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3 Big Things Today, May 10
1. Soybeans, Grains Little Changed Overnight on Trade Worries
Soybeans and grains were little changed in overnight trading despite the U.S. following through with its promise to raise tariffs on $200 billion worth of Chinese goods.
The U.S. bumped the tariff rate on the Asian nation’s goods to 25% from 10% after the sides failed to negotiate a trade agreement. President Donald Trump said earlier this week that China backtracked on many of the concessions it made, while Beijing said the talks are ongoing.
China said after the levy increase by the U.S. that it would respond with its own countermeasures but didn’t say exactly what those would be. Vice Premier Liu He is in Washington for a second day of negotiations.
Still, investors seem upbeat about the prospects of a trade deal coming out of the talks. Trump said yesterday that he received a “beautiful” letter from Chinese President Xi Jinping and that there was a chance a deal could be made.
Soybeans for May delivery were unchanged at $8.12¾ a bushel overnight on the Chicago Board of Trade. Soy meal added 80¢ to $289.90 a short ton, and soy oil declined 0.02¢ to 26.61¢ a pound.
Corn futures for May delivery gained ¾¢ to $3.54 a bushel overnight.
Chicago wheat for May delivery rose 1¾¢ to $4.31¼ a bushel, while Kansas City wheat added 1¾¢ to $3.99½ a bushel.
2. Export Sales Fall Into Negative Territory For Soybeans, Marketing-Year Lows For Grains
It was an abysmal week for export sales, as soybeans for delivery in the current marketing year dropped into negative territory and corn and wheat sales hit marketing-year lows.
Soybean sales ended in a net reduction of 149,100 metric tons as unknown customers canceled shipments totaling 263,500 metric tons, Malaysia nixed a cargo of 53,800 tons, Indonesia canceled a purchase of 51,100 tons, Thailand decided against a sale of 34,200 tons, and the Philippines canceled a sale of 13,300 tons, according to the USDA.
On the plus side, the Netherlands bought 141,700 metric tons, South Korea was in for 57,100 tons, Colombia bought 21,000 tons, Mexico purchased 20,100 tons, and Taiwan took 16,500 tons.
For the 2019-2020 marketing year that starts on September 1, sales totaled 296,500 tons as Mexico purchased 293,900 tons, the USDA said in a report.
Analysts had expected combined soybean sales of 350,000 to 1.1 million metric tons, according to researcher Allendale.
Corn sales for delivery in the current marketing year, meanwhile, dropped 51% week to week and 60% from the prior five-year average to 287,600 metric tons, according to the government. That’s the lowest since the start of the marketing year.
Colombia was the big buyer at 112,600 metric tons, Japan bought 33,400 tons, Guatemala was in for 30,500 tons, an unknown customer took 22,500 tons, and Jamaica purchased 16,600 tons. Nicaragua canceled a purchase of 18,600 tons.
Analysts had pegged sales from 550,000 to 1 million metric tons.
Wheat sales also hit the lowest for the grain’s marketing year that started on June 1.
Exporters sold 90,600 metric tons, down 26% from the previous week and 68% from the prior four-week average, the USDA said.
Nigeria was the biggest buyer at 46,800 metric tons, the Philippines took 30,000 tons, Colombia bought 29,000 tons, Italy was in for 22,400 tons, and Algeria purchased 21,000 tons. An unknown buyer canceled a shipment of 122,000 tons.
The news was better for the 2019-2020 marketing year that starts on June 1 as sales totaled 412,300 metric tons. South Korea was the big buyer at 88,600 tons, unknown customers bought 71,000 tons, Nigeria took 64,000 tons, the Philippines was in for 63,000 tons, and Saudi Arabia bought 55,00 tons, the USDA said.
Analysts had forecast total sales from 175,000 to 600,000 tons, Allendale said.
3. Freeze Warning in Effect in Nebraska, Kansas; Rain, Flooding Expected in Arkansas, Louisiana
A freeze warning is in effect for much of central Nebraska until 10 a.m. as temperatures are in the upper 20s and lower 30s, according to the National Weather Service.
The warning also includes some counties in extreme northwestern Kansas. At this point, it’s unlikely any crops were damaged, though some hard red winter wheat in the area could be at risk.
In southwestern Kansas and the Oklahoma panhandle, where the bulk of the U.S. hard red crop is grown, a frost advisory is in effect this morning as temperatures drop to 32˚F. to 35˚F., not low enough to harm plants.
Farther south, a sliver of southern Arkansas, parts of east Texas, and all of Louisiana are under flood warnings, flash flood watches, or flood advisories.
Another 2 inches on top of what’s already fallen are expected today with higher amounts in isolated areas, the NWS said in a report early this morning.
The “excessive heavy rainfall” could result in flash floods, especially in low-lying areas. Creeks, bayous, lakes, and rivers are already higher than normal from previous rainfall.
“This additional rainfall will likely result in additional rises and crests on all waterways,” the NWS said.