By: Dan Hueber –
The grains were able to maintain strength yesterday but over in the bean/meal trade, not so much. Realistically, none of these markets did much of anything and all appear to be suffering from a lack for fresh news to work with.
There were several stories out of China in the past 24 hours to mull around a bit. On the corn auction this week, they sold another 2.7 MMT from inventory, which was 91% of the quantity offered. Do note though that they only sold 4,000 MT of wheat, which represented .2% of the total offered. On the heels of this, the Chinese starch association and the National Grain and Oilseed Info Center stated that corn demand in 2018 will increase around 7% (15 MMT) to a total of 225 MMT. While it may have been coincidental, Chinese Commence Ministry this morning stated that they are prepared to address any negative effects with the trade spate with the US and that we should “not underestimate China’s resolve to fight back.”
This is Thursday, which mean Prince Spaghetti Day…whoops my mistake, it means weekly export sales report. I might as well start with the worst news first and that comes via a new marketing year low set in wheat with negative sales of 66,900 MT, or -2.46 million bushels. The trade was expecting to see something in the 100 to 550 MMT range. There were increases to the Philippines of 48.3k MT, Chile for 33k and Venezuela for 30k but cancellations from Japan, Unknown and Indonesia to the tune of 178.7k MT. This backs marketing YTD sales to 844.1 million bushels or 91% of the projected target. To reach this now we need to average 11.6 million per week for the next 7-weeks. The trade was expecting corn sales to all in a range between 750k and 1.4 MMT and were not disappointed as the number came through at 1,091,700 MT or 43 million bushels. This number was 30% above last week but still 4% below the 4-week average. Top sales were made to Columbia at 246.3k MT, followed by Taiwan with 175.7k and Japan in for 65k. There were cancellations from unknown of 180.9k MT. Marketing YTD we have now reached 1.940 billion bushels or 87.2% of the target of 2.225 billion. To hit this mark, we now need to average 14.2 million bushels per week. At face value the bean sales of 1,040,700 MT or 38.25 million bushels do not sound all that bad. That said, this was 31% below last week and the trade was expecting something in the 1.4 to 2.2 MMT range. The top sales were made to unknown destinations with 581k MT, Mexico at 129.9k and Indonesia with 77.8k but noted as well were cancellations of 52.9k from China. Marketing YTD we have now reached 1.985 billion bushels or 96.2% of the goal. Note as well that meal sales were down 48% for the week and 41% below the 4-week average. On a brighter note, 2018/19 soybeans sales were solid at 1,090,700 MT.
There is little to be drawn from the macros either this morning as we have metals lower, the dollar rather flat, but decent strength in the energies (more on that tomorrow). Seeing we are on the downhill side of the month, overall, I continue to believe grain and soy prices will also remain with a downhill slide as we move out into May and more weather concerns.