From: Terry Reilly
Sent: Thursday, September 06, 2018 8:09:45 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 09/06/18
PDF attached
Selected World Weather bullet points:
- The tropical storm that impacted the southern US shifted more east than thought. Delta producers in the west may have the opportunity to harvest later this week.
- U.S. Midwest flooding will raise concern over crop conditions from Kansas and southeastern Nebraska to southern Michigan and northern Ohio.
- Drought continues in western CIS, but relief is likely for central and southeastern Ukraine Thursday into the weekend with daily showers expected.
- Drought in Canada’s Prairies will prevail through the next ten days
- Eastern Australia will get some additional rainfall in the coming week
- Western Australia will dry out over the next ten days
- Brazil weather will be drier this week until the weekend and early next week when rain returns to the south
- Argentina weather will stay dry into Saturday this week and then may get some light showers Sunday into Tuesday of next week
Source: World Weather and FI
SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS
WEST CORN BELT EAST CORN BELT
-Thu 90% cvg of up to 0.75”
and local amts to 1.50”;
wettest west
Thu 20% cvg of up to 0.75”
and local amts to 2.0”;
SE Mo. wettest
Fri-Sat 20% cvg of 0.75-2.0”
and local amts over 3.50”
from central to east Mo.
with up to 0.75” and
locally more elsewhere
Fri-Sun 80% cvg of 0.75-3.0”
and local amts over 4.50”
from west-central and
SW Il. to east Oh. with
up to 0.75” and locally
more elsewhere; driest
north
Sun-Tue 15-30% daily cvg of
up to 0.50” and locally
more each day;
wettest NW
Mon 15% cvg of up to 0.60”
and locally more;
wettest SE
Tue-Sep 14 Up to 20% daily cvg of
up to 0.25” and locally
more each day; some
days may be dry
Sep 12-13 10-25% daily cvg of
up to 0.60” and locally
more each day;
wettest NW
Sep 14-16 60% cvg of up to 0.50”
and locally more
Sep 15-17 60% cvg of up to 0.40”
and locally more
Sep 17-19 5-20% daily cvg of up
to 0.35” and locally
more each day
Sep 18-19 5-20% daily cvg of up
to 0.30” and locally
more each day
U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS
DELTA SOUTHEAST
-Thu 40% cvg of up to 0.75”
and local amts to 1.50”
with some 1.50-4.0”
amts from central to SE
Ms. and SW Ala.
Tdy-Fri 100% cvg of 0.75-3.0”
and local amts over 4.0”
with lighter rain in a
few southern locations
Fri-Sat 10-25% daily cvg of
up to 0.40” and locally
more each day
Sat-Mon 90-100% cvg of 0.15-0.85”
and local amts over 2.0”
Sun-Tue 75% cvg of up to 0.75”
and local amts to 2.0”;
wettest west
Tue-Sep 15 10-25% daily cvg of
up to 0.35” and locally
more each day
Sep 12-15 10-25% daily cvg of
up to 0.35” and locally
more each day
Sep 16-19 Up to 20% daily cvg of 5-20% daily cvg of up
up to 0.30” and locally to 0.30” and locally
more each day more each day
Source: World Weather and FI
THURSDAY, SEPT. 6:
- Trump administration awaits Sept. 6 end of public comment period before it potentially proceeds with next round of tariffs on $200b Chinese goods; China expected to retaliate
- EIA U.S. weekly ethanol inventories, output, 11am (delayed from Wednesday because of Labor Day holiday)
- Statistics Canada’s domestic crop stockpile report for July, 8:30am ET
- FAO Food Price Index for August, 4am
- The Russian Grain Union hosts conference in Moscow
- Agriculture Ministry’s director for food markets Anatoly Kutsenko, director of crop department Pyotr Chekmarev expected to attend
- 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
- UN Climate Change Conference in Bangkok, Day 3
- Kingsman Asia Sugar Conference in New Delhi, final day
- Intl Rubber Glove Conference in Kuala Lumpur, final day
FRIDAY, SEPT. 7:
- Brazil on public holiday
- USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am (delayed from Thursday because of Labor Day holiday)
- Guatemala’s National Coffee Association’s export data for August
- FranceAgriMer weekly updates on French crop conditions
- UN Climate Change Conference in Bangkok, Day 4
- 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
SATURDAY, SEPT. 8:
- China’s General Administration of Customs releases agricultural commodity trade data for August (preliminary), including soybean imports
- UN Climate Change Conference in Bangkok, Day 5
- Oats down 14 to 11 (Superior, WI)
- KC wheat down 169 to 305 (Wichita, KS)
Selected crop estimates:
· Allendale Inc. survey: 177.7 / 14.529 corn; 52.2 / 4.636 soybeans
· FC Stone: 177.7 / 14.532 corn; 53.8 / 4.782 soybeans
· FI: 175.5 / 14.355 corn; 50.9 / 4.517 soybeans
· Informa may release updated figures on Thursday
· Informa AUGUST: 176.0 / 14.392 corn; 49.8 / 4.445 soybeans
· USDA @ 178.4 / 14.586 corn; 51.6 / 4.586 soybeans
Statistics Canada July 31 Canada stocks
· Not much lead may come from the results of the StatsCan report as trade estimate didn’t deviate much from July 31 stocks reported this morning. There were revisions to last year but they were minor.
