Afternoon Soybeans: Beans extend into new recent highs.
<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 once again shrugged off overnight sell pressure to turn around with a firmer trade. We continue to digest the rapid fire tariff headlines that, so far, appear to be supporting positive negotiations with our largest trade partners and that has encouraged the bulls to resume control and pushed beans into new recent highs. March beans settled 16.75 higher while the new crop futures gained 10.25 cents with both contracts hitting their highest settlement price since October. The new crop bean to corn ratio rose to 2.29%, a three-week high. Futures volume was routine but traders turned to options in size today in effort to manage uncertainty and price risk, in both directions. Strength in the bull spreads was a feature once again as both the nearby and the old to new crop calendar spreads have rallied for three consecutive days. The cash markets were mostly steady in the face of renewed farm selling while CIF bids at the Gulf were also steady. The currency action was supportive to the market as the dollar broke sharply by 100 pts and the Brazilian real advanced to a near three-month high. <br> <br>Overnight, China imposed tariffs on US imports (including farm machinery) and put several American companies, including Google, on notice for possible sanctions, in a measured response to the additional 10% tariff on Chinese imports imposed by President Trump. Beijing’s limited counter tariffs reflect an effort by Chinese officials to engage in talks that could avoid an outright trade war. China’s new tariffs will not take effect until Feb. 10, giving Washington and Beijing time to try and reach a deal with a Trump-Xi phone call anticipated in the coming days. China left soybeans off their initial tariff list while the US tariffs failed to address used cooking oil imports. <br> <br>Weather in the Southern Hemisphere is generally stressful in Argentina and wet in most of Brazil (beyond the south). Argentina rains the next two days will favor crops in the northern half of Buenos Aires, though it will also reach into southern Cordoba, southern Santa Fe and southern Entre Rios with a more limited rainfall distribution. It will be dry in the central to northern crop regions of Argentina for the next week with very warm to hot temps to amplify the crop stress. Brazil continues to be frustrated by wet conditions that are slowing soybean harvest and safrinha corn planting. Bean yields out of Mato Grosso are reportedly excellent. Bean harvest in the southern state of Parana (where rains are not slowing progress) reached 23% compared to 25% last year. The best drying opportunity will be the second half of this week and through the weekend and progress will be made around rain events. <br> <br>Dr. Cordonnier lowered his Brazilian corn crop forecast by 2 mmt to 123 mmt (USDA 127 mmt) due to planting delays that will push 30-40% of the crop to be planted after the ideal window. He left his Brazil soybean estimate unchanged at 170 mmt (USDA 169 mmt) and he left his Argy crops unchanged at 49 mmt on beans (USDA 52 mmt) and 47 mmt for corn (USDA 51 mmt). Cordonnier projects total South American corn production will decline by 300 tmt (.2%) from last year and soybean production to rise by 16.6 mmt (7.6%) from last year.<br> <br>In the product trade, bean oil gapped lower before moderating its losses that were inspired by the delayed tariff on Canadian rapeseed oil and the absence of tariff on Chinese used cooking oil leaving both biofuel feedstock competitors on the playing field for the moment. The US doesn’t need to tariff UCO imports it only needs to exclude foreign feedstocks from qualifying for the taxpayer funded subsidy to right the wrong. Meal rallied sharply and closed its gap that was opened a couple of weeks ago. Meal gained on the other side of the oil share spreading although the current rains in Argentina and weak domestic cash markets argue against the futures from getting carried away to the topside. Board crush margins settled 2 cents lower to $1.19/bushel. <br> <br>Elsewhere in the news, ADM's CEO Tuesday sees support in oilseed crush margins due to more biofuel policy certainty this year.<br> <br>USDA census crush report yesterday afternoon showed December crush at 217.7 mb, right in line with the average trade estimate. This represents a new record crush for any month. Year to date crush is running 6.2% ahead of last year vs. the USDA forecast for a 5.3% increase. . The census crush showed soyoil stocks as of Dec. 31 were 1.695 bln lbs, falling short of the average estimate at 1.734 bln lbs although it was an increase from November inventories at 1.613 bln lbs. Meal stocks tightened to 414,192 short tons from 463,019 in November.<br> <br>Weekly bean inspections were 37 mb up from 27 mb last week. . Bean inspections total 1.252 bb which is about 16% ahead of last year's pace of 1.082 bb. Weekly bean inspections need to average 20 mb to reach the USDA’s target of 1.825 bb.<br> <br>India vegoil dealers estimate January palm oil imports hit a 14 year lower, falling to 272,000 mt, well below the monthly average at 750,000 mt of palm oil imports this past marketing year. Dealers are said to have been importing soyoil and sunflower oil at slightly higher paces January. January soyoil imports are forecast up 4% on the month at 438,000 mt, and sunflower oil imports are expected to rise by 9.5% to 290,000 mt.<br> <br>Soybean Basis: <br>Location Spot <br>US Gulf steady +62 <br>Cedar Rapids, IA steady -35h<br>Mankato, MN steady -50h<br>Decatur, IL steady -15h<br>Decatur, IN steady opt price h <br>Columbus, OH steady -20h </span></div></div>