Morning Grain Market Research

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Was it just a one-day fling, or are buyers returning to engage in a bit of courting with the grain and soy markets? It would be premature to start making any engagement plans but as I have commented previously, we have reached down to levels that should be looking attractive to a number of suitors. Granted, they have reason to be cautious at this time as the relationship with the bear has not officially broken off, and that is never easy when it happens. But it should be about time as they have made all of us depressed for long enough. Of course, it may not hurt that the old Uncle who has been holding the purse strings, telling everyone just have valuable his coins are, has obviously had a change of heart as well. The dollar has pushed down to the lowest level traded since early July and could be on a slippery slope. As I said though, it is probably too early to get hopes up too much and there undoubtedly will be a little back and forth waffling as everything is sorted out with the split, which could take another month or so. But the time for a new relationship is upon us.

As I have commented in the past, with Brazil taking the lions share of the Chinese beans market since the trade wars began, this had to create opportunities for US soy elsewhere and we finally have some data to back that up. Over the past 12-weeks, the U.S. share of the European bean trade has risen to 52%, compared with just 25% a year ago. Now, part of this could be reflecting the EUs promise to purchase more soy from the U.S. and realistically, we are talking about a total of 1.47 MMT for that period, but it is an increased market share nevertheless.

Bloomberg news published a report this morning that tells us that China is planning to now lower tariffs on 1,500 consumer products it imports from trading partners, ranging from cosmetics to home appliances. There were no specifics as to which trading partners will receive preferred status or what specific items will be included on the list, but considering they just implemented tariffs on another $60 billion of U.S. imports in retaliation to our moves, it would be easy to assume we are not.

Export sales were released this morning and for the second week of this new marketing year for corn and beans, we posted solid numbers. For the week ending September 13th, we sold a total of 1,383,700 MT or 54.48 million bushels of corn. The number one buyer was Mexico taking 344.6k MT, followed by South Korea with 204.3k and then Peru at 148.9k. In this mornings daily system, the USDA also announced sales of 148,590 MT of corn for 2018/19 and 11,430 MT of corn for 2019/2020 all to Mexico. Soybean sales did not quite reach the million mark, but absent China were decent at 917,600 MT of 33.72 million bushels. Mexico also topped this list (do they recognize a bargain in the US?) with purchases of 165.6k MT, followed by Indonesia with 90.5k and Costa Rica at 70.3. Wheat sales were also decent at 468,400 MT or 17.21 million bushels. This was 21% above last week and 32% above the 4-week average. The top purchasers were the Philippines at 80k MT, followed by Indonesia with 70k and then Vietnam at 61k.

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