FW: FI Morning Grain Comments 08/24/18

PDF attached

 

Weather and crop conditions

·         6-10 day for the US is drier in the northwestern Great Plains while temperatures are slightly cooler in the Midwest.

·         11-15 day is wetter in the west central and northern Plains and temperatures are unchanged.

·         Rain over the short-term could slow harvesting in the Delta and lower Midwest, while rain in the northern areas could benefit late maturation.

·         A ridge of high pressure may evolve across the southeastern states, Delta, Corn Belt, and eastern Hard Red Winter Wheat Region Aug. 30 – Sep. 6 (two days later than what was predicted Monday).

·         The second week of the weather outlook calls for cool temperatures across the US Corn Belt but that could change depending on ridge development.

·         The Delta will see rain next week.

·         US spring wheat will see minor harvesting delays for the balance of the week.

·         HRW wheat country will see showers on and off through early next week.

·         Eastern Australia’s rainfall starts Thursday evening lasting through Saturday.

·         Western Australia could see rain mid-next week.

·         Eastern China will see net drying through at least August 29.

·         Canada’s Prairies will remain on the dry side this week.

·         Indonesia and Malaysia rainfall are slowing and some attribute the below normal rainfall to El Nino.

Source: World Weather and FI

We look for US crop conditions to be steady when reported on Monday.

 

 

 

 

SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS

                        WEST CORN BELT              EAST CORN BELT  

       -Fri                  80% cvg of up to 0.75”

                                and local amts over 2.0”;

                                Ks. to Mo. to east Ia.

                                wettest; Neb. and S.D.

                                driest

Tdy-Sat                                                                                 75% cvg of up to 0.75”   

                                                                                                and local amts to 1.50”;

                                                                                                driest south; wettest

                                                                                                west

 

Sat-Sun                50% cvg of up to 0.75”                   

                                and local amts to 1.50”;                 

                                driest south

Sun-Mon                                                                             50% cvg of up to 0.60”

                                                                                                and local amts to 1.30”;

                                                                                                driest south

Mon-Wed           75% cvg of up to 0.75”

                                and local amts over 2.0”;

                                driest NW

Tue-Aug 30                                                                         75% cvg of up to 0.75”

                                                                                                and local amts to 2.0”

Aug 30-31            40% cvg of up to 0.75”

                                and local amts to 1.75”;

                                wettest south

Aug 31-Sep 1                                                                      60% cvg of up to 0.55”

                                                                                                and local amts to 1.15”

Sep 1-2                 20% cvg of up to 0.60”

                                and local amts to 1.40”;

                                wettest north

Sep 2-6                                                                                 10-25% daily cvg of         

                                                                                                up to 0.25” and locally   

                                                                                                more each day 

 

Sep 3-6                 5-20% daily cvg of up                     

                                to 0.25” and locally                         

                                more each day                                 

 

U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS

                        DELTA                                   SOUTHEAST

Tdy-Sun               Mostly dry with a few

insignificant showers

 

Fri-Mon                                                                                15-35% daily cvg of

                                                                                                up to 0.70” and locally

                                                                                                more each day; west

                                                                                                and south wettest

Mon-Aug 30       Up to 20% daily cvg of                    

                                up to 0.25” and locally

                                more each day; some                   

                                days may be dry

Tue-Aug 30                                                                         5-20% daily cvg of up

                                                                                                to 0.35” and locally

                                                                                                more each day

Aug 31-Sep 1      10-25% daily cvg of                          10-25% daily cvg of         

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

                                more each day                                  more each day

Sep 2-6                 5-20% daily cvg of up                      5-20% daily cvg of up

                                to 0.25” and locally                          to 0.25” and locally         

                                more each day                                  more each day 

Source: World Weather and FI

 

Source: World Weather Inc.

