Afternoon Soybeans: Meal and oversold charts lead a meager bean reversal effort.
The soybean market had a quiet, two-sided session and ultimately settled slightly higher to grudgingly snap an 8 session losing streak. In the absence of any fresh export news, beans had to rely on leadership from meal and oversold charts to stick the meager reversal and for today at least, the market responded. Beans basis remains elevated in most markets as the farmer locks the bin after a 95 cent drop on the board. Yesterday's larger than expected census crush data combined with an eye opening fund selling effort helped take some of the pressure off today as well.
The headline of the day leaned on the negative side of the scale. At the NATO summit, President Trump indicated he'd be fine with a potential trade deal with China getting pushed back until after the next US election cycle. While that certainly may end up be the case, the threat of a Dec 15 tariff hike remains on the table unless substantial progress is made on a limited phase one agreement first. The tariff increase is not meaningless in terms of scope or products impacted. We'll have to wait and see if that is enough to entice some negotiating concessions out of Beijing, or not.
Elsewhere in the news, 19/20 soybean crop is now approximately 88-90% planted compared to 93% last year and 85% average. Mato Grosso and Parana planting is essentially finished with the remaining areas to plant based primarily in northeastern Brazil and far southern Brazil.
In the spreads, board crush margins up 2 to $1.09/bushel - not sure how significant a chart gap is on the oil share but 1.11 to 1.13 offers a tech objective for this run. Oil share weaker to 33.8%. Soybean bull spreads were mixed but fought back from early weakness. New crop 2020 bean/corn ratio slipped to 2.36%, a two-month low that represents corn fighting for acres back from beans, in basics.
Bean basis bids at the Gulf a penny better to +56 for spot and steady at +35 for Feb. Interior processor bids remain steady. Brazilian fob soybean offers for Feb steady +73. Brazilian meal basis is up 2-3 and oil basis up 20-40 for Jan-March in a possible signal that tightening old crop bean supplies are slowing crush.