FW: FI Morning Grain Comments 09/18/19

PDF attached

 

Good morning.  The funds appear to be knocking around prices this morning.  US FMOC will decide on rates today. 

 

Weather

• 6-10 day is drier for the central and southern Great Plains and temperatures are warmer for the Great Plains and western Midwest.  The 11-15 day is unchanged.  Temperatures are warmer for the Great Plains, Midwest, and Delta.     
• The upper Great Plains saw rain Tuesday into Wednesday, and those rains are now moving into the WCB. 
• Over the next two weeks, the US Midwest will see daily shower activity, but showers are expected to be on the lighter side.  The temperature outlook for the remainder of the month is non-threatening. 
• Net drying is expected in the west-central high Plains, including western hard red winter wheat production areas.
• West TX will see rain Friday and Saturday. 
• Monsoon rains in India in the week through to 9/17 were above average-third straight week, at 38% more than the 50-year average. Central India saw too much rain- 63% above average.  Overall, India has received 5% more rain than average since the start of the monsoon season on June 1.
• Western Argentina will remain dry through the rest of the month.   
• Frost could occur soon for Buenos Aires province and in eastern La Pampa and southern Entre Rios.
• Eastern Australia will see some rain this week disrupting barley and wheat harvest progress.  Western Australia rainfall is not likely to be very great during the coming week.
• Western Russia frost and freezes will occur more often in the coming week.

Source: World Weather Inc. and FI

 

 

 

5-day outlook

 

Bloomberg Ag Calendar

TUESDAY, Sept. 17:

• Japan milling wheat tender, 3am (4pm Tokyo)
• New Zealand dairy auction
• Malaysia’s Sept. 1-15 palm exports numbers by SGS, 3am ET (3pm KL)
• Abares agricultural commodities report

WEDNESDAY, Sept. 18:

• EIA U.S. weekly ethanol inventories, production, 10:30am ET
• USDA total milk production, 3pm

THURSDAY, Sept. 19:

• USDA weekly crop net-export sales for corn, soybeans, wheat, 8:30am
• Port of Rouen data on French grain exports
• USDA red meat production, 3pm ET
• Palm Oil Economic Colloquium, Kuala Lumpur
• Japan milling wheat tender result, 3am (4pm Tokyo)

FRIDAY, Sept. 20:

• US Cattle on Feed, 3pm
• ICE Futures Europe commitments of traders weekly report on coffee, cocoa, sugar positions, ~1pm (~6pm London)
• CFTC commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• Russia’s Agroinvestor magazine holds annual conference on Russian crop production
• FranceAgriMer weekly crop conditions
• AmSpec, Intertek to release Malaysia’s Sept 1-20 palm oil export data, 11pm ET Thursday (11am KL); SGS palm shipment figures, 3am ET (3pm KL)

Source: Bloomberg and FI

 

 

 

 

Macros

・         USD:  +12 (7:31 am CT)

・         US DOW: -29

・         Crude:  -$0.81 

・         Gold:  -$2.20

・         US Housing Starts Aug 1.364 Mln (est 1.250 Mln; prevR 1.215 Mln; prev 1.191 Mln)

                  -US Building Permits Aug 1.419 Mln (est 1.300 Mln; prevR 1.317 Mln; prev 1.336 Mln)

・         Canadian CPI (Y/Y) Aug 1.9% (est 2.0%; prev 2.0%)

                  -Canadian CPI (M/M) Aug -0.1% (est -0.1%; prev 0.5%)

 

Corn.

・         US corn is mostly lower on risk off in the energy complex. 

・         Parts of IL are harvesting corn, and some are concerned the short-term weather maps that are wet will delay early harvesting. 

・         Global AgriTrends warned China’s 2019 herd loss could end up at 60%.

・         Ukraine corn export prices are trading at their cheapest level in more than a decade.

・         In the weekly DOE ethanol update, a Bloomberg poll called for production to end up at 1.013 (1.023 last week) million barrels.  Stocks averaged 22.517 (22.499 last week). 

