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Soybeans lower on China tariffs

News that China was retaliating with their own tariffs on $60 billion of U.S. goods drove soybeans down early in the session. But, the path for soybean prices still looks very bearish. DTN says CNBC.com reported there are no plans yet for U.S. and Chinese trade negotiators to meet again. USDA estimated on Friday that U.S. ending soybean stocks just short of 1-billion bushels after dropping the export estimate by 100-million bushels. Monday’s inspections report was bearish, with 18.9 million bushels of soybeans inspected for export last week, well below the 31 million bushels needed each week to meet USDA’s new export estimate of 1.775 billion bushels.

Corn rebounded after the China retaliatory tariff moves. China does not buy a lot of U.S. corn, but soybean prices influence corn prices. There was added concern about current trade negotiations with Japan and whether there would be a deal. Weather forecasts look drier in the five-day forecast which pressured prices a few cents lower Sunday evening with some optimism about increased planting. USDA said Monday morning that 39.4 million bushels of corn were inspected for export last week, close to, but not the 44.3 needed each week to meet USDA’s export goal.

There are still plenty of places in the Corn Belt too wet or flooded to plant and there’s a wetter forecast for the coming weekend. Friday’s 2.485 billion bushel estimate of U.S. ending corn stocks in 2019-‘20 is likely too high, but can’t be discounted if talks with Japan don’t turn out. The price outlook for corn remains roughly neutral but there are unknowns about the new-crop season. Cash corn has dipped back below its one-year average, but is holding above the lower end of its sideways range.

Kansas City wheat had small losses early in the session and finished higher by the end of Monday’s session. July Chicago wheat was up more, rebounding from Friday’s new contract lows. Friday’s WASDE report from USDA was not good for wheat prices, estimating 1.13 billion bushels of U.S. ending wheat stocks and a 6% increase in world wheat production in 2019. Although WASDE numbers were higher than official estimates, exports haven’t been doing well for several months and the International Grains Council had already estimated a 4% increase in world wheat production. USDA reported 31 million bushels of wheat inspected for export last week, more than the 23.4 million needed each week to reach USDA’s new export goal of 925 million bushels by May 31. Larger supplies are expected in 2019, but prices are cheap enough to find support. Spot Kansas City wheat is close to its lowest prices in 13 years.

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