AgriVisor Market Recap

Thursday, August 06, 2020
Corn, soybeans, and wheat were on both sides of unchanged today as fund positioning intensified. Export data for the week ending July 30th, but favored soybeans over the grains, making that commodity the early leader. Another flash sale on soybeans to China was also positive for the complex, with this one totaling 126,000 metric tons for the 2020/21 marketing year. Early strength was countered with more favorable weather outlooks for the Western Corn Belt, including regions that claim to be suffering from dry soils, mainly in Iowa. Traders are already starting to shore positions for the upcoming WASDE report which added to market activity. 

Export sales for the week ending July 30th were again poor on old crop corn at just 4 million bu. While better than last week’s net negative sales from cancellations, this total was still well below the volume needed to reach the yearly projected total. This low total also verifies that buying interest is shifting from the US to South America. New crop corn sales were considerably better at 102.34 mbu. Soybean sales were solid all around with 12.68 mbu on old crop and 51.62 mbu for new crop. Old crop soybean bookings are now 75 mbu ahead of the latest USDA projections for the year. Wheat sales topped the volume needed on a weekly basis with 22.25 mbu. 

Export sales of US beef and pork declined on the week. A total of 13,400 metric tons of US beef were sold for export last week. This was a 55% decrease from the week before, and a 40% decline on the year. Pork sales for the week totaled 30,348 metric tons. This was a decline of 25% from the prior week, but a 121% increase from the same week a year ago. 

The official US Census export data for the month of June has been released with mixed numbers. Corn exports for the month totaled 198.38 million bu. This was down from May, but up 70% from June 2019. Soybean exports for the month totaled 66 million bu, down a large 45% from last June. The low soybean export total is a direct result of the ongoing competition the US is seeing from Brazil in the global market. 

Product exports in June were also mixed. The United States exported 78.5 million gallons of ethanol in June, the least amount for the month in the past four years. Soy meal exports during the month increased 8% from May though at 1.07 million metric tons. It was a poor month for soy oil exports though at just 76,000 metric tons. Marketing year to date soy oil are now the greatest since the 2009/10 marketing year. 

Beef and pork exports for June were also mixed. Beef exports in the month were an eleven year low at 183.3 million pounds. Pork exports during the month totaled 515 million pounds. This was a nine-month low on pork exports but was still a record for the month of June. What is more positive for pork is that every month for the past thirteen has now been a record for exports. 

Officials in China believe that country will soon start to increase its wheat imports in an effort to cover growing feed demand. Sources close to the matter claim China will import 6 million metric tons in the year that started in June, a 2 mmt increase from the year before and the most since the 2013/14 year. Wheat is now cheaper for China to import than corn and will be an economical feed grain substitute. China is projecting its yearly wheat feeding will total 20 mmt. 

Brazil has been a leading exporter of soybeans in recent months, but this pace is expected to slow considerably in August. Officials in the country believe Brazil will export 6.7 million metric tons of soybeans in August, which is still 33% more than in August of 2019. Corn exports in the month are expected to perk up from the recent pace to 6.3 mmt, which is also a 33% increase from a year ago. This is a smaller export figure on corn than earlier expected though as Brazil continues to both fill domestic reserves and focus on soybean loadings. 

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is believed to be reliable but is not guaranteed to accuracy or completeness by AgriVisor, LLC. This report is provided for informational purposes only and is not furnished for the purpose of, nor intended to be relied upon for specific trading in commodities herein named.  This is not independent research and is provided as a service.  As such, this is considered a solicitation.