By Steve Freed
Soybeans, soymeal and soyoil traded lower. Corn and wheat traded higher. US Dollar was higher. Crude turned higher. Renewed fears about the state of the Chinese economy came during a week when statements from China’s Politburo meeting alluded to the economic threat posed by increasing trade friction.
In July, nearby soybean futures moved from a low near 8.20 to a high near 9.20. The rally in part was due to record demand for US soybeans and hope US and China could find a way to avoid further trade sanctions. Some warmer and drier US Midwest weather also dropped USDA soybean ratings although they are still above average. Some feel US 2 week Midwest weather could turn normal. Others feel a warm and dry trend could evolve in August. Actual weather will be key to final yields. One crop group estimated the 2018 US soybean crop near 4,574 mil bu vs USDA est of 4,310 and 4,392 in 2017. That could add 260 mil bu to an already record carryout near 580. Weekly US soybean export sales were near 3 mil bu. China cancelled open sales. Sales from unknown were also cancelled. Total commit is near 2,136 mil bu vs 2,230 last year. USDA goal is 2,085 vs 2,166 ly. New crop sales increased 20 mil bu. Most of that was to the unknown.
Corn futures trended higher. Higher wheat trade, talk of lower World corn supplies and increase demand for US corn offered support. Ongoing concern about escalation of trade war between US and China and potential impact of global economy may be offering resistance. Some feel US 2 week Midwest weather could turn normal. Others feel a warm and dry trend could evolve in August. Actual weather will be key to final yields. One crop group estimated the 2018 US corn crop near 14,562 mil bu vs USDA est of 14,230 and 14,604 in 2017. That could add 330 mil bu to a carryout near 1,552. This increase is not as bearish to corn as the increase would be in soybeans. Group est IL corn yield near 204 vs 201 ly, IA 198 vs 202 ly, MN 192 vs 194 ly, NE 193 vs 181 ly and MO 130 vs 170 ly. Weekly US corn export sales were near 11 mil bu. Total commit is near 2,337 mil bu vs 2,219 last year. USDA goal is 2,400 vs 2,293 ly. New crop sales increased 39 mil bu. Most of that was to Mexico and unknown. USDA 2018/19 export goals is near 2,225.
Wheat futures trended higher. Talk of lower World wheat supplies continues to support prices. EU futures made new 3 ½ year highs overnight. Most point out the French wheat export prices are near $250. This is still below levels of previous years of steep crop losses and Russia exports controls when prices were near $350-400. Russian prices are near $230. Key will be final World supplies. USDA est World crop near 736 mmt vs 758 last year. Some are now est EU closer to 130 vs USDA 145. USDA est Australia crop near 22 mmt. Some feel it could be lower. USDA est Canada crop near 32.5 mmt. Recent dryness could lower their final crop. Total domestic demand is est near 749 mmt. Total end stocks are est Near 281 mmt vs 273 ly. China is 136 of the total. Major exporters stocks are near 18 mmt vs 25 ly. Some feel drawdown of exporter stocks could push nearby KC wheat over 6.00.
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