July 16 Weekly Update

7/16 – In last week’s WASDE report, the USDA reduced soybean exports by 250M bushels, or 12%, reflecting the projected impact of China’s retaliatory import duties that took effect on July 6. The Chinese bought $14 billion of U.S. soybeans in 2017. Soybean futures prices have plunged by 22%, from $10.41 per bushel to $8.14 (7/13) over the past 7 weeks. But what is a pain for growers, is an opportunity for buyers. The USDA raised 2018/19 soybean crush by 45M bushels to 2.045B, reflecting an increase in projected soymeal usage and exports. As a byproduct of that extra crush, we will be awash in soy-oil. Over the past 2 months, the USDA has bumped 2018/19 soy-oil production by 3.0%, from 23.0B to 23.6B pounds and increased 2018/19 ending stocks by 21.7%, from 1.84B to 2.24B lbs. Soy-oil futures closed at a 2½ -year low of $.3870/lb (post WASDE) on Friday.