FW: FI Morning Grain Comments 08/08/18

PDF attached

 

Weather and crop conditions

 

 

SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS

                        WEST CORN BELT              EAST CORN BELT  

       -Wed                                                                             85% cvg of 0.15-0.75”

                                                                                                and local amts over 2.0”

                                                                                                with lighter rain in a

                                                                                                few areas; driest NW

Wed-Mon           5-20% daily cvg of up

                                to 0.30” and locally

                                more each day

Thu-Aug 14                                                                         20-40% daily cvg of

                                                                                                up to 0.40” and locally

                                                                                                more each day

Aug 14-15            65% cvg of up to 0.70”                   

                                and local amts to 1.40”                  

Aug 15-16                                                                            75% cvg of up to 0.60”

                                                                                                and local amts to 1.30”

Aug 16-17            5-20% daily cvg of up

                                to 0.30” and locally

                                more each day

Aug 17-18                                                                            5-20% daily cvg of up

                                                                                                to 0.30” and locally

                                                                                                more each day

Aug 18-20            70% cvg of up to 0.65”

                                and locally more                              

Aug 19-21                                                                            75% cvg of up to 0.65”

                                                                                                and locally more               

 

U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS

                        DELTA                                   SOUTHEAST

        -Wed             70% cvg of 0.25-0.75”

                                and local amts to 1.70”

                                north with up to 0.30”

                                and locally more south

Wed-Fri                                                                                60% cvg of up to 0.75”

                                                                                                and local amts to 2.0”;

                                                                                                east Ga. and S.C. driest

Thu-Fri                  75% cvg of up to 0.75”

                                and local amts to 1.50”;

                                driest north

Sat-Mon              20-40% daily cvg of                          80% cvg of up to 0.75”

                                up to 0.50” and locally                    and local amts to 2.0”;

                                more each day                                  driest west        

Aug 14-15            5-20% daily cvg of up                      5-20% daily cvg of up

                                to 0.30” and locally                          to 0.30” and locally         

                                more each day                                  more each day 

Aug 16-18            65% cvg of up to 0.60”                    75% cvg of up to 0.75”

                                and locally more                               and locally more

 

Aug 19-21            10-25% daily cvg of                          10-25% daily cvg of

                                up to 0.30” and locally                    up to 0.30” and locally   

                                more each day                                  more each day

Source: World Weather INC and FI

 

Bloomberg weekly agenda

WEDNESDAY, AUG. 8:

• China’s General Administration of Customs releases preliminary agricultural commodity trade data for July, 11pm ET Tuesday (11am Beijing Wednesday)
• EIA U.S. weekly ethanol inventories, output, 10:30am
• French Agriculture Ministry publishes crop areas, production forecasts

THURSDAY, AUG. 9:

• USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
• Brazil’s crop agency Conab updates its forecast on 2017-18 grain and oilseed crop, 8am ET (9am Sao Paulo)
• Strategie Grains monthly report on European market outlook
• 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
• EARNINGS: BayWa

FRIDAY, AUG. 10:

• USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report for August, noon
• China’s Ministry of Agriculture publishes China Agricultural Supply & Demand Estimates (CASDE) report
• Malaysian Palm Oil Board (MPOB) releases data on palm oil stockpiles, exports, production as of end-July, 12:30am ET (12:30pm Kuala Lumpur)
• Cargo surveyors Intertek, AmSpec release respective data on Malaysia’s Aug. 1-10 palm oil exports, 11pm ET Thursday (11am Kuala Lumpur Friday)
  • SGS data during same period, 3am ET Friday (3pm Kuala Lumpur Friday)
• Unica’s bi- weekly Brazil Center-South sugar output, 9am ET
• 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
• EARNINGS: BRF

Source: Bloomberg and FI

 

Registrations

• Soybeans down 93 to 816. Cofco Chicago
• Ethanol down 94 to 211

 

 

 

Macros.

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

·         Canada Building Permits (M/M) (Jun): -2.3% (est -0.1%, prevR 4.8%)

 

Corn.

• Corn is moderately higher from higher soybeans and wheat.
• The US WCB will trend drier over the next 10 days while much of the ECB will be wetter than normal.
• Baltic Dry Index fell 1.6 percent to 1704 points, or down 28 points.

·         JBS is importing more corn from Argentina. Purchases now total 120,000 tons. Southern Brazilian end users found Argentina corn was about 5 percent less than corn coming out of Mato Grosso.

·         Argentina may not have any corn to offer after October.

·         A large grain company estimated Brazil corn exports could decline to 20 in 2018, lower side of many other projections, and 10 million below Brazil’s AgMin forecast earlier this year. If realized, USDA 2018-19 US corn exports could expand at least another 5 million tons from current forecast to 61.5MMT, or 200 million bushels to 2.425 billion.

·         Anthrax was discovered in a pig in Romania.

·         Note 5 days ago China’s AgMin issued a warning after African Swine Fever was detected in Shenyang, which led to the culling of about 1000 pigs.

