From: Terry Reilly
Sent: Friday, October 05, 2018 8:41:17 AM (UTC-06:00) Central Time (US & Canada)
Subject: FI Morning Grain Comments 10/05/18
PDF attached
· Heavy rain expanded across the upper Midwest from Thursday into Friday.
· 6-10 day is drier for the Delta, eastern Texas and western Midwest. 11-15 day is wetter for the eastern Midwest and southwestern Plains.
· Heavy rain will fall across the US over the next 7 days, delaying harvesting efforts. A heavy band stretching from Texas to the Great Lakes will result in flooding, river cargo shipping restrictions, and crop quality problems. About 2-4” is expected, locally a lot more.
· There will be an important period of drier weather October 10-15, which will be needed for producers.
· Traders should monitor European weather as net drying will prevail over the next week. Some parts of France could see winter crop planting delays until more rain develops.
· The Black Sea region will be on the drier side over the next week.
SIGNIFICANT CORN AND SOYBEAN BELT PRECIPITATION EVENTS
WEST CORN BELT EAST CORN BELT
Tdy-Sat 80% cvg of 0.40-1.75”
and local amts to 3.0”
in Ks., Mo., and nearby
areas with up to 0.75”
and locally more
elsewhere; S.D. to east-
central Neb. to south-
central Mn. driest
Fri-Sun 80% cvg of 0.50-1.50”
and local amts to 2.35”
from west-central and
SW Il. to north In. with
up to 0.65” and local
amts to 1.30”
elsewhere; driest SE
Sun-Tue 90% cvg of 0.50-1.50”
and local amts to 3.0”
in east Ks. and nearby
areas with up to 0.75”
and local amts over 2.0”
elsewhere
Mon 25% cvg of up to 0.40”
and locally more;
wettest north and SE
Tue-Wed 80% cvg of up to 0.75”
and local amts to 2.0”;
wettest west; driest SE
Wed-Oct 12 75% cvg of up to 0.65”
and local amts to 1.40”
Oct 11-13 75% cvg of up to 0.75”
and local amts to 1.50”
Oct 13-18 Up to 20% daily cvg of
up to 0.25” and locally
more each day
Oct 14-18 Up to 20% daily cvg of
up to 0.25” and locally
more each day
U.S. DELTA/SOUTHEAST SIGNIFICANT PRECIPITATION EVENTS
DELTA SOUTHEAST
Tdy-Fri Up to 15% daily cvg of
up to 0.20” and locally
more each day; some
days may be dry
Tdy-Sun 5-20% daily cvg of up
to 0.40” and locally
more each day
Sat-Sun 60% cvg of up to 0.50”
and local amts to 1.10”;
wettest south
Mon-Tue 15-35% daily cvg of
up to 0.50” and locally
more each day
Mon-Oct 11 10-25% daily cvg of
up to 0.30” and locally
more each day
Wed-Oct 11 20-40% daily cvg of
up to 0.60” and locally
more each day
Oct 12-13 70% cvg of up to 0.60”
and local amts to 1.20”
Oct 12-14 80% cvg of up to 0.65”
and local amts to 1.40”
Oct 14-18 Up to 20% daily cvg of
up to 0.20” and locally
more each day
Oct 15-18 Up to 20% daily cvg of
up to 0.20” and locally
more each day
Source: World Weather Inc. and FI
- 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
SUNDAY, OCT. 7:
- Brazilian presidential election, first round
MONDAY, OCT. 8:
- U.S. Columbus Day holiday; CBOT, ICE Futures U.S. remain open
- Japan on public holiday; Rubber futures trading on Tocom will be halted
- U.K. publishes first estimates for wheat and barley crops in 2018-19 season, 4:30am ET (9:30am London)
- EU weekly grain, oilseed import and export data, 10am ET (3pm London)
- Sugar Week in London, with various events and seminars throughout the week
- Ivory Coast weekly cocoa arrivals, and start date for main- crop harvest
- EARNINGS: Louis Dreyfus
TUESDAY, OCT. 9:
- Unica bi-weekly data on Brazil Center-South sugar output
- Marex Spectron Sugar Symposium in London, with speakers from Louis Dreyfus, Sopex, Freepoint Commodities
- France’s Agriculture Ministry updates its crop estimates
- The IMF presents its World Economic Outlook
- USDA weekly corn, soybean, wheat export inspections, 11am; USDA weekly crop progress report, 4pm (Both delayed from Monday due to public holiday)
WEDNESDAY, OCT. 10:
- FranceAgriMer updates estimates for grain crops
- Malaysian Palm Oil Board (MPOB) releases stockpiles, exports and production data for September, 12:30am ET (12:30pm Kuala Lumpur)
