Fridays USDA raised more questions than answers for me but, from wheat’s perspective at least, reconfirmed that big crops get bigger. The dominant wheat number from the USDA was the global new crop carry out at 293 million tonnes (Mt) – can’t get bullish with this hanging over the market. Russia at 77Mt has some upside while Australia at 22.5Mt probably has some downside but this is just semantics when the carry out is close to 300Mt. Beans are equally as bearish but for different reasons – if you are selling widgets and you have one widget buyer and they decide not to buy widgets…. Corn was the report before the real report – the USDA chose to wait for confirmation on abandonment and yield losses so it was widely viewed that the US balance sheet tightens in the June numbers. So, in summary, bearish. Wheat globally has more than enough to go around, the bean outlook is dire with a combination of African swine flu and trade negotiations while corn is probably the only one with even a glimmer of a silver lining.

Friday came and went without a trade agreement between the US and China – the well communicated fall out was the initial increase of US tariffs on selected goods while we are still waiting for the Chinese response. In the meantime, Donald suggested that there are other solutions to look at, one of which would be to use the revenue from the increased tariffs to soften the blow to the US grower. This was quickly rebutted in the press with many indicating the US had done that in the past with an eventual negative outcome. Fair to say the Chinese will return serve which makes a resolution look more unlikely, not more.