 

 

Export Developments

・         China will auction 10,000 tons of pork from reserves on September 19.  It will include pork imports from Denmark, Germany, France and the United States.

• China sold about 21.5 million tons of corn since the start of year’s reserve sale campaign.

 

 

Soybean complex.

・         CBOT soybean complex is lower on lower energy complex and light fund selling.   Look for a two-sided trade.  Lower crude oil and lower lead by outside vegetable oil markets could weigh on soybean oil. 

・         Traders are still waiting for details on the Trump plan to increase biofuel use. A final ruling from the EPA is expected this November. 

・         USDA Attaché pegged EU rapeseed production at 17.8 million tons. 

・         China prices:

・         Our China cash crush margin calculation were last 89 cents (75 previous) and compares to 77 cents late last week and 115 cents year ago.

• Offshore values early this morning was leading the soybean oil 22 points lower and meal $1.90 higher. 
• Rotterdam vegetable oils were 11-12 euros higher in the nearby positions.  Rotterdam meal when imported from SA were unchanged to mixed. 
• Cargo surveyor SGS reported month to date September 15 Malaysian palm exports at 700,935 tons, 51,535 tons below the same period a month ago or down 6.8%, and 76,114 tons below the same period a year ago or down 9.8%.   ITS: 715,215 tons of Malaysian palm exports, down 5.5% mom.  AmSpec: 669,709 tons, down 12.5%.

・         Malaysian palm markets:  

・         There is no weather threat for the US through the end of the month.

 

Oilseeds Export Developments

• There were no 24-hour reporting system announcements.   USDA recently reported combined soybean sales to China of 460,000 tons, bringing cumulative sales over a 3-day business period to 720,000 tons (12-60k cargos). 

 

Wheat

・         US wheat is mixed with China bias higher on US dryness concerns over part of US HRW country.  The USD is higher.

・         Traders are awaiting Egypt import tender results, their first tender in about three weeks.  Lowest offer is $194.13/ton for 60k Russian wheat. 

・         December Paris was down 0.75 to 171.00 euros. 

・         Russia’s wheat exports since July 1 are running 9% below last year.

・         Morocco will lower its soft wheat import duty to 35 percent from 135 percent to ensure domestic use requirement and keep prices in check.  The 2019 grain harvest fell 49 percent from last year to 5.2 million tons. 

 

Export Developments.

• Egypt seeks wheat for late October / early November shipment.  Lowest offer is $194.13/ton for 60k Russian wheat. 
• Tunisia seek 42,000 tons of soft milling wheat and 50,000 tons of feed barley on Sept. 19 for October, November, and December shipment.  The lowest price for Turkey to buy 250,000 tons of red milling wheat was $202 a ton c&f for shipment between Oct. 15 and Nov. 6.
• Algeria bought 450-650k milling wheat in a tender which closed at about $211 a ton c&f. Some traders put the price at $211-$213 a ton c&f. (Reuters)
• Japan received no offers for feed-quality wheat or barley under its SBS import tender.  
• Japan seeks 120,000 tons feed wheat and 200,000 tons of barley on September 25 for arrival by February 27, 2020. 
• Japan seeks 127,893 tons of food wheat on Thursday.

・         Turkey seeks 250,000 tons of red milling wheat on September 18 for October 15 through November 6 shipment. 

• Taiwan seeks 110,300 tons of US wheat from the US on September 24 for November and early December shipment. 
• Qatar is seeking to buy 90,000 tons of wheat bran in an import tender on September 24.
• Jordan seeks 120,000 tons of wheat, optional origin, on September 24.  Possible shipment periods are Dec. 1-15, 2019, Dec. 16-31, 2019, and Jan.1-15, 2020.
• Ethiopia seeks 400,000 tons of milling wheat on October 23 for shipment with shipment within two months after contract signing. 

 

Rice/Other

• None reported