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-Grain markets hammered on renewed Chinese trade war concerns
-Brazilian corn/soybean crop ideas raised
-Drier U.S. weather outlook – especially for eastern belt
-Funds hit new record shorts in soybeans/KCBT wheat

 

Just when it looked like the U.S./China trade war was nearing an end, with optimism at its highest point in some time as “final†talks were expected this week in Washington, President Trump threatened to increase tariffs on $200 billion of Chinese products from 10% to 25% on Friday, as well as potentially add another $325 billion in Chinese products to the 25% tariff list, reportedly prompting thoughts Chinese officials may reconsider their trip to Washington this week, although their official stance at this time is the delegation will make the trip. Trump said he is unhappy with the progress of trade talks. In reaction, soybeans were hammered overnight, pulling corn and wheat lower, as well, while equity markets appear set for notable weakness, as well. Additionally, while the corn belt will see rains this week, the heaviest amounts appear set for the western belt, with very welcome lighter amounts in the east, while the 6-10 day outlook indicates below average precip for the vast majority of the belt. The eastern belt could see a decent stretch of limited rains over the next 10+ days. ï‚· USDA’s WASDE and Crop Production reports will be out Friday, May 10 and will include their first official estimates of U.S. and global balance sheets for 2019/20, as well as their first objective production estimate of this year’s U.S. winter wheat crop. ï‚· Corn planting progress this afternoon is generally expected to be around 25% complete vs average near 46%. ï‚· Safras & Mercado raised their estimate of the Brazilian corn crop to 101.8 MMT from 99.6 MMT previously (USDA 96.0 MMT/82.0 MMT last year) and the soybean crop to 117.9 MMT from 116.4 MMT previously (USDA 117.0 MMT/122.0 MMT last year). ï‚· Friday’s CFTC COT data showed funds widely adding to their net short positions in grain markets, hitting new record shorts for soybeans and KCBT wheat, with net selling for the week of 19k and 4.8k contracts respectively. Funds were also net sellers of 7.4k contracts in SBO and 15.5k CBOT wheat, but were net buyers of 15.5k contracts in corn and 3.8k SBM. ï‚· China’s Dalian Commodities Exchange said they plan to allow foreign participation in trading of its soybean, soybean meal, soybean oil and palm oil futures contracts this year. ï‚· India postponed the deadline on their tender for non-GMO corn to May 15 from May 8 originally, with the shipping period pushed back to June 10-July 10 from May 29-June 20 set in the initial tender. ï‚· South Korea bought 75k tonnes of US wheat (various classes) for Aug 10-Sept 10 shipment. ï‚· Saudi Arabia bought 840k tonnes of barley (expected to be Black Sea/EU origin) for July-August arrival at an average price of $193.03/tonne c&f. Weather A cold front will work through most of the corn belt today bringing modest rains of .20-.60â€, with coverage of around 75%, favoring the northern ½ to 2/3 of the region. Another front will impact the belt late Tues thru Thur with totals of .50-1â€+ for much of the region, with some 1.5-3†totals also possible, especially in central and NE IA, as well as far SE MN. Friday and most of the weekend looks dry for the corn belt, but with .20-.60†amounts possible on Sunday for the northern portion of the belt impacting MN, IA, WI, MI and northern IL. The 6-10 day period looks mostly dry, while the 11-16 day period currently shows a good rain event May 18-19 impacting most of the Plains, along with MN, IA, MO, WI and IL, but IN, OH and MI look to miss that event. In the Northern Plains, rains of .50-1.5†will fall in most of SD Tuesday and early Wednesday and then other than some light and scattered rains from time to time, things look to be mainly dry across most of MT and the Dakotas for the rest of this week, the weekend and early next week. The Southern Plains outlook remains favorable. 

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