-China looks to delays shipment of U.S. soybean purchases
-USDA reports new crop corn sales to Mexico, but Export Sales for corn very weak
-Iraq bumper wheat crop likely to reduce import needs
-Wet forecast continues
-EU wheat crop ideas bumped lower, corn slightly raised
Wire services are reporting Chinese state-owned grain trading entities have requested around 2 MMT of U.S. soybean purchases originally slated to be shipped in July be delayed until August. U.S. grain traders whose sales to China are impacted confirmed the request. While not an outright cancellation at this time, and still falling within old crop marketing year parameters, it is appearing as though at least some of the current 6.3 MMT of soybeans on the books to China for 2018/19 may not end up being shipped this marketing year. It is likely U.S. exporters will do all they can to get old crop sales shipped prior to the new crop harvest, though, rather than allow them to be rolled forward, while outright cancellations would obviously be the worstcase scenario.
Strategie Grains slightly lowered their estimate of the EU soft wheat crop to 142.8 MMT from 143.9 MMT previously, but remains up solidly from last year’s 127.1 MMT. With the lower crop estimate, they also lowered expected 2019/20 EU soft wheat exports by 1.0 MMT to 22.1 MMT, but still up from last year’s 21.0 MMT. They slightly raised their estimate of the EU corn crop to 63.4 MMT from 62.9 MMT previously (61.7 MMT last year).
Ukraine ag consultant ProAgro sees the country’s corn crop this year at 32.6 MMT vs previous ideas of 31.2 MMT and compares to USDA at 33.0 MMT and last year’s 35.6 MMT. They see the wheat crop at 28.1 MMT, down slightly from previous expectations of 28.1 MMT, and compares to USDA at 30.0 MMT and last year’s 24.6 MMT (USDA 25.1 MMT).
Iraq officials said a very good growing season could allow for state purchases of around 4 MMT of locally-produced wheat for reserves this year vs last year’s total local purchases of just 2.2 MMT. Purchases from this year’s crop have already reached 2.65 MMT. Iraq consumes around 4.5-5.0 MMT of wheat domestically each year, typically relying on imports of around 2 MMT, but this year’s large crop is likely to reduce Iraqi wheat import needs for the coming year.
China sold 2.542 MMT of the 3.979 MMT of state reserve corn offered at this week’s auction at an average selling price of around $242/tonne. Total auction sales so far of 12.2 MMT compare to 44.7 MMT sold through mid-June last year, as last year’s auctions started more than a month earlier than this year’s.
USDA reported the sale of 175k tonnes of new crop, 2019/20, corn to Mexico this morning in the daily sales announcements.
Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/36306 for details on today’s USDA Export Sales report.
U.S. corn sales were just 169k tonnes (6.6 million bushels), well below already-weak market expectations of 250-550k tonnes and followed the previous week’s net cancellations of 8.8k tonnes.
U.S. soybean sales last week of 256k tonnes (9.4 million bushels) were within market expectations of 200-500k tonnes, but were the lowest in five weeks and well below last year’s same-week sales of 19.1 million bushels. See our comments on Market Insights at the link above for more details on the soybean export situation as it relates to China’s impact on export prospects.
U.S. wheat sales, in the first week of the 2019/20 marketing year, were 325k tonnes (12.0 million bushels), in line with market expectations of 250- 450k tonnes and put total commitments at 226 million bushels to start the marketing year, solidly above last year’s 166 million at this time.
U.S. soybean meal sales of 113k tonnes were at the extreme bottom end of market expectations of 100-250k tonnes, but still exceeded the average “needed” pace. SBO sales were minimal at 5.1k tonnes.
Above average rainfall is still seen across much of the region in the next 10 days. The current system will be finishing up in the extreme east in the next 12-18 hours. Additional amounts of .20-.60” look to fall in most of MI and the northern 1/3rd of IN/OH. The rest of the region looks to be dry today and during the day tomorrow. The next system to impact the region will arrive tomorrow night and continue into the weekend and Monday. This system still looks to bring rains of .50-1” to fall in most areas, with some isolated heavier amounts as well. The best coverage and greatest amounts are currently indicated to favor MO, IL, IN and OH. Tue/early Wed look to be mainly dry. More showers and thunderstorms are seen to occur across most of the region the second of next week. Ideas call for totals of .50-1”+ with coverage of around 85-90%