TOP STORIES:
Wheat Drops on Forecast for Larger-Than-Expected Russian Crop
Wheat for September delivery fell 0.9% to $4.91 a bushel on the Chicago Board of Trade Monday in response to new data showing a larger-than-expected Russian wheat crop.
Wheat futures on the CBOT fell Monday in reaction to a Russian agency again increasing its forecasts for Russian wheat production. The firm, IKAR, now forecasts the Russian wheat crop at 129 million metric tons. This is a 1.5 million ton uptick from the firm's previous projection. "Wheat is starting its next leg lower on large Russian production ideas," said Doug Bergman of RCM Alternatives.
New Wave of Export Sales Supporting Soybeans -- Market Talk
11:03 ET - Soybean futures trading on the CBOT are being lifted by a wave of new export sales announced by the USDA this morning. The USDA says nearly 600,000 metric tons of soybeans were sold to China for delivery in the 2020/21 marketing year, with another 111,000 tons being sold to unknown destinations for the same marketing year. The announcement comes after China said this weekend it would sanction 11 American citizens for comments about Hong Kong, including Republican Senators Ted Cruz and Marco Rubio. "The US is likely to keep increasing pressure on China through the US November election," says AgResource. "The unknown is whether there is a point where rising tensions impact the Phase 1 Trade Pact?" Soybean futures are up 0.6% on the CBOT Monday. (kirk.maltais@wsj.com; @kirkmaltais)
STORIES OF INTEREST:
Corn Export Inspections Exceed Projections -- Market Talk
12:09 ET - Export inspection of US corn exports exceeded 1M metric tons this week, according to USDA data. The USDA says that 1.15M tons of corn will be inspected for export this week. That's higher than estimates of 700,000 tons to 950,000 tons, according to Futures International. The uptick in inspections comes as grains traders aren't confident China will be able to meet its targets for export purchasing under the phase-one trade agreement. "China will not likely hit the $36.5 billion target for importing US Ag products this year," Arlan Suderman of StoneX says. "It may not come close. But it has significant needs that it is filling, although it doesn't want us to know that it has those needs and will downplay that aspect." (kirk.maltais@wsj.com; @kirkmaltais)
U.S., China Trade Negotiators Set to Meet Amid Diplomacy Friction. Here's a Primer. -- Barrons.com
China imposed sanctions on 11 Americans on Monday, including Sens. Marco Rubio and Ted Cruz, the latest tit-for-tat following a spate of measures by the U.S. that have inflamed tensions between the two countries.
The moves make for a difficult backdrop as trade negotiators are expected to meet next weekend to review the phase one trade deal signed early this year. What emerges from that meeting could potentially awaken markets to the growing U.S.-China risk. So far, they have been relatively nonplussed. Global stocks, including China's CSI 300, were up on Monday.
THE MARKETS:
Hogs Close at Nearly 2-Month High -- Market Talk
15:31 ET - Lean hog futures on the CME finish trading up 5.6%, to 53.825 cents per pound. It's the highest level hog futures have closed at since June 15--nearly 2 months. "Pork prices continue to advance in a period of higher production," says RJO Futures, noting that prices are gaining despite US pork production being up nearly 10% versus the same time last year--suggesting that lower retail prices have been stimulating consumer demand. Live cattle futures also finished higher, rising 0.7% to $1.0715 per pound. (kirk.maltais@wsj.com; @kirkmaltais)
