Weekly Market Recap


U.S./Chinese talks have apparently stalled, reportedly due to China wanting to see restrictions lifted off Huawei first, but trade officials will continue to converse by phone. Rumors were rampant on Friday that China may issue some import quota without tariffs on US ag products.  This got the market very excited and pushed the market to reverse most of Thursday’s big losses. The Baltic Dry Index of ocean freight made new highs this week, hitting the highest level since January of 2014.


BAGE estimated Argentina’s corn harvest 61% complete, up 8 on the week and 8 below last year’s pace.  Their production estimate was unchanged at 48mmt, while USDA is currently at 50mmt. The Rosario Board of Trade raised their estimate of Argentina’s corn crop 1mmt to 51mmt.  Agrural estimated Brazil’s Safrinha corn crop is 56% harvested, up 12 points from last week. Brazil and India will meet later this year to discuss a partnership in ethanol trade; India has a goal of increasing their ethanol blending rate to 20% over time.

17% of the corn crop is silking, well behind the 5 year average of 42% for this date.  Corn is rated 58% Good/Excellent, up 1 from last week. Corn export sales have been weak since the end of May.  This week was no exception as combined sales were only 333,000 tons, when the weekly average for the year is over 800,000 tons. 


BAGE estimated that Argentina is 92.1% complete on their wheat planting.  6.6 mha is expected to be planted this year, up .4 mha from last year. Egypt bought 60tmt of Russian wheat in their snap tender this week. No US wheat was offered. Russia’s wheat production estimate was lowered 1mmt, by the Ikar consultancy, to 77.5mmt.  USDA is currently estimating 74.2mmt.

The Wheat Quality Council’s Hard Spring Wheat and Durum Tour will begin with a meeting Monday night and kick off the tour Tuesday morning. 57% of the winter wheat crop has been harvested, compared to 71% on average.  The HRS crop is rated 76% G/E, down 2 from last week, with declines shown in Idaho, Montana and North Dakota. Wheat inspections were 315tmt, the lowest amount so far in the new marketing year, but HRW accounted for 60% of the total. 


Rusagro in Russia reported that their first shipment of soybeans to China has occurred.

Crop progress showed that 22% of the soybean crop is blooming, which is well behind last year’s 62% and the 5 year average of 49%.  Soybeans Good/Excellent rating is 54%, up 1 from last week. The NOPA crush report estimated 148.843 mbu of soybeans were crushed in June.  That was the smallest amount since September 2017.  Flooding issues at some processors reportedly contributed to the decline. 854tmt of soybeans were inspected for export last week, that was above the highest estimate and the largest amount in 14 weeks.  China was the destination for 54% of that total. 


The cattle of feed report was about as neutral as can be.  Placement were estimated at 98.2 and the actual number was 98. Cash cattle traded in a $11-115 range this week which is pretty much in line with last week.  Packer margins continue to slide.  Last week was at $140/head and this week its down to $118/head. 


Headline news flow seems to be the main driver in recent trade. The IEA reduced its 2019 oil demand growth forecast to 1.1 million bpd from 1.2 million bpd previously due to signs of economic weakness emanating from the US/China trade row. In a Bloomberg Bull/Bear survey, as of yesterday crude bulls represented 39% of respondents and bears were 50%. The week prior bulls were 60% and bears were 23%. AAA is reporting the average national gasoline price at the pump is $2.790 per gallon. Prices a week ago averaged $2.755 and last year during the same period were $2.857.