- Malaysia Oct. 1-10 palm oil exports data from cargo surveyors AmSpec, Intertek, SGS
THURSDAY, 0CT. 11:
- EIA U.S. weekly ethanol inventories, output, 11am (Delayed from Wednesday due to public holiday)
- Strategie Grains monthly report
- Brazil’s crop agency Conab releases figures on corn, soybean production for October, 8am ET (9am Sao Paulo)
- USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report for October, noon
- 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
- ADM Investor Services’ Sugar Treat seminar in London
- EARNINGS: Suedzucker
FRIDAY, OCT. 12:
- USDA weekly net-export sales for corn, wheat, soy, cotton, 8:30am (Delayed from Thursday due to holiday)
- China’s customs office releases September energy & commodities trade data (prelim), including soy, corn, palm, 11pm ET Thursday (11am Beijing Friday)
- 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
Weekly Bloomberg bull/bear survey:
· Wheat: Bullish: 11 Bearish: 2 Neutral: 5
· Soybeans: Bullish: 7 Bearish: 6 Neutral: 6
· Corn: Bullish: 9 Bearish: 4 Neutral: 6
· Raw sugar: Bullish: 6 Bearish: 4 Neutral: 0
· White sugar: Bullish: 5 Bearish: 5 Neutral: 1
· White-sugar premium: Widen: 2 Narrow: 4 Neutral: 4
Deliveries
· SBM 68 – no apparent commercial stoppers
· SBO 407 – no apparent commercial stoppers
Apparently Informa reported October production estimates
- Corn 182.1 / 14.890 versus 178.8 / 14.621 previously
- Soybeans 53.0 / 4.677 versus 52.9 / 4.698 previously
- USDA is at 181.3 / 14.827 and 52.8 / 4.693.
· US stocks are mostly higher, USD lower, WTI crude lower, and gold higher, at the time this was written. (8:39 am CT)
· US Non-Farm Payrolls (Sep): 134K (est 185K, prev R 270K)
– US Unemployment Rate (Sep): 3.7% (est 3.8%, prev 3.9%)
– US Average Earnings MM (Sep): 0.3% (est 0.3%, prev R 0.3%)
· US International Trade $ (Aug): -53.2Bln (est -53.5Bln, prev R -50.0Bln)
– Canadian Employment Change (Sep): 63.3K (est 25.0K, prev -51.6K)
– Canadian Unemployment Rate (Sep): 5.9% (est 5.9%, prev 6.0%)
· Canadian Trade Balance C$ (Aug): 0.53Bln (prev R -0.19Bln)
Corn.
- Corn is higher but may trade two-sided on lack of direction and a reversal in WTI crude oil to the downside. Nearby December hit a one-month high.
- Corn spreading was active overnight with CZ/CH trading 18k, CZ/CK 3.9k and CZ/CN 4.4k.
- France collected 42 percent of their corn crop as of October 1, double from the previous week and above 12 percent from a year ago.
- Bird flu was detected in Bulgaria.
- Baltic Dry Index is down 18 points at 1,536 points.
- Nearly 20 percent of Argentina’s corn crop had been planted on record 5.8 million hectares. The BA Grains Exchange looks for a 43 million ton harvest.
· China may sell 8 million tons of corn for the week ending October 12.
· China sold about 85.5 million tons of corn out of reserves this season and some are predicting up to 100 million tons will be sold by the end of the marketing season.
Soybean complex.
· Soybeans are higher Friday morning along with soybean meal as rain started to fall across the upper Midwest, expanding the area of US harvest delays.
· The USD is lower.
· Soybean oil is lower on meal/oil spreading.
· The Philippines bought 134,000 tons of soybean meal. US soybean meal export business should remain steady to firm over the next few months as Argentina and Brazil become non-competitive.
· The US exported 123.7 million bushels of soybeans in August, down from 125.9 million in July and up from 113 million in August 2017. Soybean meal exports were 1.344 million short tons, up from 1.226 million in July and well above 875,484 short tons in August 2017. Soybean oil exports were 198 million pounds, up from 174.7 million in July and 163.2 million in August 2017.
· Mexico and Canada are buying US soybean meal, from what we are gathering. Canada is also taking in US soybeans to crush them in the east and turning around and exporting Canadian soybean inventories to China.
