-USDA reports another large corn sale to China – record purchases on the books
-China reserve corn auction sees first non-100% sale rate
-New crop soybean sales strong – record sales on the books
-Weather models pull back on rain ideas
China’s weekly auction of corn reserves saw the first non-100% sale rate since auctions began in late May. While still strong, 3.55 MMT of the 3.99 MMT offered this week were purchased, with the average selling price declining modestly again to 1919 yuan/tonne (~$278.63) from the previous week’s 1959 yuan (~$283.18), which was the lowest since mid-July. So far, 55.5 MMT of corn has been sold from state reserves vs 20.9 MMT at this time last year.
ï‚· USDA reported the sale of another 747k tonnes of corn to China, as well as 140k tonnes to unknown, for 2020/21 delivery this morning. This brings their estimated total purchases of U.S. corn to around 8.0 MMT already vs record U.S. annual corn exports to China of 5.1 MMT.
 Brazil will reportedly eliminate the import tariff for soybeans, corn and rice temporarily, according to an ag ministry official’s comments to the press, although details were not provided on the timing or longevity. Brazil already allows tariff-free imports from other Mercosur countries (Argentina, Paraguay, Uruguay).
ï‚· Brazilian mills continue to process sugarcane heavily favoring sugar production over ethanol, with 47% of first half August processing going to sugar vs 32% during the same period last year. Ethanol demand remains weak, with FH August sales down 18% from last year. Since the start of the 2020/21 marketing year in April, Brazil has produced 16.8 billion liters (4.4 billion gallons) of ethanol, down 6.4% from 18.0 bil liters (4.7 bil gal) last year.
 The advanced level of new crop farmer selling of next year’s Brazilian soybean crop and favorable prices are expected to result in a spike in insurance coverage of the crop, with an ag ministry official saying farmers buying insurance may double to around 10 million hectares (24.7 mil acres), but would still only represent a modest portion of total soybean area expected around 37 mil hectares (91.4 mil acres).
ï‚· Global-leading palm oil plantation Sime Darby said demand from China and India has returned to pre-pandemic levels, but remains constrained by rising crude palm oil prices. They maintained their 2020 crude palm oil price expectation at 2,500-2,600 ringgit/tonne vs benchmark futures currently at 2,682.
ï‚· Argentine grain inspectors will hold a 36-hour strike starting Friday on wage talks.
ï‚· In routine business, Taiwan bought 100k tonnes of U.S. wheat for Oct-Nov shipment periods. South Korea bought 60k tonnes of South American soybean meal for Oct 8-27 shipment at $386.25/tonne c&f and 65k tonnes of optional-origin feed wheat for Nov shipment at $245.95/tonne c&f.
 Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/41244 details on today’s USDA Export Sales report.
ï‚· New crop soybean sales were strong again, as expected, at 1.874 MMT (68.9 million bushels) vs market expectations of 1.2-2.2 MMT with 592k tonnes in sales officially reported to China, along with 822k tonnes reflected as unknown. This brings China’s reported purchases for 2020/21 to 12.5 MMT vs new crop purchases at this time last year of a mere 260k tonnes. Total commitments for 2020/21 are now at 824 million bushels vs new crop sales at this time last year of 206 million and are the highest on record.
ï‚· New crop corn sales of 1.181 MMT (46.5 mil bu) were strong, but within market expectations of 700k-1.3 MMT with 666k tonnes reported to China for the week. This brought 2020/21 total commitments to 527 million bushels vs new crop sales at this time last year of 218 mil bu and are the 2nd highest on record
ï‚· U.S. wheat sales last week of 764k tonnes (28.1 mil bu) slightly exceeded market expectations of 400-700k tonnes, rose solidly from the previous week’s 19.1 mil bu and were a marketing year high now 12 weeks into 2020/21.
ï‚· Old crop soybean meal sales of 53k tonnes and new crop sales of 98k tonnes were both within, but at the lower end of market expectations of 50-200k tonnes and 75-300k tonnes, respectively. New crop soybean oil sales were respectable at 21k tonnes vs expectations of 0-15k, while old crop sales
were minimal at 1.3k tonnes and followed the previous two weeks of minor net cancellations.
Weather
The near term forecast still shows limited rains (generally less than .35â€) expected in most of IA, although totals of .35-1†do look to fall in the northeast ¼ of that state, as well as into most of MN and the southern 2/3 of MO. Changes include the addition of .40-1†in NE IA and the southern ¼ of MN. Totals of .40-1â€+ look to fall in most areas to the east of the MS River, with the exception of central IL, where totals of less than .30†are now seen. The 6-10 day forecast shows little in the way of rains to fall across much of the corn belt due partly to a change in the forecast, but also the fact that some of the rains
previously indicated to fall in this time frame are now in the 1-5 day period. The only rains now indicated to fall are totals of .25-.75†in the OH River valley and totals of generally less than .50†in around 65% of IN and OH. Other areas look to be dry.