 

Bloomberg weekly agenda

FRIDAY, AUG. 24:

• ProFarmer issues final yield estimates after crop tour, 2pm
• USDA cattle-on-feed report for July, 3pm
• Unica bi-weekly report on Brazil Center-South sugar output
• Salvadoran coffee council’s El Salvador July export data
• Nicaragua’s coffee council releases July export data
• 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

MONDAY, AUG. 27:

• U.K. summer bank holiday
• SGS data for Malaysia’s Aug. 1-25 palm oil exports, 3am ET (3pm Kuala Lumpur)
• EU’s monthly Monitoring Agricultural Resources (MARS) bulletin on crop progress and weather conditions in Europe, 7am ET (noon London)
• EU weekly grain, oilseed import and export data, 10am ET (3pm London)
• USDA weekly corn, soybean, wheat export inspections, 11am
• USDA weekly crop progress report, 4pm
• Ivory Coast weekly cocoa arrivals

TUESDAY, AUG. 28:

• Palm Oil Trade Fair & Seminar in Kuala Lumpur, Aug. 28-29. Speakers include Oil World Executive Director Thomas Mielke, LMC Intl Chairman James Fry and Godrej Director Dorab Mistry

WEDNESDAY, AUG. 29:

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

THURSDAY, AUG. 30:

• 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. 31:

• Malaysia on holiday; No palm oil futures trading on Bursa Malaysia Derivatives
• Statistics Canada’s domestic crop production report for July, 8:30am 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

Source: Bloomberg and FI

 

Bloomberg bull/bear survey (taken in Wed.)

·         Soybeans: Bullish: 0 Bearish: 17 Neutral: 3

·         Wheat: Bullish: 6 Bearish: 7 Neutral: 6

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

·         Raw Sugar : Bullish: 4 Bearish: 5 Neutral: 0

·         White sugar: Bullish: 4 Bearish: 4 Neutral: 1

·         White-sugar premium: Widen: 2 Narrow: 4 Neutral: 3

 

Registrations

• No changes

 

 

 

Macros.

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

·         US Durable Goods Orders (Jul P): -1.7%(est -1.0%, prevR 0.7%)

·         US Durables Ex Transport (Jul): 0.2% (est 0.5%, prevR 0.1%)

·         US Durables Ex  Defence (Jul) (M/M): -1.0% (est 0.8%, prevR 1.2%)

·         US Cap Goods Orders Nondef (Jul P):1.4%(est 0.5%,prevR 0.6%)

·         US Cap Goods Ship Nondef (Jul P):0.9%(est 0.3%,prevR 0.9%)

 

Corn.

• Corn futures are trying to rebound from a 5-week low on Friday.
• Day four of the US crop tour showed corn yields in Minnesota below average from too much rain and flooding early in the growing season. IA corn prospects are large but in the western areas yields varied. A large yield for soybeans is not out of the question for IA. MN could see a final yield slightly above USDA’s August estimate.
• French corn conditions as of Aug. 20 were unchanged from the previous week at 61 percent, down from 80 percent a year earlier.
• Baltic Dry Index decreased 12 point or 0.7 percent to 1697 points.
• South Africa’s CEC will update their corn production next week and a Reuters poll calls for 13.11 million tons, down 0.7 percent from the 13.207 million tons in July.

·         Argentina’s AgMin sees corn planting area up 2.7% to 9.35 million hectares

• USDA reported 13 percent of the US corn area is experiencing some type of drought as of 8/14, up from 11 percent last week and compares to 15 percent at this time a year ago. Missouri, Texas and Kansas are seeing the bulk of drought conditions.
• IGC raised their outlook for the 2018 world corn production to 1.064 billion tons, 12 million higher from previous.

 

US crop tour

• Day four of the US crop tour showed corn yields in Minnesota below average from too much rain and flooding early in the growing season. IA corn prospects are large but in the western areas yields varied. A large yield for soybeans is not out of the question for IA. MN could see a final yield slightly above USDA’s August estimate.
• IA corn yields came in above last year and a three-year average but the 2018 average of 188.2 bu/ac falls below USDA’s all-IA corn yield of 196.0 bu/ac. Corn yields varied across IA as weather had a negative impact on some areas.  MN corn yield was estimated at 178.7 bu/ac, below last year (191.5) and tour average (188.2), and falls below USDA’s 191.0 bu/ac and 194.0 bu/ac in 2017.
• Day three of the crop tour showed the IL corn yield was estimated at 192.6 bu/ac, above last year and tour average, but it falls below USDA’s 207 bu/ac and 201.0 bu/ac in 2017.
• Day two of the US ProFarmer Crop Tour showed corn yields up from a year ago and above average. NE was pegged at 179.2 bu/ac, up from 165.4 in 2017 and average of 163.1 bu/ac. IN was projected sharply higher than a year ago at 179.6 bushels per acre, above 164.6 for 2017 and average of 154.0 bu/ac.
• Day one of the US ProFarmer Crop Tour showed South Dakota corn yields up from a year ago and above average. SD was pegged at 178.0 bu/ac, up from 148.0 in 2017 and average of 154.6 bu/ac. Ohio were projected sharply higher than a year ago at 179.6 bushels per acre, above 164.6 for 2017 and average of 154.0 bu/ac.

