USDA Crop Progress Report Shows Corn Improvement
The USDA’s Weekly Crop Progress report issued on Monday, Sep. 23 showed an improving corn crop, no real change the soybean crop, and a spring wheat harvest that continues to lag.
The reported corn condition scores showed a slight improvement from the previous week where the percentage of the corn rated “good/excellent” rose by 2 percentage points to 57%.
Corn condition scores in Minnesota and Missouri showed improvement.
Percentage of the soybean crop reported as “good/excellent” remained unchanged from the previous week at 54%.
Both corn and soybeans maturity remains behind the 5 year averages.
Reported spring wheat harvest at 87% continues to lag behind the 5 year average of 97%. Harvest delays in North Dakota combined with excessive wet weather are presenting late season quality challenges for the wheat crop that remains in the field.
FBN’s Take On What It Means: We believe that the recent weather patterns throughout much of the eastern and western corn belts have helped the corn and soybean crops stabilize and reduce yield penalties. We remain concerned about the pace of the spring wheat harvest and believe that the delays combined with the recent bout of rain in North Dakota is one variable that is supporting futures prices.
China Buys 600,000 MT of Soybeans
Chinese importers bought about 10 boatloads of U.S. soybeans on Monday following mid-level trade talks in Washington last week.
The soybean sales were among the largest by non-state owned Chinese importers since Beijing raised import tariffs by 25% on U.S. soybeans in July 2018.
The volumes totaled about 600,000 tonnes and will be shipped from the Pacific Northwest during October to December. The purchase is similar in size to a wave of buying earlier this month.
Other soybean purchases over the past calendar year have been made almost exclusively by state owned Chinese firms which are exempted from the existing tariff structure.
FBN’s Take On What It Means: We believe that any material export sales for U.S. soybeans can be good for prices. We are also wary of these “good will” purchases ahead of U.S./Chinese trade negotiations as these orders can be cancelled. With Brazil soybean supplies getting tight into the end of the southern hemisphere's marketing year, we expect to see global soybean export business start shifting to the U.S.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
