No cold air threat remains in forecasts through the 16-day period, with today’s extended outlook for the 11-16 day period going warmer.
-No cold air threats through 16 day period – extended guidance warmer
-Higher Ukraine wheat export memorandum sought
-No USDA sales announcements
-Rising Brazil ethanol production expected next year
* As the Ukraine government nears the signing of the annual wheat export memorandum with the country’s grain traders, traders reportedly have requested an increase in the total allowed wheat exports in 2019/20 to 20 MMT from the initial government proposal of 19 MMT. A memorandum is signed each year allowing the export of a set amount of wheat in total, with the government’s agreement being to not change export rules during the season as long as traders keep exports within the limit. Traditionally, the government has also set the export limit for milling quality and feed quality wheat within the framework, but traders reportedly have asked for no differentiation to be put in place for wheat exports this year. So far in 2019/20, Ukraine has exported 6.75 MMT of wheat, which would leave 13.25 MMT to be exported through the end of June if the 20 MMT limit is allowed. During July-Sept last year, Ukraine exported 5.4 MMT of wheat, with 10.6 MMT shipped during Oct-June. USDA is currently estimating Ukraine’s wheat exports this year at 19.5 MMT vs last year’s 16.0 MMT. There were no USDA sales announcements this morning.
* Ukraine’s winter grain planting is 12% complete vs 20% at this time last year. So far, 780k hectares (1.9 mil acres) of winter wheat have been planted vs 1.3 million hectares (3.2 million acres) last year.
* In as many days, South Korea confirmed the 2nd case of African swine fever today at a farm roughly 30 miles from the initial disease confirmation site and also near the North Korean border.
* After the close yesterday, Egypt tendered for an unspecified amount of wheat for Oct 21-Nov 10 shipment. On an fob basis, Russian was the lowest offer for Oct 21-31 shipment at $194.13/tonne, while French and Ukraine wheat were the lowest for Nov 1-10 shipment at $196.90/tonne.
* Agroconsult expects Brazil’s 2020/21 center south sugar cane production to rise to 597 MMT from 585 MMT in 2019/20, with overall sugar prices remaining depressed in the year ahead. Accordingly, they expect mills to remain heavily biased towards ethanol production vs sugar production, allocating 66% of cane to ethanol and 34% to sugar, the same as this year. With the increase in cane production, Brazil’s center south ethanol production is expected to rise 1 billion liters (264 million gallons) to 32 billion liters (8.45 billion gallons) from this year.
* Algeria reportedly bought up to 600k tonnes of milling wheat following their recent tender, with prices believed to have been $211-$213/tonne c&f for November shipment. The vast majority is expected to be French and Baltic Sea region origin.
* Ethiopia tendered for 400k tonnes of milling wheat with offers due by October 23. Weather No cold air threats remain through the 16-day outlook, even in the Northern Plains, with the extended guidance turning warmer today. Above normal temps remain expected over the coming 10-day period, while the forecast has raised temp ideas in the 11-16 day outlook from previous expectations, as above normal temps are now expected to continue throughout the Midwest and Plains vs previous indication of a return to more normal temps in the period. Rain activity is to remain consistent, with favorable conditions for late grain fill for corn and soybeans.
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