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July 20, 2020 | FBN Insights | Kevin McNew

Grains Struggle With Weather Versus Demand

Increased exports of soybeans are expected as U.S. remains most competitive global origin

Export Sales Announcement

  • Private exporters reported to the U.S. Department of Agriculture export sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.

 

Grains Struggle With Weather Versus Demand 

  • Rains are moving into dry areas of western Iowa this morning after falling significantly in Missouri and Illinois over the weekend.
  • Forecasts across the Corn Belt are for higher temperatures, but are accompanied by normal precipitation.
  • Last week USDA reported record sales of 3+ million tonnes of corn to China.
  • As soybean exports decrease out of Brazil due to dwindling stocks, demand has shifted to the US due to relatively lower prices.  
  • Commercials still are not seeing enough producer bean movement to satisfy the increasing export demand.

FBN’s Take On What It Means: Weather has mostly supported beneficial growing conditions and yield expectations are growing for corn. Bean yields are more dependent on August weather and forecasts are beginning to project into that time period. China’s WTO corn import quota has likely been met for the first time since the agreement was signed in 2001. Increased exports of soybeans are expected as the US remains the most competitive global origin.

Chinese Ports Hit Capacity Due to Virus Tests 

  • China increased inspections of imported food last month after an outbreak of the coronavirus among people working at a major food market in Beijing.
  • Import container pick-up activities have been severely impacted due to the lack of freezer plug-in facilities.
  • Though it has only found the virus in a few samples out of more than 200,000 tested so far, China continues to test a large portion of arrivals.
  • The current bottleneck is insufficient inspection and disinfection capacity for the containers at customs.
  • Shippers have warned that containers could be sent to alternative ports and that cargo owners would be liable for additional costs.

FBN’s Take On What It Means: Chinese customs have added additional resources to accelerate customs clearance, and it is expected inspection capacity and speed will improve. The slowdown has not had an effect on grain shipments which continue to arrive at a record pace. 

 

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