 A significant decline in China’s reserve corn auction buying was seen this week with only 1.35 MMT of the 4.02 MMT offered being purchased, a sell rate of 33.6%. While this may seem to indicate slowing demand, it is likely more due to older reserve corn, and therefore cheaper corn, no longer being offered. Prior to this week’s auction, the vast majority of purchases were for 2015 corn, but no corn from that year was offered this week, instead seeing all available corn being from 2016 and 2018, which carries a much higher price tag. The average selling price of this week’s auction was 2,072 yuan/tonne ($303, $7.70/bu), up sharply from the previous week’s 1,919 yuan/tonne ($279) average price when a large portion of sales were 2015 corn. So far, 56.8 MMT of corn has been sold from state reserves vs 21.1 MMT at this time last year.
ï‚· USDA reported soybean sales this morning of 132k tonnes to China and 318k tonnes to unknown, confirming market talk yesterday of at least 8 cargoes being sold, expected to be for Dec-Jan shipment.
ï‚· Malaysian palm oil futures were sharply higher overnight following the steep gains posted in Dalian palm oil and soybean oil futures. This, in turn, prompted gains in CBOT soybean oil, as well.
ï‚· After the close yesterday, Egypt tendered for an unspecified amount of wheat for Nov 5-15 shipment. The lowest offers were again Russian at $225-$231/tonne fob ($240.60-$244.90 c&f). The lowest Ukrainian offer was $230.50 fob ($245.23 c&f). In their last tender, Egypt bought 530k tonnes of Russian wheat for Oct 11-31 shipment periods at $213.00-$213.33/tonne fob ($227.17-$228.73 c&f) on August 25.
 Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/41315 details on today’s USDA Export Sales report.
ï‚· U.S. new crop corn sales were very strong at 2.389 MMT (94.1 million bushels), at the top end of market expectations of 1.5-2.5 MMT and included sales to China of 1.155 MMT and 569k tonnes to unknown. There were also sales of 72k tonnes of old crop corn to China this week, as well. This week’s activity brought China 2020/21 commitments through 8/27/20 to 7.54 MMT, while current total purchases are above 9.0 MMT given the daily sales announcements since this week’s reporting day.
ï‚· U.S. new crop soybean sales were 1.763 MMT (64.8 mil bu), at the very top end of market expectations of 1.0-1.8 MMT, and included 1.0 MMT in reported sales to China, as well as 526k tonnes to unknown. China’s official purchases for 2020/21 through 8/27/20 stood at 13.5 MMT vs total purchases for 2019/20 of 17.0 MMT, but are likely in the 17-18 MMT when taking into account sales reflected as unknown and announced sales since this week’s sales data reporting date.
ï‚· U.S. wheat sales last week were solid, as well, at 585k tonnes (21.5 mil bu), at the top end of expectations of 350-600k tonnes and brought total commitments to 458 million bushels vs 419 million at this time last year.
ï‚· Old crop soybean meal sales were 114k tonnes vs expectations of 25-125k, while new crop sales of 229k tonnes were towards the top of expectations of 50-250k tonnes, as well. Soybean oil sales were minimal this week at 4.9k tonnes for old crop and 3.0k for new crop, with old crop sales over the last four weeks TOTALING only 0.9k tonnes given the net cancellations at times.
Weather
Rains of .20-.80†fell across the OH River Valley yesterday, with conditions dry across the rest of the belt. The next rains appear set for Sunday with .50-1â€+ expected for the southern 1/3 of MN, the northeast ½ of IA, into the SW corner of WI, the northern ½ of IL and into central IN. This is a wetter forecast for central IL and IN. Totals elsewhere with that activity look to be under .25†with spotty coverage. Models continue to vary substantially for the 6-10 day period. Both models have rains Tuesday and Wednesday, with the GFS even continuing rains across the eastern Midwest into Thursday, but amounts and locations different substantially. Thee GFS sees totals of 1-2â€+ to fall across the eastern 2/3 of IA, into the northern ½ of IL/IN and much of lower MI, with a band of 4â€+ rains from around Champaign IL to Chicago. Totals across the rest of the region would be in the .50-1.5†range. The European sees rains of .50-1.5â€+ to fall in areas west of a line from Kansas City to Green Bay, with
totals less than .35†elsewhere. At this point, there is more confidence in the European model idea as is consistent with previous ideas and the GFS is vastly different from yesterday and appears to be struggling.
