#Grain #Futures Comments

-Ukrainian ag exports see minimal impact so far – overall impact viewed as likely limited as well
-Ukraine corn crop ideas remain strong
-EPA set to announce final 2019 biofuels blending mandates – little change from June proposal expected
-USDA reports soybeans sold to unknown
-South American forecast turns drier – no concern for now but will be watched
-First notice day for December deliveries Friday

 

Soybeans were firmer again overnight as some optimism continues to seep into the market ahead of Friday’s Trump/Xi meeting. First notice day for December deliveries is Friday.

 

 Ukraine’s acting ag minister said the country’s imposition of martial law in some areas, as a result of Russia’s capturing of three Ukrainian naval vessels in the Azov Sea has not yet impacted grain shipping activity from ports in the Azov Sea, although prospects for potential impacts remain unclear. He also said, if necessary, shipments can be diverted to the Black Sea if they become impacted in the Azov Sea. Traders said the overall impact of the situation is not expected to be significant as shipments from Azov Sea ports only account for around 4-5% of total Ukrainian grain exports.

 Ukraine’s ag ministry said 33 MMT of corn has been harvested so far, with 6% of planted area remaining to be harvested, which is already nearly in line with the USDA’s current estimate of total production of 33.5 MMT. Based on reported total area, the remaining 6% of area could result in another 2 MMT of corn being harvested if yields are in line with average levels achieved so far. Last year’s crop was 24.1 MMT.

 Ukraine’s 2018/19 corn marketing year to date corn exports reached 5.2 MMT vs 2.9 MMT exported at this time last year, while wheat exports so far of 9 MMT are down modestly from last year’s same-period shipments of 9.6 MMT.

 An EPA official said they have rejected requests from the ag/ethanol lobby to reallocate biofuel volumes waived under the small refinery exemptions into the 2019 mandates, which have yet to be officially announced, but are expected to be later this week. Additionally, the official said the 2019 mandates will be largely in line with the agency’s June proposal of 19.88 billion gallons in total biofuels blending, including 15.0 billion gallons for conventional biofuels (ethanol), with the ethanol component being unchanged from 2018 levels. The 2019 biomass-based biodiesel component of the RFS has already been officially set at 2.1 billion gallons, which is unchanged from 2018. Accordingly, the final ruling of the 2019 blending mandates later this week should be a non-event.

 Separately, but relatedly, reviews of small refinery exemption requests from biofuel blending apparently have been put on hold by the Trump Administration as the Energy Department and the EPA review the program to reevaluate the scoring system used by applicants for waivers following the notable increase in waivers granted in 2017 – some including individual operations of very large refiners. The EPA granted 29 waivers in the 2017 compliance year vs 20 in 2016 and 14 in 2015. There are currently 7 waiver applications for 2017 and 15 applications for 2018 on file, which are now on hold.

 The chairman and interim CEO of Malaysia’s largest palm oil producer, FGV holdings, said they expect crude palm oil prices in 2019 mostly in a range of 1,900-2,100 ringgit/tonne ($450-500), which would be little-changed from current benchmark futures, which closed overnight at 2,014 ringgit/tonne ($480). Overall crude palm oil stocks are expected to remain higher than desired.

ï‚· South Korea tendered for 69k tonnes of optional-origin corn for LH April arrival.

 USDA reported the sale of 269k tonnes of soybeans to unknown for 2018/19 delivery.  During the session yesterday, Sovecon raised their estimate of 2018/19 Russian grain exports to 43.2 MMT from 42.6 MMT previously, including wheat export ideas being raised to 34.7 MMT from 34.2 MMT previously. The USDA last estimated Russia’s wheat exports at 35.0 MMT, which compare to last year’s 41.4 MMT.

ï‚· Following their recent tender, Algeria is believed to have purchased around 600k tonnes of wheat, priced from $250.50-$252.50/tonne c&f, with traders seeing most being sourced from Argentina and France.