Afternoon Soybeans: Beans export sales show signs of slowing seasonally.
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><div style=\"line-height: 1;\"><span style=\"font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">The soybean market reversed sharply lower leaving behind a temporary peak to our recovery rally. Beans settled 20 cents lower, giving up most of the gains from the holiday abbreviated trading week. The spot month gained 1 penny on the week while the new crop November futures lost nearly 4 cents. The bull spreads were mixed today while corn gained on beans in the new crop ratio for a second consecutive day to settle at 2.29%. Put options were heavily traded today including almost 25k contracts combined of the March 9.80, 9.00 and May 9.00 puts.<br> <br>What changed today? For one, we saw the producer return yesterday and reward strength (and the new tax year) with fresh cash sales. Volumes were not massive, but we had a structured seller for the first time in a couple of weeks that offered some moderate resistance. The other trigger was this morning’s weekly export sales report that confirmed the slowing pace of US soybean sales (a new marketing year low). Keep in mind, it was a holiday week, the dollar has been surging, and we’ve seen some recovery in prices on the board; all of which contributed to a poor week for export sales (not including bean oil). The bean export slowdown has been anticipated seasonally but as this report showed, the window is now in the process of shutting and a key demand piece that had provided underlying support is wobbling and threatening to give out. Lastly, as the futures showed signs of capitulation, we had plenty of bears waiting in the woodwork to jump on board.<br> <br>Argentina’s weather forecast is warm and mostly dry for the next couple of weeks which will lead to stressful conditions for crops as soil moisture reserves dry down. The Buenos Aires Grain Exchange sees soybean conditions rated 53% G/E and 4% P/VP compared to 58% G/E and 4% P/VP a week ago. It will be interesting to watch these ratings deteriorate in the coming weeks. Argy bean planting was 92.7% complete, up 8% on the week. Weather in Brazil has remained conducive to most prime crop areas (warm and dry along southern fringes) and as their record production potential is becoming more assured, it will likely temper Argy concerns. Cordonnier currently forecasts total SAM soybean production at 241.5 mmt, up 22.3 mmt (10.2%) from last year. Many would argue at this point that any reduced Argy tonnage could be offset by increasing production potential in Brazil but we are working with plenty of supply cushion if conditions worsen.<br> <br>In the product trade, meal and oil both were weaker which contributed to the soybean pressure. Meal gave up its rally effort and settled more than $11 lower. This was not due to a change in weather forecast, but the short covering (from both managed fund money side and the end user) that had been driving the gains appeared to have run its course. Fundamentally, yesterday’s monthly crush data showed meal stocks at the end of November had ballooned to an eight month high and US cash values need to restructure lower in price in order to better compete for exports going forward. The oil share spread snapped back to its high for the week. Board crush margins fell by 8 cents to $1.26/bushel. <br> <br>Elsewhere in the news, Sowing of the 2024/25 soybean crop in Rio Grande do Sul advanced by just 1 percentage point in the last week and has reached 97% of the projected area, according to Emater. The slow pace was attributed to the reduction in soil moisture and the need to wait for the harvest of areas occupied by other crops. The general condition of the crops is considered adequate.<br> <br>Brazil soy exports in December are seen at 1.47 mmt vs. 1.62 mmt in prior estimate according to Anec. Meal exports 1.8 mmt vs. 2.1 mmt. Corn exports 3.62 mmt vs. 4.1 mmt. <br> <br>Weekly old crop soybean sales of 485 tmt or 18 mb--a marketing year low--were down 51% from the previous week and 67% from the prior 4-week average. Exports of 1.704 were up 8% from the previous week, but down 10% from the prior 4-week average.<br> <br>Weekly old crop meal sales of 204 tmt were down 48% from the previous week and 26% from the prior 4-week average. Meal exports of 252 tmt were down 14% from the previous week and 27% from the prior 4-week average. <br> <br>Weekly old crop soybean oil sales of 38 tmt were down 6% from the previous week, but up 18% from the prior 4-week average. Oil exports of 60 tmt--a marketing-year high--were up noticeably from the previous week and from the prior 4-week average. <br> <br>India vegoil imports in December dipped to their lowest level in three months, dropping -25% to 1.19 mln mt. December palm oil imports were off sharply dropping 40% to 503,000 mt, and sunflower oil imports plunged 22% to 265,000 mt, however soyoil imports were up slightly, gaining 3% on the month to 420,000 mt.<br> <br>Indonesian energy minister Friday suggested there will be a 45 day transition period for companies to meet the B40 mandatory blending requirements. They expect the blend mandate to rise to 50% next year, and 60% in 2026.<br> <br>The USDA census crush showed a new record November crush of 210 mb compared to the average trade guess of 207.6 mb. The crush was down from October’s all-time record monthly crush of 215.6 mb, but the average daily rate of crush in November (with one less day) was a new all-time record of 7.0 mb/day, up from Octobers 6.95 mb/day. Marketing year to date the crush stands at 612.2 mb, an increase of 6.1% from last year’s pace at this time of 576.6 mb. <br> <br>Oil stocks expanded to 1.612 bln lbs, a larger build than the average guess at 1.478 bln lbs and an increase from October’s stocks of 1.485 bln lbs. Meal stocks in November expanded to an eight month high at 463 thousand short tons compared to 303 tst in October.<br> <br>Soybean Basis: <br>Location Spot <br>US Gulf up 4 to +81 <br>Cedar Rapids, IA steady -20h<br>Mankato, MN steady -35h<br>Decatur, IL steady -4h<br>Decatur, IN steady +8h <br>Columbus, OH off 5 to -25h </span></div></div>