From: Terry Reilly
Sent: Tuesday, September 18, 2018 9:17:06 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 09/18/18
PDF attached
· Frost and freezes may eventually develop in the northern most Midwest and a part of the northern Plains in late September.
· The upper US Midwest will see rain bias mid-week (eastern South Dakota, northern Iowa, Minnesota, and areas in Wisconsin).
· Lingering showers will occur in Texas this week.
· Canada’s Prairies will be cool and wet this week, delaying harvesting efforts.
· Additional cold weather could occur across eastern Australia this week.
· Australia’s precipitation will remain limited this week.
· Russia’s Volga River Basin could see additional rain will fall this week.
· Europe will see limited rainfall through Thursday.
· Xinjiang China will see frost and light freezes Wednesday morning in the far northeast.
· Brazil will see good rain this week from Mato Grosso do Sul and Paraguay to southern Minas Gerais, Parana, Santa Catarina and Parana.
· Argentina will see a mixture of rain and sunshine.
SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS
WEST CORN BELT EAST CORN BELT
-Tue 55% cvg of 0.50-1.50”
and local amts to 2.50”;
from SE S.D. and NE
Neb. to NW Ia. with up
to 0.75” and local amts
to 1.50” elsewhere; far
NW and far south driest
Tue-Wed 10-25% daily cvg of
up to 0.60” and locally
more each day; north
Il. wettest
Wed-Thu 80% cvg of 0.25-1.25”
and local amts to 2.75”
from east S.D. to east-
central Ia. and Wisc.
with up to 0.60” and
local amts to 1.10”
elsewhere; far SE driest
Thu-Fri 60% cvg of up to 0.40”
and local amts to 1.0”
Fri-Sat 20% cvg of up to 0.75”
and local amts to 1.50”;
far south wettest
Sat-Sun 30% cvg of up to 0.50”
and local amts to 1.10”;
wettest south
Sun 15% cvg of up to 0.20”
and locally more
Sep 24 15% cvg of up to 0.20”
and locally more
Sep 24-26 80% cvg of up to 0.75”
and local amts to 1.50”
Sep 25-27 80% cvg of up to 0.75”
and local amts to 1.50”
Sep 27-28 5-20% daily cvg of up
to 0.30” and locally
more each day
Sep 28-29 10-25% daily cvg of
up to 0.30” and locally
more each day
Sep 29-Oct 1 Up to 20% daily cvg of
up to 0.20” and locally
more each day
Sep 30-Oct 1 Up to 20% daily cvg of
up to 0.30” and locally
more each day
U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS
DELTA SOUTHEAST
Tdy-Fri Up to 20% daily cvg of
up to 0.30” and locally
more each day; some
days may be dry
Tue 15% cvg of up to 0.35”
and locally more;
east N.C. wettest
Wed Mostly dry with a few
insignificant showers
Thu-Fri 5-20% daily cvg of up
to 0.30” and locally
more each day
Sat-Sep 24 45% cvg of up to 0.75” 50% cvg of up to 0.75”
and local amts to 1.50”; and local amts to 1.40”;
wettest north wettest north
Sep 25-26 Up to 20% daily cvg of 10-25% daily cvg of
up to 0.25” and locally up to 0.30” and locally
more each day; some more each day
days may be dry
Sep 27-28 75% cvg of up to 0.65”
and local amts to 1.40”
Sep 27-29 70% cvg of up to 0.65”
and locally more
Sep 29-Oct 1 Up to 20% daily cvg of
up to 0.25” and locally
more each day
Sep 30-Oct 1 5-20% daily cvg of up
to 0.30” and locally
more each day
Source: World Weather and FI
TUESDAY, SEPT. 18:
- New Zealand dairy auction on Global Dairy Trade online market starts ~7am ET (~noon London, ~11pm Wellington)
- Brazil’s crop agency Conab releases its 3rd estimate for 2018 coffee crop
- Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) releases agricultural commodities report
- The United Nations General Assembly opens, with general debate to begin Sept. 25, including speeches from numerous world leaders
- EARNINGS: General Mills Inc.
