by Steve Freed,
Interesting day. Fact POTUS will delay imposing 10 pct tariff on $300 billion dollars of China goods supported soybeans, soymeal, Crude, US Dollar and US stocks. Funds continued to liquidate out of net long corn positions. Cattle continued to be sharply lower.
Soybeans traded higher. Fact that POTUS will delay imposing 10 pct tariff on $300 billion dollars of China imports triggered hopes China might buy US soybean as a goodwill gesture. US and China traded negotiators talked last night and will continue to talk but there is no news on if they will meet face to face in September. USDA est World soybean trade at 149 mmt vs 148 last year. Brazil exports are 76 mmt vs 76 last year. US is 48 vs 46 ly. China imports are est near 85 vs 83 this year and 94 ly. USDA est US soybean yield near 48.5 vs 51.6 ly. USDA rates the crop 54 pct good to excellent vs 67 last year. USDA estimates total US 2019/20 soybean demand near 4,016 mil bu and carryout near 755. Key will be final US crop size, China demand for US soybeans and South America 2020 crop sizes.
Corn futures closed lower and near session lows. Managed funds continued to liquidate net long positions after USDA reported US 2019 corn yield, acres and carryout above expectations. Fact USDA lowered US export demand and final exports could even be lower also offered resistance. Brazil export prices are still below US despite the recent sharp selloff in US prices. Brazil is already expected to increase corn acres in 2020. Steep drop in Argentina currency could also encourage Argentina farmers to increase acres in 2020.
There are some that feel USDA corn acreage and yield numbers may be a little high versus final but that the corn yield may need to drop to 155 and carryout below 1,500 before corn prices can rally. Some feel that fact USDA NASS used satellite imagery analysis for August yield may be suggesting a higher yield than expected due to the fact plants are still sending a green image due to late plantings. USDA est US corn yield near 169.5 vs 176.4 ly. USDA rates the crop 57 pct good to excellent vs 71 last year. USDA estimates total US 2019/20 corn demand near 14,130 mil bu and carryout near 2,181. Carryout versus use numbers still suggest lower prices.
Wheat futures followed corn prices lower. Lower World wheat prices offered resistance to futures. There is too much wheat supplies in the US and World. US total supply is near 3,187 mil bu with total demand near 2,173. End stocks are 1,014 and stocks to use ratio suggest lower prices. HRW supply is 1,351 versus 899 demand, SRW supplies is near 420 vs 302 demand. HRS total supply is near 896 vs 574 demand. USDA est 2019/20 World begging wheat stocks near 275 mmt. Crop is near 768 mmt vs 730 last year. EU is 150 vs 136. Russia is 73 vs 71. Ukraine is 29 vs 25. India is 101 vs 99 last year. China is 132 vs 131 last year. Total domestic demand is 758 vs 736 last year. Trade is 182 vs 173 last year. This leaves end stocks near 285.
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