Soybean Morning Update & Commentary: Soy complex leads to the downside.
Overnight grain markets traded lower, unable to build on yesterday's gains with soybeans leading to the downside on improved condition ratings, a reduced domestic crush, and weekend rains showing for parts of MN, WI, IA, N IL and even some for ND. The weather forecast will trend warmer again with above normal precip around the lakes states and eastern belt while the plains will remain in a below normal precip pattern.
In the product trade, both meal and oil are under pressure early on. Oil stocks on June 30th were 100 mln lbs above the trade estimate coming in at 2.099 bln lbs. Rapeseed returned from holiday and is trading -$5.5 lower. Malaysian palm oil managed a smaller upside reversal trade closing +23 ringgit, or +.56%.
There were zero soybean deliveries against the August futures, 1 oil and 94 meal receipts retendered.
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%.
Cordonnier left his corn and soybean yield estimates unchanged at 175.5 bpa and 50.0 bpa respectively with a neutral bias. He lowered his Brazilian total corn production estimate by 2 mmt to 84 mmt compared to the USDA at 93 mmt.
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.
• Trade sources on Tuesday say $1,379/mt cf is the lowest offer in Egypt GASC tender for 30,000 mt of Soyoil. No purchase has been finalized yet, and results are expected later today.
• The Dominican Republic will slaughter tens of thousands of pigs after detecting outbreaks of African swine fever in 11 of the country's 32 provinces, authorities said on Monday. Fernando Duran, administrator of the state-run Banco Agricola, told a news conference the government will pay pig farmers the market price of each animal slaughtered.
• Brazil government data released Monday afternoon pegged July 2021 soybean exports at 8.67 mln mt vs 9.96 mln mt in the year ago month.
• Brazil government data released Monday afternoon pegged July 2021 corn at 1,983,372 mt vs 3,979,224 mt the year ago month.
• Brazil government data released Monday afternoon pegged July 2021 Beef exports at 166,293 mt compared to the 169,274 mt in the year ago month
• Brazil government data released Monday afternoon pegged July 2021 Poultry exports at 391,625 mt compared to the 337,257 mt in the year ago month
• American Bakers Association, the group representing some of the largest American bakers, has asked President Biden to reconsider its biofuels programs, the group said grain crops going to alternative fuels would raise the costs of breads and other baked goods. The industry group has recently met with the US EPA and other farm state federal legislators to press their case.
• USDA Monday weekly crop progress report showed Soybean blooming progress at 86% complete compared to last week's 76% and year ago week 84%
• USDA Monday weekly crop progress report showed Soybean setting pods progress at 58% complete compared to last week's 42% and year ago week 57%
• USDA Monday weekly crop conditions report showed Soybean 60% good to excellent, 28% fair, 12% poor to very poor versus last week's 58% good to excellent, 30% fair, 12% poor to very poor
• USDA Monday weekly crop progress report showed Cotton squaring progress at 82% complete compared to last week's 78% and year ago week 90%
• USDA Monday weekly crop progress report showed Cotton setting bolls progress at 50% complete compared to last week's 37% and year ago week 52%
• USDA Monday weekly crop conditions report showed Cotton 60% good to excellent, 32% fair, 8% poor to very poor versus last week's 61% good to excellent, 31% fair, 8% poor to very poor
• Pending Tender: Egypt's GASC Friday afternoon also announced a tender to close on Tuesday, August 3rd seeking at least 30,000 mt of Soyoil and 10,000 mt of Sunflower Oil for delivery in the Oct 1-20 period. Egypt's GASC last bought 73,500 mt of vegoils back on June 22nd.
• Euronext Paris November rapeseed futures on Tuesday are trading +0.50 euro higher at 527.75 euros/mt
• Dalian Sept soybean futures on Tuesday traded +66 yuan higher ending at 5,740 yuan/mt; Sept soymeal futures rose +9 yuan to end at 3,619 yuan/mt
• Dalian September vegoil futures on Tuesday traded lower, soyoil lost -142 yuan to end at 8,614 yuan/mt, palm oil lost -220 yuan to end at 8,126 yuan/mt
• Malaysian October crude palm oil futures on Tuesday traded +24 ringgit higher ending at 4,144 ringgit/mt
• Malaysian September RBD palm oil and olein on Tuesday traded +$2.50/mt higher ending at $1107.50/mt and $1,110.00/mt, respectively
• CBOT Deliveries: August Soybean 0, Meal 94, Oil 1
• Outside markets. Crude Oil +34c ; Gold -$9.30 ; Silver -7.0c ; US $ index -15 pts
US Gulf steady +67
Brazil Paranagua up 5 to +155u
Cedar Rapids, IA steady +65x
Mankato, MN up 5 to +30x
Decatur, IL steady +95x
Claypool, IN steady +110x
Columbus, OH steady +40x