (2pm CST)
• Datagro’s Global Agribusiness Forum in Sao Paulo, final day

WEDNESDAY, JULY 25:

• Costa Rica public holiday; Pakistan holds general election
• Cargo surveyors AmSpec, Intertek to release data on Malaysia’s July 1-25 palm oil exports, 11pm ET Tuesday (11am Kuala Lumpur Wednesday); SGS data for same period, 3am ET Wednesday (3pm local time Wednesday)
• EIA U.S. weekly ethanol inventories, output, 10:30am
• Allendale holds webinar on grains and oilseeds, 3pm ET (2pm CST)
• U.S. poultry slaughter June, 3pm
• Wheat Quality Council’s U.S. spring wheat crop tour, 2nd day
• Grain World crop tour in Canada, 2nd day
• EARNINGS: Coca-Cola

THURSDAY, JULY 26:

• Intl Grains Council monthly grains report, 8:30am ET (1:30pm London)
• USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
• Allendale holds webinar on livestock outlook, 3pm ET (2pm CST)
• Port of Rouen data on French grain exports
• Buenos Aires Grain Exchange weekly crop report
• Wheat Quality Council’s U.S. spring wheat crop tour, 3rd day
• Grain World crop tour in Canada, final day
• Bloomberg weekly survey of analysts’ expectations on grain, sugar prices
• World Trade Organization holds a General Council meeting that will last through July 27 to cover issues related to the U.S.-China trade conflict
• EARNINGS: Nestle SA, Anheuser-Busch Inbev, Diageo Plc

FRIDAY, JULY 27:

• Thailand, Peru public holidays
• G20 Agriculture ministers meet in Buenos Aires
• 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

Source: Bloomberg and FI

 

Registrations

·         Rice down 50 to 35

 

 

Weekly Bloomberg Survey (taken Wed)

·         Wheat: Bullish: 11 Bearish: 2 Neutral: 7

·         Corn: Bullish: 12 Bearish: 5 Neutral: 3

·         Soybeans: Bullish: 9 Bearish: 5 Neutral: 6

·         Raw sugar: Bullish: 3 Bearish: 1 Neutral: 5

·         White sugar: Bullish: 2 Bearish: 3 Neutral: 4

·         White-sugar premium: Widen: 0 Narrow: 4 Neutral: 5

 

 

Macros.

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

·         Trump says he’s prepared to hit all $500B in Chinese imports with tariffs

·         White House adviser: China offering ‘no options’ on trade: Axios https://www.reuters.com/article/us-usa-trade-china-kudlow/white-house-adviser-china-offering-no-options-on-trade-axios-idUSKBN1KA1H9?feedType=RSS&feedName=businessNews&utm_source=Twitter&utm_medium=Social&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28Business+News%29

 

Corn.

• Corn prices are higher for the 5^th consecutive day on good demand by major exporting nations and lower USD. The December contract broke out to the upside, from a downtrend, finding support above $3.6525.
• China reported their June pig herd down 1.8 from a year ago and down 1.2 percent from May, and sow herd down 2.9% from year ago and down 1.3 percent from May.
• China is looking into expanding imports of corn, wheat, and soybeans from Russia. 
• French corn conditions were down 2 points in the G/E to 71 as of July 16 from the previous week.
• Baltic Dry Index was 32 points higher to 1,689, or 1.9%.
• Yesterday the Buenos Aries Grain Exchange lowered Argentina 2017/18 corn production to 31 MMT from 32 MMT.  Harvest is 76% complete up from 70.6% last week.
• EPA reported lower ethanol (D6) blending credits for June at 1.26 BLN from 1.30 BLN in May.

·         The USDA Cattle on Feed report will be released after the close. Estimates are below the export development section.

 

Export Developments

·         China sold 1.102 million tons of corn from auction at an average price of 1421 yuan per tons ($209.23/ton), 28 percent of what was offered. Yesterday China sold 1.110 million tons of corn from auction at an average price of 1541 yuan per tons ($228.68/ton), 28 percent of what was offered.

·         China sold about 55.6 million tons of corn out of reserves this season.

 

 

Soybean complex.

·         Soybeans were higher early from a rally in US soybean meal, which is higher in part to a 1.2% appreciation in China soybean meal futures. Soybean oil is on the defensive on renewed meal/oil spreading and lower than expected RIN generation for the month of June.

·         Real is higher and USD is down nearly 60.

·         Trade war fears created a two-sided trade in soybeans and meal.

·         The CNGOIC estimates China will import 9 million tons of soybean in July, and July-Sept imports at 26 million tons. The July-September import forecast is down 600,000 tons from their previous forecast and 600,000 tons down from same period year earlier.

·         China September soybean futures increased 10 yuan per ton or 0.3%, September meal was up 37 or 1.2%, China soybean oil 4 (0.1%) and China September palm down 4 (0.1%).

·         September China cash crush margins were last running at 46 cents, up from 39 previous session, and compares to 39 cents last week and 78 a year ago.

·         Rotterdam vegetable oils were unchanged to higher and SA soybean meal lower, as of early morning CT time.

·         September Malaysian palm was 1 higher at MYR2194, and cash unchanged at $570.00/ton. 

·         Malaysian palm exports improved over the last 5 days. Cargo surveyor SGS reported July 1-20 Malaysian palm exports at 692,334 tons, up 21,892 tons or 3% from the same period a month ago and down 125,627 tons from the same period a year ago (15% decrease).   AmSpec reported palm exports at 681,178 tons, down 1.3 percent from the previous period last month.

·         Offshore values were leading soybean oil 38 points higher (46 higher for the week to date) and meal $0.10/short ton lower ($0.50 higher for the week.

·         EPA reported lower biodiesel (D4) blending credits for June at 317 MLN from 350 MLN in May.

·         Agriculture and Agri-Food Canada increased its Canadian canola production from the previous month to 20.335 million tons from 19.15 million tons.  

 

Export Developments

• South Korea seeks 1,500 tons of non-GMO soybeans on July 25 for September-December delivery.
• Iran seeks 30,000 tons of soybean oil on August 1.

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

 

Wheat. 

·         US wheat is higher on fund buying.

·         Agriculture and Agri-Food Canada lowered its Canadian wheat production from the previous month to 30.6 million tons from 31.1 million tons.  

·         France harvested 64 percent of their soft wheat crop, up from 20 percent from the previous week and compares to 53 percent a year ago.

·         Agritel in their yearly survey said the soft wheat quality of the French crop is not that bad, with average protein likely to end up above 12 percent, similar to last year. They pegged production at 34.17 million tons, down 6.5 percent from 2017.

• BA Exchange reported Argentina wheat planting 92.5% complete vs 87.2% last week. 

 

Export Developments.

·         Japan is back in for 62,957 tons of food wheat, all from Canada, on Thursday.

·         Taiwan seeks 102,775 tons of US wheat on July 26.

·         Jordan seeks 120,000 tons of wheat on July 26 for Sep-Nov shipment.

·         Jordan seeks 120,000 tons of barley on July 24.

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

 

Rice/Other

• 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.