#Grain #Futures Comments

-Trade deal appears near
-Record Indian wheat crop expected
-No USDA sales announcements
-Overall wet Midwest pattern keeps planting concerns elevated
-Soybean sales strong on Chinese buys, wheat strong, corn disappointing

 

 A Bloomberg article late yesterday kept the “optimism train†running full steam as comments were made regarding discussions of when and where President Trump and Chinese President Xi will meet to sign a deal. While both sides continue to say it’s not yet a done deal, with details yet to be worked out, it is clear each day that passes gets another day closer to a deal. The article mentioned China’s commitment to buy more U.S. commodities by 2025, with some citing as much as $1 trillion in total purchases during the period, but without providing specifics, while the White House is pushing to get commodity purchases frontloaded through the 2nd quarter of 2020 in an effort to boost President Trump’s re-election efforts. Trump and Chinese Vice Premier Liu are meeting in the Oval Office this afternoon, leading to speculation additional soybean sales announcements could be forthcoming.

 The USDA ag attaché in India estimates their 2019/20 (April-March) wheat crop at 100.0 MMT, just exceeding last year’s current record crop of 99.7 MMT and will allow them to essentially remain out of the wheat trade arena for another year.

 The USDA ag attaché in Paraguay estimated this year’s soybean crop at 10.0 MMT, up solidly from last year’s 8.8 MMT, with exports expected to rise accordingly to 6.2 MMT from 5.2 MMT a year ago.

 Indonesia’s Ag Ministry estimated the country’s palm oil production in 2019 will rise 6% to 42.9 MMT from last year’s 40.6 MMT. With the exception of 2015/16 when palm oil production declined, the average annual increase in Indonesian palm oil production over the previous five years was 8.5%.

ï‚· There were no USDA sales announcements today.

 During the session yesterday, the firm previously known as Informa raised their estimate of Argentina’s corn crop to 46.5 MMT from 45.5 MMT previously (USDA 46.0 MMT), raised Brazil’s corn crop to 94.5 MMT from 94.0 MMT previously (USDA 94.5 MMT), put the Argentine soybean crop at 55.0 MMT (USDA 55.0 MMT) and Brazil’s soybean crop at 114.5 MMT (USDA 116.5 MMT). They also put the U.S. winter wheat crop at 1.276 billion bushels, which would be up a solid 92 million bushels (7.8%) from last year’s 1.184 billion.

ï‚· U.S. soybean sales were stronger than expected at 1.972 MMT (72.4 million bushels) as all of the previously-announced sales to China showed up in this week’s data. Nearly all of this week’s sales, though, went to China at 1.700 MMT, with total sales to all other destinations being a mere 272k tonnes.

ï‚· U.S. corn sales last week were disappointing at just 537k tonnes (21.2 million bushels), coming in below market expectations of 700k-1.1 MMT, falling from the previous week’s 35.5 million bushels and were below last year’s same-week sales of 35.4 million bushels, as well as the average “needed” sales pace of 26.5 million bushels/week. Nearly all of this week’s sales were routine with 276k tonnes to Japan and 258k tonnes to Mexico, accounting for a combined 534k of the 537k tonnes total, with all other activity essentially being a net wash with switches out of “unknown.”

ï‚· U.S. wheat sales last week were solid at 705k tonnes (25.9 million bushels), coming in above market expectations of 300-600k tonnes and rising from 17.5 million bushels the previous week.

ï‚· U.S. soybean meal sales of 190.3k tonnes rebounded from the previous two weeks’ sales each below 100k tonnes and were in line with market expectations of 100-350k tonnes. SBO sales were quite solid at 36.8k tonnes, beating expectations of 0-25k tonnes.