Headlines:

  • China to Start Buying More Argentine Soybeans
    China is starting to buy more Argentine soybeans because of China’s trade war with the United States, and Argentina will in turn purchase more U.S. soybeans to meet its own needs, oilseeds analysts Oil World said on Tuesday. Soybean exports from the United States to China have come to a virtual stop since July when Beijing imposed heavy tariffs on U.S. imports as part of a trade war between the two countries. China has transferred much of its soybean purchases from the United States to Brazil, but tightening Brazilian supplies mean Chinese buying is now starting to transfer to Argentina. “With Brazilian export supplies declining seasonally, and falling below the year-ago level in October/December 2018, China is turning to Argentina,” Oil World said in its weekly report. “In September, Argentina is expected to export approximately 100,000 tonnes of soybeans to China. We estimate that shipments to China may reach 1.8 million tonnes between September 2018 and February 2019 against none a year ago,” the Hamburg-based company said. This means China would dominate Argentina’s September 2018-February 2019 soybean exports, which were expected to total 1.90 million tonnes against 1.77 million tonnes in the same year ago-period, Oil World said. But the poor Argentine soybean crop in early 2018 and reduced domestic supplies would make it necessary for Argentine crushers to turn to the United States to cover their needs.
  • USDA Data to Be Price Damper Friday, Economist Says
    The USDA releases the Quarterly Grain Stocks report on September 28. The report indicates corn and soybean use during the fourth quarter of the 2017-18 marketing year. Corn and soybean prices are unlikely to find any support with the release of the report on Friday. The supply of corn available on June 1 of the marketing year is the base for estimating September 1 stocks. Corn stocks started the quarter at 5.306 billion bushels based on the June Grain Stocks report estimate. Currently, the Census Bureau estimates for corn imports are only available through July. Imports for the fourth quarter are on pace to total nearly 7 million bushels. By combining imports with the beginning stocks, total available supply for the fourth quarter comes in at 5.313 billion bushels.

Summary:

China has taken out ads in Iowa’s largest newspaper to show the impact of the trade war on Iowa’s farmers as “the fruit of a president’s folly.  It was a massive 4 page spread in Sunday’s Des Moines Register which highlighted how the trade dispute is forcing China to buy from South America instead of from the US. They are realizing that this administration is not going to budge and they are now desperate to try to change the narrative. This move is a clear indication that the tariffs are hurting China.

The corn futures finished higher because of concern over wet weather affecting yield projections. The crop progress report showed positive insights toward harvest. The corn rating increased 1% to 69% in the good to excellent category. The corn harvest progress was at 16%, up 7% from the previous week. Soybean futures also closed higher on news of increased export into Argentina (they will buy from us to cover their China demand). The soybean rating rose 1% to 68% in the good to excellent category. Soybean progress was up 8% from the prior week to 14%. Wheat futures felt some selling pressure from profit taking and beneficial rain covering the majority of Russia and Ukraine.