Gleadell Daily Grain Comment - 19 September 2018

[ADM Agriculture]

• US markets close – Soybean and corn markets traded lower, setting fresh contract lows as the Trump administration imposed another round of tariffs on Chinese imports. Wheat higher on talk of adverse conditions in Siberia affecting harvest, Australian/Canadian frosts.
• US corn and soy market weaken as President Trump imposes 10% tariff on about $200bln worth of import from China, and threatened duties on approx. $267bln more if China hit back on the latest US action.
• US weekly export inspection report had US wheat exports running 30% behind y/y vs the USDA forecasting a 14% increase, corn 25% ahead y/y vs a forecasted 1% decline, and soybean 21% behind y/y vs a forecasted 3% decline.
• US food companies kept slaughter plants shut Monday in south eastern states swamped by hurricane Florence, as catastrophic flooding killed almost 2mln chickens and caused major logistical and transport issues.
• US 11-16 day forecast has turned to below average temperatures in most of the Midwest and eastern plains, including frost or even freezing temperatures. Precipitation seen running near average in most of the Midwest.
• Informa economics projected that US corn plantings would rise to 93.044mln acres in 2019, compared with the USDA’s 2018 figure of 89.1mln acres. Also projected a drop in soybean plantings to 82.27mln acres, down from the USDA’s 2018 figure of 89.6mln acres.
• China said on Tuesday it has no choice but to retaliate against new US trade tariffs, risking even stronger action from President Trump in an escalation of the trade war between the world’s largest economies.
• Egypt’s GASC purchased 180,000t of wheat (120 Russian/60 Ukrainian) for 1-10 November, along with 295,000t of Russian wheat for 11-20 November positions. Prices paid were about $4-5/t higher than previous tender on the 12th September.
• Russia’s Ag Ministry said on Tuesday that it saw the country’s grain exports for the 2018/19 season at between 35-37mln t, the TASS news agency reported. Wheat exports for the same period could total 30mln t.
• Ukrainian farmers are likely to expand the 2019 sowing area under barley and wheat, taking advantage of favourable prices, but reduce the maize sowing area, analysts UkrAgroConsult reported.
• Kazakhstan plans to harvest 20mln t of grain this year, with 9mln t available for export, the Ag Minister reported. Last year Kazakhstan harvested 21.9mln t of grain.
• In a monthly crop report on Monday, the EU’s crop monitoring unit MARS, cuts its forecast of the EU’s 2018 grain maize crop to 7.49t/ha, from 7.57t/ha estimated last month.

Last Trade Settlement:

London Nov ’18 Settle £172.75/t – up £1.25/tonne from previous close

Paris Dec ’18 Settle €199.25 – up €1.25/tonne from previous close

CBOT Nov ’18 Soybeans Settle - $8.1400/bushel – down 9.50 cents/bushel from previous close

CBOT Dec ’18 Corn Settle - $3.4325/bushel – down 4.75 cents/bushel from previous close

CBOT Dec ’18 Wheat Settle – $5.1050/bushel – up 4.25 cents/bushel from previous close

Currency Today:

GBP EUR 1.1275

GBP USD 1.3205

EUR GBP 0.8865

EUR USD 1.1710