Soybean Weekly Comments Sept. 15

Soybean Weekly Comments Sept. 15

Soybeans started the week by opening higher and then traded in a fairly tight range for the entire session, closing with small gains. It was a quiet session as positioning ahead of tomorrow’s USDA report was the main driver. USDA announced a sale of 185,000 MT of soybean cake and meal to the Philippines. The first export shipments report of the new marketing year had soybean shipments at just 11.4 MB, at the very low end of trade expectations. Soybean’s crop condition rating dropped 1% to 52% g/e (as expected). Of the major states, ND saw the only increase (up 4%), IL was unchanged, and the rest saw declining ratings: SD: -3%, NE: -1%, KS: -2%, MN: -2%, IA: -5%, MO: -1%, IN: -1% and OH: -1%.

On Tuesday soybeans were mostly on the lower side overnight but losses accelerated after the USDA report came out at 11 am and the market closed sharply lower. Tuesday’s USDA report was negative soybeans as the production cut was offset by demand cuts. US old crop ending stocks were cut by 10 MB as exports were increased by the same amount.

For new crop, the national yield was cut by 0.8 bu. to 50.1 bu. (as expected) but acres were increased by 100,000, resulting in a production cut of 59 MB (6 MB more than expected). On the demand side for new crop, crush was cut 10 MB and exports were cut 35 MB, bringing ending stocks to 220 MB. That was 25 MB less than last month but 7 MB more than expected.

World ending stocks were pretty much a non-event as old crop stocks were lowered by 0.1 MMT to 103.0 MMT and new crop ending stocks came in at 119.3 MMT, again just 0.1 MMT lower than last month (however, that was 0.9 MMT more than expected).

In Wednesday’s session soybeans opened lower and continued to trade with small losses throughout the night session. Soybeans continued to trade in a lackluster fashion through the first half of the day session with most of the activity focused on harvest pressure and the expectation that harvest activity will pick up over the next 5 days due to forecasts calling for warm dry conditions. USDA’s report was not as bad for soybeans are first glimpse as although demand was trimmed, stocks came in close to expectations. That realization helped soybeans firm around midsession, but it was technical buying and spill over support from the higher wheat and corn that really helped soybeans push to the plus side. Light support came from the 6 to 10 day and 11-to-15-day forecasts calling for rains, which if realized would slow down harvest and could impact quality.

On Thursday soybeans traded in a narrow range on either side of unchanged overnight but climbed higher in the day session and closed with decent gains. Rains added to the 6 to 10 and 11-to-15-day forecasts supported the market as it will slow down harvest. Technical buying added to the gains. Last week’s export sales were at the bottom of the range of trade expectations. Marketing year to date sales of 612 MB are 34% lower than last year’s same week cumulative sales. The NOPA August crush report will be released on Friday, and the average trade estimate is 167.8 MB, which would be quite a bit lower than last month’s 173.3 MB as many facilities shut down for maintenance. Rosario Grains Exchange lowered their wheat estimate for Argentina due to dry conditions in some parts of the country but left their soybean estimate unchanged at 48.0 MMT (in line with USDA’s estimate).

Nov support is at $12.85 while resistance is at $14.35.

For the week, Nov soybeans were at $13.4025 down 22.75 cents and Jan soybeans were at $13.5575 down 22.25 cents. Oct soybean meal was at $393.60 down $9.10. Oct soybean oil was at $63.38 up $1.92.