· US stocks are higher, USD lower, WTI crude higher, and gold higher, at the time this was written.
· US ADP Employment Change Aug: 163K (est 190K; prev R 217K)
Corn.
- Corn prices are unchanged to slightly lower on lack of news but losses are limited to heavy rains falling across the US Midwest.
- Oats are higher again on cold temperatures in Canada.
- The northern fringes of MN saw frost overnight.
- We are hearing one producer in southern IL is at 280 versus 220-240 average.
· Baltic Dry Index is last 1,484, up 7 points or 0.5% from last session.
· Look for US harvest progress to slow this week especially across the Delta and lower Midwest.
· On Monday the USDA will update US corn harvest progress. We look for 3 percent complete, about in line with average.
· Up 10. China reported three more outbreaks of African swine fever in Jiamusi city in Heilongjiang in China’s northeast, and in the cities of Wuhu and Xuancheng in the eastern province of Anhui. These cities had reported previous outbreaks.
· A Bloomberg survey calls for US ethanol production to come in at 1.074 million barrels, up 4,000 from the previous week and stocks at 23.016 million, down from 23.061 million last week (-45).
Source: Reuters News and FI
Source: Reuters News and FI
· China sold 2,986,997 tons of corn out of auction, at an average price of 1570 yuan per ton ($229.65/ton), 75 percent of what was offered.
· China sold about 74 million tons of corn out of reserves this season. Another 4 million tons of China corn reserves will be offered on Friday.
Soybean complex.
- Soybeans and soybean meal are higher on short covering. Soybean oil is moderately lower. News is light, and the cash trade is slow across the US Midwest.
· Malaysia futures traded 14 lower and cash was down $2.50/ton. The lower trade is associated with expectations for rising palm production over the next few months.
· Rotterdam oils were mixed and SA soybean meal when imported into Rotterdam $2.00.500/ton lower.
· Offshore values were suggesting a lower lead for US soybean meal by $2.00 and higher lead for soybean oil by 3 points.
· Look for US harvest progress to slow this week especially across the Delta and lower Midwest.
· Census reported July US soybean exports 6 million bushels higher than what we expected at 126 million bushels, above 119.6 million in June and well above 83.15 million in July 2017. We are using 2.128 billion bushels for 2017-18 US soybean exports. USDA is at 2.110 billion.
· July exports for soybean meal were a large 1.23 million short tons but they still came in 68,000 short tons below our estimate.
· US July soybean oil exports were only 175 million pounds and weekly shipments for August are currently running roughly 75 percent of July shipments when eyeballing USDA export sales data. We lowered out soybean oil export figure for 2017-18 to 2.410 billion pounds, 40 million pounds less than USDA.
· Brazil’s Abiove increased their 2018 soybean export forecast to record 76.1 million tons, up 3.5% from 73.5 million tons. They lowered ending stocks to 1.465 million tons from 3.865 million tons. 2018 production was seen at 118.8 million tons, 100,000 tons above their previous forecast. The crush is expected at 43.6MMT.
· Results awaited: South Korea seeks 15,000 tons of non-GMO soybeans on September 4 for Nov/Dec arrival.
- Iran seeks 30,000 tons of sunflower oil on September 24.
- China sold about 1.69 MMT of soybeans out of reserves this season.
Wheat
· US wheat futures are lower on lack of bullish news and slowing US exports. Prices are seen limited to the downside on tight global high protein wheat supplies.
- December Matif wheat futures fell as Black Sea exporters are constantly selling wheat into Asia.
· Russia’s AgMin on Thursday again said Russia had no plans to impose an export tax on wheat. We would be cautious of such statements. Changes in inflation could trigger policy changes at any moment by the government to help fight rising food prices. Traders should monitor any outbreaks of protests/demonstrations.
· (MPI) Black sea wheat basis DEC settled +.50 yesterday at 246.00. The spread between Sep and Dec exploded out to $21.00. As a reference this spread was at $6.75 on 8/15. The Oct-Dec is out past $15.00 after touching $4.00 on that same date. Shows where the trade is putting the risk. Continued chatter of Russian curbs into yearend loom over the trade. Black sea wheat exports for July-Aug were reported at around 12 MMT compared to 8.6 MMT last year. This pace allows the chatter to continue and it makes sense to slow the roll into year end.
· The European Union granted import licenses for 129,920 tons of reduced-tariff wheat and 10,000 tons of barley.
- Saudi Arabia seeks 1.02 million tons of barley for November/December delivery.
- Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on September 12 for arrival by late February.
- Syria’s General Establishment for Cereal Processing and Trade (Hoboob) seeks 200,000 tons of soft bread wheat from Russia, Romania or Bulgaria, with shipment sought between Oct. 15 and Dec. 15. The deadline is Sept. 17 and requires payment in Syrian pounds.
- Ethiopia seeks 200,000 tons of milling wheat on September 18 for shipment two months after contract signing.
Rice/Other
· The Philippines seeks an extra 250k tons of rice for Q4 and Q1 2019 shipment.
· Results awaited: 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
Terry Reilly
Senior Commodity Analyst – Grain and Oilseeds
Futures International │190 S LaSalle St., Suite 410│Chicago, IL 60603
W: 312.604.1366
AIM: fi_treilly
ICE IM: treilly1
Skype: fi.treilly
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AMcom090618.pdf