July 10 Afternoon Comments

By Steve Freed

Soybean traded higher and grains futures traded mostly sideways in front of the USDA July supply and demand report and weekly US export sales. Trade is also waiting for more news on US and China trade talks and US summer weather. Fed Chairman remarks rallied US stocks, crude and gold and weighed on US Dollar.


November soybean futures are sitting just above 9.00. Supply bears feel World stocks are adequate to satisfy demand. Demand bears are concerned that China may import less soybeans. That leaves the final US soybean crop size as key to final carryout and eventually price direction. In June, USDA estimated World 2019/20 soybean crop near 355 mmt vs 362 last year. Total domestic demand was estimated near 355 mmt vs 347 last year. Exports were estimated near 152 mmt vs 149 last year. China imports were estimated near 87 mmt vs 85 last year. Brazil crop is 123 mmt vs US 113. This compares to a crop in 2005 of 215 mmt. This was on 93 mil hectares. 2019 acres are estimated near 127 million hectares. Total use was near 206 mmt with exports near 65 mmt. Increase from 2005was due to higher China hog numbers and increase demand for soybean imports to crush and produce feed soymeal.

Soybean Futures Chart


Corn futures are backing off recent highs due to talk that US weather may be helping the late planted US crop. Slow export trade is also weighing on futures. In contrast, US domestic corn basis is strong especially in the east where the crop is the latest and rated the lowest. Most feel US farmer may be a reluctant seller of stocks until his 2019 crop is pollinated. In June, USDA estimated World 2019/20 crop near 1,099 mmt vs 1,120 last year. Most of the drop was US. They est US crop near 347 mmt vs 381 in May and 366 last year. Total Domestic demand is estimated near 1,134 mmt vs 1,134 ly. Exports are estimated near 171 mmt vs 172 last year. End stocks are estimated near 290 vs 325 last year. In 2005, World Crop was 700 mmt on 145 million harvested acres. 2019 World acres are near 190 this year. 2005 total use was near 788 mt with exports near 81 mmt. Most of the increase was due to Ethanol and increase World animal numbers.

Corn Futures Chart


Wheat futures have backed off recent high. Talk of normal crops in Europe and Black Sea plus better than expected US winter wheat yields has offered resistance. Continued near record high ratings of the US spring wheat crop has also weighed on prices. Wheat prices are also follow corn. Fact that US HRW cash prices are below corn suggest increase US wheat feeding. This though will not reduce US 2019/20 wheat carryout of 1,072 mil bu. US export pace remains below the pace to reach USDA goal of 900 mil bu. USDA estimates World 2019/20 wheat crop near 780 mmt vs 731 last year. Demand is est near 763 mmt vs 736 last Year. Exports are est near 185 mmt vs 175 ly. US share is only 24 mmt. In 2005, World crop was 619 mmt on 217 million harvested acres. 2019 World acres are near 219. 2005 total use was near 733 mt with exports near 117 mmt. With US share 27 mmt.

Wheat Futures Chart

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2019-07-10T19:48:15+00:00 July 10th, 2019|