On Thursday, the U.S. Department of Agriculture released its supply and demand forecasts in its monthly report. The World Agriculture Supply and Demand Report was being watched closely for data on corn and soybean production in the U.S.
Given the late planting of the crop, it was thought that the August yield estimates for both crops were too high, at 169.5 and 48.5 bushels per acre, respectively. Analysts called for a dip in both of those figures ahead of the report, so when the WASDE showed reductions near expectations, the market response was muted. The soybean balance sheet did tighten up on some increased old crop demand (both crush and exports were higher than the August report), but the larger news was out of China.
Traders were reporting that ahead of October trade talks between the U.S. and China, soybean purchases totaling 600,000 metric tons were made by China in a good faith move. This was surprising, given that earlier in the week, China agreed to import soybean meal from Argentina. China has a huge crush operation and has historically only imported soybeans and processed them domestically and avoided importing soybean meal. But the trade war and demand for feed pushed China to agree to buy meal from Argentina (the top meal producing and exporting country in the world). The result of all of this was a firmer soybean market and a cloudier outlook about the future of the trade war between the U.S. and China.
Wheat markets firmed up this week. The WASDE Report from the USDA held no changes for the domestic balance sheet. Globally, lower production forecasts were a result of Australia and Kazakhstan dry weather. Stocks were higher for the 2019-20 crop year however, as lower exports and consumption along with large carry-in stocks bumped up supplies. U.S. spring wheat harvest is in its final weeks, at 71% completion. This is lagging the five-year pace of 87%. Rains across the Northern Plains have been keeping farmers from getting into the fields as they normally would, though hot weather has limited any fears of damage.
The durum market remains quiet. Minneapolis prices have been steady through the summer with little excitement to report. The WASDE Report held little news.
The canola market has not been able to rise off of support. Thursday's news of China buying U.S. soybeans supported the fats complex, spilling over into canola. However, the outlook for canola has not changed. Despite calls from many for Canada and China to begin repairing its relationship to resume trade, the lack of purchases have kept canola on or near the lows.
The barley balance sheet from the USDA kept ending stocks at a comfortable 93 million bushels. Harvest is wrapping up as well, with 82% of the work done compared to 92% for the five-year average pace.
Old crop mustard seed supplies in Canada were larger than expected. Stocks were roughly 20% greater than previously thought with carry-out totaling 72,700 metric tons.
The U.S. lentil crop is smaller than a year ago because of lower planted area. Production is off 22% from the 2018 crop, totaling 297,000 metric tons.