 

 

Export Developments

·         South Korea’s (KFA) bought about 61,000 tons of corn from the United States at $209.95 a ton c&f for arrival around Jan. 15, 2019.

·         China sold 788,487 tons of corn out of reserves at 1,439 yuan per ton ($209.34/ton), 19.8 percent of what was offered.

·         Yesterday they sold 2.095MMT of corn out of reserves at 1,548 yuan per ton ($225.20/ton), 52.6 percent of what was offered.

·         Another 4 million tons will be offered on Thursday and Friday of next week.

·         China sold about 65.4 million tons of corn out of reserves this season.

 

 

Soybean complex.

·         The soybean complex is higher on technical rebound after November soybeans dropped 5 consecutive sessions. December meal is also finding support after hitting a short-term contract low.

• Day four of the US crop tour showed a large yield for soybeans is not out of the question for IA. MN could see a final yield slightly above USDA’s August estimate.

·         After the Thursday close, The White House released a statement saying the trade talks between the US and China had ended.  The White House also said that the two nations “exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship.”  The soy complex did sell off into the close and the lack of and solid agreement between China and the U.S. may have weighed on the market. 

·         Uncertainty over the US/China trade deal was thought to contribute to weakness in US soybean bids for export.

·         Traders are awaiting the Brazil court to rule on glyphosate ban.

·         Argentina’s AgMin sees the 2017/18 soybean harvest at 37.78 million tons, up 0.30% from last month’s 37.48 million tons and down 31.3% from last year’s 55 million tons.

·         November Malaysian palm increased 1MYR to 2219, and leading SBO 18 points higher. Cash was off $1.25/ton or 0.2%.

·         Rotterdam oils were unchanged to higher and SA soybean meal when imported into Rotterdam $0.50-$7.00/short ton lower. 

·         China cash margins were last 82 cents/bu on our analysis, down 6 cents from the previous session, compared to 97 cents late last week, and 96 cents last year.

·         China’s soybean complex traded mixed. Soybeans were down 33 yuan or 0.9%, soybean meal dn 1.1%, soybean oil up 0.3% and palm decreased 0.3%.

·         Offshore values were suggesting a higher lead for US soybean meal by $2.60 ($3.10 for the week to date) and higher lead for soybean oil by 35 points (12 higher for the week to date). 

·         The USDA on Monday, not Friday, may unveil its $12 billion producer, stockpiling, and agriculture chain assistance program. Agri-Pulse via a DJ story mentioned the payment rate for soybean farmers has been preliminarily proposed at $1.65 per bushel and 1 cent per bushel for corn farmers.

• USDA reported 18 percent of the US soybean area is experiencing some type of drought as of 8/14, up from 16 percent last week and compares to 16 percent at this time a year ago. Missouri, Texas, Michigan and Arkansas are seeing the bulk of drought conditions.

·         The USDA on Monday, not Friday, may unveil its $12 billion producer, stockpiling, and agriculture chain assistance program. Agri-Pulse via a DJ story mentioned the payment rate for soybean farmers has been preliminarily proposed at $1.65 per bushel and 1 cent per bushel for corn farmers. The AgSec said he hoped to have the program up and running after Labor Day.

 

US crop tour

• Day four of the US crop tour showed a large yield for soybeans is not out of the question for IA. MN could see a final yield slightly above USDA’s August estimate.

