FW: FI Morning Grain Comments 08/15/18

PDF attached

 

Weather and crop conditions

 

 

·         6-10 is drier in the northern Great Plains and wetter in the north central Midwest. 11-15 day is slightly wetter in the west central Midwest and drier in the northwestern Great Plains.

·         US weather will remain mostly favorable through the end of the week.

·         Forecast for US rainfall this week calls for scattered showers and thunderstorms from Texas to Nebraska and east through the Midwest, Delta and Tennessee River Basin.

·         Rainfall in the heart of the Midwest will vary from 0.50 to 1.50 inches by Sunday.

·         Northern Plains rainfall will vary from 0.10 to 0.60 inch and local totals to 0.75 inch, but most of the region will experience net drying until next weekend when greater rain falls in the east.

·         The Delta will see daily rounds of showers and thunderstorms through the next 7 days. 

·         Upcoming Thomson Reuters crop tours: August 6-8: U.S. corn & soybeans

·         Two waves of rain will move through northwestern portions of the CIS during the coming week. Most of the precipitation will occur from western Ukraine, Belarus and Baltic States across northwestern Russia to the Volga-Vyatsk.

·         India’s monsoon is not likely to resume normally in the west or far south for another 5 days and that will continue of some concern.

·         Canada’s Prairies continues to suffer from drought. Some rain may develop this weekend.

·         Western Australia, South Australia and Victoria may see rain this week, but New South Wales and Queensland remain dry.

Source: World Weather and FI

 

SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS

                                WEST CORN BELT                             EAST CORN BELT              

Tdy                  40% cvg of up to 0.65”          

                        and local amts to 1.40”;

                        and east-central and SE

                        Mo. wettest; far NW

                        driest

Tdy-Fri                                                            90-100% cvg of 0.20-1.30”    

                                                                        and local amts over 2.50”;

                                                                        wettest SW

Thu-Fri            50% cvg of up to 0.60”

                        and local amts to 2.0”;

                        Neb. to Mo. wettest;

                        driest NW

Sat                   15% cvg of up to 0.30”           20% cvg of up to 0.75”

                        and locally more;                     and local amts to 1.50”;

                        S.D. wettest                              wettest south

Sun                                                                  10% cvg of up to 0.20”

                                                                        and locally more

Sun-Mon          80% cvg of up to 0.75”          

                        and local amts over 2.0”;

                        far NW driest

Mon-Tue                                                          75% cvg of up to 0.65”

                                                                        and local amts to 1.35”

Tue                  15% cvg of up to 0.20”

                        and locally more

Aug 22                                                             15% cvg of up to 0.20”

                                                                        and locally more

Aug 22-23       20% cvg of up to 0.60”

                        and locally more;

                        far south wettest                     

Aug 23-24                                                       20% cvg of up to 0.60”

                                                                        and locally more;

                                                                        wettest south

Aug 24-26       45% cvg of up to 0.75”          

                        and locally more;                     

                        wettest north                           

Aug 25-27                                                       50% cvg of up to 0.60”

                                                                        and locally more          

Aug 27-29       40% cvg of up to 0.60”

                        and locally more                     

Aug 28-30                                                       60% cvg of up to 0.50”

                                                                        and locally more

 

U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS

                                DELTA                                                   SOUTHEAST

Tdy-Thu                                                          15-30% daily cvg of

                                                                        up to 0.75” and locally           

                                                                        more each day;

                                                                        driest NE

Tdy-Fri            60% cvg of 0.60-2.0”

                        and local amts to 3.0”

                        north with up to 0.60”

                        and locally more in

                        central and southern

                        areas

Fri-Sun                                                             85% cvg of 0.35-1.50”

                                                                        and local amts over 3.0”

                                                                        from east Ms.to west

                                                                        Ga. with up to 0.75”

                                                                        and local amts to 2.0”

                                                                        elsewhere

Sat-Sun            65% cvg of up to 0.75”

                        and local amts to 1.75”;

                        driest south

Mon-Tue          75% cvg of up to 0.55”

                        and local amts to 1.20”

Mon-Aug 22                                                    80% cvg of up to 0.65”

                                                                        and local amts to 1.40”

Aug 22             15% cvg of up to 0.20”

                        and locally more

Aug 23-24       50% cvg of up to 0.65”

                        and local amts to 1.40”;

                        wettest north

Aug 23-25                                                       60% cvg of up to 0.75”

                                                                        and locally more                                 

Aug 25-29       5-20% daily cvg of up

                        to 0.30” and locally

                        more each day

Aug 26-29                                                       15-35% daily cvg of

                                                                        up to 0.60” and locally

                                                                        more each day

Source: World Weather and FI

 

Source: World Weather and FI

 

 

Bloomberg weekly agenda

WEDNESDAY, AUG. 15:

• India on holiday
• Cargo surveyors Intertek, AmSpec release respective data on Malaysia’s Aug. 1-15 palm oil exports, 11pm ET Tuesday (11am Kuala Lumpur Wednesday)
  • SGS data for same period, 3am ET Wednesday (3pm Kuala Lumpur Wednesday)
• EIA U.S. weekly ethanol inventories, output, 10:30am
• National Oilseed Processors Association report on U.S. soybean processing data, noon
• The Salvadoran coffee council releases monthly El Salvador export data

THURSDAY, AUG. 16:

• 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, AUG. 17:

• 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: Deere & Co.

