The spat between Trump and China continues to look likely to hurt US soybean exports. The latest out of China confirms their intentions to reduce soybean imports and increase domestic production. Although even increasing their production to 15.8mt is still a long way from covering their consumption which is now estimated at 111mt. The increase in supply and the intention to reduce imports may not sound like much but 1mt here and 1mt there starts to move carryover stocks from one location to another. At the moment the soybean market seems to be the oilseed most likely to impacted by the changes with canola currently likely to escape the issues.
With the USDA WASDE report due out tonight we see the punters coming out with their pre report estimates. Drought across the US HRW belt is going to be a key item in this report. A Reuters poll was said to have pegged HRW production at around 17.6mt, about 3mt less than last year. But all up US wheat production estimates are expected to rise with both spring and soft red winter wheat production increasing. The punters peg US all wheat production at about 48.36mt about 1mt more than last year.
World ending stocks are expected to fall fractionally but importantly show consumption outpacing demand for the first time in 5 years.
Much of the attention will be on other major exporters with production expected to decrease in Russia, Ukraine and Australia while increases are expected in Argentina and potentially the EU.
In the June report Chinese data is expected to be removed from the wheat table to show a more realistic picture of world supplies.