Afternoon Soybeans: Heavy rainfall forecast for the heart of the corn belt sinks soybean rally effort.
The soybean market was not able to sustain early day session strength and sold off around the mid-day model forecast release that continues to show heavy rainfall potential over the heart of the corn belt in the coming 5 days. This forecast was not new, but it continued to verify in the latest model run and encouraged selling with the maps showing soaking rains will reach W IA, N MO, IL, S WI, W IN and MI through the weekend and takes the focus off the dry regions around the N Plains for now. Early bull spread leadership turned into spread weakness at the same time the flat price broke with July beans settling more than 20 cents lower and November beans settling 17 lower. Futures volumes were very light.
Another factor in today's soybean selloff may have been disappointment that there was not a follow up sale announcement by the USDA with more Chinese biz awaiting confirmation from the recent break. Following the recent break in price, firming PNW bids and competitive new crop pricing support the idea of China extending coverage into the fall. There was talk of another round of 5-8 soybean cargoes bought by China today for Oct-Nov so 8 am announcements will continue to be monitored for confirmation of this business.
In the product trade, soybean oil closed modestly higher for a third consecutive session in both flat price and in the oil share spread. There have not been any new updates regarding the potential for the Biden admin to offer relief to oil refiners in some form or another and the bean oil market seems to be slowly regaining its confidence as a result. To the contrary, it was reported that US Senators are looking at an increase in federal funding for higher blending biofuel retail gasoline pumps and also seeking tax credits for automobile makers to place more "flex fuel" cars on the road. Regardless of the politics, bean oil was a heavily loaded boat and overdue for a significant cleansing of length which appears to have been accomplished. The meal market that took the brunt of the selling with futures settling nearly $10 lower.
Quarterly stocks and acreage reports will be released a week from tomorrow. The 30th is also first notice day on July futures and marks the end of the month/quarter.
Elsewhere in the news, Brazil based ANEC on Tuesday estimated June 2021 soybean exports at 11.0 mln mt off from the 11.5 mln mt monthly forecast previously.
US Gulf off 1 to +53
Brazil Paranagua off 10 to +15n
Cedar Rapids, IA up 10 to +20q
Mankato, MN steady +10n
Decatur, IL steady +70x
Claypool, IN steady +50n
Columbus, OH steady +15n