Afternoon Soybeans: Bean crop saw more improvement than deterioration over the past week.
The soybean market traded weaker through the overnight hours but managed to regain its composure to reverse higher during the day session. The initial selling was driven by weekend rains that brough meaningful moisture to crops across parts of IA, SD, NE, MN, WI and IL - coverage was not complete but for those crops that got them, the rains were beneficial. The weather forecast going forward is a bit of a mixed bag with something for the bull and something for the bear but in basics, temps will warm up again this week and there will be opportunities for additional rains but nothing widespread is forecast for the western drought areas. Continued production uncertainty along with strength in the wheat complex and corn helped beans recover.
The bull spreads in beans continue to soften with quiet nearby demand leading to liquidation and a weakening of the inverses. Domestic bean basis continues steady to lower with the end of the marketing year fast approaching and new crop availability just around the corner.
In the product trade, soybean oil traded weaker with negative influence spilling over from the palm oil and crude oil markets. This helped meal rally on the other side of the oil share spreading. The bull spreads in meal were weaker despite the flat price gains as the front month meal felt pressured by the 95 deliveries out of Gilman. Malaysian palm oil dropped by -5.7% after trading into a new contract high on Friday, high prices have slowed export demand and the market is correcting. Rapeseed was closed for Civic Day in Canada.
Crop progress showed soybean conditions improved by 2% G/E to 60% GE while P/VP ratings held steady at 12% - the trade was anticipating a 1% reduction in G/E. This time last year, the crop was rated 73% G/E and 6% P/VP.
The states that saw the greatest improvement week over week in G/E were IL +3, IN +4, NC +2, OH +6 and SD +4. The states that saw the great deterioration week over week in G/E were KS -3, MN -2, MO -2, and NE -2. P/VP ratings increased in KS +2, MN +3, ND +4, and SD +4. The crop is now 86% blooming, up from 76% last week and compares to the 5 yr avg. of 82%. The crop is now 58% setting pods, up from 42% last week and compares to the 5 yr. avg. of 52%.
Census crush for the month of June came in at 161.7 mb, just below the avg. trade est. for 162.1 mb and down from the May crush of 173.5 mb. At a 5.39 mb daily avg. crush rate, this is the slowest daily avg. for any month going back to June of 2019. Oil stocks came in at 2.099 bln lbs, well above the avg. trade est. for 1.990 bln lbs but down from May stocks of 2.160 bln lbs. Meal stocks were 390,755 tons down from 592,860 tons in May.
Weekly grain inspections for export were better than expected in corn at 1.384 mmt (54.4 mb), beans and wheat were lighter than expected at 181 tmt (6.6 mb) and 388 tmt (14.2 mb) respectively. China loaded 25 tmt of beans out of the Gulf, in addition to 564 tmt of corn and 52 tmt of sorghum, they took an additional 276 tmt of corn off the PNW. 2 more cargoes of corn to China out of the Gulf were added to last week's loadings. The other top soybean destinations were Mexico 43 tmt, Vietnam 35 tmt, Japan 23 tmt and Indonesia 21 tmt.
Marketing year to date exports for corn total 62.807 mmt or 2.472 bb, US census exports are 173 mb higher which when added to inspections data would mean we would need to avg. better than 51 mb/week for the remaining 4 weeks in order to reach the USDA's 2.850 bb export projection. Bean exports total 58.223 mmt or 2.139 bb and would need to avg. nearly 33 mb/week over the next 4 weeks to reach the USDA's 2.270 bb export projection. Wheat exports early in their marketing year are 3.771 mmt compared to 4.688 mmt this time last year.
There were zero soybean deliveries against the August futures, 1 oil and 95 meal out of Incobrasa, Gilman, IL.
Elsewhere in the news, according to government trade data, Brazil exported 8.666 mmt of soybeans in July compared to 9.955 mmt in the prior year month, corn exports were 1.983 mmt compared to 3.979 mmt in the prior year month.
US Gulf steady +68
Brazil Paranagua up 5 to +155u
Cedar Rapids, IA up 10 to +65x
Mankato, MN up 5 to +30x
Decatur, IL steady +95x
Claypool, IN steady +110x
Columbus, OH off 20 to +40x