3 Big Things Today, May 4
1. Soybean Futures Fall After China Cancels Export Sales
Soybean futures were lower in overnight trading after government report showed China is taking a step back from purchasing oilseeds from the U.S.
The Weekly Export Sales Report showed China not only didn’t buy old-crop U.S. soybeans last week, but also they ended up canceling shipments totaling 133,700 metric tons.
That confirmed fears by traders and producers that the Asian country is likely retaliating, albeit quietly, against threats of tariffs on their goods by the Trump administration.
The U.S. has threatened to impose duties on as much as $150 billion worth of Chinese goods, while China has said it will put tariffs on imports of U.S. wares. A U.S. delegation is in Beijing this week in an attempt to work out the trade spat.
Grains were also lower, following soybeans.
Soybean futures for July delivery dropped 13¾¢ to $10.39½ a bushel overnight on the Chicago Board of Trade. Soy meal fell $3.20 to $395.40 a short ton, while soy oil dropped 0.16¢ to 30.65¢ a pound.
Corn futures fell 1¾¢ to $4.06¼ a bushel overnight.
Wheat for July delivery lost 6½¢ to $5.31 a bushel in Chicago, while Kansas City futures dropped 8¼¢ to $5.59½ a bushel.
2. Corn Export Sales Surge, Soybeans Mixed as China Cancels More Than it Buys
Export sales of corn jumped, while soybeans were mixed last week.
Corn sales in the seven days that ended on April 26 totaled 1.02 million metric tons, up 46% from the previous week at 16% from the prior four-week average, the USDA said in a report.
Mexico was the biggest buyer at 310,100 tons, followed by Colombia at 148,200 tons. South Korea bought 126,000 tons, Egypt took 116,700 tons, and Taiwan purchased 80,100 tons. An unknown customer canceled a cargo of 127,400 tons, and Panama canceled a shipment of 51,800 tons.
New-crop sales for delivery after September 1 totaled 49,300 tons, all to Mexico.
Analysts had pegged old-crop sales from 700,000 to 1 million tons and new-crop sales from -50,000 to 150,000.
Soybean sales were mixed at 416,300 tons for 2017-2018, up 12% weekly but down 58% from the prior average, the USDA said.
China was in the mix, but not in the good way.
Mexico was the big buyer at 126,200 tons, followed by Vietnam at 74,200 tons – including 66,000 tons switched from China. Taiwan was in for 68,600 tons, and Indonesia bought 56,700 tons. China canceled a shipment for 133,700 tons.
For 2018-2019, net sales totaled 469,900 tons as Argentina bought 190,000 tons, unknown buyers took 129,000 tons, and China was in for 66,000 tons, according to the USDA.
Old-crop soybean sales were pegged from 300,000 to 600,000 tons, while new-crop sales were forecast from 150,000 to 350,000 tons.
Wheat sales last week were reported at 234,800 metric tons, down 21% week to week but up noticeably from the prior four-week average and well above expectations.
Mexico bought 70,000 tons, South Korea took 50,100 tons, Chile was in for 34,000 tons, and Guatemala purchased 23,900 tons. The Philippines canceled a cargo of 47,000 tons.
New-crop sales for delivery after the start of the marketing year on June 1 totaled 201,300 tons, the government said. Mexico bought 60,900 tons, Iraq purchased 50,000 tons, the Philippines took 50,000 tons, and Taiwan was in for 47,100 tons.
Analysts had pegged old-crop sales from zero to 30,000 tons and new-crop sales from 100,00 to 300,000.
3. Flood Warnings in Effect Along Mississippi River in Iowa, Red-Flag Warnings Up North
Flooding along the Mississippi River is expected in the next seven to 10 days, while the Wapsipinicon River and the Iowa River also may breach their banks, according to the National Weather Service.
Another round of thunderstorms is expected in eastern Iowa and western Illinois starting Saturday, though the storms aren’t expected to be severe, the NWS said in a report early Friday morning.
Flood warnings are also in effect for parts of southern Missouri near Branson.
An isolated thunderstorm or two may develop in the region all of next week, though severe weather isn’t expected, the NWS said.
Farther north, in much of North Dakota and Minnesota, a red-flag warning is in effect. Winds will gust up to 35 mph while relative humidity will be around 20%, creating tinderbox-like conditions, according to the agency.
Any fires that develop could spread rapidly, the NWS said.