By metmike - July 16, 2018, 11:02 a.m.
Export inspections out 1 minute ago:
https://www.ams.usda.gov/mnreports/wa_gr101.txt
Did you like the bean number mcfarm?
The June crush number was a record number again but came in around what was expected.
I have never in my life traded anything you can eat and I do not understand this report. In plain English, what is going on?
Richard,
Glad that you asked.
Because of the tariff war with China, soybeans are getting crushed..........not literally(which happens for them to be used-more on that below) but figuratively as in the price has dropped over $2 a bushel from a high in SX at the end of May at $1060 to the current price around $854/bushel.
A lot of this drop has been the market expectations of our exports to China going to ZERO and China has been, by a very wide margin our biggest customer.
There are other reasons, like outstanding weather and predictions for record yields. The USDA report last Thursday was unbelievably bearish. Ending stocks for next year were projected at 200 million bushels higher levels than they were just a month ago.
So back to China and demand and the export inspections. Without China buying our beans, exports should be plunging but somebody sure took alot of beans.
The sales number that we get on Thursday mornings are just that...........sales. Big numbers are good(they haven't been that good recently) but sales can be cancelled. Inspections on Monday mornings report are what is going out.
The last 2 weeks, inspections were at 600,000+. Not huge but still pretty decent and probably more than most expected.
Am not sure what the break down is regarding what countries are getting those beans but beans are the cheapest they have been in over 10 years, so alot of places are probably loading up.
Apparently, China is going to buy all their beans from South America. SA is going to run out of beans or/and the price is going to run up from Chinese buying compared to the price in the US......................so the rest of the world knows where to go to get cheap beans...................the US.
So China can either cut back on their use of beans or pay more for them in SA. It does hurt the US a bit, especially when the market is trading a negative effect and funds sell the heck out of them but on the global market, if US beans are the cheapest(which they are by quite a bit) buyers will show up.
http://odells.typepad.com/blog/an-explanation-of-the-soybean-crush.html