By Steve Freed
Soybeans, soyoil, soymeal, corn and wheat traded lower. US Dollar was lower.
Soybeans traded lower following the lower trade in corn and wheat. Weak longs may be liquidating positions without firm news on a new US and China trade deal. Some close to the talks were surprised at the selloff in futures. Most thought the closer they get to a deal the higher prices might trade. There are still some that could see final US 2018/19 soybean carryout increase to closer to 965 vs USDA 910 due to lower exports. Weekly US soybean exports are 34 pct behind Last year vs USDA est of a 12 pct drop. In their annual Estimate of 10 year trade forecast USDA est by 2027 World soybean trade could reach 204.8 mmt. (154.4 this year); US 68.4 and Brazil 96.4. Imports EU 13.6 and China 143.0. USDA est this years China imports near 88.0 mmt. Crop insurance guarantee for US average Feb Nov soybean futures prices is near 9.54 versus 10.16 last year.
Corn futures traded lower. Liquidation of the March open interest before first notice and liquidation of weak longs weighed on prices. Fact POTUS is in Vietnam with N Korea talks reduces the chance for any new news on US and China trade deal. Most had hoped by now the deal would have been signed, US tariffs against China dropped and China would be a net buyer of US Ag goods. Now it may be until March for the 2 Presidents to meet and sign a deal. Weekly US corn exports are near 38 pct ahead of last year. USDA estimates is for a 1 pct increase. Some feel normal 2019 Black Sea and South America crops could reduce US exports late in the marketing year. Annually USDA estimates 10 year World corn trade. 2027 World corn trade is estimated near 188.8 mmt. (167.3 this year). US 55.9, Brazil 44.8, Argentina 32.5, Ukraine 30.5. Imports EU 14.2, Japan 15.0, S Korea 10.7, Vietnam 13.1, Mexico 23.5 and other S Americas 16.7. Some could see higher Black Sea and South America trade that USDA estimated.
Wheat futures continued to trade lower. WK is now down 58 cents or 11 pct in last 8 trading days. The slide in prices may be due in part to a lack of new demand for US exports. During this time EU futures and Russia export prices have also dropped. Market is not sure if the EU and Russia prices are leading futures lower or following. Annually in February, USDA issues an outlook for the next 10 years for World GDP and trade. USDA will update these number on March 13. USDA estimates World 2018-2027 GDP growth to average 2.9 pct vs 2.3 in 2008-2017. This could be key to World food and fuel demand. 2027 World wheat trade is estimated near 212.1 mmt. (178.6 this year). US 27.5, EU 39.7, Russia 33.9, Ukraine 21.8. Some feel USDA Black Sea estimates could be low.
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