Soybean Morning Update & Commentary:

USDA Weekly Export Sales:
Trade Est. (combined) Actual (old and new crop)
Corn 200-650 56 and 308
Wheat 250-500 462 and 12
Beans 150-700 -110 and 817
Meal 175-400 130 and 144
Oil 5-25 1

Overnight grain markets traded cautiously higher led by corn which is extremely oversold and due for a bounce after re-testing contract lows. The wheat market will be watching the GASC tender today where US hrw should be competitive in the world markets with the freight disadvantage to Egypt the only thing making it close. The soybean market meanwhile has developed a near term range this week, trading roughly in an $8.75 to $9.00 range. Weather forecast includes plenty of rainfall although not complete coverage for the central to eastern belt and will support soybean yield potential for those that get the rains, what ever that may be on those late planted and small plants.

Overnight Chinese headlines were a negative influence referencing China preparing retaliatory measures to US threatened tariffs. That influence turned more supportive this morning on a Chinese statement that they hope the US can meet halfway with it on trade issue. China's foreign ministry references the previous Trump comment that China needs to resolve Hong Kong issue on its own and they hope US will do what it said. He also says that Xi and Trump are in touch via meetings, phones and letters. Exhausting.

Futures open interest yesterday was -8.4k in corn, -5.2k srw, +1.6k hrw, +5.5k beans, -2.5k meal and +3k oil.

Weekly export sales were within expectations for corn, wheat and meal. Soybean sales were on the top end of the range of expectations while soybean oil sales failed to follow up last week's strong activity and missed expectations this week. China was very busy this week. They cancelled a cargo of old crop corn and replaced it with one cargo in the new crop, they cancelled 423 tmt of old crop soybeans, they bought 118 trb of new crop cotton, they bought 10 tmt of pork 79 tmt of old crop sorghum (54 switched from previously announced unknown sales), cancelled 25 tmt of new crop sorghum, the bought 135 thousand pieces of whole cattle hides and 22 thousand unsplit wet blues.

Old crop bean sales were net -110 tmt. Buyers included Netherlands (127, including 130 switched from previously announced unknown sales, Pakistan (71, including 68 from China), Japan (63), Germany (56), and Taiwan (38). Reductions were primarily for China (423) and unknown (124). New crop net sales of 817 went to unknown (586), Mexico (104), Pakistan (57), Egypt (55), and Malaysia (23) with a reduction for Taiwan (31).

Outstanding old crop sales on the books total 5.658 mmt with China earmarked for 2.841 mmt of that total and unknown 1.114 mmt. Accumulated soybean exports to date stand at 43.013 mmt compared to 53.891 mmt this time last year. This represents a shortfall of 400 million bushels to last year's export pace, the USDA is estimating exports to fall short of last year by 434 million bushels.

July NOPA crush comes out at 11 with the avg. trade estimate at 155.8 mb compared to 148.8 mb in June where flood related disruptions and a break in margins reduced activity. Oil stocks are estimated at 1.530 bln lbs compared to 1.535 bln lbs in June.

A possible revision to Brazil's 18 and 19 soybean crops could be coming due to some discrepancies with private-sector estimates which raised doubts about the official government S&D numbers. CONAB's director of information Bastos mentioned a hefty soybean export forecast by Abiove as one factor triggering the ongoing revision. "The balance of supply and demand is tight, there is no space for exporting 72 mmt of soybeans" this year he said, according to Reuters.

The USDA currently pegs Brazilian soybean exports this year at 76.5 mmt. Safras estimates Brazil soybean august export volume at 5.271 mmt with Feb-Aug total exports at 54.401 mmt to date. It is estimated they have covered 50% of their September needs, 10% of October and nothing yet for Nov, Dec and Jan before Brazil's yet to be planted new crop begins to come online.

DTN digital/satellite crop tour yield estimates, waiting on IL, IN, OH and MI:
KS C 144 (USDA 135)
KS B 36 (USDA 42)
MO C 138 (USDA 160)
MO B 39 (USDA 45)
NE C182(USDA186)
NE B 56 (USDA 58)
SD C 149 (USDA 157)
SD S 40 (USDA 45)
IA C 187 (USDA 191)
IA S 53 (USDA 55)
MN C 175 (USDA 173)
MN S 44 (USDA 46)
WI C 167 (USDA 165)
WI S 46 (USDA 47)

In the news:
• Ahead of today's monthly NOPA crush report for July, analysts are expecting member firms to have crushed 155.8 mln bushels of soybeans. For comparison last month's NOPA crush was 148.84 mln bushels and the year ago month was 167.73 mln bushels. The data will be updated around 11:00 am CDT, Thursday, Aug 15.
• Ahead of today's monthly NOPA crush report for July, analysts are expecting member firms Soyoil stockpiles at the end of July at 1.530 bln lbs; end of June stockpiles were 1.535 bln lbs. and the July 2018 ending stocks were 1.764 bln lbs.
• SGS Thursday pegged Malaysian palm oil product exports in the first half of August at 752,470 mt, up +14.3% over their first half July estimate.
• Intertek on Thursday pegged Malaysian palm oil product exports in the first half of August at 755,820 mt, up +11.2% over their first half July estimate.
• AmSpec Agri on Thursday pegged their Malaysian palm oil product exports in the first half of August at 765,205 mt, up +16.6% over their first half July estimate.
• Argentina presidential contender Fernandez Wednesday described talks with President Macri as good, adding that both want markets to stabilize. Fernandez further said his political policies do not include defaulting on the country's debt.
• Head of information at Brazil's CONAB food stats agency, according to reuters report Thursday, said given discrepancies between government grain data and private forecasters, the agency will review 2018 and 2019 Soybean production estimates. The director of information, Guilherme Bastos, acknowledged the tightness in supply, demand situation and said there is no room for 72 mln mt of soybean exports this year.
• On Thursday, China's customs agency banned Myanmar pig imports and related product imports due to African swine fever concerns.
• Euronext Paris November rapeseed futures Thursday are trading -0.25 euro lower at 376.75 euros/mt
• Dalian January soybean futures Thursday traded -13 yuan lower ending at 3,438 yuan/mt; Jan soymeal futures gave up -14 yuan to finish at 2,876 yuan/mt
• Dalian January soyoil rose +34 yuan to end at 6,148 yuan/mt on Thursday, palm oil futures were unchanged at 4,812 yuan/mt
• Malaysian Sept cash offers for RBD palm oil and olein traded -$5.00/mt lower on Thursday, ending at $542.50/mt and $547.50/mt respectively
• Malaysian October crude palm oil futures Thursday traded -4 ringgit lower finishing at 2,175 ringgit/mt
• CBOT Deliveries: August Soybean 143, Oil 0, Meal 69

Early spread action:
• Soybean bull spreads firmer.
• Board crush margins off a nickel to 99 cents/bushel.
• Oil share weaker to 32.9%.

Soybean Basis: fob US Gulf soybeans are a $25/mt discount to Brazil and a $9/mt discount to Argentina fob prices.
Location Spot
• US CIF Gulf up 3 to +35
• Brazil fob offers up 5 to +130
• Argy fob offer off 8 to +72
• Cedar Rapids steady -50
• Decatur, IL steady -18x
• Claypool, IN steady -8x

Outside markets feature the dollar trading unch at 97.83, crude oil -.38 to 54.87 and DJIA +119. The Brazilian real is trying to stabilize its break trading +.22%. Malaysian palm oil broke sharply to close -45 at 2,174 ringgit.