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Soybeans, corn, wheat down on profit taking, weather

Soybeans were lower on profit taking and technical selling. There have been more rumors about new demand from China, but nothing has surfaced. About 200 million bushels of U.S. beans previously purchased by China remain unshipped, with about a month and a half left in the marketing year. No timetable has been announced for the resumption of negotiations and U.S. and Chinese tariffs remain in place. China was the top weekly destination for export inspections, but the overall pace remains slow. Chinese demand has slowed because of African Swine Fever, those tariffs on U.S. beans, and lower protein content in Brazil’s crop. The USDA says 40% of U.S. beans are blooming, compared to the five-year average of 66%, and 7% have reached the pod setting stage, compared to 28% on average, with 54% of the crop rated good to excellent, unchanged from last week. Commodities in general are getting ready for the USDA’s next set of supply, demand, and production numbers out August 12th, which will have the results of the USDA’s acreage resurvey and prevent plant totals. The report will not include objective yield data. Soybean meal and oil followed beans lower.

Corn was lower on profit taking and technical selling. During the session, the USDA’s corn condition rating was expected to be steady to higher despite hot weather in many key U.S. growing areas over the past week. Still, the USDA’s good to excellent rating has been around multi-year lows. The USDA says 35% of corn is silking, compared to 66% on average, and 5% is at the dough making stage, compared to the usual pace of 10%, with 57% of the crop called good to excellent, down 1%. Most of the Corn Belt is expected to see a generally non-threatening weather pattern this week as the crop heads through key development phases. Because of the historically slow planting pace, the trade remains wary about potential damage from an early frost. Weekly export inspections were bearish for corn and sorghum with the 2018/19 marketing year running through the end of August. Sorghum has been hit hard by Chinese tariffs and corn is suffering from increased competition from Argentina, Brazil, and Ukraine. Ethanol futures were lower. U.S. ethanol and DDGS are also rumored purchase targets for China. DTN says South Korea bought 55,000 tons of optional origin corn. Hot, dry weather in Europe could damage their corn crop.

The wheat complex was lower on profit taking and technical selling. The trade was expecting a good week for the winter wheat harvest and an increase for the spring wheat condition rating. For winter wheat, 69% of the crop is harvested, up 12% on the week, but 10% behind both last year and the five-year average. Yields are generally strong, while the protein content and disease issues for winter wheat seem to be on the back burner. For spring wheat, 92% of the crop has headed, compared to the normal pace of 94%, and 76% of the crop is rated good to excellent, unchanged on the week, but with 3% moving from good into excellent. Export competition is also a bearish factor as even though inspections are ahead of last marketing year’s pace, it’s early in 2019/20 and the 2018/19 bar is a low mark to beat. In any event, the main destinations for the week were Algeria and Malaysia. DTN says Taiwan is tendering for 90,650 tons of U.S. wheat and Jordan is in the market for 120,000 tons of milling wheat. The trade is also watching weather in Australia, Canada, Europe, Russia, and Ukraine.

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