October 02, 2020 | FBN Insights | Kevin McNew

Markets Sell Off Following Trump’s COVID Infection

Soybean export sales, for the week ended September 20, at 95.2 million bushels were again above the range of expectations

Weekly Export Sales Remain High

  • Soybean export sales, for the week ended September 20, at 95.2 million bushels were again above the range of expectations.
  • Through September 24, China officially had 20.6 million tonnes of soybeans committed vs 3.6 million at the same time last year.
  • Corn sales last week were very strong at 79.8 million bushels, exceeding market expectations.
  • Weekly sales of corn through the first four weeks of the marketing year are averaging an impressive 74.8 million bushels per week.
  • Wheat sales last week of 18.6 million bushels were also better than expected.
  • 257,000 bushels of wheat were sold to China bringing the total to 55 million bushels compared to just 2.2 million last year.
  • Upland cotton sales of 233,800 running bales were up noticeably from the previous week and up 7% from the prior 4-week average.
  • FBN’s Take On What It Means: China already owns the majority of their projected needs and are in good shape should any production issues arise in South America this coming season. Other large importers could be caught short if supplies are limited for any reason. While buying from China could slow or switch to other origins, this could bring other world demand to the US. 

Argentina Lowers Soy Export Tax

  • Argentina has cut soybean, soymeal and soyoil export taxes by 3% to 30%.
  • The government is trying to help stimulate export revenue as the country struggles with recession and decreasing foreign currency reserves.
  • The tax cut is temporary through year-end and will revert to 33% in January.
  • Last year Argentina generated $15.7 billion from exports of beans, meal and oil.
  • Argentine farmers have turned reluctant sellers of old-crop beans, having sold 32.2 million tonnes of soybeans, down over 12% from last year. 
  • FBN’s Take On What It Means: It’s doubtful that this marginal tax cut will encourage much selling enthusiasm.  A much larger cut would be needed to offset high inflation and doesn’t help producers with the weak Peso or foreign exchange restrictions. 

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