By Kirk Maltais
--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.
--Soybeans for November delivery rose 0.7% to $8.73 1/4 a bushel.
--Corn for December delivery rose 0.7% to $3.23 a bushel.
HIGHLIGHTS
Russia's Bounty: 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.
China Buying Binge: Soybean futures were lifted by a wave of new export sales announced by the USDA this morning. The USDA said 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 sales announcement created a counterbalance to negative sentiment coming from China's declaration this weekend that it would sanction 11 American citizens for comments about Hong Kong, including Republican Senators Ted Cruz and Marco Rubio. "The U.S. is likely to keep increasing pressure on China through the U.S. November election," said AgResource. "The unknown is whether there is a point where rising tensions impact the Phase 1 Trade Pact?"
INSIGHTS
Rock Bottom?: Corn futures on the CBOT closed in on a year-low earlier this month, and are now floating around the $3.20 per bushel to $3.25 per bushel range. Grains traders are trying to determine if corn futures have any downside left, or if a big jump is coming. The main factor controlling what futures do will be projections for the 2020 corn crop in the U.S., said Todd Hubbs of the University of Illinois. "August weather looks to go a long way in determining the eventual size of the crop," said Hubbs. "A change in corn planted acreage remains in the picture as well."
Everybody's Gotta Eat: Export inspection of US corn exports exceeded 1 million metric tons this week, according to USDA data. The USDA says that 1.15 million 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 are not confident that 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 U.S. Ag products this year," said Arlan Suderman of StoneX. "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."
AHEAD:
--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.
--The USDA releases its monthly WASDE report at noon ET Wednesday.
--The USDA will release its latest weekly export sales numbers at 8:30 a.m. ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
