New export sales support soybean futures
Soybeans were higher on fund and technical buying. China bought 522,000 tons of U.S. beans and unknown destinations picked up 351,000 tons, both mostly new crop. The sale to China was split into 132,000 tons for 2019/20 and 390,000 tons for 2020/21, while that sale to unknown is broken down into 65,000 tons for this marketing year and 286,000 tons for next marketing year. So far this month, announced U.S. soybean export sales are 1.738 million tons, with a big chunk of that for new crop delivery. The tensions between the U.S. and China remain in the background, for the most part. The weekly export sales were within expectations, with another slow week for shipments. The trade is watching development weather in the Midwest and Plains, expecting mostly favorable conditions over the near-term. Soybean meal and oil followed beans higher.
Corn was higher on fund and technical buying. Corn is also watching the weather, waiting to see if rainfall happens as expected. Parts of the Midwest and Plains have received rain this week, including heavy rainfall in dry parts of the eastern Midwest, and more areas are expected to see rain into next week. Still, parts of the Corn Belt will also see very hot temperatures, potentially stressing the crop. Weekly export numbers were solid, sales and shipments, driven by the recent demand from China. This week’s record purchase of U.S. corn by China will show up in next week’s report. Ethanol futures were steady. APK-Inform raised its’ production guess for Ukraine to 36.6 million tons, up 1.2 million from the last estimate, with exports of 29 million tons, 1 million higher. Ukraine, Argentina, Brazil, and Russia are all playing an increased role in the export market. According to reports, Argentina’s ag minister says Buenos Aires does not plan to raise export taxes on corn, soybeans, or wheat.
The wheat complex was lower on profit taking and technical selling, with most contracts posting double digit losses. Contracts were overbought and corrected as the winter wheat harvest advances and spring wheat crop prospects improve in some areas. Also, while the USDA did lower some world production estimates recently, the global crop will likely be a new record. Strategie Grains has the European Union’s soft wheat crop at 130.3 million tons, down sharply on the year. Parts of wheat growing areas in Argentina, Australia, and Russia remain drier than normal. Just over a month into the 2020/21 marketing year, weekly export sales were a marketing year high. There’s talk China bought more U.S. wheat this week, but nothing has surfaced. The USDA’s next set of supply and demand estimates is out August 12th. Japan is tendering for 80,000 tons of feed wheat.