Afternoon Soybeans: Beans gap lower on reciprocal tariff move. Market concerned about retaliatory measures by China.
<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 gapped lower overnight - along with the other grains - in response to the sweeping reciprocal tariff announcement and implementation yesterday afternoon by President Trump. Unlike corn and wheat, the bean gap went unfilled as the markets tried to claw back their losses with varying degrees of success. May beans settled 18 cents lower and the new crop November futures lost 20 cents. The bull spreads bounced back with a firmer trade despite the flat price weakness. 8k of the November 9.40 puts were traded and Nov option volatility was up .30 to 18.6%. The dollar was trading 1.8% or 1.60 pts lower heading into the grain close and hit a 6-month low. Meanwhile, the Brazilian real was up nearly 2% and reached a 5-month high. <br> <br>In the product trade, the oil share spread had a fairly routine correction with meal bouncing out of a fresh contract low while bean oil corrected after its challenge of overhead at its highs that left the chart extremely overbought. This correction was due regardless of the tariff news and for bean oil, tariffs on Chinese used cooking oil imports should be very supportive for demand in biofuel feedstock. The US consumed nearly 7.4 bln lbs of the yellow grease (includes used cooking oil) for biofuels in 2024. Board crush margins gained 4 cents to $1.40/bushel which is a 2.5 month high.<br> <br>Weekly export sales were within trade expectations, with the exception of soybean meal coming in light at a marketing year low of just 94 tmt. Old crop soybean sales of 410 tmt (15 mb) were up 21% from the previous week, but down 9% from the prior 4-week average. Increases primarily for China (286, including 264 switched from unknown), Taiwan (73), Indonesia (70), Egypt (65), and Mexico (65), were offset by reductions for unknown (180), Panama (6). New crop soybean sales of 3 tmt were reported for Japan. Exports of 842 tmt were down 9% from the previous week, but up 4% from the prior 4-week average. The destinations were primarily to China (641), Mexico (80), Colombia (23), Indonesia (20), and Vietnam (17).<br> <br>Marketing year to date, soybean sales plus shipments total 46.170 mmt (1.696 bb) which is 14% higher than last year’s pace. Total commitments represent 93% of the USDA’s projected total (49.67 mmt or 1.825 bb) for the year, slightly trailing the 5 year average of 94% for this date. With 22 weeks remaining in the marketing year, soybean sales would need to average 159 tmt or 6 mb per week to reach the USDA’s outlook. <br> <br>Old crop meal sales of 94 tmt--a marketing-year low--were down 44% from the previous week and 51% from the prior 4-week average. Exports of 522 tmt--a marketing-year high--were up noticeably from the previous week and up 89% from the prior 4-week average. <br> <br>Old crop soybean oil sales of 14 tmt were down 69% from the previous week and 73% from the prior 4-week average. New crop soybean oil sales of 9 tmt were for Mexico. Exports of 44 tmt were up 51% from the previous week and 40% from the prior 4-week average. <br> <br>Elsewhere in the news, USDA census export data showed soybean exports in February totaled 3.066 mmt, down 41.8% from a year ago and below the February inspections of 3.216 mmt. Meal exports were 1.125 mmt, down 17.6% from a year ago and oil exports of 136 tmt, 2,012% above a year ago.<br> <br>The USDA weekly drought monitor shows 44% of US corn area sits in drought conditions down from 53% a week ago but up from 24% a year ago. 36% of bean area sits in droughts down from 42% a week ago but up from 20% a year ago. 39% of spring wheat sits in drought unchanged from a week ago but up from 22% a year ago. 38% of winter wheat area sits in drought up from 34% a week ago and 16% a year ago. <br> <br>USDA attaché report from Mexico is forecasting the country's 25/26 marketing year Soybean imports to rise by 1% on higher demand from livestock feeders and general population growth. The 24/25 oilseed imports are expected steady at 7.7 mln mt. <br> <br>Brazil is close to reaching an agreement with Chinese authorities enabling the sale of Brazilian corn-based distiller's dried grains (DDG), which is used as animal feed, Agriculture Minister Carlos Favaro said on Thursday.<br> <br>The Buenos Aires Grain Exchange left its soybean production forecast unchanged at 48.6 mmt. They see the bean crop rated 36% G/E and 23% P/VP, an improvement from last week’s 32% G/E and 25% P/VP. <br> <br>Argentina's government raised the price of biofuels for the domestic market, two decrees published in the official gazette showed on Thursday. The economy ministry set the minimum purchase price for biodiesel at 1,192,226 pesos ($1,111.37) per metric ton, up from a previous 1,151,909 pesos. Argentina, which is battling high inflation, is a major producer of biofuels, particularly biodiesel. It regularly raises prices for the domestic market.<br> <br>Soybean Basis: <br>Location Spot <br>US Gulf off 3 to +71 <br>St. Louis, MO steady +16k<br>Cedar Rapids, IA steady -10k<br>Mankato, MN steady -20k<br>Decatur, IL steady +6k<br>Decatur, IN up 5 to +20k <br>Columbus, OH steady opt price k </span></div></div>