Choco_commodity: July 2019

Monday, July 1, 2019

USDA’s projected 91.7 million acres planted to corn this year. That was over 4.5 million acres above analysts’ average estimate
The soybean area came in 4.6 million acres less than expected. If UDSA’s figures are correct, this will be the smallest soybean acreage since 2013.

NASS will be resurveying farmer’s planting data for corn, cotton, sorghum, and soybeans in July. If the new survey data justifies change, the agency will issue an updated acreage report on Monday, 12 August.
Weekly NASS crop conditions reported yesterday showed corn and soybeans unchanged at 56% and 54% G/E respectively which falls short of trade expectations of a 1-2% improvement.
The latest weather forecasts show average or below-average temperatures for most of the Midwest in the next two weeks with average or above-average rain. The outlook isn’t good for fledgling crops, but it’s likely better than hot/dry weather.
News was released last week that a new tax bill being debated in Paraguay would lower the VAT for exporters of soy crushing derivatives.
President Trump and Xi had a “good” meeting at the G-20 Summit. The meeting prompted Chinese officials to claim additional purchases of U.S. agricultural products would soon occur, though details were not provided. The market’s expectation is that any such purchases will wait until after a deal is officially inked.
The Export Inspections report did no favors for the corn market as it showed the continued effects of stiff global competition. The report was bearish corn and soybeans but moderately bullish wheat with YTD exports up 28 percent early in the marketing year.

Macros

Wall street climbed on Monday, led by gains in tech. stocks on optimism for progress in U.S.-China trade talks

Stocks still gave up a good portion of earlier gains as investors contemplated whether Fed Reserve would be as dovish as anticipated
DJIA gained 0.44%, S&P increased 0.77%, Nasdaq advanced 1.06%

Asian stocks rallied before Monday market close as investors priced in U.S.-China trade truce

Asian markets are however, mixed on Tuesday morning as weak global manufacturing activity reinforced worries about slowing world growth
Further dragging on sentiment was U.S. government’s threat on Monday of tariffs on $4b of additional EU goods

OPEC agreed on Monday to extend oil supply cuts until Mar 2020 as group’s members overcame difference to prop up price of crude
OANDA: After 2 ½ years of production cuts, effects of rolling over production cuts is losing steam
WTI at $58.61/bbl and Brent at $64.73/bbl

Corn

Traders remain uncertain how many acres were actually planted after USDA pegged planted acres well above trade expectations

USDA: Export inspections pegged at 273kmt ; well below expectations of 500kmt to 800kmt
USDA: Crop condition unchanged at 56% GD/EX, 1% below market expectations
Maxar: Temperatures well above normal across corn belt over weekend; accelerating crop growth
APK Inform: Corn exports expected to fall to 26.5mmt from 28mmt; due to a decrease in output from 35.8mmt to 34.8mmt

Wheat

USDA: Export inspections pegged at 609kmt; topping trade expectations for 300kmt to 500kmt
USDA: Winter wheat harvest at 30% complete by Sunday, up from 15% in last week’s report
APK-Inform: Ukraine’s wheat exports to increase from 15.8mmt to 16.2mmt as harvest likely to rise from 24.6mmt to 25.7mmt
IKAR: Cuts forecast for Russia’s wheat harvest and exports earlier on Monday

Saudi Arabia’s state grain buyer SAGO bought 730kmt of wheat for Sep-Nov delivery in latest international purchasing tender

Soy

CBOT: Aug soybeans fell 14 ¾ cents to $8.89 ¾ /bu, Aug soybean meal down $8.10 to $307.20/st

Soy futures retreated from early advances under pressure from improving weather that should bolster U.S. production prospects
Traders also shrug off support from U.S.-China trade talks

USDA: Export inspections pegged at 719.3kmt, near the high end of trade expectations for 450kmt to 750kmt
USDA: Crop conditions unchanged at 54% GD/EX; 2% below market expectations