AG Receives Post-WASDE Support

Export Sales Announcement

Private exporters reported to the U.S. Department of Agriculture export sales of 204,000 metric tons of soybeans for delivery to China during the 2019/2020 marketing year.

September WASDE: Supportive Soy, Neutral Wheat

Cornwas the bearish category as the old and new crop carryout ending stocks rose. The USDA lowered yields from August by 1.3 BPA to 168.2 BPA which was +1 BPA above trade expectations. At 2.190, the 19/20 carryout stays above the 2 billion bushel mark.

Soyyields from August declined by .6 BPA to 47.9 BPA which was +.7 BPA above market expectations. Increased old crop domestic and export soybean use helped push the 18/19 carryout lower to just above 1 billion bushels. 19/20 ending stocks declined by 115 MBU to 640 MBU.

Wheat.Some minor inter-class calibrations made between HRS and HRW. The all wheat number was neutral as the government made no changes to the supply or demand sides of the equation.

Cotton.The USDA reduced 19/20 production but this was offset by a decline in export demand which left the carryout unchanged.

FBN’s Take On What It Means:We believe that despite the USDA’s “tempered” adjustments to corn and soybean yields, the developing supply and demand scenario for the 19/20 crops is becoming clearer. While a 640 MBU soybean ending stocks for 19/20 is not “bullish”, robust domestic crush and export demand are positives. For corn, the scenario is more complex. A 2.445 BBU 18/19 ending stocks number is the largest since 1987. The estimated 19/20 2.190 BBU carryout inside of a domestic and global export climate that lacks a supply or demand shock can present challenges for future price development.

China Makes Largest Soybean Purchase Since June

Privately run Chinese firms bought at least 10 boatloads of U.S. soybeans on Thursday which represent the country's largest purchase in more than a year.

At more than 600,000 tonnes, the soybeans are scheduled for shipment from U.S. Pacific Northwest export terminals during the October to December time period.

China bought 10,878 tonnes of U.S. pork in the week that ended September 5, which is the most in a single week since May.

FBN’s Take On What It Means:The purchases seems to be another political indication that trade tensions between Washington and Beijing could be warming, after hitting a low in August when China suspended all U.S. farm product purchases in response to threats by President Donald Trump to impose more tariffs on Chinese goods. The purchase of soybeans and pork is a positive development ahead of the scheduled October meeting between the two nations.

期货交易的风险,套期保值,speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

—Kevin McNew