Afternoon Soybeans: Processors maintained record crush pace through January.

The soybean market failed to sustain its gap higher opening and settled 13 lower on the day in SK as we resume our choppy trade on either side of $14.  With the start of the new month, money flow was a negative influence with selling concentrated on the front end of the curve while new crop beans held in to settle 3 lower in the midst of its spring acreage battle where the clock is ticking and it is a struggle to pull acres away from profitable alternatives such as corn, sorghum, cotton and spring wheat - depending on your location.  The new crop bean/corn ratio continues to hang around in this 2.60% area.  

Fresh news during the session was fairly limited with the highlight being the export loadings data that highlighted bean shipments continue to wind down their pace seasonally with nearly 85% of the projected program already out the door.

After the close, USDA census crush report showed processors crushed 196.5 mb in January compared to the avg. trade guess of 195.6 mb, up from 193.7 mb in December and comes in slightly below the record all-time monthly crush of 196.6 mb from October 2020. Oil stocks grew to 2.305 bln lbs, just shy of the avg. trade guess for 2.315 bln lbs and an increase from 2.219 bln lbs in December. Meal stocks ballooned to 512,393 short tons from 358,134 in December. The top three highest monthly crushes on record have taken place this marketing year which also holds four of the top five of all-time.

In the product trade, both meal and oil were weaker on the day with meal gaining just a touch in the oil share spread. Malaysian palm oil closed with a key reversal lower -1.55%, canola finished steady while crude oil weakened throughout the day.

Weekly grain inspections were better than expected for corn at 1.636 mmt up from 1.267 mmt and better than expected for beans at 880 tmt, up from 803 tmt last week, wheat fell below expectations at 273 tmt, down from 325 tmt last week. Chinese loadings picked up some with 5 soybean cargoes loaded, 4 off the PNW and 1 out of the Gulf. They also loaded 5 cargoes each of corn and 1 sorghum out of the Gulf.

Marketing year to date corn inspections for export now total 1.012 bb representing 38.9% of the USDA projected 2.600 bb program for the year, up from 36.3% last week and close to the 37% avg. for this date. Bean inspections total 1.906 bb representing 84.7% of the USDA projected 2.250 bb program for the year, up from 83.1% last week and well ahead of the 66% avg. for this date. Wheat inspections total 663 mb representing 67.2% of the USDA projected 985 mb program for the year, up from 66.2% last week and trailing the 69% avg. for this date.

Weekend rains in Argentina were a bit better than anticipated although coverage was limited and the forecast remains hot and dry going forward the next couple of weeks. March is the main pod filling month for Argentina's bean crop so the absence of moisture is not ideal. Brazil's soybean harvest and Safrinha corn planting continues around the wet conditions. Safras on Friday pegged 20/21 Brazil soybean harvest at 22.5% complete up from the 12.4% last week. Safras noted this year's harvest is 17.1 percentage points behind last year's pace. South American weather is slightly concerning due to Argentina's forecast and for the wetness in parts of Brazil that will have to be watched but is not raising alarms at this point.

Spread action:
• Soybean bull spreads soft.
• Board crush margins steady off 2 to 71 cents/bushel basis May.
• Oil share higher to 37.0% basis May.
• New crop bean/corn ratio 2.60%.

Soybean Basis:
Location Spot
US Gulf off 2 to +75
Brazil Paranagua steady +15
Cedar Rapids, IA up 4 to -16k
Mankato, MN steady -20h
Decatur, IL up 6 to +18k
Claypool, IN up 3 to +40k
Columbus, OH steady +10k