By Steve Freed
Soybeans, soymeal, soyoil, corn and wheat closed lower following abearish USDA crop report. USDA estimated US farmers will arvest a record soybean crop and record yielding corn crop in 2018
Soybeans closed sharply lower. 42 cents drop and back below the 20 day moving average could suggest soybeans could make new lows. Soymeal chart also negative esp if we trade below the July lows. USDA est the US 2018 soybean crop higher than expected. This raised US and World carryout to new record highs. SX is down hard and the numbers suggest we have not yet seen the bottom. USDA did raise US 2017/19 soybean demand 35 mil bu and lowered the carryout to 430. USDA now est the US soybean crop near 4,586 vs their July est of 4,310. USDA est US demand near 4,256 vs 4.286 this year. This suggest a carryout near 785 vs 580 est in July. USDA increased US 2017/18 crush due to high soymeal exports and domestic soyoil demand. World July soybean plus soymeal exports were near 15.3 mmt vs 12.4 last year. Higher US and Brazil exports offset lower Argentina. Oct-July exports are near 134.0 vs 132.2 ly. USDA Oct-Sep goal is 163.5 vs 158.7 ly
USDA est US 2018 corn yield a record 178.4. US est corn plant population record high and ear weight also near record high. Some feel that hot June and smaller ears could suggest USDA corn yield may be too high. USDA has IL yield near record 207 vs 201 last year, IA 202 vs 202 ly, NE 196 vs 181 ly and MO 131 vs 170 ly. USDA raised US 2018/19 feed use 100 mil bu and exports 125. Some feel final exports could even be higher. This left a carryout near 1,684 vs 2,027 last year and 1,552 last month. This is still tight and could support prices. USDA est World corn carryout near 155 mmt vs 152 last month and 193 last year. Most of the increase is US. USDA did lower the EU and Brazil corn crop but increased Ukraine. USDA est China crop near 225 mmt vs 215 ly, EU 59 vs 62 and FSU 47 vs 42 ly. Higher FSU crop could have offered resistance to prices. CZ traded below the 20 day moving average near 3.73. End users should look for further weakness to add to 2019 coverage.
USDA lowered US 2018 wheat crop only 4 mil bu to 1,877. This was less than trade was looking for. USDA also increased exports 50 mil bu and lowered feed use 10. Exports are now est near 1,025 vs 901 last year. USDA est World exports near 184 mmt vs 182 ly. Su is 28 mmt vs 24 ly. FSU is 61 mmt vs 69 ly. This left a carryout near 935 vs 1,100 last year. By class, USDA est HRW near 394 mil bu vs 417 last month and 581 ly, HRS 262 vs 283 last month and 191 ly and SRW 178 vs 169 last month and 205 ly. Some feel final exports could be even higher. USDA dropped World wheat crop only 7 mmt to 730 vs 758 last year. Most of the drop was in EU. Some feel final crop could be 10-15 mmt lower. Some still feel it will take increase in demand for US exports and lower World numbers to push wheat prices higher.
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