WEDNESDAY, SEPT. 19:
- EIA U.S. weekly ethanol inventories, output, 10:30am
- USDA milk production data for August, 3pm
- Malaysian Palm Oil Council (MPOC) holds Intl Palm Oil Sustainability Conference in Kota Kinabalu, Malaysia, Sept. 19-20; Executives from FAO, Nestle, Olam, Sime Darby, MPOB expected to attend
- INTL FCStone holds agribusiness conference in Sao Paulo, with Finance Minister Eduardo Guardia and BRF CEO Pedro Parente due to speak
THURSDAY, SEPT. 20:
- Intertek and AmSpec release their respective data on Malaysia’s Sept. 1-20 palm oil exports, 11pm ET Wednesday (11am Kuala Lumpur Thursday)
- SGS data for same period, 3am ET Thursday (3pm Kuala Lumpur Thursday)
- USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am
- USDA red meat production for August, 3pm
- 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
- Intl Palm Oil Sustainability Conference in Kota Kinabalu, final day
FRIDAY, SEPT. 21:
- Ghana public holiday
- 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)
- USDA cattle-on-feed report for August, 3pm
- CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
Registrations
· US stocks are higher, USD lower, WTI crude higher, and gold higher, at the time this was written.
· President Trump will impose new tariffs on about $200 billion in Chinese products and threatened to add more. 10% was set to take affect September 24 and will rise to 25% at the end of the year
· China To Impose 10% Tariffs On US Goods It Previously Listed For A 25% Tariff Rate
– To Impose 10% Tariffs On US Goods It Previously Listed For A 20% Tariff Rate
– To Impose 5% Tariffs On US Goods It Previously Listed For A 10% Tariff Rate
· Chinese Filed Complaint To WTO On Latest US Tariff Measures
– Complaint Is On Planned US Tariffs on $200Bln Worth Of Chinese Goods
· Canadian Manufacturing Sales (M/M) Jul: 0.9% (exp 0.6%; R prev 1.3%)
Corn.
- Corn futures are lower on large US crop prospects and harvesting pressure.
- Baltic Dry Index was down 1 point or 0.1% to 1356.
- USDA US corn export inspections as of September 13, 2018 were 1,030,267 tons, within a range of trade expectations, above 783,495 tons previous week and compares to 687,996 tons year ago. Major countries included Mexico for 270,761 tons, Japan for 150,135 tons, and Peru for 106,319 tons. 1,861 tons of corn out of the interior were included for China.
· USDA reported US corn harvesting progress at 9 percent, one point below a Reuters trade guess, up 4 points from the previous week and compares to 7 last year and 6 average.
· USDA reported US corn crop conditions at 68 percent, unchanged from the previous week (trade was looking for unchanged) and compares to 61 last year and 66 average.
· Our weighted crop index for US corn crop conditions ended up at 82.4 percent (82.4/100), unchanged from the previous week, above 80.7 a year ago and 82.0 a year ago. Using this index against a 10-year trend yield history against FI crop conditions as of or near October 1, the US yield could end up around 182.5 bushels per acres (+8.0/bu above a 174.5 ten-year trend yield), 1.2 bushels above USDA and compares to 176.6 bushels a year ago, the current record. Using 81.795 million acres for the US corn harvested area, production could end up near 14.982 billion bushels, 101,000 bushels above USDA, assuming ratings remain unchanged from now until October 1.
· Taiwan Sugar bought a combined 15,000 tons of US corn.
· South Korea’s FLC bought 68,000 tons of corn from the US at $204.14/ton, c&f, for arrival around February 20, 2019.
· South Korea’s NOFI bought 66,000 tons of corn at $202.55/ton, c&f, for shipment in early 2019.
· China will sell another 8 million tons of corn later this week.
· China sold about 80 million tons of corn out of reserves this season.
Soybean complex.
· The soybean complex is lower with November soybeans at a contract low. US harvesting pressure and China/US trade concerns are the largest fundamentals noted. Soybean meal broke below $300/short ton. This might attract end user buying. Higher crude oil is limiting losses in soybean oil.
· China is now sending a low-level aid to Washington. There is talk China may increase the US soybean import tariff. A move like this would stop ideas of China importing US soybeans anytime soon.
· Malaysia is back from holiday and November palm oil fell 44MYR in part to China/US trade concerns, rising palm oil production, and currency fluctuations.
· Cargo surveyor SGS reported month to date September 15 Malaysian palm exports at 777,049 tons, 373,187 tons above the same period a month ago or up 92%, and 124,699 tons above the same period a year ago or up 19%.
· Rotterdam oils were mixed and SA soybean meal when imported into Rotterdam mixed.
· Offshore values were suggesting a higher lead for US soybean meal by $3.60 and higher lead for soybean oil by 2 points.
· Brazil’s soybean area may increase 3.5% according to Soybean and Corn Advisor. Argentina’s soybean areas was projected slightly higher.
· Brazil boosted #biodiesel output by 26% in Jan/July 2018. Record volume produced in July. https://www.oilworld.biz/
· Brazil’s Parana AgMin, Deral, estimated soybean plantings at 9 percent, above only 1 percent a year ago. Weather in Brazil and Argentina is favorable for early fieldwork progress.
