China Soybean Crush Margins Decline

MORNING AG OUTLOOK

Grains are lower. TGIF. US stocks are higher on hope of an EU trade deal. USD is higher. Crude is higher and near $65. Gold is lower. US Midwest should continue to see showers. US jobless claims dropped for 6th consecutive week, reducing odds of Fed rate cut.

SOYBEANS  

SU is near 10.00. Dalian soybean, soymeal, and palmoil futures were lower. Soyoil was higher. US crush will supply higher biofuel use. North and east cornbelt rains should help US soybean crop. Most still feel above average US crop and record Brazil crop should eventually weigh on futures. Some est US 25/26 carryout to closer to 510 vs USDA 310.  Brazil basis firmed on talk of Increase China buying, and slowdown in farmer selling. US soybean export commit is near 50.8 mmt (1,867 mil bu), up 12 pct vs ly and USDA up 9. China soybean crush margins are in decline due to talk if increase Argentina soymeal imports.

CORN 

CU is near 3.99. Dalian corn futures were lower. North and east cornbelt rains should help US corn crop. Above average US crop and record Brazil crop should continue to weigh on futures. Some could see 25/26 US corn carryout could closer to 2,085 vs USDA 1,660. US corn export commit is near 70.1 mmt (2,760 mil bu), up 27 pct vs ly and USDA up 22. Slow harvest and farmer selling has firmed Brazil corn basis. USDA announced 135 mt US corn to S Korea and 284 mt US corn both 24/25 and 25/26 to unknown.

WHEAT 

WU is near 5.39. KWU is near 5.26. MWU is near 5.88. Appears US and especially EU Matif futures have disconnected to talk of lower Russia yields and firm cash markets. Resistance is from talk of good summer South Hemisphere crops. Annual US ND wheat crop tour est yield at 49 bpa vs 54.5 ly and USDA estimate of 59. US wheat export commit is near 8.95 mmt (329 mil bu), up 12 pct vs USDA up 3. Canada wheat exports to date are near 27.2 mmt vs 23.7 ly.

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