Export sales for beans came in at 364,200 tonnes for old crop while new crop sales tallied 547,000 for a total at just under a million metric tons combined. China was in for about 700K of the old and new crop totals. China also announced an auction out of their soybean reserves on Friday (7.15.16) in a series of prearranged sales in the next weeks and months that could total as much as 1.5 million metric tons. This shell game they are attempting is to artificially drive the bean price lower by signaling soft demand. Make no mistake, when countries maneuver grain or any commodity out of their reserves it’s bullish from a demand perspective long term. At some point the reserves will need to be replenished regardless of talk from the Chinese government that they will not replenish.
Cumulative sales for beans stand at 105.8 percent of the USDA forecast vs. a five year average of 102.3 percent. If the export pace keeps up exports could be revised higher by 60 million bushels dropping ending stocks from 290 to 230 million bushels. If yield slips two bushels per acre from 46.7 to 44.7, ending stocks would drop to 52 million bushels. This brings us to weather. The main topic of conversation is a high pressure ridge that brings temps from 95 to 105 for much of the Midwest for a 5 to 7 day period beginning the middle of next week. The question going forward is will the high pressure ridge redevelop by month’s end and into early August? The trade will be monitoring any potential rains toward month end and into early August following the excessive heat. The latest weather runs show a cooling off period in the last few days of July particularly in the eastern grain belt accompanied by rain. These latest forecasts were enough to halt the midweek corn and bean rally sending prices spiraling lower late Thursday and Friday.
Technicals read like this for next week. For November beans support is down at 1017.0, and with a close under 9.79 is next. Resistance is up at 11.08 and then 11.61. For December corn support comes in first at 3.44 and then 3.32. Resistance comes in at 3.74 and then 3.92. For September wheat support comes in at 4.12 and then 4.04. Resistance is up at 4.40 and then 4.60.