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July 31, 2020 | FBN Insights | Kevin McNew

Markets Steady to Higher Expecting Greater Demand

New crop soybean sales last week were 122.9 million bushels, with 73.5 million reported as Chinese

Export Sales Better Than Expected  

  • New crop soybean sales last week were very large at 122.9 million bushels, with 73.5 million reported as Chinese and another 44 million as "unknown.”
  • There are 505 million bushels of new-crop sales on the books compared with  123 million last year, and are the largest since 2014/15.
  • Corn export sales of 25.1 million bushels were well within expectations.
  • Wheat sales for the week were solid at 24.9 million bushels, up slightly from the previous week's 22.7 million.
  • Sales of 118,700 running bales of upland cotton for 2019/2020 were up noticeably from the previous week. 
  • FBN’s Take On What It Means For The Farmer: Corn buying reported for the week ended July 23 was solid but not spectacular. However, the story there has been the new purchases seen over the last week (see below). Large purchases by China are pushing up total commitments, especially of soybeans. We expect continued buying of soybeans from around the world as the US has become the most competitive origin to be supportive of prices. 

China Buys Record Amount of Corn 

  • On Thursday, exporters reported China booked a record 76.25 million bushels of corn purchases for the 2020/21 marketing year.
  • The purchase comes on top of the 69.4 million bushels bought two weeks ago, which was the previous record.
  • Added to previous commitments the sale brings the total 398 million bushels compared to last year's 153 million bushels at this time.
  • Of the total, China’s has bought 5.7 million tonnes or 225 million bushels.
  • Ukraine is expected to sell at least 3 million tonnes of corn to China for the 2020/21 marketing year.
  • USDA previously projected China’s 2020/21 corn imports at 7 million tonnes.
  • FBN’s Take On What It Means For The Farmer: Potential corn buying from China has been viewed as the wildcard for the upcoming marketing year. Their expected total import commitment is essentially already accounted for and will likely be adjusted upward. The questions going forward will be whether purchases continue and whether they can offset the potential for record large US production.   

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