3 Big Things Today, July 9
1. Soybean Futures Plunge Overnight Amid Ongoing Trade Spat
Soybean futures were lower overnight amid an ongoing trade war between the U.S. and China.
China canceled purchases of soybeans for delivery in the 2017-2018 and 2018-2019 marketing years, the USDA said in a report on Friday. The Asian nation, once the biggest buyer of the oilseeds on a weekly basis, now tends to be mentioned only when it cancels purchases. Still, sales were higher week to week.
The Trump administration on Friday began imposing tariffs on $34 billion worth of Chinese goods, and Beijing responded with duties on an equal amount of U.S. goods, including soybeans.
Prices on Friday rallied 4% on speculation the so-called trade war wouldn’t amount to much, but the delayed export sales report showed China wasn’t in a buying mood.
Corn and wheat, which were supported by soybeans on Friday, also sold off overnight.
The trade war could escalate as President Trump last week said the U.S. may target more than $500 billion worth of Chinese goods for tariffs – encompassing almost everything imported from the Asian country.
Soybean futures for November delivery fell 10½¢ to $8.84 a bushel overnight on the Chicago Board of Trade. Soy meal lost $3.10 to $334.30 a short ton, and soy oil declined 0.05¢ to 29.41¢ a pound.
Corn futures fell 3¾¢ to $3.69¼ a bushel in Chicago.
Wheat for September delivery fell 5½¢ to $5.09¾ a bushel, while Kansas City futures declined 5¢ to $5.08 a bushel overnight.
2. Soybean Sales Jump Week to Week Despite Chinese Cancellations
Export sales of soybeans jumped week to week despite the cancellation of a very large order by China, according to the USDA.
Sales in the week that ended on June 28 totaled 561,500 metric tons, the USDA said in a report that was delayed by a day due to the Fourth of July holiday. That’s up 57% from the prior week and 78% from the previous four-week average.
The Netherlands was the biggest buyer at 162,100 metric tons, the government said. Pakistan bought 134,700 metric tons, though 60,000 of that was originally destined for China, and Bangladesh purchased 109,300 tons, 60,000 tons of which were originally a Chinese order. Japan took 80,400 tons and Germany bought 79,600 tons, the USDA said.
The overall total would’ve been higher, but China canceled a shipment for 366,000 metric tons.
New-crop sales came in at 458,700 tons as Mexico purchased 193,600 tons, an unknown customer took 187,500 tons, Vietnam bought 60,500 tons, and Thailand was in for 35,100 tons. China canceled a purchase of 66,000 tons, according to the agency.
Corn sales for the 2017-2018 marketing year that ends on August 31, meanwhile, at 440,700 metric tons were down 48% from the prior week and 37% from the four-week average, the USDA said.
Mexico purchased 144,800 tons, Egypt was in for 109,200 tons, Vietnam bought 74,100 tons, Colombia took 74,200 tons, and Saudi Arabia was in for 71,900 tons.
An unknown customer canceled a shipment of 228,800 tons, Spain nixed a cargo of 52,100 tons, and France canceled a purchase of 20,500 tons, the USDA said.
New-crop sales were reported at 232,100 tons as Guatemala bought 91,100 tons, Mexico was in for 47,500 tons, Japan bought 31,000 tons, and an unknown buyer purchased 25,400 tons.
Wheat sales for delivery in the 2018-2019 marketing year that started on June 1 were reported at 440,100 tons, according to the government.
Taiwan bought 97,600 tons, Mexico was in for 88,300 tons, an unknown buyer took 49,200 tons, and Chile purchased 40,000 tons, the USDA said.
3. Rain Expected in Much of Midwest Will Offset Triple-Digit Heat Indexes
Weather conditions look fairly ideal across much of the Corn Belt today, though some flooding remains a problem along the Missouri River in southeastern Nebraska and southwestern Iowa.
Flood warnings are in effect along the states’ border for the next several days, according to the National Weather Service. More thunderstorms are forecast for the region starting on Wednesday that will last through the weekend.
Hot weather also may become an issue later this week with heat indexes creeping as high as 105˚F., the NWS said in a report early Monday morning.
Farther east, isolated to widely scattered precipitation is expected in parts of central Illinois. The storms aren’t expected to be severe, but rain will be widespread, the agency said.
The precipitation will be welcome, as heat indexes could reach the triple digits starting tomorrow, according to the NWS.