·         A Bloomberg poll calls for weekly US ethanol production to average 1.069 million barrels from 1.064 last week and stocks at 22.054 million barrels versus 21.967 million last week.

 

Export Developments

·         Taiwan’s MFIG seeks 65,000 tons of optional origin corn on August 9 for shipment between October 21 and November 9, later if from the US PNW.

·         China sold about 59.4 million tons of corn out of reserves this season.

 

 

Soybean complex.

·         Soybeans are trading higher on follow through buying after US crop conditions eroded on Monday. 

·         Germany’s Farm Cooperatives estimated the German rapeseed crop at 3.47 million tons, down from 4.26MMT in 2017.

·         China’s soybean complex traded higher led by a 1.6% increase in soybeans and 1.2% increase in meal.

·         China customs data reported July China soybean imports declined to 8.01MMT from 8.70MMT in June and below 10MMT in July 2017.

·         China imported 52.88MMT of soybeans during the Jan-July period, 3.7 percent below 54.89MMT year ago. Some analysts look for Aug and Sep imports to total 8MMT each. (Reuters)

·         China bought 32.9 million tons from the United States in 2017, 34 percent of its total purchases. (Reuters)

·         China imports of vegetable oils in July were 506,000 tons, down 2.7 percent from the previous month but up 87.4 percent from a year ago. (Reuters)

·         Oil World in their weekly update suggested China may have to start importing soybeans again from the United States as SA will run out of supplies. 15 million tons during the Oct-Mar period was noted.

·         Offshore values were suggesting a lower lead for US soybean meal by $2.80 and lower lead for soybean oil by 23 points. 

·         Malaysian palm was higher overnight by 23 ringgit and leading SBO 3 points lower.

·         India’s oilmeal exports in July increased 18.3 percent from a year earlier to 148,983 tons. July rapeseed meal exports were a large 46,364 tones while soymeal exports decreased 63,748 tons from 87,797 tons in July 2017.

·         Rotterdam meal was mixed and Rotterdam oils mostly higher.

·         A Brazilian federal judge suspended products that include agrochemical glyphosate, a herbicide widely used for soybeans.  Certain glyphosate weed-killers have been blamed for sickening people in the US.

 

Export Developments

·         China sold 37,428 tons of 2013 soybeans at auction at an average price of 2983 yuan/ton ($436.88/ton), 12.5% of what was offered. China sold 1.091 million tons of soybeans out of reserves so far, this season.

·         China sold 25,755 tons of 2011 soybean oil at auction at an average price of 5,000 yuan/ton ($734.01/ton), 59.6% of what was offered. 

·         China sold 600 tons of rapeseed oil at auction at an average price of 6,000 yuan/ton ($878.73/ton), 1% of what was offered. 

• Egypt received offers for 30k SBO and 10k Sunflower oil for LH September. The lowest offer for sunflower oil was $760.93 per ton for 11,500 tons of sunflower oil, and lowest offer for soyoil was at equivalent to $687.54 per ton for 10,000 tons. (Reuters)
• Iran seeks 30,000 tons of sunflower oil on September 24.
• Results awaited: South Korea seeks 12,000 tons of non-GMO soybeans in Aug 7 for Nov/Dec arrival.
• Results awaited: USDA seeks 2,160 tons of refined vegetable oil under the PL480 program on August 7 for shipment in September for Zimbabwe.
• Results awaited: Iran seeks 30,000 tons of soybean oil on August 1.

 

Wheat. 

·         Chicago and KC wheat are higher after markets took a break on Tuesday. September MN is higher for the 11^th consecutive session.

·         The US wheat/corn ratio is trading at its highest level since November 2014.

·         Ukraine harvested 30.7 million tons of grain with an average yield of 3.43 tons/hectare.

·         Germany’s Farm Cooperatives estimated the German grain crop at 36.3 million tons, including 19.2 million tons of wheat, down from 45.5MMT and 24.0MMT, respectively, in 2017.  The grain harvested would be the lowest in 24 years, if realized.

·         The weekly crop report for Manitoba, Canada, indicated dry conditions continued across much of the province, and crop stress is rising.

·         Saudi Arabia said they will no longer buy wheat or barley from Canada amid a diplomatic dispute.

 

BLACK SEA TUESDAY BLOCKS

*NOTE THE DEC/MARCH SPREAD WAS BLOCKED 400X

 

Export Developments.

·         Thailand passed on 39,000 tons of feed wheat, optional origin, for September shipment. Offered were around $240/ton, $5-10 above what they wanted.

• Japan in a SBS import tender bought 2,900 tons of feed wheat and 200 tons of barley for arrival by January 31. 
• Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on August 22 for arrival by January 31. 

·         Results awaited: Jordan issued an import tender for 120,000 tons of feed barley on August 8.

·         Japan seeks 150,640 tons of milling wheat on August 9.

·         Jordan issued an import tender for 120,000 tons of hard milling wheat on August 9.

 

Rice/Other

·         Iraq seeks 30,000 tons of rice on August 12, open until Aug 16.