Afternoon Soybeans: Beans seeking out a harvest low.
The soybean market extended its slide to $9.00 SF, unable to capitalize on the solid weekly exports report this morning or sustain modest overnight strength. A sharp break in soybean oil was one of the reasons for the bean selling, along with technical selling, SAM weather selling, fund selling where they have now flipped from a long to a short in beans, and trade war fatigue selling. This is a market in the process of seeking out a seasonal harvest low.
WSJ reports that the Chinese have invited US reps Mnuchin and Lighthizer to Beijing for face to face talks as phase one negotiations appear to have bogged down again. They hope the in-person talks take place before Thanksgiving, next Thursday. The US has not officially accepted and likely would only make the trip if the Chinese indicate a willingness to budge on IP protection, forced tech transfer and ag purchase commitments. Tariffs are scheduled to go up again on Dec 15. There is real concern that the Hong Kong bill will completely derail trade negotiations if is signed by the President as expected.
Pelosi and Lighthizer met today on the USMCA and reported 'progress' but no agreement was made. There was some talk around that the USMCA passage was imminent but other reports had it passing after the new year. It sounds like it will become law either way, but what's with the hold up? Get 'er done.
Weekly bean export sales came in above the range of expectations at 1.517 mmt and featured 569 tmt sold to China. Soybean sales on the books now stand at 11.352 mmt compared to 11.737 mmt this time last year. Of that total, China is earmarked for 4.449 mmt with unknown for another 3.102 mmt. Exports to date total 12.368 mmt compared to 10.824 mmt representing an increase of 57 million bushels ahead of last year's pace, the USDA is currently estimate total year soybean exports to exceed last year by 27 million bushels. The next 60 days will be very important to rack up export sales before what could be a monster SAM crop starts making its way to into export channels.
Elsewhere in the news, the Buenos Aires Grain Exchange increase their soybean planting estimate for Argentina by 100,000 hectares to 17.7 mln with those acres switching away from corn planting due to dryness concerns.
In the spreads, board crush margins up 1 to $1.06/bushel. Oil share set back to 33.7%. Soybean bull spreads were mixed. New crop 2020 bean/corn ratio 2.40%.
Basis in the country is steady to firmer with Dec, IL taking their bid up 3 to +10 and Gilman up 3 to +15 - we remain extremely elevated. Gulf basis steady +52 nearby while Brazilian fob offers for Feb up 2 to +62.
Soybean ATM option volatility: Soft, led by the fronts. Dec expires tomorrow, there were 1,469 900 puts and 890 910 calls traded on the screen today.