DTN Grain Close: Soybeans Surge Higher on US-China Trade Optimism

    Maturing soybean pods. Photo: Kevin Hudson, Mississippi State University

    Following a weekend of contentious tariff threats and escalation of the U.S.-China trade impasse, the Trump administration reported early Monday from the G7 summit that China wants to return to the negotiating table. There is some question as to whether China agrees with that statement, but the downtrodden equities markets and soy futures reacted with a modest rally.


    Midday: Soybeans lead at midday.


    Corn is narrowly mixed with trade finding light buying on the potential resumption of trade talks, along with continued oversold conditions. Weather should continue to remain a short-term non-issue with continued cool weather the biggest concern at this point as we move towards September.

    The crop tour wrapped up with a yield number of 163.3 BPA for production of 169.5 BPA. Ethanol margins remain poor with blenders in the best position, with more plants likely to be idled with rumors of the refinery waivers to be reversed again refuted late last week.

    Ethanol futures are slightly weaker this a.m. Weekly export inspections remain soft at 639,154 metric tons, with weekly crop progress expected to show steady conditions and maturity still well behind normal. Basis remains mixed to firmer overall with harvest getting closer.

    On the September nearby chart support is likely the $3.57 1/4 low with the lower Bollinger Band at $3.47 below that with resistance the 10-day at $3.63.


    Soybean trade is 9 to 12 cents higher at midday, regaining the Friday selloff on trade optimism, but we remain squarely in the bottom part of the range. Meal is $2.00 to $3.00 higher, and oil is 5 to 15 points higher. Crush margins remain positive overall, with oil staying towards the upper end of the range, and meal finding support at $289. Basis remains flat overall. The Brazilian real has continued to grind lower.

    The weather looks to be a short-term non-issue for soybeans as well coming forward with maturity remaining the biggest concern. The crop tour pegged yields at 46.1 BPA. Weekly export inspections were a little softer at 961,964 metric tons. Weekly crop progress is expected to show steady conditions, and lagging maturity.

    September chart support is the lower Bollinger Band at $8.41, with the next round up the 10-day $8.59, which we tested overnight.


    Wheat trade is mixed at midday with the winter wheats leading as spring harvest continues with spillover support from the row crops. The Kansas City/Chicago spread is at 81 after a high of 90 cents last week and a low of 71 cents this week with Kansas City gaining slightly overnight. The corn/HRW spread is wider, back to 34 cents.

    Kansas City wheat is now back to competitive on the world market trading as well as into feed rations, although that has faded in recent days. Spring wheat harvest is trying to play catch up with the slow start in the northern hemisphere. The dollar remains near the upper end of the range, with a reversal from Friday overnight. Weekly export inspections were inline with recent weeks at 492,988 metric tons.

    The September Kansas City chart support is the new low at 3.80 3/4 with the first resistance the 10-day at $3.89 which we are just above, and the 20-day at $4.04.

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