·         Day four of the crop tour shows western IA pod counts are very good as they average 10.6% higher than last year. USDA looks for all Iowa soybean yield to increase 4.4%. MN pod counts are up 6.9% from last year while USDA predicts a 4.3% rise in the soybean yield for the state.

• Day 3 of the crop tour showed IL pod counts are up 8% from last year while USDA predicts a 10.3% rise in the soybean yield for the state.
• Day two of the US ProFarmer Crop Tour showed IN soybean pods in a 3-by-3 foot area averaged 1,312, above 1169 pods a year ago and the three-year average of 1147 pods. Pods in NE averaged 1,299 pods, up from 1131 pods in 2017 and the three-year average of 1191. See our table below
• Day one of the US ProFarmer Crop Tour showed South Dakota soybean pods in a 3-by-3 foot area averaged 1,024.7, above 900.0 pods a year ago and the three-year average of 975.1 pods. Pods in Ohio averaged 1,248.2 pods, up from 1,107.0 pods in 2017 and the three-year average of 1,095.8.
• Final results will be out Friday, August 24.  Follow the Pro Farmer Midwest Crop Tour here on Twitter #pftour18

 

 

Export Developments

• None reported.
• During the week ending August 31, China plans to sell 301,200 tons of 2013 soybeans, 60,100 tons of 2011-2013 rapeseed oil, and 53,800 tons of imported 2011 soybean oil.
• China sold nearly 1.3MMT of soybeans out of reserves this season.
• Iran seeks 30,000 tons of sunflower oil on September 24.

 

Wheat. 

·         US wheat futures are lower on light selling. News is light.

·         EU December wheat was 1.25 euros lower at 204.50 euros, at the time this was written.

• The German AgMin pegged the Germany’s 2018 winter wheat crop at 19.1 percent from the 2017 to 19.4 million tons. The Germany 2018 grain harvest was estimated at 34.5 million tons, down 15.8 percent on the year. Germany saw their highest summer temperatures since 1881.
• USDA reported 32 percent of the US hay area is experiencing some type of drought as of 8/14, up from 31 percent last week and compares to 15 percent at this time a year ago. Missouri, Utah, Oregon, and Colorado are worse off.
• It’s time to start thinking about 2019 US winter wheat seedings. We look for a small increase in area from wheat was planted for 2018 harvest.  Note 31 percent of the US wheat area is experiencing some type of drought, down from 33 percent last week but double where it was a year ago. Missouri, Texas and Oklahoma are hardest hit areas.

·         The IGC reduced its forecast for 2018 world wheat production by 5 million tons to 716 million tons from previous.

• Argentina has seen drought conditions creep back with 15 percent of the wheat area affected. One group said that could expand to 30 percent by early September.

 

Export Developments.

·         Taiwan seeks 110,500 tons of US milling wheat from the US on August 31 fir October/November shipment.

·         Results awaited: Offers low as $238.25/ton. Tunisia seeks 50,000 tons of soft milling wheat and 50,000 tons of feed barley on Thursday for shipment around October.

·         China sold 5,050 tons of 2013 imported wheat at 2,242 yuan per ton ($326.16/ton), 0.31 percent of what was offered.

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

·         Jordan seeks 120,000 tons of hard milling wheat on Aug 29 for Nov/Dec shipment.

• Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on August 29 for arrival by January 31. 

 

Rice/Other

·         South Korea seeks 92,783 tons of rice on Aug. 31 for Nov/Dec arrival.

    TONNES(M/T)    GRAIN TYPE      ARRIVAL/PORT

    10,000         Brown medium    Nov 30/Gwangyang

    10,000         Brown medium    Dec 31/Busan

    20,000         Brown medium    Dec 31/Gunsan

    20,000         Brown medium    Dec 31/Mokpo

    20,000         Brown medium    Dec 31/Donghae

    12,783         Brown long      Nov 30/Masan

·         China reported early rice production down 4.3 percent from year ago.

·         Results awaited: Egypt’s ESIIC seeks 100,000 tons (150k previously) of raw sugar for shipment within the first half of September and two 50,000-ton shipments from September 15-Oct 15.

·         Results awaited: Thailand plans to sell 120k tons of raw sugar on Aug. 22.