- It has been another mixed morning in Chicago, with corn finding support on export demand and with soybeans still languishing amid rapid harvest progress in S America and the lack of any new export sales announcements. China has reportedly secured three cargoes of US corn off the PNW, with talk that they may be in the market for 500,000 mt. This is unconfirmed and sources cite poor quality of domestic feed supplies, but moving forward if more corn is needed by China, S American origin will be thrown into the mix. We doubt that China will embark on a major US buying spree, and a few cargoes are unlikely to affect US annual exports or the world trade matrix. Exporters also sold two cargoes of US corn to Mexico for 2017/18 arrival.
- Spot Chinese soybean crush margins are calculated at a negative 175 yuan/mt, the weakest since last summer. We can find very little correlation between spot crush margins and monthly/quarterly Chinese soybean imports, but ongoing weakness in crush margins there is being talked about more and more.
- Three cases of bird flu have been found in Alabama this week. So far only one case of highly pathogenic bird flu has been found in the US (two weeks ago in TN), but this underpins a larger problem for domestic feed use, steep competition and limited demand growth.
- Fresh news this week has been mostly negative. US Gulf wheat is again highly competitive in the world market, ethanol margins are improving, and NASS’s planting intentions report is due in two weeks.