Soybean Morning Update & Commentary: Soy complex easier to start the day.
Overnight grain markets traded lower across the soy complex and corn with wheat slightly higher. Row crops are running into end-of-week long liquidation and moderate farm selling as harvest ramps up with warm/dry US weather rapidly pushing crops to maturity. Fresh news is limited trade volumes are light. Soybeans are trading nearly 9 lower basis Nov headed into the biscuit break, the weekly chart is still up 12 cents on the week with the aid of the Sept. expiration. $13.00 continues to act as a near term barrier to a further recovery in price while the post USDA reversal trade from a week ago has stabilized the downside. This leaves the futures temporarily range bound as the market watches harvest and export demand play out. The USDA reported a private sale of 132 tmt of beans to China this morning, the past two days have featured new sales of 4 cargoes that almost offset the 5 cargoes cancelled on Wednesday. China continues to buy high priced Brazilian cargoes in addition to US for near term fill in supply until US export capacity is more fully restored and that is a slowly improving work in progress.
Soybean export sales are trailing last year's pace. Current marketing year bean sales on the books total 22.031 mmt compared to 30.084 mmt this time last year. Of this total, China is earmarked for 10.228 mmt with unknown for another 7.320 mmt. Exports marketing year to date total 258 tmt compared to 2.143 mmt this time last year. Most of the attention and conversation has been on Chinese demand but another major factor (along with higher commodity prices, more competing supply and logistical disruption) is the cost of shipping commodities around the world has skyrocketed as shown by the Baltic Freight Index exceeding decade highs. As a result, buyers are shifting to more of a hand to mouth strategy from their previous high volume re-stocking approach. The hope is freight will eventually cool off and deferred purchases will not be as expensive to ship.
In the product trade, meal and oil are both trading lower to start. Oil has company in the weaker veg oil trade with canola down $3.5 (.4%) and Malaysian palm oil off by 74 ringgit (1.7%). In the outside markets, crude is $.33 lower while the dollar is also weaker by .13.
• While Australian wheat and canola farmers are anticipating another great crop this harvest season, hot farm equipment demand coupled with supply chain issues have dramatically increased delivery times, and covid lock downs have limited domestic and foreign farm worker movement
• SGS on Friday estimated Malaysian palm oil product exports over the FH September at 839,533 mt up +45.3% over their FH August export estimate
• On Thursday, French rapeseed growers group forecast this winter's and next spring's plantings up by 15% to 20% over last year. They attribute the higher plantings on better yield prospects and higher prices
• Weekly Saskatchewan crop report Thursday noted quick harvest progress continues, 74% of the crop has been combined, up from 56% last week and well ahead of the five-year (2016-2020) average of 50% for this time of year. An additional 17% of the crop is swathed or ready to straight-cut. Warm and dry weather is desired to continue drying down crops and allow harvest to continue without delay.
• Weekly Saskatchewan crop report estimates 82% of the barley, 89% of the durum, 83% of the spring wheat, 54% of the canola and 25% of the flax has now been combined. An additional 34% of the canola is swathed or ready to straight-cut.
• CME Group on Thursday announced they will lower CBOT soyoil futures margins by $200 per contract for March 2023 through Dec 2024 contracts effective Sept 17, 2021
• Pending Tender: Grain trade sources Tuesday say 30,000 mt of Soymeal is sought by Algeria's state grain agency in a tender to close on Wed., Sep 15th. The grain is for shipment in either Nov 10-30 period or first half of December.
• Euronext Paris November rapeseed futures on Friday are trading -3.25 euros lower at 595.00 euros/mt
• Dalian November soybean futures on Friday traded +53 yuan higher ending at 5,953 yuan/mt; January soymeal futures gained +37 yuan ending at 3,570 yuan/mt
• Dalian January vegoil futures on Friday traded sharply lower, soyoil lost -124 yuan ending at 8,970 yuan/mt, palm oil dropped -172 yuan finishing at 8,352 yuan/mt
• Malaysian November crude palm oi futures on Friday traded -73 ringgit lower ending at 4,367 ringgit/mt
• On Friday, Malaysian October cash offers for RBD palm oil and olein traded -$15/mt lower at $1172.50/mt and $1,175.00/mt, respectively
• Outside markets. Crude Oil ; Gold ; Silver ; US $ index
US Gulf steady +72
Brazil Paranagua off 5 to +240x
Cedar Rapids, IA steady -30x
Mankato, MN steady -25x
Decatur, IL steady -10x
Claypool, IN steady opt price x
Columbus, OH +20x for dlv today, steady -10x