Afternoon Soybeans: Beans and oil fought off overnight selling to extend their recoveries.

The soybean market traded sharply lower overnight following weekend rains that fell largely as advertised.  After the morning bell, beans were able to fight off that overnight pressure and managed a reversal higher led by strength in the old crop with beans able to build on Friday's reversals and demonstrate further stability following the sharp break in prices this month.  July beans settled 19 cents higher and 45 cents off the overnight low, November gained just over 6 cents and settled 39 cents off its low.  With most of the growing season still in front of us and the extremely tight old crop and projected new crop supply, beans could not extend to the downside suggesting that enough premium has already been extracted for now.  

The weather forecast shows more moisture is on the way this week and combined with the cool down in temperatures we should see a favorable near term environment for crop development for most Midwest crops. This should allow for a needed recovery from stressful conditions. Despite the favorable shift in the near term weather pattern, the longer term subsoil moisture deficits have not been fixed in and will remain a factor moving forward. In particular, the Dakotas and parts of MN, NW IA and NE generally received the least moisture and relief, and this will also be the region where warmer and drier conditions will be quickest to return.

The USDA flashed daily export sales of 336 tmt of new crop beans to China along with 120 tmt of new crop beans to unknown. This confirms the biz that took place on the dip late last week with talk of a few more cargoes traded that will be watched for in the coming 8 am sales time slots. Uncovering fresh demand on the break was another factor that helped underpin prices on the board.

Weekly grain inspections for corn were 58.3 mb, beans 6.4 mb and wheat 20.1 mb. China loaded out 20.7 mb of corn out of the Gulf and 10.5 mb off the PNW. With 10 weeks remaining the row crop marketing year, corn exports need to avg. 66.4 mb/week to reach the USDA's projected 2.850 bb export total. If you account for the larger exports shown by the monthly census data, that avg. comes down to 51.1 mb/week. Beans need to avg. 18.6 mb/week to hit the USDA's projected 2.280 bb export total. If you account for the larger exports shown by the monthly census data that avg. comes down to just 6.2 mb/week.

In the product trade, bean oil built upon its reversal trade from Friday with another positive performance. Gains in crude oil and rapeseed were supportive, Malaysian palm oil closed weaker early in the day. There has been no new information regarding the Biden admin's reported 'consideration' of relief for refiners from the cost of renewable credits but the fear that took hold of the oil market last week appears to have subsided. Meal closed lower on the day on the other side of the oil share spreading.

The crop progress report showed soybean crop ratings slipped by 2% on the week to 60% G/E with an uptick in P/VP to 9%, last year's crop at this point was 70% G/E and 5% P/VP. The states that saw the greatest deterioration on the week were IN (-3), IA (-4), LA (-8), MN (-8), Ms (-3), MO (-2), NE (-4), SD (-12) and WI (-3). The states that saw improvement on the week were IL (+3), KS (+3), and MI (+4). 35% of the ND crop is rated P/VP and SD is rated 14% P/VP, the past 2 years soybean production out of the Dakotas accounted for 9-10% of our national production. Next week's report should show widespread improvement for those crops that received the rains. The crop is 97% planted compared to 94% last week and the 5 yr. avg. of 94%. Emergence is up 5 to 91% compared to the 5 yr avg. of 85%. The crop is 5% blooming which is in line with the 5 yr. avg.

The delayed COT report showed managed fund money through the week ending 6/15 as big sellers of the grains. They -22.8k corn (net long 252.7k), -7k srw (net short -8.3k), -33.9k beans (net long 107.4k), -7.6k meal (net long 19k) and -14k oil (net long 67.2k).

Elsewhere in the news, MARS, the EU crop monitoring committee, increased their 2021 EU rapeseed yield forecast to 3.23 mt/ha compared to the 3.21 mt/ha back in May.

Soybean Basis:
Location Spot
US Gulf off 2 to +54
Brazil Paranagua up 5 to +25n
Cedar Rapids, IA steady +10q
Mankato, MN steady +10n
Decatur, IL steady +70x
Claypool, IN steady +50n
Columbus, OH steady +15n