Feed Ingredients Report: Week Ending Aug. 10, 2018

Weekly Average Price History

Week	Corn	Soybeans	Wheat SRW
Aug. 12, 2018	3.68	8.84	5.65
Aug. 5, 2018	3.68	8.91	5.55
July 29, 2018	3.68	8.91	5.55
July 22, 2018	3.58	8.64	5.27

• USDA’s initial survey of the 2018 corn and soybean production were released this week and both crops came in well above expectations. The 2018-19 U.S. soybean outlook this month is for larger supplies, greater use, and record stocks. The 2018-19 U.S. corn outlook is for larger supplies, greater feed and residual use, increased exports, and larger ending stocks. The 2018-19 U.S. wheat outlook this month is lower supplies, greater use, and reduced stocks
• Corn – slightly bearish. Record 2018/19 U.S. corn yield forecast 178.4bpa offset by high demand. U.S. yields were revised 4.4 bpa higher MOM, to a record 178.4 bpa. The 356m bushels added to production were partially offset by strong export and domestic feed demand. U.S. carry-out is now 132m bushels higher YOY, though cuts in yield or higher demand could eventually bring that figure lower.
• Soybeans – bearish. Larger-than-expected U.S. yields of 51.6bpa to drive prices lower. U.S. 2018/19 soybean yields were revised higher, to 51.6bpa, 3.1bpa above the July report and well above the average market estimate of 49.8bpa. Demand was raised marginally (72m bushels from old and new crop), with 205m bushels added to carry-out, now a record 785m bu.
• Wheat – bearish. Amid lower corn prices – 2018/19 global stocks are cut 5.3m tonnes YOY. EU production is cut by a hefty 7.5m tonnes MOM, to 137.5m tonnes, after hot, dry late-season conditions. This comes close to trade guesses, with exports cut back to 23m tonnes, a six-year low. U.S. exports hiked 5% MOM, as 2018/19 export availability from the EU and Black Sea falls sharply. Global imports are cut 1m tonnes MOM and will remain similar to 2017/18 levels.
• Short term, we could see additional technical selling in corn as funds trim their position with support at $3.50-3.55. Risk for end users is greater to the upside though if September ear weights are not near avg. Note with the early pace of maturity of the crop in much of the U.S., the September report should contain more actual harvest results.

Weekly Spotlight

The USDA this week raised U.S. ending stocks of soybeans to a record high 785 million bushels due to excellent yield potential and the trade war with China.