To start the week soybeans dropped lower for the first part of the overnight session before starting to trim the losses. The market traded in a narrow range in the day session and closed with small losses. Technical selling and the strong US dollar (up over ½ cent today) pressured soybeans. Pressure also came from a StoneX survey that increased Brazil’s production by 4.0 MMT to 181.6 MMT. In addition. Celeres increased their estimate by 4.1 MMT to 181.3 MMT. Losses were limited by reports that Argentina’s crop condition rating dropped 8% last week to 53% g/e. USDA reported Dec. Crush at 230.0 MB, slightly below the average trade estimate of 230.4 MB but much higher than last Dec’s 217.7 MB. Last week’s export shipments were at the top end of the range of trade expectations. Marketing year-to-date shipments are running 36% behind last year’s pace.
Soybeans opened higher overnight to start Tuesday’s session and then saw the session highs early in the day session. The market trimmed the gains a bit but still closed with decent gains. Spillover support came from the sharply higher soybean oil market as the IRS released draft rules for the 45Z biofuel tax credit that were friendly to the biofuel industry. Credits are geared to the biofuel processor, not the fuel blender. Imported used restaurant oil (mainly coming from China) will not be eligible for the credit. Drier 6-to-10-day forecasts for Argentina were also supportive. The US and India reaching a trade deal with India agreeing to buy more US ag products added to the gains. India imports 16 MMT of vegetable oils yearly.
In Wednesday’s session soybeans traded in a very narrow range overnight and into the day session. After President Trump’s social media post on the call he had with Chinese President Xi, the market shot 50 cents higher. But within an hour, the gains had been cut in half and the market held steady there for the rest of the session, closing with 25+ cent gains. President Trump said that China is considering buying a total of 20 MMT of US soybeans “this season.” That includes the 12 MMT China recently purchased, leaving another 8 MMT to buy.
But buying another 8 MMT will be complicated for China. Brazilian soybeans are currently much cheaper than US beans so private Chinese companies have no incentive to buy US beans. That means the government would need to buy the beans and put them in the state reserves. But analysts believe China doesn’t have room in their reserves for another 8 MMT. China has been auctioning off reserve beans to make room for the 12 MMT they bought since the end of October.
After briefly turning lower early in the overnight session, the market slowly climbed throughout Thursday’s session and again closed with over 20 cent gains. Continuing export optimism after President Trump’s post yesterday that China is considering buying another 8 MMT of US soybeans this season supported the market. If China does buy 8 MMT of soybeans this marketing year, it would pretty much wipe out US ending stocks. 8 MMT equals 294 MB and last month USDA put ending stocks at 350 MB. Some analysts think China may end up buying some US corn instead of soybeans making up the entire 8 MMT.
Support on Thursday also came from the release of China’s “No. 1 Document,” which dictates ag policy. The document backed off on the previous push for self-sufficiency in food production and supported trade and imports of ag products as essential for food security for the country. This is a major policy shift for China. With all that positive news, the market largely ignored last week’s export sales report that showed soybean sales at a marketing year low.
Producers should have priced 25% of their old crop soybeans at $11.03 March (as cash contract) and priced 10% of new crop at $10.95 Nov futures fixed. The next target price to advance sales is $11.35.
March soybean support is $10.30.
For the week, March soybeans were at $11.1525 up 51.0 cents while May soybeans were at $11.2875 up 51.75 cents. March soybean meal was at $303.60 up $10.00 and March soybean oil was at $55.33 up $1.82.
Soybean Weekly Comments February 6
Soybean Weekly Comments February 6
To start the week soybeans dropped lower for the first part of the overnight session before starting to trim the losses. The market traded in a narrow range in the day session and closed with small losses. Technical selling and the strong US dollar (up over ½ cent today) pressured soybeans. Pressure also came from a StoneX survey that increased Brazil’s production by 4.0 MMT to 181.6 MMT. In addition. Celeres increased their estimate by 4.1 MMT to 181.3 MMT. Losses were limited by reports that Argentina’s crop condition rating dropped 8% last week to 53% g/e. USDA reported Dec. Crush at 230.0 MB, slightly below the average trade estimate of 230.4 MB but much higher than last Dec’s 217.7 MB. Last week’s export shipments were at the top end of the range of trade expectations. Marketing year-to-date shipments are running 36% behind last year’s pace.
Soybeans opened higher overnight to start Tuesday’s session and then saw the session highs early in the day session. The market trimmed the gains a bit but still closed with decent gains. Spillover support came from the sharply higher soybean oil market as the IRS released draft rules for the 45Z biofuel tax credit that were friendly to the biofuel industry. Credits are geared to the biofuel processor, not the fuel blender. Imported used restaurant oil (mainly coming from China) will not be eligible for the credit. Drier 6-to-10-day forecasts for Argentina were also supportive. The US and India reaching a trade deal with India agreeing to buy more US ag products added to the gains. India imports 16 MMT of vegetable oils yearly.
In Wednesday’s session soybeans traded in a very narrow range overnight and into the day session. After President Trump’s social media post on the call he had with Chinese President Xi, the market shot 50 cents higher. But within an hour, the gains had been cut in half and the market held steady there for the rest of the session, closing with 25+ cent gains. President Trump said that China is considering buying a total of 20 MMT of US soybeans “this season.” That includes the 12 MMT China recently purchased, leaving another 8 MMT to buy.
But buying another 8 MMT will be complicated for China. Brazilian soybeans are currently much cheaper than US beans so private Chinese companies have no incentive to buy US beans. That means the government would need to buy the beans and put them in the state reserves. But analysts believe China doesn’t have room in their reserves for another 8 MMT. China has been auctioning off reserve beans to make room for the 12 MMT they bought since the end of October.
After briefly turning lower early in the overnight session, the market slowly climbed throughout Thursday’s session and again closed with over 20 cent gains. Continuing export optimism after President Trump’s post yesterday that China is considering buying another 8 MMT of US soybeans this season supported the market. If China does buy 8 MMT of soybeans this marketing year, it would pretty much wipe out US ending stocks. 8 MMT equals 294 MB and last month USDA put ending stocks at 350 MB. Some analysts think China may end up buying some US corn instead of soybeans making up the entire 8 MMT.
Support on Thursday also came from the release of China’s “No. 1 Document,” which dictates ag policy. The document backed off on the previous push for self-sufficiency in food production and supported trade and imports of ag products as essential for food security for the country. This is a major policy shift for China. With all that positive news, the market largely ignored last week’s export sales report that showed soybean sales at a marketing year low.
Producers should have priced 25% of their old crop soybeans at $11.03 March (as cash contract) and priced 10% of new crop at $10.95 Nov futures fixed. The next target price to advance sales is $11.35.
March soybean support is $10.30.
For the week, March soybeans were at $11.1525 up 51.0 cents while May soybeans were at $11.2875 up 51.75 cents. March soybean meal was at $303.60 up $10.00 and March soybean oil was at $55.33 up $1.82.