USDA August Crop Reports Are Finally Here

August 10, 2012 01:10 AM

What Traders are Talking About:

* August crop reports out this morning. USDA's long-awaited first survey-based estimates of the corn and soybean crops will be released at 7:30 a.m. CT. How low NASS goes with its crop estimates will determine how aggressively the World Board must cut usage projections to keep new-crop carryover projections at somewhat reasonable levels.

The long and short of it: Check back later today for my take on the report data.

* Chinese trade data signals economy is struggling more than anticipated. China's trade surplus narrowed to $25.1 billion in July from $31.7 billion in June, according to official customs data. Traders were expecting the trade surplus to widen to $35.2 billion. While imports rose less than expected (4.7%), the real problem is on the export side, as July exports rose only 1% last month compared to expectations for an 8.6% increase.

The long and short of it: The disappointing July trade data has traders anticipating an imminent move by China to ease monetary policy and try to promote economic growth through a cut to bank reserve requirements and/or interest rates -- possibly today or this weekend.

* China actively gobbling up soybeans. China imported 5.87 MMT of soybeans in July -- the highest monthly total since June 2010 -- according to official customs data. That was a 4.4% increase from June and 9.7% higher than July 2011 imports. For January through July, soybean imports stand at 34.92 MMT, an increase of 20.1% from year-ago. Edible oils imports were 730,000 MT in July, an increase of 35.2% from June and 4% higher than year-ago.

The long and short of it: Chinese imports are likely to ease somewhat this month, but the country's appetite for soybeans will remain strong despite historic prices as robust demand for meal and edible oils should keep crush margins favorable.



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