-Russia blocks Ukrainian vessels on Azov Sea – grain impact viewed as limited
-Chinese soybean crush margins turn red
-First notice day for December deliveries tomorrow
-Weekend dinner plans for Trump/Xi to have all eyes on tweets
The weekend G20 summit, which kicks off Friday, remains the heavy focal point of the market. President Trump and Chinese President Xi are set to have dinner on Saturday. White House officials said there are no plans to hold a joint press conference or announcement after the meeting/dinner, but rather will leave it to the two sides to disseminate their take on the meeting in their own ways. Many are doubting a significant breakthrough or concrete agreement will come out of the meeting, but even an indication of a “truce†or easing of tensions could improve the psyche of the soybean market regarding the potential for resumed trade. The bottom line, though, comes down to the fact that China is well-supplied with Brazilian soybeans and the historically fast planting pace of this year’s Brazilian crop will allow for a much earlier than usual availability of new crop supplies, as well. With U.S. soybean ending stocks currently estimated to be near 1.0 billion bushels, a resumption of Chinese imports of U.S. soybeans, at some point during the 2018/19 marketing year, could help to lower stocks ideas from current estimates, but is extremely unlikely to keep stocks from building notably from last year, nonetheless, leaving the fundamental structure of the overall soybean situation very burdensome. We do not see this weekend’s events likely resulting in much of the way of specific fundamental revelations for the balance sheet, but could help set a tone, either negative or positive, regarding prospects for a true fix to the trade situation coming sooner or later, which in turn will likely see the market react accordingly one way or the other. The fund net short in soybeans is currently thought to be in the 60-65k contract range. All eyes will be on the tweets…..
ï‚· Russia has blocked Ukrainian vessels from entering or leaving the Azov Sea, with 35 vessels of all types reportedly affected so far. As we mentioned yesterday, though, traders supposedly familiar with the situation stated only 4-5% of Ukrainian grain exports typically leave via Azov Sea ports.
ï‚· Chinese soybean crush margins in the heavy crushing province of Shandong are said to have turned negative this week for the first time since August on a combination of weakening soybean meal demand (African swine fever influence?) and large existing SBM stocks. JCI reflected crush margins of around -$4.18/tonne (-11 cents/bu) vs positive margins of around $8.65/tonne (24 cents/bu) earlier in the week.
 SovEcon’s early ideas on Russia’s 2019/20 wheat crop reflect an expected rebound in production to around 77.3 MMT from this year’s 70.0 MMT crop, while total grain production next year is seen rebounding to 121 MMT from this year’s 110 MMT. Winter grain planted area is seen at a record 18.2-18.3 million hectares (~45 million acres) vs 17.8 million hectares (44.0 million acres) for this year’s harvested crops.
ï‚· Taiwan tendered for 110k tonnes of U.S. wheat for Jan-Feb shipment, with offers due by Dec 5.
ï‚· Tomorrow is first notice day for December deliveries. Corn, CBOT and MPLS wheat deliveries are expected to be light, while KCBT deliveries may be heavier.
 Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/34214 for details of this week’s USDA Export Sales report.
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