-USDA soybean sales announcements continue
-Rising tensions with China following embassy closure
-U.S. weather outlook favorable through early August
-Russian wheat yields down moderately from last year
-Several Asian grain tenders passed on due to high prices
 It will be interesting to see if today’s EIA ethanol data shows a further slowing of the ongoing production recovery given the notable pullback in ethanol values and, accordingly, margins, of late. Ethanol margins have fallen as much as 20 cents/gallon in some locations recently. Last week’s data showed ethanol production holding at a 13% year-over-year decline for the 2nd consecutive week following the previous two weeks’ 17% declines, while ethanol stocks held mostly steady from the previous week’s modest uptick, which was the first increase in stocks in 11 weeks.
 Equity markets are expected to be under pressure today following the U.S.’ abrupt closure of China’s embassy in Houston in what is viewed as a clear escalation of tensions between the two countries. The U.S. gave China three days to close its embassy, with the move being said “to protect American intellectual property and Americans’ private information.†The U.S. has accused two Chinese hackers of working for the government to steal coronavirus-related research, among other information, from Western countries. China has vowed retaliation if the U.S. doesn’t reverse the closure.
 To counter the potential negative influence of the rising political/diplomatic tensions with China, the USDA’s daily sales announcements continue to roll on with 453k tonnes of soybean sales to China announced this morning, 66k tonnes for 2019/20 and 387k tonnes for 2020/21. USDA also announced 211k tonnes in new crop soybean sales to unknown for 2020/21 delivery, as well. A final announcement this morning was a late reporting of a 262k tonne sale of soybeans to China for 2020/21.
 The Council of Palm Oil Producing Countries sees Indonesian and Malaysian palm oil production declining in 2020, with Indonesia estimated at 42-43 MMT vs last year 44 MMT, while Malaysian production is estimated around 19 MMT vs last year’s 19.9 MMT.
ï‚· Russia has harvested 29.3 MMT of wheat so far vs 30.8 MMT by this time last year. The average yield seen so far is down 7.5% from last year through July 21. A total of 8.4 million hectares (20.8 mil acres) has been harvested so far vs 8.2 mil hectares last year.
ï‚· South Korea reportedly passed on their recent tender for 68k tonnes of corn citing prices being too high. The lowest price offered was $196.52/tonne c&f for Nov shipment.
ï‚· Thailand also reportedly passed on their tenders for 196k tonnes of feed wheat and 98k tonnes of feed barley with offered prices being higher than desired. The lowest wheat offers were in the $235-$240/tonne c&f range for Oct-Dec shipment.
ï‚· Pakistan is thought to have purchased around 300k tonnes of Black Sea-origin wheat for Aug-Sept shipment periods, with four cargoes bought in recent weeks at prices ranging from $231-$239/tonne c&f, while one cargo bought in late June was done at $219.50/tonne c&f.
 Brazilian grain exporter association Anec slightly tweaked their ideas of July exports, with soybeans now seen at 8.8 MMT vs 8.9 MMT previously, but still above last year’s July exports of 7.4 MMT, but declining seasonally from June exports of 13.75 MMT. July corn export ideas were bumped a bit higher to 5.64 MMT from 5.55 MMT previously and compare to 5.93 MMT last year. Brazilian corn exports are sharply ramping up in seasonal fashion after minimal June exports of 348k tonnes.
ï‚· Egypt ended up buying 115k tonnes of Ukrainian wheat following their latest tender, priced at $224.48-$227.28/tonne c&f for Aug 21-31 shipment.
Weather
Rain activity yesterday included .50-1â€+ across the northern 2/3 of MO, central IL and IN, while .20-.60†was seen in the SW corner of MN and the SE ½ of IA, with similar amounts in the rest of IL, IN and most of OH. Showers and thunderstorms will impact areas mainly south of a line from around St Louis to Detroit in the next 24-36 hours, bringing totals in the .50-1†range, with some isolated heavier totals, and coverage of near 100% to those areas. Rains north of I-80 look to be generally less than .30â€, with coverage of around 50%. The exceptions will be most of MN and the western ½ of IA, where amounts of .50-1†are seen by the weekend. The 6-10 day forecast has changed with models differing again. The GFS sees rains to fall in most of the Midwest, with totals of .50-1â€, isolated to 1â€+ and coverage of 85-90%, while the European shows rains of .20-.70â€
in areas mainly south of I-80. The GFS has been the much better model over the last 3-4 weeks and so it is the preferred idea at this time. The 11-16 day outlook shows a transition into a NW flow aloft, which would cool temps down to average to below and also produce close to average rainfall across the Midwest through August 5th.