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Soybeans mostly firm, supported by export demand

Soybeans were steady to mostly modestly higher, with November unable to close over $9. Mexico and China bought new crop U.S. beans, the tenth business day in a row with an announced sale. The sale to Mexico was 250,371 tons and the purchase by China was 132,000 tons, bringing the running total to 3,647,671 tons, mostly new crop to unknown destinations and China. That demand from China continues despite the political tensions. Weekly export inspections were bearish, mainly to China and Mexico. Chinese customs data shows June soybean purchases from Brazil were 10.51 million tons, an increase, according to Allendale, of 18.6% on the month and 91% on the year. U.S. crop weather looks mostly non-threatening heading into August, but recent rain did miss drier parts of the region. The USDA says 76% of U.S. soybeans are blooming, compared to the five-year average of 72%, and 43% have reached the pod setting stage, compared to 36% on average, with 72% of the crop in good to excellent shape, up 3% on the week. Soybean meal was higher and bean oil was lower on the adjustment of product spreads.

Corn was mixed on spread adjustments, with September 2020 through July 2021 down and the remaining months steady to firm. Corn is also watching the weather, with generally cooler, wetter conditions expected this week in many areas. Still, the rain could miss drier parts of Iowa and Michigan, but at least temperatures will likely be milder. There will continue to be a lot of talk about yield in between now and the USDA’s next set of supply, demand, and production numbers August 12th. As of Sunday, 82% of U.S. corn is silking, compared to the usual pace of 75%, and 22% is at the dough making stage, compared to 17% normally in late July, with 72% of the crop called good to excellent, an increase of 3%. Ethanol futures were unchanged. Chinese corn futures at Dalian hit a record high heading into the U.S. session on their tight domestic supply and solid demand at state auctions. Weekly export inspections were bearish with just over a month left in the 2019/20 marketing year.

The wheat complex was lower on fund and technical selling, despite losses in the U.S. dollar. The world remains on pace for a large crop, even with some private firms reducing outlooks over the last few weeks, including projections for key export competitors. Also, eastern Australia got rain over the weekend. Chicago led the way down as the rumored demand from China for U.S. soft red winter wheat has not shown up, at least in terms of announced sales. If Beijing has purchased U.S. wheat over the last week, it’s been in increments of less than 100,000 tons, the threshold for reporting. Weekly export inspections were above what’s needed to meet projections for the 2020/21 marketing year, none of that was headed to China. The trade is watching the U.S. winter wheat harvest and spring wheat development weather. For winter wheat, 81% of winter wheat is harvested, compared to 82% on average. For spring wheat, 97% of the crop has headed and 1% is harvested, both behind normal, and 70% is in good to excellent condition, 2% higher than a week ago. The USDA’s attaché in Canada says 2019/20 wheat imports were 640,000 tons, mostly feed quality from the U.S., but that’s expected to decline to 450,000 in 2020/21. Exports during 2019/20 were 23 million tons, compared to 24.392 million in 2018/19, but that’s expected to rise to 24.5 million in 2020/21.

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