China Keeps Buying U.S. Soybeans June 8, 2020
Good Morning from Allendale, Inc. with the early morning commentary for June 8, 2020.
Grain Market continued pushing higher after a weekend with hot temperatures and little precipitation. Soybean and corn futures lead the way with fund buying on lower volume and strong Chinese export sales after tensions flared earlier in the week. Traders will continue to watch trade relations, fund activity, and weather maps this week.
Last week, July corn futures were up 6.75 cents, July soybeans were up 27.50 cents, July wheat down 5.50 cents, July soymeal was up $6.10 and July soyoil was up 88 points.
USDA Weekly Crop Progress Report will be released this afternoon at 3 p.m. CST. Trade is expecting corn planting around 98% complete (93% last week, 78% last year, 95% average). Soybean planting expected at 85% complete (75% last week, 54% last year, 80% average). Hard red Spring wheat planting expected at 97% complete (91% last week, 97% last year, 99% average).
CFTC Commitments of Traders report showed funds new net position short -282,266 corn contracts, long +6,637 soybean contracts, short -13,472 wheat contracts, short -50,981 soymeal contracts and long +11,376 soyoil contracts.
Private exporters reported to the USDA export sales of 588,000 metric tons of soybeans for delivery to China/Unknown. Of these purchases, 258,000 tonnes occurred the previous day, the USDA’s Foreign Agricultural Service said. The remaining 330,000 tonnes were sold over the course of several days between May 29 and June 4, the agency said. With these sales included, last week’s soybean export sales showed 1.026 million tonnes in confirmed deals to China and to unknown destinations, according to USDA data.
China’s exports in May fell 3.3% from a year earlier after being surprisingly 3.5% higher last month. They also had a sharper-than-expected fall in imports as well pointing to growing pressure on manufacturers as global growth stalls, according to customs data.
China’s soybean imports in May surged 27.4% from last year, as a large volume of shipments from Brazil arrived after South American weather improved, customs data showed. China brought in 9.38 million tonnes of soybeans in May (7.36 million tonnes last year).
Last week’s cattle kill pushed to 636,000 head (best in 10 weeks) and it was 4.3% under last year. Wholesale beef continued to remove extraordinary gains made during the virus weeks. Last week saw a 97.50 drop through Friday morning to 265.84.
Last week’s hog kill improved to 2.452 million head (best run in nine weeks) and it was 1.8% over last year. Last week added only 52,000 head to the backlog, currently around 2.566 million head (assuming 500,000 market hog euthanasia’s).
Dressed beef values were sharply lower again with choice down 10.78 and select down 13.99. The Feeder cattle index is 127.93. Pork cut-out values were down 2.07.
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