-USDA reports largest single-day corn sales on record to China
-U.S. weather outlook remains mostly non-threatening
-China June soybean imports record high
-Ukraine wheat crop ideas raised/Russia lowered
-US corn/soybean conditions decline a bit more than expected, but rains to help
The USDA’s large U.S. corn sale report to China this morning should support the market to start, but rain ideas for this week and a not severely threatening longerterm outlook could keep gains in check.
ï‚· USDA reported the sale of 1.762 MMT of corn to China for the 2020/21 marketing year this morning. Adding in the report sale of 1.365 MMT on July 10 (765k tonnes old crop/600k tonnes new crop), China has bought 3.127 MMT (123 mil bu) of corn over the last week. The previous largest single-week Chinese purchases of U.S. corn, according to weekly Export Sales reports, was 1.26 MMT in July 2013. There is no denying these purchases are substantial/encouraging/psychologically supportive, etc., but need to be kept in context as the vast majority have been for new crop shipment and the USDA is already reflecting a 375 million bushel (9.5 MMT) increase in U.S. corn exports in 2020/21 in their balance sheet.
ï‚· USDA also reported the sale of 129k tonnes of soybeans to China for 2020/21, as well.
 The USDA ag attaché in Brazil sees this year’s soybean crop at 123.0 MMT vs USDA’s just upwardly-revised 126.0 MMT estimate, with exports at 78.0 MMT vs USDA’s 79.5 MMT and last year’s 73.4 MMT. More importantly, the attaché is expecting a considerable expansion in Brazilian soybean area next year to 38.5 million hectares (95.1 mil acres) from this year’s 36.9 mil hectares (91.2 mil acres), even a bit larger than the USDA’s estimate for a 3.4 mil acre increase, resulting in an early estimated crop next year of 130.0 MMT, which is in line with the USDA’s 131.0 MMT ideas. Next year’s exports are estimated to increase to 84.0 MMT by the attaché vs USDA’s 83.0 MMT estimate.
 The ag attaché in Brazil sees this year’s total corn crop at 100.0 MMT vs USDA’s 101.0 MMT estimate, with exports at 33.5 MMT vs USDA’s 34.0 MMT and last year’s 39.7 MMT. However, given the attachés ideas of larger soybean area next year, they are more conservative on next year’s Brazilian corn crop ideas at this time at 103.0 MMT vs USDA’s 107.0 MMT, with exports only rising modestly to 36.5 MMT vs USDA’s more aggressive ideas of 38.0 MMT.
ï‚· Preliminary trade data showed Chinese June soybean imports were an all-time monthly record high of 11.16 MMT, up from 9.38 MMT in May and sharply above year ago June imports of 6.51 MMT. The vast majority of imports are obviously Brazilian, although the preliminary data does not include source breakdown. 2019/20 marketing year-to-date (Oct-Jun) imports of 69.0 MMT are up 12.8 MMT from last year.
 APK-Inform raised their estimate of Ukraine’s wheat crop to 25.3 MMT from 24.5 MMT previously, resulting in exports being raised to 17.3 MMT from 16.5 MMT previously. USDA last estimated their crop at 26.5 MMT and exports at 17.5 MMT, but USDA’s estimates include the Crimean Peninsula, which typically is around 1.0 MMT, while others include the region in Russian estimates.
 SovEcon modestly lowered their estimate of Russia’s wheat crop to 79.7 MMT from 80.8 MMT previously.
ï‚· South Korea bought 131k tonnes of optional-origin corn at $188.99-$189.55/tonne c&f for Nov-Dec arrival. Traders commented the prices were aggressively low.
ï‚· After the close yesterday, Egypt tendered for an unspecified amount of wheat for Aug 16-26 shipment. Russia was the lowest offer at $226.75/tonne c&f, followed by a cargo of Ukrainian wheat at $228.37/tonne c&f. The next two lowest offered cargoes were Russian at $228.89-$229.00/tonne c&f. In their last purchase on July 7, Egypt bought 230k tonnes of Russian wheat at $218.80/tonne c&f.
 U.S. corn crop conditions declined by 2% g/e last week to 69%. Wire services reflected average ideas being for a 1% decline, but a 1-2% reduction was widely anticipated. Overall conditions remain above the 5-year and 10-year averaged for mid-July and remain modestly below those of 2018, 2016 and 2014. The recent improvement in rains should help stabilize conditions. U.S.-wide corn silking is at 29% vs 32% average, with IL 36%, IA 35%, MO 59%, MN 21% and IN 30%. U.S. soybean conditions declined 3% in g/e last week to 68% g/e vs wire service-reported expectations of 69-72% g/e. The decline resulted in conditions also slipping a bit below those of 2018, 2016 and 2014, but are still the 4th best of the last 16 years for this time. Spring wheat conditions declined 2% g/e to 68% vs expectations for near unchanged, putting overall conditions right in line with the 10-year average for mid-July. Winter wheat harvest is 68% complete vs 56% last week, 54% last year and 66% average. For full details on yesterday’s Crop Progress update, see our post at ttps://portal.rjobrien.com/MarketInsights/Blog/Read/40769.
Weather
A cold front will work through the corn belt today, tomorrow and finish up in the east Thursday with expectations for .50-1†in most of MN, the eastern 2/3 of IA, northern MO, most of WI, MI, IL, the northern ½ of IN and western ½ of OH. Totals elsewhere look to be generally under .50â€. The models continue to differ on the 6-10 day outlook with the GFS remaining wetter than the European and is wetter than yesterday, with totals of .50-1†to fall with coverage of around 95%. The
European sees rains of .50-1â€, isolated to 1â€, to fall in most areas north of I-80, with less than .35†elsewhere. The GFS has had a better handle on things overall this summer and thus it is the preferred approach at this time. For the 11-16 day period, the GFS sees a NW flow aloft to produce average to a bit below average rains and average temps. The European sees ridging to produce below average rains and above average temps. The GFS is the preferred idea for this time frame, as well. Temps will run above average in MO and the southern ½ of IL, IN and OH, with average temps elsewhere in the next 5 days. Temps in the 6-10 day look to run above average, although temps above 95 are expected to be very sparse.