Soybean Morning Update & Commentary: Improving weather seen for crops in the ground.
Overnight grain markets traded higher following substantial weekend rain totals for a good portion of the Midwest including some 4-6 inch totals across E KS and NW MO. A warmer and 'less wet' weather pattern will develop this week which will be favorable for crop development. The corn and wheat markets are also keeping an eye on hot European weather.
Crop progress should show soybean planting move from 77% up to around 90% while corn was 92% last week and for all intents and purposed is done with its planting. Large prevent plant acres make these planting percentage numbers less accurate as a reflection of what our real planted acreage numbers are. Look for soybean and corn conditions at around 59% gte and possibly a little better.
Friday is going to be a busy/chaotic day. We have first notice on July futures. It is also the end of the quarter which can mean money flow and allocations will be an influence our trade. We will have the quarterly stocks and acreage reports although the acreage side of that will be rightly questioned and less meaningful than normal. The stocks numbers will highlight the burdensome old crop supply situation with the story in corn and beans residing strictly in the new crop production threat. The G-20 summit is also taking place in Japan and President Trump and Xi will meet to discuss and hopefully revive trade negotiations.
The dollar is trending lower and adding some macro support to commodities.
In the news:
• In the COT report, managed money through Tuesday +32.3k corn (net long 143.5k), +20.9k srw (net long 22.7k), +2.8k hrw (net short -20.7k), +35.8k beans (net short -55.3k), -4.6k meal (net long 18), +11k oil (net short -42.7k).
• China's Nat'l Grain Trade Center reported 24,993 mt of Rapeseed Oil was sold from state reserves at auction today. Today's volume was 100% of the total offered into the marketplace. Today's average price was 6,252 yuan/mt.
• India weather bureau officials say monsoon rains have covered nearly half the country and conditions are setting up so that it will slide into central and western India. The annual rains are helping to push farmers with their planting of summer crops.
• Report from Argentina government released Friday shows they expect 18/19 Soybean production at 55.6 mln mt off -300,000 mt from the prior outlook. The report increased the 2018/19 corn production figure to 57.0 mln mt up +1.0 mln mt over the previous estimate.
• Ahead of Wednesday's Stats Canada 2019 planting estimate report, analysts are forecasting Canola acres at 20.7 mln, that compares to the 21.31 mln acres in the April report and 2018 crop at 22.81 mln acres.
• Ahead of Wednesday's Stats Canada 2019 planting estimate report, analysts are forecasting Soybean acres at 5.7 mln, that compares to the 5.65 mln acres in the April report and 2018 crop at 6.32 mln acres.
• Analysts ahead of this Friday's USDA acreage report analysts are expecting US Soybean planted acres at 84.7 mln, that compares to the USDA March projection at 83.0 mln acres. The data will be released Friday, June 28 at 11:00 am CDT.
• Analysts are projecting US quarterly grain stocks report this Friday to show US soybean stocks as of June 1 at 1.870 bln bushels, on the year ago date stockpiles were 1.219 bln bu. The data will be released at 11:00 am CDT, Friday June 28th.
• Euronext Paris August rapeseed futures on Monday are trading -1.00 euro lower at 367.75 euros/mt
• Dalian Sept soybean futures on Monday traded -27 yuan lower finishing at 3,433 yuan/mt; Sept soymeal futures were unchanged at 2,896 yuan/mt
• Dalian Sept vegoil futures Monday traded lower, palm oil fell -24 yuan finishing at 4,316 yuan/mt, soyoil lost -36 yuan to end at 5,396 yuan/mt
• Malaysian August cash offers for RBD palm oil and olein traded Monday -$2.50/mt lwoer at $505.00/mt and $510.00/mt, respectively
Early spread action:
• Soybean bull spreads are firm.
• Board crush margins off 1 to $1.04/bushel.
• Oil share weaker to 30.8%.
Soybean Basis: Coming into the day, US fob soybeans are $10/mt discount to Brazil and a $7/mt premium to Argentina.
• US CIF Gulf off 1 to +53
• Brazil fob offers off 3 to +92
• Argy fob offer steady +45
• Cedar Rapids steady -55
• Decatur, IL steady -15
• Claypool, IN steady +5
Outside markets feature the dollar trading -.20 to 95.15 (the May high was 97.71), crude oil +.41 to 57.84 and DJIA +69. The Brazilian real is +/11% and near three-month highs. Malaysian palm oil closed -24 to 1,998 ringgit.