Grain Notes 7/14/2020 AM Comments

Good afternoon. Markets were mixed today with soybeans up and corn down as we trade weather. September corn was down 2 3/4 to 3.26 and December corn was down 2 3/4 to 3.3375. August soybeans were up 4 to 8.78 to invert for the first time against the November contract which finished up 2 1/4 to 8.7750. Corn export demand saw a big shot in the arm today as the Chinese purchased 69 million bushels today in the daily flash sale which was the largest ever daily sale to them and they also 5 million bushels of beans. China is heavily rumored to be in the market for more beans off the PNW.  Corn was hurt by the weather that remains non-threatening for most of the corn belt and spot ethanol prices falling 6 cents per gallon as concerns about gasoline demand return. In outside markets the dollar index is .18 lower to 96.28, oil is down 19 cents to 40.29, and the Dow was up 556 points. 
  • This morning USDA confirmed China booked 69.3 mln bu (1.76 mmt) of new crop corn, which was the largest single day purchase and surpassed last week’s 53.7 mln bu announcement. The USDA reports China corn sales on the US books amount to 1.36 mmt for 19/20 and 2.98 mmt for 20/21. There is speculation that the 6 mmt quota allowance issued by the Chinese government will be filled by the US making it the largest US program to China in 20 years.
  • China also purchased 129 mmt of soybeans for new crop. China reported its June soybean import volume at 11.16 mmt, up 1.8 mmt from May and a record volume for any previous month.
  • NOPA will release their crush estimate for June tomorrow. The average guess for the NOPA report is 162.2 million bushels, 13.2 mbu above a year ago. The May crush was 14.8 mbu above the prior year. If estimates are correct, then the implied annual crush is 2157 mbu. The USDA estimates the crush at 2155.
  • Aug ethanol prices continue to collapse, down over 6 cents/gal and down over 16 cents/gal from last week. Concerns about gasoline demand slowing as COVID numbers spike at the same time more plants are ramping up production along with collapse in corn futures prices. Weekly EIA report tomorrow is expected to show increased ethanol stocks along with increase weekly production.
  • The 5 day rain forecast brings in needed rains and if realized, the dry areas will shrink materially. There is also another system(s) introduced in the 6-10 as it breaks to the wetter side. The temperatures, high temperatures, persist through the end of the 10 day outlook.
Have a great day.