Soybean Morning Update & Commentary: Lower start as choppy trade continues.

Overnight grain markets feature corn, wheat and beans trading 7-9 lower on the front end of the curve without much news around to start the day.  In the case of soybeans, old crop has developed a near term choppy range on either side of $14, unable to extend in either direction for the moment.  

In the product trade, oil and meal are both weaker to start with oil gaining in the oil share spread. Canola is holding steady while Malaysian palm oil closed +1%.

Argentina saw some rain pop up in Santiago del Estero stretching down into norther Cordoba while the balance of the country was dry. The forecast continues to promote mostly dry and hot conditions for another week at least. The crop areas that miss out on relief will see increasing levels of stress during this dry stretch. March is the main pod filling month for Argentina's bean crop so the absence of moisture is not ideal - see US August 2020. Brazilian rains across the central to northern growing regions are forecast to continue with regularity - this pattern continues to slow soybean harvest and is causing some quality issues but the bigger impact is squarely on the Safrinha corn planting delays that have the potential to reduce production more significantly.

World Weather Inc:
· Argentina's rainfall outlook is not very good and many areas in the nation will experience net drying over the coming week, despite some periodic showers of varying significance
o Most of the precipitation will not counter evaporation for a while
o World Weather, Inc. sees some changes in the upper air wind pattern evolving in the second week of the forecast that may help to bring a little better opportunity for rain periodically
§ But, confidence is still low on how much relief might occur
o Crop stress will remain a serious concern for many summer crops in Argentina until a generalized soaking rain evolves
o Temperatures will continue too warm to hot to allow scattered showers of light intensity to change the drying trend during this next seven days
§ Some cooling is expected next week, but temperatures will remain above average

· Brazil's weather has not changed overnight and for the next two weeks most of the nation will be impacted by alternating periods of rain and sunshine
o The moisture will be mostly near normal except in the northeast where drier than usual conditions are expected
§ A few locations in southern Rio Grande do Sul may also receive a more limited amount of rain
o Field progress advanced favorably in some areas last week with 25% of the soybean harvest complete compared to 40% a year earlier
§ That was an advancement of 10% over the previous week
§ Mato Grosso had 52% of its soybeans harvested compared to 84% done last year
o Greater rain frequency in this current week will slow field progress again

Overnight deliveries: Corn 0, SRW 0, HRW 0, Beans 0, Meal 1, and Oil 0.

In the news:
• USDA attache to Argentina in a recently filed report projected 20/21 soybean production at 47.5 mln mt that was below the official USDA forecast at 48.0 mln mt. The attaché expects the 2020-21 crush to climb to 41 MMT, which is 2 MMT higher than USDA's official projection while exports are projected at 6 mmt, 1 mmt less than the USDA's official estimate.
• USDA attache to Argentina in a recently filed report also projected 20/21 sunflower seed production at 2.65 mln mt that was below the official USDA forecast at 2.9 mln mt.
• Deral in Parana Brazil on Tuesday noted the region's 20/21 soybean harvest is 23% complete up from the 6% pace last week. In the year ago week the harvest was 42% complete, and the long term average for this point in the season is 27% finished.
• Deral in Parana Brazil on Tuesday noted the region's 20/21 soybean conditions are 81% good up from 80% last week, poor conditions were steady at 3%
• An outbreak of African swine fever has been confirmed in piglets being illegally transported through Funing county in China's southwestern province of Yunnan, according to the farm ministry. The case comes amid growing concern that a severe wave of disease in recent months has hit China's hog herd, the world's largest.
• Purdue University/CME Group February Ag Economy Barometer was down 2 points to a reading of 165 in February. Current conditions index was steady near its all-time high at a reading of 200. Meanwhile, future expectations index continued a four-month decline, down 20% from its October peak, to a reading of 148.
• Pending Tender: On Tuesday, grain traders said Egypt's GASC set Thursday, Mar 4 as offer deadline in a tender seeking at least 30,000 mt of Soyoil and at least 10,000 mt of Sunflower oil. The vegoil is for delivery in first half May.
• Euronext Paris May rapeseed futures on Wednesday are trading +1.50 euros higher at 504.00 euros/mt
• Dalian May soybean futures on Wednesday jumped +163 yuan higher ending at 6,206 yuan/mt; May soymeal futures lost -2 yuan ending at 3,394 yuan/mt
• Dalian May vegoil futures on Wednesday traded lower, soyoil gave up -26 yuan ending at 8,770 yuan/mt, palm oil lost -102 yuan ending at 7,350 yuan/mt
• Malaysian cash offers for RBD palm oil and olein Apr/May/Jun delivery traded +$2.50/mt higher on Tuesday at $952.50/mt and $955.00/mt, respectively
• Malaysian May crude palm oil futures on Wednesday traded +37 ringgit higher at 3,679 ringgit/mt
• Outside markets. Crude Oil +93c ; Gold -$11.30 ; Silver -22.4c ; US $ index +15 pts

Early spread action:
• Soybean bull spreads firm despite lower flat price.
• Board crush margins up 1 to 62 cents/bushel.
• Oil share 37.2%.
• New crop bean/corn ratio 2.59%.

Soybean Basis:
Location Spot
US Gulf steady +69
Brazil Paranagua steady +10
Cedar Rapids, IA steady -16k
Mankato, MN steady -5k
Decatur, IL steady +18k
Claypool, IN steady +40k
Columbus, OH steady +10k