Weekly Market Recap


President’s Trump and Xi agreed to restart trade negotiations following their meeting at the G20 summit in Japan. President Trump said that China has agreed to buy “tremendous” amounts of US farm goods but no details on what products or how much will be bought. Chinese sources saying they will make some ‘goodwill’ purchases of US beans, corn, and pork as trade talks set to resume.  The shocking acreage and stocks report is still be digested by the market trying to determine what is really out there. The focus going forward will be on the USDA’s decision to re-survey acres and their findings.  This could drag on until the October crop before it all gets figured out.  


Army worms have been detected in the major corn producing province in China.  So far, no damage is being reported from that area. As the week went on, more reports of army worms spreading to different area of China have surfaced.   

The corn market opened the week with a tame overnight session, but the bearishness of the acreage report and a bearish outside day key reversal last week provided too much pressure.  Corn tried to fill the gaps left open from back in May.  Corn export inspections were flat out terrible.  This was the lowest inspection figure of the year at 272,000 tons.  This is also the lowest total going back to November 2015.  Corn conditions held steady at 56% good/excellent.  This is about 20% below normal and falls in line with the disaster years of 1993 and 2012.  USDA May grain crush report put corn used for ethanol at 459 mil bushels, below market expectations. Milo for ethanol used was 9.3 mil bushels. Ethanol Production increased by 9,000 bpd this week to 1,081,000 bpd. This matches the 2nd highest production level of the year. Ethanol inventories jumped sharply higher by 1.2 million barrels to 22.8 million barrels. This is the biggest weekly build in stocks in 16 months.



IKAR dropped the Russian wheat production estimate to 79.3 mil tons due to hot, dry weather, but the Russian Ag Ministry has made no changes yet.

Wheat export inspections were ok at 609,000 tons.  Every week roughly 45-60% of the inspection total is made up of HRW wheat. Winter wheat harvest advanced to 30% complete but that is still well behind the 5 year average of 48%.  Lots of harvest activity occurring now in Kansas with huge variability in yields and proteins on the lower side. 


Soybean export inspections were seasonally in line at 719,000 tons.  Soybean plantings advanced to 92% complete.  The 5 year average is 99%.  This means we still have 5 to 7 million acres of soybeans left to plant. Soybean emergence is 83%.  There is a lot of acres that have yet to come out of the ground and we are now into July.  The good/excellent rating on soybeans held steady at 54%.  This is about 15% below average.  Export sales for soybeans showed some signs of life this week.  Combined sales topped 1 million tons for the first time since March.  China was the main reason buying over 600,000 tons of old crop beans.


Vietnam is saying that a swine fever vaccine could come very soon.  Apparently, it is being tested already in northern Vietnam with good success. Cash cattle traded in a $109-$112 range this week which was steady to slightly better than the previous week. Packer margins are still crazy good at $200/head.     


WTI has been supported by a strong US jobs report which signifies increased demand, and ongoing tension with Iran. British special forces seized an Iranian oil tanker off the coast of Gibraltar that was on its way to Syria. Some OPEC members were irked (particularly Iran), that Russia’s President Putin (Russia is not an OPEC member) announced at the G-20 over the weekend that OPEC+ was extending cuts by 1.2 million bpd before OPEC had met.