Tariffs on Chinese poultry imports are damaging our commodity export potential to China. Chinese markets are closed for a week long holiday.

Soybeans

Rain substantially slows soybean harvest helping keep current supplies tight. Traders expect USDA reports will reflect tight supplies. Ending stocks for Sept. 1 were 138 million bushels and 28 million above expectations. Sept. 1 last year, ending stocks were 205 million bushels.

Soybean crush is 9 million bushels below last month and as much below the crush last year at this time. Soybean sales are nearly double the 5 year average and 88 percent above last year. USDA quarterly ending stock estimates of 138 million bushels was 27 million greater than market traders anticipated.

Traders switched to the sell side of the soybean market earlier in the week. Commercial traders have become net sellers of beans. Traders have been reluctant to buy soybeans with favorable weather in the Corn Belt providing increased production potential.

China is buying 1 million tons of oilseed rape from domestic sources to support prices. It remains to be seen if this will hurt soybean prices.

Soybean maturity estimates include leaf drop occurrence in 63 percent of the crop where average is 77 percent. Export inspections of 7.42 million bushels were disappointing. Weekly export sales of 1.384 million tons were well above trade estimates of 750,000 tons.

Corn

Corn crop maturity is 37 percent where the average is 72 percent. U.S. corn maturity is the lowest in 24 years. Harvest delays are significant. Only 6 percent of our corn is harvested where 18 percent is average. Harvest is the slowest in 25 years.

Ethanol production has increased by 34,000 barrels per day. The current production rate is 728,000 barrels per day. That is a 2 million barrel increase from last month. Ethanol use is 45 million bushels above USDA projections of 3.67 billion bushels.

Traders are buying corn at currently low prices. Export inspections were below expectations at 29.582 million bushels. Quarterly ending stock estimates of 1.674 billion bushels were 45 million bushels below market expectations. Carryover is nearly the same as last year.

An ample corn supply in the Philippines has stimulated the government to support prices. The government bought 300,000 tons last year but will double that amount this year buying 600,000 tons. That will limit any corn sales to the Philippines in the near future. Argentina predicts only 4.63 million acres of corn, the lowest number in 20 years.

Chinese feed grain prices have increased to farmers. China now predicts corn production of 148.8 million tons. That is 11 million tons below USDA predictions last month. Chinese farmers are expected to harvest 79 bushels per acre, which is 9 bushels below average.

World corn production estimates were lowered by 2 million tons. United States weekly exports sales of 1.223 million tons exceed expectations by nearly half a million tons.

Wheat

Weekly wheat exports are above expectations but total wheat exports are 12 percent behind average. Export inspections of 24 million bushels were bullishly above expectations. September wheat supplies are estimated at 2.215 billion bushels. That is 80 million bushels above estimates.

Winter wheat planting in the United States will be reduced partly because of the late soybean crop. Wheat planting intensions in the southern hemisphere have also dropped. Russia has harvested 88 million tons of grain. U.S. weekly export sales of 538,000 tons met expectations.

Wheat prices may have bounced off the near term bottom last week. Harvest in the United States and Canada are pressuring wheat prices. North American harvest is nearing 90 percent complete. United States wheat production exceeds estimates.

Expected European wheat production increases are also price bearish. India expects winter wheat production to increase by 8 million tons.

Rice

Late planting, wet weather, lodging, and diseases are reducing rice yields in much of the Rice Belt. Harvest is a month late in many areas. Some traders are saying bullish fundamentals of lower U.S. supply may not be factored into market prices. Weekly exports were up 34 percent at 61,000 tons but shipments were down 22 percent at 31,000 tons.

Weak export demand reflects Asian competition. Stored rice in Thailand is a major market concern. If prices increase, Thailand could dump large amount of rice onto world markets. Vietnam is selling rice at a dollar per pound less than Thailand. Vietnam continues to sell most of the rice into world markets for now.

Cotton

Cotton exports were 62,000 bales, well below the 150,000 bales needed to meet USDA projections.

Weather continues to hurt production and quality in the Delta and Southeast as cotton harvest is delayed. However, Texas weather is production favorable and price bearish.

Production and quality concerns support higher cotton prices if demand increases. Only 8 percent of U. S. cotton is harvested where 17 percent is average. Cotton harvest is the slowest in 25 years.

The cotton market is technically overbought adding pressure to markets that are factoring in less export demand and possible increased Texas production. The market setup is short term bearish though increased demand could rapidly change fundamentals.

China predicts 10 percent less cotton production but the government is selling 600,000 tons of cotton reserves. Pakistan announced a reduction of 10 percent in cotton production. World cotton supplies are getting tighter.

e-mail: heartland.agriculture@yahoo.com