Ami Heesch

Sep 15, 2020

Kevin Stockard

 

Highlights                                           

  • China’s consumer spending in August rose for the first time this year. The Civil Aviation Administration of China says air traffic in August was back up to 80% of last year. Chinese movie theaters will be allowed to increase capacity to 75%.
  • The IEA cut their Q4 oil demand estimate by 600k barrels/day. OPEC cut their 2021 demand forecast by 1.1 million barrels/day.
  • Tropical Storm Sally is expected to make landfall late tonight or early tomorrow morning. Winds are down from 100 mph to 85 mph, but “historic flooding” is possible in parts of Mississippi, Alabama, and the Florida panhandle.
  • As of 6:57 am CT, crude oil is up 58 cents at $37.84/barrel, gold is up 15.0 at $1,978.70, DOW up 178 to 28,171, dollar index is down 231, and Euro is up 305 pts.

Corn 

  • Crop Progress showed corn rating down 1% to 60% good-to-excellent. Traders were expecting unchanged conditions. The crop is 89% dented vs 82% 5 year average, 41% mature vs 32% average, and 5% harvested vs 5% average.
  • The U.S. Grains Council director says global ethanol production will likely be down 20% this year, although recent months have improved to down 10% year-over-year.
  • Corn open interest is up 39,870 contracts since Friday.
  • MARS lowered their EU corn yield estimate from 8.01 tons/hectare to 7.83 t/ha.
  • Weekly corn export inspections totaled 878.9k MT vs 500-900k MT estimates. 

Outlook:  Dec futures flat to down 1 ¾ overnight.. likely to see resistance as harvest advances, with producers much more willing to sell corn than beans.

Oilseeds 

  • Soybean rating was down 2% to 63% good-to-excellent, while traders were expecting unchanged. The crop is 37% dropping leaves vs 31% average.
  • August NOPA crush is out this morning and estimated at 169.468 million bushels, which would be down 1.9% from July but still a record for August. Soyoil stocks are estimated at 1.515 billion pounds, down from 1.619 billion.
  • The Mississippi River will be closed to all vessel movement today from MM20-MM303 due to Tropical Storm Sally.
  • China’s Dalian no1 beans were up 28 ¼ overnight, soymeal up 0.90, and soyoil up 144. Malaysian palm futures were up 45 ringgits to a new contract high.
  • Weekly soybean export inspections totaled 1.283 MMT vs 800k-1.5 MMT estimates

Outlook:  Nov beans down ½ to up 6 ¼ overnight..  soybeans are technically “overbought”, with RSI at 84.5, so the market probably needs daily bullish news to keep the rally going. Lower condition ratings helped, and we’ll see if the USDA announces sales again this morning

Wheat 

  • Pakistan is tendering for 170k MT of wheat today. Offers range from $274-$277, over $40 more than their last tender! Turkey received offers on their tender to buy 500k MT of red milling wheat ranging from $240-$257. Ethiopia issued a tender to buy 200k MT of milling wheat.
  • Spring wheat is 92% harvested vs 92% 5 year average. Winter wheat is 10% planted vs 8% average. Kansas is 2% planted vs 5% average, NE 9% vs 17%, and CO 30% vs 19% average.
  • France lowered their soft wheat crop estimate by 200k MT to 29.5 MMT.
  • Weekly wheat export inspections were 637.2k MT vs 450-700k MT estimates. 

Outlook:  Dec KC wheat up 2 ¼ to down 2 ¾ overnight..  U.S. wheat has mostly been left out of the China buying spree, but world wheat export values are strong in general.