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-Malaysian June palm oil stocks above expectations
-Attache sees larger Australian wheat crop/exports, but below USDA official ideas
-Indonesian domestic biodiesel consumption on track with higher target
-Corn belt rains limited in near term, but possible tropical storm impact eyed
-Bulgaria African swine fever reports warrant monitoring
-USDA reports tomorrow
 
USDA’s Crop Production and WASDE reports will be released tomorrow at 11:00 AM CT. Our pre-report commentary/analysis can be found at https://portal.rjobrien.com/MarketInsights/Blog/Read/36557. A summary of the average trade estimates is on the following page.
 
 The Malaysian Palm Oil Board reported the country’s end June palm oil stocks were 2.424 MMT, above average market expectations of 2.350 MMT, down only marginally from May stocks of 2.447 MMT and above last year’s June stocks of 2.204 MMT. June palm oil production was 1.518 MMT vs 1.538 MMT expected, 1.671 MMT in May and 1.333 MMT last year June. Malaysia exported 1.383 MMT of palm oil in June, in line with expectations of 1.387 MMT and compared to 1.712 MMT in May and 1.130 MMT last year.
 The USDA ag attaché in Australia still sees this year’s wheat crop improving from last year’s disastrous 17.3 MMT, but ongoing drought conditions in some locations look to limit the rebound to around 21.5 MMT vs the USDA’s latest official estimate of 22.5 MMT. Rains have improved in some locations helping to boost the likelihood of a larger crop this year, especially when combined with the estimated 8% increase in wheat area (USDA official estimate 17.6% wheat area increase). With the better crop expectations, the attaché sees 2019/20 Australian wheat exports at 12.5 MMT (USDA 13.5 MMT) vs 9.1 MMT for 2018/19 and 13.8 MMT in 2017/18. Barley production is seen rising to 9.2 MMT from 8.3 MMT last year, with new crop exports estimated at 5.0 MMT vs 4.5 MMT this year.
 Indonesia is largely on track to meet their notably higher domestic biodiesel blending target this year, much different than in recent years as shortfalls were regularly seen, as 2.89 million kiloliters of unblended biodiesel was consumed during Jan-June representing 47% of the 6.2 million kiloliter target for 2019. This year’s target reflects a substantial 44% increase from 2018 usage of 4.3 million kl.
 China reported finding fall armyworms in the northern province of Shanxi, the 21st province reporting cases of the destructive insect. The ultimate impact of the widespread issue this year is far from known at this point, but the USDA ag attaché did at least partially attribute their notably lower crop outlook to the pest.
 Bulgaria reported six new outbreaks of African swine fever in small operations in the northern region of Pleven and follows two outbreaks in the same region reported earlier in July, as well. While Bulgaria is a rather small hog producer in the big picture (22nd out of 28 EU nations), the Pleven region boarders Romania and Serbia, which are the 10th and 12th largest hog producing countries in the EU. Containment measures and culling in the impacted area is taking place, but obviously the situation warrants close monitoring.
 Just days after issuing a new tender to import non-GMO corn, following multiple delays in their previous tender, which did not result in a purchase, India already has postponed the tender by two days to July 11. Prior to the announced delay, India said they are lowering import duties on an additional 400k tonnes of corn imports to 15% from the standard 60% to help mitigate high domestic corn prices following last year’s drought. In June, India allowed 100k tonnes of corn imports at the reduced tariff.
 Egypt ended up buying 240k tonnes of wheat following their latest tender, with 180k tonnes Romanian at $213.44/tonne c&f and 60k Ukrainian at $215.34/tonne c&f.
Weather
Other than rains to fall courtesy of the remnants of the season’s first tropical system the middle of next week, rainfall looks to be fairly limited in the next 10 days. Rains in the next 5 days look to favor MN and N IA, but even there, totals look to be in the .20-.60” range. Totals elsewhere look to be generally under .35” and coverage of around 45%. The forecast for next week sees the remnants of a tropical system (yet to form in the northern Gulf) to track up the lower MS River Valley and then bring rains of 1-2” to the SE 3/4 of MO, most of IL, the northern 2/3 of IN and northern 1/3 of OH. Totals elsewhere across the region look to be generally less than .35”, although the GFS is indicating an area of .50-1”+ rains for much of MN. It must be noted that the tropical feature has not yet even officially formed so the track of the remnants through the Midwest are still a week away, certainly making the forecast for the Midwest next week tenuous. Temps will be running average to below average across the region as a whole in the next 3-4 days, with above average temps to take over for the 6-10 day period. The Northern Plains are expected to see mostly average precip over the coming 10-day period keeping growing conditions favorable. 

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