Afternoon Soybeans: Monday reversal set the tone for the week for bean prices.
The soybean market settled lower for a second consecutive session in a quiet, light volume trade. The bull spread was back under pressure today with the August contract losing 15 ¼ cents while new crop November slipped by 10 ½ cents, both contracts respected yesterday's lows.
Weather was the primary driver of the selling today with the second week of the outlook now expected to feature less intense heat and better moisture opportunities. Ahead of that, you have a very hot and mostly dry setup that is going to increase crop stress and likely reduce ratings in the areas that have not had much rain of late. Crop conditions are mostly in decent shape, but we have our problem areas with drought in the northwest and we have crop areas in the central to eastern belt that have been limited by 'wet feet'. At the end of the day our final yields will come down to how the August rains perform.
For the week, beans lost 53 ¾ cents, meal -$9.6, oil -2.65, rapeseed -$34.1 while Malaysian palm oil gained 242 ringgit or 5.6%. Palm oil has been quietly gaining back on soybean oil since bottoming out 6 weeks ago at a $600/mt discount, today that spread settled at a $373/mt discount. Board crush margins were 1-4 cents firmer as bean oil strength and soybean weakness combined to offset the sharp drop in meal on the board.
The USDA reported a daily export sale of 100 tmt of old crop beans to Mexico. China has been active this week, but they are still filling in coverage for Aug-Sept out of Argentina and Brazil while the US program for Oct-Dec is expected to pick up around the corner.
US domestic bean basis continues to soften; Cedar Rapids lowered their bid by a dime to +65x after trimming it by 20 cents the day before. Mankato took their bid down by 20 today to +35x.
August options expired today with futures settling at $14.01. There were 1,819 $14.00 calls and 1,978 $14.00 puts open to start the day which could make for some interesting exercise/abandonment decisions this afternoon.
The COT report showed managed fund money through the week ending 7/20 had +14.5k corn (net long 223.3k), +19.8k srw (net short -3.7k), +6k hrw (net long 27.7k), +13.1k beans (net long 95.8k), +4.8k meal (net long 21.4k) and +8.2k oil (net long 57.1k).
US Gulf steady +71
Brazil Paranagua up 4 to +90q
Cedar Rapids, IA off 10 to +65x
Mankato, MN off 20 to +35x
Decatur, IL steady +95x
Claypool, IN steady +70q
Columbus, OH steady +60x