- The USDA announced the sale of 720,000 mt of US soybeans to China. 657,000 mt was sold for new crop with 63,000 mt for 2019/20. Today’s purchase takes China’s new crop soybean purchases to 3 million mt.
- US Weekly Export Sales were; 9.9 million bu of wheat, 26.0 million bu of corn and 36.9 million bu of soybeans. US weekly soybean sales were larger than expected.
- For their respective crop years to date, the US has sold 214.2 million bu of wheat (down 5% or 12 million), 1,619 million bu of corn (down 286 million or 15%), and 1,604 million bu of soybeans (down 119 million or 7%).
- The June USDA Crop report was modestly bearish with 2019/20 corn and soybean end stocks rising slightly. Traders had expected demand cuts in 2019/20 US corn ethanol grind and US soybean exports, so the stocks increase did not trigger any market impact. It is Central US weather and yield expectations that will direct Chicago values into the June Stocks/Seeding report on the 30th. The US 2020 wheat crop was slightly larger, but US 2020/21 stocks are forecast at a 6-year low. The downside wheat potential is limited below $4.45 July KC futures.
- WASDE reduced 2019 US corn production by 45 million bu (Upper Midwest/N Dakota) which was largely balanced by a 50 million bu drop in US 2019/20 US corn ethanol grind. We look for another 100-150 million bu cut in US corn ethanol demand in coming reports as USDA takes an approach of cutting demand each month as weekly EIA data indicates. WASDE forecast 2019/20 US corn end stocks at 2,103 million bu with 2020/21 corn end stocks also raised by 5 million bu to 3,323 million. The new crop US corn end stocks estimate is the largest in 33 years and considered bearish if 2020 corn yield is trend line or above at 178.5 bushels/acre.
- The USDA left 2020 Brazilian corn production estimate at 101 million mt with Argentina at 50 million mt. The 2020 Ukraine corn crop was forecast at a record large 39.0 million mt. World 2020/21 corn supplies were projected at a record large 1,188 million mt, with new crop end stocks pegged down 2 million at 338 million mt. This compares to old crop world corn stocks at 313 million mt (gain of 25 million).
- WASDE raised 2019/20 US soybean end stocks 5 million bu to 585 million bu to account for reduced exports (down 25 million to 1,650 million bu), increased crush to 2,140 million bu (up 15 million) and a 5 million bu reduction in the 2019 North Dakota soybean crop of 5 million bu. A further cut in US soybean exports is forecast.
- In world soy production, WASDE left 2020 Brazilian soybean production at 124 million mt and Argentina at 50 million mt. It appears unlikely that either crop will be adjusted one way or the other at this late date. Brazilian soybean exports were raised to a record large 85 million mt with Argentina at 9. million mt.
- NASS raised US winter wheat production 11 million bu to 1,266 million via modest yield boosts in KS, CO, ID, IL, IN and Ml. HRW production is pegged at 743 million bu, vs. 733 million in May. SRW production is pegged at 297 million, vs. 298 million in May and vs. 239 million a year ago. The boost in HRW yields is a bit surprising but we note that the trade often underestimates production in June.
- US wheat end stocks were lifted 16 million bu to 925 million due to larger production and a modest increase in new crop carryin. As expected, old crop US wheat exports were reduced 15 million bu to 965 million.
- 2020 world wheat end stocks were raised to a new all-time record 316 million mt. World stocks less China are estimated at 154 million mt, vs. 150 in May and up 9 million from 2019/20. Combined EU and Ukrainian production was lowered 3.5 million mt from May. Russian production was left unchanged at 77. The Aussie crop was boosted 2 million mt to 26 following ABARES update this week. The major exporter wheat balance tightened slightly amid reduced production and a slight boost to projected world trade in 2020. We maintain that while near-term shortages will be avoided, Black Sea spring wheat weather needs close monitoring.
- The USDA’s June WASDE is rarely market-moving and aside from higher than expected wheat production, today’s report proved no different. It is back to watching US and Black Sea climate forecasts. The midday GFS weather forecast continues to hint at the return of Midwest precipitation beyond June 21. Whether this shift occurs will be key to mid-summer price direction.