· USDA US soybean export inspections as of September 13, 2018 were 784,752 tons, within a range of trade expectations, below 926,332 tons previous week and compares to 932,628 tons year ago.
· NOPA reported the August crush at 158.9 million bushels, 5.0 bushels below a Reuters trade guess, down 8 million from the previous month and up 16.5 million from the previous year. US September 1 NOPA soybean oil stocks came in at 1.623 billion pounds, 139 million below an average trade guess, 140 million below the end of August and 206 million above August 2017. US soybean meal exports reported by NOPA were very good at 762,000 short tons, 24,000 above the previous month and 335,000 above the previous period year ago. August meal exports were a record for the month.
· USDA reported US soybean harvesting progress at 6 percent, 1 point above a Reuters trade guess, and compares to 4 last year and 3 average.
· USDA reported US soybean crop conditions at 67 percent, down one point from the previous week (trade was looking for unchanged) and compares to 59 last year and 63 average.
· Our weighted crop index for US soybean crop conditions is running at 82.2 percent (82.2/100), above 80.3 a year ago and 81.4 average. Using this index against a 15-year trend yield history against FI crop conditions as of or near October 1, the US yield could end up near 53.1 bushels per acres (3.4/bu above the 49.7 fifteen-year trend yield), 0.3 bushel above USDA and compares to 49.1 bushels a year ago. Using 88.733 million acre soybean harvested area, production could end up near 4.712 billion bushels, if ratings remain unchanged from now until October 1. Our production estimate is 19 bushels above USDA.
· Taiwan Sugar bought about 15,000 tons of US soybeans.
· South Korea’s NOFI bought 60,000 tons of corn at $391.80/ton, c&f, for shipment in early 2019.
· Results awaited: The CCC seeks 1540 tons of fully refined vegetable oil on September 18 for carious countries for Oct/Nov delivery.
- Iran seeks 30,000 tons of sunflower oil on September 24.
- China sold about 2.29 MMT of soybeans out of reserves this season.
Wheat
· US wheat is higher on Australian production woes and speculation export demand could increase out of the Northern Hemisphere.
· There are rumors Russia may limit wheat exports, which are unfounded. Another rumor is that Russia asked one or some of their customers (major importing countries) to lower wheat import tariffs. Details were lacking.
· Egypt seeks wheat for November shipment. Lowest offer was $225.95/ton Russian wheat.
· France’s port lineup shows wheat cargoes are readying wheat shipments to Algeria.
· USDA US all-wheat export inspections as of September 13, 2018 were 406,004 tons, within a range of trade expectations, below 430,715 tons previous week and compares to 468,704 tons year ago. Major countries included Japan for 150,580 tons, Thailand for 58,179 tons, and Mexico for 49,629 tons.
· USDA reported US winter wheat planting at 13 percent, up 8 points from the previous week, 6 points below a trade average and compares to 12 last year and 14 average.
· USDA reported US spring wheat harvesting progress at 97 percent, one point below a Reuters trade guess, up 4 from the previous week and compares to 98 last year and 92 average.
· Australia lowered its wheat export projection to 12.95 million tons, down from 15.2 million tons in June and compares to 15.5 million a year earlier. If realized that will be the lowest since 2007-08.
· Egypt seeks wheat for November shipment. Lowest offer was $225.95/ton Russian wheat.
· Japan seeks 149,586 tons of wheat on Thursday.
· China sold 3,649 tons of imported 2013 wheat at auction from state reserves at an average price of 2,171 yuan ($316.21) per ton, 0.37 percent of total wheat available at the auction.
- Jordan passed on 120,000 tons of feed barley, optional origin.
- Results awaited: 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.
- Algeria seeks 75,000 tons of feed barley on Wednesday for November shipment.
- Jordan seeks 120,000 tons of feed wheat, optional origin, on September 19.
- Ethiopia seeks 200,000 tons of milling wheat on September 18 for shipment two months after contract signing.
- Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on September 19 for arrival by late February.
- Iraq seeks 50,000 tons of wheat on September 23, with offers valid until September 27. Iraq needs wheat for four after Turkey restricted flour shipments.
- Morocco seeks 336,364 tons of US durum wheat on September 28 for arrival by December 31.
Rice/Other
· China sold 46,022 tons of rice at auction from state reserves at average price of 2,130 yuan ($310.44) per ton, 4.5 percent of total rice available for the auction.
· Iraq seeks 30,000 tons of rice from India on October 9 for LH October / FH November shipment.
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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AMcom091818.pdf