Headlines:

  • China’s soybean imports to set record for 14th season in a row
    China’s soybean imports will set a record high for a 14th consecutive season, backed by ever-growing demand for protein and vegetable oils – although South American exporters, rather than the US, will pick up the extra demand. US Department of Agriculture staff in Beijing, in their first forecasts for 2017-18, pegged Chinese soybean imports, by far the world’s biggest, at 89m tonnes, up 3m tonnes year on year on its estimates. That would extend a spell of unbroken annual increases in Chinese purchases going back to 2004-05, when imports came in at 25.8m tonnes.
  • Egyptian wheat imports to rise after fraught year
    Egyptian wheat imports will rise next season, after the government streamlined its customs regulation, US officials said. Traders are “optimistic” that a new grain inspection system will bring some clarity to the task of shipping wheat to the world’s top buyer, the US Department of Agriculture’s Cairo bureau said. Egyptian wheat imports are forecast at 11.5m tonnes, up 0.5m tonnes year-on-year.

Summary:

Beans continue to brace for the supply impact of record South American production. Some weather forecasts had projected potential harvest delays from rain in Brazil near-term, but nothing serious is expected. Nearby Beans were down 3 cents but the deferred contracts were essentially flat. In a politically motivated move, Mexico appears to be negotiating with Argentina for possible Corn purchases. The reality is that the numbers may not make economic sense. Most likely just posturing for leverage but may not help if the “emperor has no clothes”. Currently, South American Corn offers are about 50 cents per bushel higher in cost delivered Mexico versus US offers. US Corn exports could possibly be impacted further down the road compared to Soybeans with Brazil’s second crop heading into pollination. The trade has its eye on planting ahead of the USDA’s prospective planting report at the end of the month. The supply side of the market is bearish Wheat and demand is basically neutral. These factors are limiting any potential upside. World crop conditions are generally considered to be a non-factor to the overall fundamental outlook.