Headlines:
- China’s clampdown on DDGs to bolster soybean imports
A slowdown in Chinese imports of soybeans, which some commentators say could drop for the first time in 15 years, may be prevented by the knock-on effects of a slump in purchases of distillers’ grains. Many investors have trimmed estimates for soybean imports by China, the top buyer, after Beijing launched a program of sales from state inventories, which initially received a strong take-up, being priced well below market values. All of the 300,000 tonnes of soybeans offered at the first auction, on July 15, were sold, at an average price of 3,360 yuan a tonne, well below cash market prices, and the 3,820 yuan a tonne at which spot futures were trading on the Dalian exchange. “A leading industry source estimated that 3m tonnes might be sold when the auction sales end” at the close of next month, the US Department of Agriculture’s bureau in Beijing said.
- Crop Progress and Condition report at 3:00 pm CT Monday and the August WASDE report out Friday at 11:00 am CT
Summary:
Corn futures have been tumbling for the last month and half but for the past couple of weeks we have been sharing that a low of significance could establish itself this week. The low that was made on August 2nd ended up holding so we could see the downside momentum in Corn pause for the balance of the month. Price has moved down so much that trade consensus is beginning to suggest that future price discount may already be priced into the market. Today September Corn was able to rally off its intraday lows to finish in positive territory. September was up 3 cents and December was up 2.25.
Soybean had a big jump today erasing much of the losses from the week but it still finished the week well below last Friday’s close. Increased demand from China is what the trade is suggesting is the reason for the gains today. China bought almost 500k tons of Beans today and almost 1.5M tons this week. September Beans rose 15 cents and November Beans added 18.25 cents.
Wheat had another strong day with support at 400 continuing to hold for the September contract. Short covering at support has really helped and we would not be surprised to see Wheat continue to hold some ground next week. Look for resistance at about 436 to 440 on the September contract.