Source: Bloomberg and FI

 

Registrations

• Soybeans down 168 to 107, Cofco Chicago

 

 

 

Macros.

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

·         Retail Sales Advance (M/M) (Jul): 0.5% (est 0.1% prevR 0.3%)

–          Retail Sales Ex Auto (M/M) (Jul): 0.3% (est 0.6%, prevR 0.2%)

–          Retail Sales Ex Auto (M/M) (Jul): 0.4% ( est 0.4% prevR 0.2%)

–          Retail Sales Ex Auto And Gas (Jul) 0.5% (est 0.4%, prevR-0.1%)

 

Corn.

• Corn traded tow-sided early after soybeans paired early losses.
• Most of Europe is on holiday.
• Baltic Dry Index increased 0.1 percent to 1727 points.
• African swine fever discovered earlier this month resulted in the culling of more than 8,000 hogs in Liaoning.  Yesterday China’s AgMin confirmed an outbreak of foot and mouth disease in its central province of Henan.
• Safras & Mercado reported Brazil corn prices rose 14 percent since early July as winter corn production could end up 27 percent below 2017. This is bullish US corn exports.

 

Export Developments

·         Under the 24-hour reporting system, private exporters reported export sales of 114,572 tons of corn for delivery to unknown destinations.  Of the total 55,000 tons is for delivery during the 2017/2018 marketing year and 59,572 tons is for delivery during the 2018/2019 marketing year.

·         China sold about 61.4 million tons of corn out of reserves this season. Another 8 million tons will be offered this week.

 

 

 

Soybean complex.

·         The soybean complex is lower. Prices are giving back gains from yesterday. The USD hit a June 2017 high, so traders are getting anxious that the higher USD will start to impact US agriculture exports.

• Most of Europe is on holiday.

·         Argentina’s peso opened 2 percent weaker this morning. Yesterday Argentina suspended their export tax program on soybean meal and soybean oil for six months.

·         China cash margins were last 95 cents/bu on our analysis, compared to 84 previous session, 87 cents late last week, and 94 cents last week.

·         China’s soybean complex traded higher. Soybeans were up 0.6%, soybean meal up 1.9%, soybean oil up 0.6% and palm unchanged.

·         Offshore values were suggesting a lower lead for US soybean meal by $3.20 and lower lead for soybean oil by 2 points. 

·         October Malaysian palm was lower overnight by 18 ringgits and leading SBO 18 points lower. Cash was $7.50/ton lower.

·         Cargo surveyor SGS reported Aug 1-15 Malaysian palm exports at 403,862, down 50,662 tons or 11% from the same period a month ago and down 133,160 tons from the same period a year ago (25% decrease).

·         AmSpec reported palm exports at 415,719 tons, down 14.6 percent from the previous period last month.

·         Rotterdam meal was higher and vegetable oils mixed.

·         NOPA is due out later with July crush. Look for a record for the month.

 

 

Export Developments

·         China sold 127,270 tons of 2013 soybeans at auction at an average price of 3,012 yuan/ton ($437.37/ton), 42% of what was offered. China sold 1.218 million tons of soybeans out of reserves so far, this season.

·         China sold 20,113 tons of 2011 soybean oil at auction at an average price of 5,000 yuan/ton ($725.30/ton), 35.5% of what was offered. 

·         China sold 600 tons of rapeseed oil at auction at an average price of 6117 yuan/ton ($888.98/ton), 0.96% of what was offered. 

• Iran seeks 30,000 tons of sunflower oil on September 24.

 

Wheat. 

·         US wheat is lower after the USD reached its highest level since June 2017.

·         EU December wheat was 1.00 euros lower at 207.00 euros, at the time this was written.

·         UkrAgroConsult reported July wheat exports out of Ukraine at 959,960 tons.

·         Ukraine harvested 7.335 million tons of barley, 13 percent below 2017, with an average yield of 3.01 tons per hectare, down from 3.40 in 2017.

 

Export Developments.

·         Jordan bought 60,000 tons of hard milling wheat at $262/ton c&f for LH October shipment.

·         Jordan seeks 120,000 tons of feed barley on August 28.

·         Iraq seeks 50,000 tons of milling wheat on 8/15.

• 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. 

 

Rice/Other

·         Egypt’s ESIIC seeks 150,000 tons of raw sugar on Aug 18 for shipment within the first half of September and two 50,000-ton shipments from September 15-Oct 15.

·         Thailand to sell 120k tons of raw sugar on Aug. 22.