Afternoon Soybeans: Beans struggle to sustain strength.

The soybean market had another two-sided trade that ending with a loss of 2 ¼ cents.  The bull spreads were mixed.   Friday's reversal trade has helped to stabilize the downside in the bean market, but the $13.00 level basis November continues to contain our upside.  It is not uncommon to have selling interest on strength at this time of the year and that makes it difficult for rallies to extend.   

The lack of export activity at 8 am was another important factor in beans not being able to sustain its overnight strength; session highs were made in the opening minutes of the day trade and the market played defense for the balance of session. Gulf basis continues to climb as export loadings slowly recover; CIF bean bids were steady at +72. There were reports that China was a buyer beans overnight, 6-8 cargoes out of Brazil and 2 off the PNW as US export disruptions have caught them short-bought for a moment. Bean sales to China have been down from last year's pace in part due to higher prices on the board and cost of freight has buyers dragging their heels, and in part due to Brazil taking a larger share of the trade this year. US new crop beans are the cheapest supply to China and they have significant needs to cover yet for ONDJ.

The Gulf coast is being soaked again with 4-10' rains from Hurricane/Tropical Storm Nicholas, this is another speed bump for exports but is not expected to have produced any damage to US export facilities or lasting delays. The Port of Houston said all terminals would remain closed today due to the effects of Nicholas and widespread power outages. The Freeport Harbor Channel in Texas also suspended vessel movements due to unsafe conditions and power outages, according to notices from both ports. The Port of Houston anticipates resuming vessel movements on Tuesday evening and normal operations by Wednesday.

The center Gulf continues to slowly ramp up export activity in the wake of Hurricane Ida. Cargill's export terminal in Westwego, LA has resumed operations, barges began unloading on Monday. Power has been restored at the damaged Cargill Reserve terminal although no timeline was given for repairs to be made. The company is still assessing damage from the storm and developing "phased reopening plans".

In the product trade, soybean oil had strong support from the canola market following the Stats Can report this morning while meal sold off on the other side of the oil spreading that ended a streak of five sessions of meal gaining on oil. Stats Can canola production came in at 12.782 mmt vs. 13.6 mmt expected and well below the previous est. of 14.749 mmt. Some anticipate further cuts once the combines roll. Canola rallied $38 higher but profit taking limited the day's gains to a $10.6 higher settlement. France's canola production was revised up to 3.31 mmt from 3.22 mmt last month which is 0.5% above last year's poor crop despite a sharp drop in planted area. Malaysian palm oil closed 20 ringgit or .46% higher early on. Board crush margins recovered another 4 cents making it 12 cents in two days with new crop showing at 95 cents/bushel.

NOPA's August soybean crush data will be released tomorrow during the session. The avg. trade guess for crush is 154.2 mb compared to 155.1 mb in July and Aug 2020 crush of 165 mb. Soybean oil stocks are est. at 1.555 bln lbs down from 1.617 bln lbs in July.

Elsewhere in the news, BA Grain Exchange estimated Argentina's 21/22 corn production at 55 mmt and beans at 44 mmt, USDA is at 53 mmt on corn and 52 mmt on beans.

Argentina's Ag Ministry on Tuesday estimated 20/21 soybean crop sales at 29.4 mln mt an increase of 475,600 mt over the past week. In the year ago week some 31.3 mln mt of soy sales had been recorded in that marketing year.

Parana Brazil farmers, according to the latest Deral weekly report, have planted 1% of the 21/22 soybean crop.


Soybean Basis:
Location Spot
US Gulf steady +72
Brazil Paranagua off 3 to +235x
Cedar Rapids, IA steady -40x
Mankato, MN steady -20x
Decatur, IL steady -10x
Claypool, IN off 15 to opt price x
Columbus, OH steady +20x