Afternoon Soybeans: Trade talks sour once again as China refuses to budge on core disputes.
The soybean market began the day under pressure with additional cases of African swine fever being reported in the Philippines with a case reported in Russia as well. Combine that with the absence of fresh Chinese bean purchases at 8 am and the market was set for a lower trade early on.
2 Dec corn vs. 1 Nov bean gained 6 ¼ on the day and the chart appears to be creating a bottom which would be consistent with the seasonal for this time of year..
Beans made their session low midday as trade negotiation headlines turned pessimistic. Initially there were positive vibes as the Chinese scheduled visits to Montana and Nebraska next week and President Trump lifted tariffs on 400 products with progress being cited. Something must have not gone right in the face to face meetings taking place in Washington because the President returned to his hardline posture that farm purchases would not be enough for China to make a deal with the US and that he wanted a 'complete deal not a partial deal' to be made. Trump says again that he does not need a deal ahead of 202 elections. Shortly after, the Chinese canceled their plans to visit Montana and Nebraska. There is no word on the status of the planned but not officially scheduled high-level meetings in Washington next month. The delayed tariff increase on Chinese goods is currently scheduled for October 15 and are much more significant in size in what has previously been implemented on Chinese imports.
In the product trade, bean oil was sold off hard and lost to meal in the oil share. It appeared to be a technical correction for both flat price and the spread with BOZ closing its gap made early this week. There was also some disappointment that there was no announcement yet over the biofuels deal being negotiated between Trump and big oil/ethanol which is expected to bring additional demand.
The COT report showed managed money -34.2k corn (net short -170.6k), +1.8k srw (net short -12.5k), +3.9k hrw (net short -37.5k), +43.5k beans (net short -48.1k), -7.1k meal (net short -54.7k), +39k oil (net long 19.9k). In basics, the funds sold more corn that thought and bought more beans and oil than thought.
6-10 Day and 8-14 Day GFS: Dry in the ECB, wet in the C to WCB. Hot east of the Rockies, cold west of the Rockies.
Barge basis at the Gulf up 2 to +16. Interior processor bids are steady.
Brazilian soybean fob steady +100. Argy soybean fob +55. To start the day, US Gulf fob was a $25/mt discount to Brazil and $8/mt discount to Argentina.
In the spreads, board crush margins up 2 to 90 cents/bushel. Oil share weakened to 33.2%. Bull spreads in beans were soft.