FI PDF attached
US corn old and new crop stocks were reported 43 and 44 mil bu lower than expected, respectively, but US production was reported just over 100 million bushels above trade expectations. New-crop world production was upward revised 7.8 million tons and stocks up 2.4 MMT from last month (2.8MMT below trade expectations).
US soybean old crop stocks within expectations but new-crop was upward revised 86 million bushels, a bearish indicator. USDA did not upward revise old crop soybean exports, too low in our opinion. US soybean production came in 171 million bushels above trade expectations as the yield was reported at a record 53.3 bushels per acre. Brazil 2019-20 soybean exports were taken up 4.5 MMT to 93.5 million tons. World soybean production was taken up 7.9 million tons, offset by an upward revision to 2020-21 China imports by 3.0 million to 99 million. We believe China will import of 100 million tons of soybeans in 2020-21.
US wheat stocks were reported 21 million bushels below expectations although production came in slightly above expectations. World wheat was downward revised 3.3 million tons in large part to a 4 million ton decrease to the EU wheat crop. World ending stocks were taken up 2 million tons.
We see this report as less influential for price reaction unlike other August report years. The trade will shift back their focus to US weather developments and impact from the recent derecho. Another focus point the trade will be watching will be upcoming soybean and corn shipments after China committed a good amount of product. Look for prices to remain subdued over the short term. We would not rule out $2.95 Dec corn, $8.40 Nov soybeans, and $4.75 Dec Chicago wheat.
Senior Commodity Analyst – Grain and Oilseeds
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ICE IM: treilly1
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