You know the old hard luck expression; If I didn’t have bad luck, I wouldn’t have any luck at all. It would appear we could rephrase that for the ag commodity world right now as; If there were not bad news, there would be no news at all. Every day it seems we keep piling on the negative, which with weather posing no threats and trade tariff fears adding more than enough threats, it pretty easy to do. Of course, as I have repeated many a time when everyone is thinking the same way, no one is thinking. Markets have become so narrowly focused on the trade spat that they appear to have lost sight of another adage in that the best cure for low prices is low prices.
There is no question that China has been absent from the US soybean market for the past several months, but as I stated earlier this week, that does not mean that global demand for beans is shrinking significantly. We just have different players on the board. With the breakdown we have witnessed in the price here at home, U.S. beans are now selling at a discount of $1.50 a bushel to Brazilian beans and sharp users around the globe appear to be stepping in to take advantage. Pakistan, Thailand, and Mexico have all stepped up purchases, with the final nation now booking more than four-times the quantity they did at the same time a year ago. There is even discussion now that it would make economic sense for Brazil to import U.S. beans for processing to replace the increased quantity that they have been exporting. I have commented previously that ultimately economics will triumph over politics, but unfortunately, we have to work through a period of suffering and pardon my German, scheisse first.
All that said, weekly export sales did not provide us with much of anything to cheer about, regardless if it was a holiday-shortened week of not. For the week ending July 5th, we sold just 158,600 MT or 5.83 million bushels of beans. This was 72% below last week and 62% under the 4-week average. Top purchasers were Egypt with 176k MT, followed by Indonesia with 85.8k and then Taiwan at 68.3k. Simple math would suggest there were cancellations, the largest being unknow at 296,900 MT. Sales for 2018/19 totaled 270,800 MT. Corn sales came through at 402,100 MT or 15.83 million bushels. This was 9% below last week and 33% under the 4-week average. On the top of the list was South Korea with 195.3k MT, followed by Mexico at 159.4k and then Japan with 141.9k. Unknown destinations canceled 435,100 MT and sales for the 2018/19 year were a measly 128,000 MT. Last and also very literally least we have wheat sales of 136,400 MT or 5.01 million bushels. This was 69% below the prior week and the 4-week average. Nigeria with the top buyer with 78k MT, followed by the Philippines with 75.8k and then Guatemala with 34.1k.
Just a few more hours until we receive the “Word of Gov.” so there is little else to really cover before then. Once again here is a breakdown of industry estimates that I have seen thus far; Total corn production of 14.29 billion bushels coming from a yield of 175 bpa. This compares with the initial forecast of 14.04 billion and 174. The bean production estimate stands at 4.319 billion from a yield of 48.65. The current government number stands at 4.28 billion bushels and a yield of 48.5 bpa. Total wheat production is expected to come in at 1.859 billion compared with the June estimate of 1.827. 2017/18 ending stocks are projected to fall in around 2.111 billion corn, 506 million beans, and for the 2018/19 crop year, corn is pegged at 1.718 billion, beans 484 million and wheat at 979 million. On the world scene, 2017/18 ending stocks for corn are expected to come through at 191.42 MMT, 91.76 MMT for beans and 272.46 MMT wheat and then for 2018/19, corn at 156.27, beans at 88.15 and wheat at 265.05. Finally, Argentine corn production is expected to show up at 32.7 MMT and beans 36.7 and in Brazil, corn at 83.2 MMT and beans 118.9 MMT.