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-China buying Brazilian soybeans as new allocation of tariff-free U.S. purchase allowances awaited
-Australian wheat crop ideas continue to deteriorate
-French corn harvest/winter wheat planting accelerate
-Western belt forecast wetter
-Soybean export sales strong, corn dismal, wheat status quo

 Soybeans maintained a slight bid overnight following yesterday’s strength, which was prompted largely by ideas China may allocate another 5 MMT or so of tariff-free soybean imports from the U.S. With the trade tariffs remaining in place, any additional soybean sales to China essentially must be granted by the Chinese government. China reportedly continues to seek Brazilian soybeans for extended shipment periods, though, with South American supplies still well below U.S. values, as it is believed 8-11 cargoes were bought this week, with some for November shipment, but most for new crop March-forward shipment.

 National Australia Bank estimated the country’s wheat crop at just 15.5 MMT this year, reflecting a significant decline from last year’s poor crop of 17.3 MMT and well below the USDA’s latest estimate of 18.0 MMT. As drought conditions continue, estimates of the crop have been declining precipitously of late. ABARES is not scheduled to provide updated crop estimates until December 3, while they put the crop at 19.2 MMT in their September 10 crop production report.

 Ukraine’s official state statistical office put this year’s wheat crop at 28.8 MMT, in what they reflect at a 15.1% increase from last year. The USDA’s latest estimate of the Ukraine wheat crop was 28.7 MMT, but USDA numbers include Crimea, which accounts for around 1 MMT of production, while official estimates do not, implying the USDA’s estimate is still a bit low.

 A survey of Indonesian palm oil industry associations/analysts indicated ideas of the country’s palm oil stocks at the end of August were 3.040 MMT, little-changed from 3.140 MMT in July and down notably from last year’s 4.638 MMT. August palm oil production is estimated at 4.300 MMT vs 4.430 MMT in July and 4.006 MMT last year, while exports for the month of 2.890 MMT compare to 2.690 MMT in July and 2.827 MMT last year. Indonesia does not publish official monthly palm oil data.

 France’s corn crop is 30% harvested, making strong progress from the previous week’s 14%, while last year’s harvest was exceptionally fast given the drought conditions at 81% complete. Soft wheat planted accelerated strongly, as well, to 21% complete from 4% last week.

 Indonesia set a target for 2020 domestic biodiesel blending at 9.59 million kiloliters (2.53 billion gallons) vs this year’s targeted 6.63 million kiloliters (1.75 billion gallons).

 Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/37748 for details on the USDA Export Sales report.

 U.S. soybean sales were strong again at 1.601 MMT (58.8 million bushels), at the very top of market expectations of 900k-1.6 MMT and followed the previous two week’s sales of 77.0 and 76.3 million bushels. On the return of China to the U.S. market, total soybean sales over the last 6 weeks of 357 million bushels have dwarfed last year’s same-period sales of 165 million bushels.

 U.S. corn export sales remain simply dismal with just 369k tonnes (14.5 million bushels) sold last week, below market expectations of 400-800k tonnes, and put total net corn sales over the first 6 weeks of 2019/20 at 145 million bushels vs 263 million bushels sold during the same period last year.

 U.S. wheat sales continue at a very steady, consistent pace with 395k tonnes (14.5 million bushels) sold last week, in line with market expectations of 250-550k tonnes and right in line with average sales of 14.4 million bushels over the last seven weeks.

 U.S. soybean meal sales last week of 153k tonnes were at the very bottom of market expectations of 150-400k tonnes, as were soybean oil sales of 3.9k tonnes vs expectations of 0-25k.

Weather Conditions remain quiet for today, with a weak front to bring some light and scattered rains tomorrow. Amounts have been increased, though, for the system Sun-Tues for the western belt with widespread 1-2” now expected. Rains east of the MS River still look to be in the .50-1”+ range and look to favor the west. The middle of the week looks dry and then SE from St Louis to Cleveland rains at the end of next week of .30-1” are seen. Limited to no rains are expected across Argentina for the next 7-10 days. Rains of .50-1”+ will fall in most of the Brazilian growing regions in the next 5 days. The 6-10 day period sees rains of .50-1.5”+ to fall in the northern Brazilian growing states of Mato Grosso, Goias and Minas Gerais, with conditions mainly dry elsewhere.

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