The grains shed a couple pennies in the overnight session with old crop corn down 2 cents, Chicago wheat down 1 cent, and august soybeans down ¾ of a cent. Expectations at the office here are for a continuation of yesterday’s bounce, but we are concerned that the upside potential will be limited as strong selling pressure will likely meet any sharp rally. A strong new crop soybean sale to china should also help support the market this morning.
Corn had great export sales this week beating expectations for both old and new crop. Old crop sales came in at 573,700 MT which was well over expectations of 250,000 to 350,000. Old crop corn still ahead of pace to meet USDA expectations by about 43 million bushels.
Soybeans met analyst expectations for both old and new crop. Old crop sales were small, but at least they were positive which kept soybean sales well ahead of pace to meet analyst expectations. This week's 37,700 MT pushed old crop sales now 38.7 million bushels ahead of existing export projections which indicates that net cancellations must occur between now and Aug. 31 to meet USDA projections. New crop sales were slightly lower than expected with only 495,000 MT booked, compared to expectations between 500,000-700,000 MT. However, a reportable sale announced this morning of 708,000 MT of U.S soybeans to China should help lift the market. Wheat sales missed expectations to the low side only booking 320,700 MT compared to expectations of 400,000-550,000 MT.
The European Union will begin taxing corn imports at a rate of $7.2 per metric ton. This was announced following U.S. export prices at the gulf moving below levels required by the European commission. Imports of corn have not been taxed since August 2010 and this is viewed as negative news for U.S. corn prices.
Port worker strikes in Argentina continued on Thursday. The key export facility of Rosario has come to a standstill as port workers and grain inspectors are demanding higher wages. Argentina is a major exporter of soymeal and soyoil, and the strike has worked to underpin the soy complex in the last two days.
