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20 Sep 2018

#Grain Comments

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-Indonesian palm oil stocks rise to multi-year highs
-Attache sees India being aggressive SBM exporter in 2018/19
-Attache expresses modest expectations on EU soybean imports from US
-USDA reports corn sold to Mexico
-Indonesian moratorium on further palm oil plantation development
-Rainy stretch to somewhat slow US harvest
 
 The USDA ag attaché in India sees the country being a more aggressive processor of soybeans in 2018/19 than USDA does, resulting in strong exports of soybean meal. The attaché sees soybean production this year at 11.2 MMT, up from 10.6 MMT last year, in line with USDA expectations, but for crush to rise to 9.7 MMT from 8.3 MMT last year, while USDA sees new crop soybean crush at 9.0 MMT. The increased crush will allow India to export 2.3 MMT of SBM in 2018/19, sharply above USDA expectations of 1.4 MMT and up notably from last year’s 1.5 MMT. The attaché still expect India to import more SBO this year, rising to 4.0 MMT from 3.4 MMT last year, while USDA currently estimates 18/19 imports at 3.4 MMT vs their estimate of year ago imports of 3.0 MMT.
 Indian and Chinese official met today as India is asking China to drop the ban on the imports of rapeseed meal from the country established in 2011 due to quality concerns. The U.S/China trade war may increase the possibility of this occurring.
 The USDA ag attaché for the EU expected the bloc to import 14.8 MMT of soybeans in 2018/19, below USDA official ideas of 15.8 MMT and compares to last year’s 14.3 MMT. Interestingly, though, while they do anticipate an increase in soybean imports from the U.S., it is a fairly modest expectation, rising to 5.6-6.3 MMT in 2018/19 from estimated final 2017/18 imports to fall in the 5.3-5.6 MMT range. If accurate, the modest roughly 500k tonne (18 million bushel) increase in imports from the U.S. would be viewed as quite disappointing.
 According to a survey of Indonesian palm oil associations/market participants, palm oil production in the country in August was estimated at 4.006 MMT vs 3.897 MMT in July and 3.587 MMT last year. End August palm oil stocks were estimated at 4.638 MMT, up from 4.300 MMT in July, up a significant 78% from year ago August stocks of 2.600 MMT, and would be the highest in at least four years. August palm oil exports were estimated at 2.827 MMT vs 2.887 MMT in July and 2.714 MMT last year August. Indonesia does not publish official palm oil data.
 In a bow to increasing pressure from environmental groups, Indonesia’s president signed a moratorium on the development of new palm oil plantations nationwide as the palm oil situation is reassessed. Many new planned developments were said to be slated inside natural forests and with deforestation concerns escalating and feeling increased global pressure to address the situation, the moratorium was put in place.
 USDA reported the sale of 149k tonnes of 2018/19 corn and 11 tonnes of 2019/20 corn to Mexico this morning.
 China sold 3.0 MMT of the 4.0 MMT of reserve corn offered at the first auction of the week at an average price of $227.65 MMT. Recent auctions have been seeing very strong interest with 15 MMT being sold from auction reserves in just the last four weeks and more than 82 MMT being sold since they began this year in mid-April.  
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