Soybeans Morning Update & Commentary: Mixed overnight trade.
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">Overnight grain markets were mixed with wheat and corn trading modestly higher while beans were unable to hold strength and reversed slightly lower heading into the break; oil is up and meal down as the oil share spread is correcting. Judging by the empty parking lot outside this morning, many are working from home or not at all with the next couple of weeks expected to have limited trade participation during the Christmas holiday and year-end timing. Although beans and meal are lower heading into the biscuit break, short covering is the current theme as shown by reductions in open interest of 11.5k and 8.8k contracts respectively from Friday’s rally and this follows reductions of 20.4k and 9.2k contracts respectively on Thursday. Managed fund money and the trade in general had been pressing the soy complex down into new lows and over the past couple of sessions we have seen shorts lightening up those positions. The COT report showed managed fund money through the trade week ending 12/17 had -6.4k corn (net short 76.2k), -20.6k srw (net short 87.4k), +3.3k hrw (net short 33.0k), -17.9k beans (net short 76.2k), -16.5k meal (net short 88.9k), and -14.8k oil (net long 2.6k). In demand news, the USDA reported private sales of 132 tmt of beans to China and 132 tmt of beans to unknown – these sales follow the rumored purchases made by Sinograin for March-April timing to restock government reserves. China prefers US beans for stockpiling because of the lower moisture that store better than the higher moisture Brazilian beans.<br> <br>The weather forecast for the Southern Hemisphere features drying for eastern Argentina, Uruguay, western and southern Rio Grande do Sul, Brazil and southwestern Paraguay for the next 10 days at least while the balance of Brazil remains mostly favorable for crops with ample moisture. Crops in these areas are in good shape coming in but a trend of drying down is developing near term. Rain is expected to return by early next month but by that time there will be some urgency for relief. <br> <br>The outside markets feature the US dollar index trading .59 pts higher and looking to negate the bearish key reversal chart signal from Friday. <br> <br>First notice on Jan futures is the 31<sup>st</sup>, there are 205 deliverable bean receipts registered with the exchange, along with 879 oil, and 1,665 meal. <br> <br>In the news:<br><ul class=\"decimal_type\"><li>Soybean production in Brazil’s state of Parana is forecast at 22.2 mmt, -.5% from previous estimate but 20% higher year over year. First season corn production is forecast at 2.64 mmt vs. 2.59 mmt previously, 95% of the first corn crop is in good condition. </li><li>Ahead of today's quarterly USDA hogs and pigs report, analysts are forecasting as of December 1st, all hogs at 100% of the year ago figure. Hogs kept for breeding are expected at 100% of the year ago level, and kept for marketing at 100% of the year ago level. The data will be released at 2:00 PM CT, Monday, Dec 23rd.</li><li>USDA monthly Cold Storage data will be released Monday afternoon around 2:00 PM CT</li><li>Euronext Paris February rapeseed futures on Monday are trading +1.50 euros higher at 518.25 euros/mt</li><li>Dalian May soybean futures on Monday traded +41 yuan higher ending at 3,838 yuan/mt; May soymeal rose +27 yuan ending at 2,627 yuan/mt</li><li>Dalian May vegoil futures on Monday traded mixed, Soyoil rose +58 yuan ending at 7,554 yuan/mt, Palm Oil fell -68 yuan ending at 8,694 yuan/mt</li><li>Malaysian March crude palm oil futures on Monday traded +112 yuan higher ending at 4,545 yuan/mt</li><li>On Monday, Malaysian March cash offers for RBD palm oil and olein traded at $1,120.00/mt and $1,125.00/mt, respectively</li></ul>Soybean Basis: <br>Location Spot <br>US Gulf off 2 to +89 <br>Cedar Rapids, IA steady -15f<br>Mankato, MN steady -20f <br>Decatur, IL steady +5f <br>Decatur, IN steady +10h <br>Columbus, OH steady -20h </div>