· Water levels for the upper Mississippi River are high and stalling some cargo shipments.
· Safras & Mercado sees 2019-20 soybean exports out of Brazil at a large 79 million tons. We assume this is based on China and US not coming to terms on a trade deal.
· Malaysia December palm oil was lower by 9MYR and leading SBO 14 points higher. Malaysian cash palm oil was down 1.25 at $560.00/ton.
· The weakness in palm oil futures could be related to a survey on palm oil production calling for a 14.7 percent in September from August.
· Rotterdam oils were mixed and SA soybean meal when imported into Rotterdam lower.
· Offshore values were suggesting a lower lead for US soybean meal by $0.30 ($0.80 lower week to date) and higher lead in SBO by 27 points (also 27 higher week to date).
MPOB is due out October 10
Breakdown of September estimates (in tons):
Range Median
Production 1,768,493 – 1,880,000 1,861,500
Exports 1,220,560 – 1,759,333 1,649,500
Imports 50,000 – 100,000 75,019
Closing Stocks 2,350,000 – 2,798,542 2,471,000
Source: Reuters and FI
- Under the 24-hour announcement system, the Philippines bought 134,000 tons of US soybean meal for 2018-19 delivery.
- The Philippines may have bought US soybean meal this week.
- China will offer 100,000 tons of soybeans out of reserves on October 10.
Wheat
· Wheat is higher on an Australian production concerns and the return of drier bias weather across Europe and Black Sea region.
· The USD is lower.
· France planted 5 percent of their soft wheat crop as of October 1, one point below a year ago.
· The BA Grains Exchange estimated the Argentina wheat crop at a record 19.7 million tons. They noted heavy rains in the past week improved conditions. 53.6 percent of the wheat planting area had adequate to optimal moisture conditions, according to the Exchange.
- Traders should monitor a potential significant rain event in far southern Brazil Saturday into Sunday which could negatively impact wheat conditions.
- Jordan seeks 100,000 tons of feed barley on October 9.
- Yesterday Egypt bought 180,000 tons of Russian wheat for Dec 1-10 shipment.
- 60,000 tons of Russian wheat at $233.95 a ton FOB and $17.69 freight equating to $251.64 cost and freight (C&F)
- 60,000 tons of Russian wheat at $235.80 FOB and $17.69 freight equating to $253.49 C&F
- 60,000 tons of Russian wheat at $236.90 FOB and $17.69 freight equating to $254.59 C&F
- Bangladesh seeks 50,000 tons of 12.5 percent wheat on October 9, optional origin.
- Japan in a SBS import tender seeks 120,000 tons of feed wheat and 200,000 tons of barley on October 10 for arrival by late February.
- Postponed: UAE seeks 60,000 tons of wheat for Oct/Nov shipment.
Rice/Other
- Yesterday we learned Iraq bought 90,000 tons of US rice from Argentina and Uruguay, and another 90,000 tons of US rice. Details were lacking.
· The Philippines seek 250,000 tons of rice on October 18 for arrival by late November.
· Mauritius seeks 9,000 tons of rice for delivery between Nov. 15, 2018, and March 31, 2019, set to close is Sept. 27.
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
Trading of futures, options, swaps and other derivatives is risky and is not suitable for all persons. All of these investment products are leveraged, and you can lose more than your initial deposit. Each investment product is offered only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction. The information provided here should not be relied upon as a substitute for independent research before making your investment decisions. Futures International, LLC is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision. The contents of this communication and any attachments are for informational purposes only and under no circumstances should they be construed as an offer to buy or sell, or a solicitation to buy or sell any future, option, swap or other derivative. The sources for the information and any opinions in this communication are believed to be reliable, but Futures International, LLC does not warrant or guarantee the accuracy of such information or opinions. Futures International, LLC and its principals and employees may take positions different from any positions described in this communication. Past results are not necessarily indicative of future results.
This email, any information contained herein and any files transmitted with it (collectively, the Material) are the sole property of OTC Global Holdings LP and its affiliates (OTCGH); are confidential, may be legally privileged and are intended solely for the use of the individual or entity to whom they are addressed. Unauthorized disclosure, copying or distribution of the Material, is strictly prohibited and the recipient shall not redistribute the Material in any form to a third party. Please notify the sender immediately by email if you have received this email by mistake, delete this email from your system and destroy any hard copies. OTCGH waives no privilege or confidentiality due to any mistaken transmission of this email.
AMcom100518.pdf