Soybean Morning Update & Commentary: Soy complex looks to stabilize as macro sell pressure eases.
Overnight grain markets were mixed with the soy complex bouncing back to trade a shade higher while wheat and corn were slightly lower. The outside markets have settled down as fears over the Evergrande Group's potential default impacting world markets have eased up and this is taking the pressure off some of the risk off selling that dominated yesterday's market action. The DJIA is +250, crude oil +$.71 and the dollar is -.16. The Dalian exchange in China is closed today, will re-open for Wednesday's trade.
The soybean market is looking to stabilize as the macro sell pressure eases, but harvest pressure and export concerns continue to linger over prices and spreads like a black cloud. The US weather forecast includes rains for the central to eastern belt to park combines temporarily at times over the next couple of days but beyond that, the maps are warm and dry to support aggressive harvest progress. There were no 8 am export sales reported today which should keep a lid on recovery potential.
US soybean harvest progress debuted at 6% complete just a tick above the avg. trade guess of 5% and in line with the 5 year avg. on this date of 6%. The crop is 58% dropping leaves up from 38% last week and well ahead of the 5 year avg. of 48%. The crop ratings improved by 1% in G/E to 58% and held steady in P/VP at 14%, this time last year the crop was rated 63% G/E and 10% P/VP. The improvement in G/E comes on another wild swing in IL picking up 14% to 75% while P/VP went down by 7% to 4% - I cannot explain the wild weekly swings in IL, in both directions, over the past 4 weeks.
Reuters reports more than 60 vessels in the line up along the lower Mississippi River waiting to load grain once terminals are ready. Some export loading facilities have resumed operations in the center Gulf following Hurricane Ida including terminals owned by Cargill, LDC and ADM while Bunge in Destrehan has been running intermittently. Other terminals including Cargill's Reserve location remain closed for structural repairs. Yesterday's export inspections data showed activity out of the center Gulf has resumed with 350 tmt of grain loaded out although capacity remains limited as efforts continue to fully restore operations.
In the product trade, with the crude oil market rebounding the soybean oil market is also seeing a recovery trade to start. Meal is also firming while the oil share spread is steady. The canola market is $4 higher while Malaysian palm oil closed 21 ringgit or .5% higher adding to the cautious veg oil recovery trade. Board crush margins sit at 90 cents/bushel, well below summer highs but showing signs of stability.
• Ukraine Ag Ministry on Tuesday estimated 17% of the 2022 winter wheat crops have been planted so far, of the 1.32 mln hectares planted 1.2 mln has been winter wheat and 51,250 hectares has been winter barley. Winter rapeseed planting progress is 86% complete.
• AgRural sees overall Brazil soybean planting progress at .1% as of 9/16 as planting gets underway of the states of Mato Grosso, Mato Grosso do Sul, Sao Paulo and Parana.
• SGS on Tuesday pegged their estimate of Malaysian palm oil product exports at 1.070 mln mt up +36.7% over their Aug 1-20 period estimate
• US Commerce Dept on Monday morning announced improvements to anti-dumping duty and countervailing duty regulations, the enhancements will begin taking effect on Sep 20th. The department said the enhancements will better protect US companies from "unfair and illegal trade practices".
• USDA Monday weekly crop progress report showed Soybean dropping leaves progress at 58% complete compared to last week's 38% and year ago week 56%
• USDA Monday weekly crop progress report showed Soybean harvested progress at 6% complete compared to last week's 38% and year ago week 5%
• USDA Monday weekly crop conditions report showed Soybean 58% good to excellent, 28% fair, 14% poor to very poor versus last week's 57% good to excellent, 29% fair, 14% poor to very poor
• USDA Monday weekly crop progress report showed Cotton bolls opening progress at 48% complete compared to last week's 36% and year ago week 56%
• USDA Monday weekly crop progress report showed Cotton harvest progress at 9% complete compared to last week's NA% and year ago week 10%
• USDA Monday weekly crop conditions report showed Cotton 64% good to excellent, 28% fair, 8% poor to very poor versus last week's 64% good to excellent, 30% fair, 6% poor to very poor
• Pending Tender: Egypt's GASC announced Sept 22nd offer deadline in a tender seeking 30,000 mt of Soyoil and 10,000 mt of Sunflower Oil. The vegoils are for shipment from LH November through FH December.
• Euronext Paris November rapeseed futures on Tuesday are trading +5.25 euros higher at 604.50 euros/mt
• Chinese financial and commodity markets closed Tuesday due to mid-autumn festival
• On Tuesday, Malaysian October cash offers for RBD palm oil and olein traded unchanged at $1157.50/mt and $1,160.00/mt, respectively
• Malaysian December crude palm oil futures on Tuesday traded +21 ringgit higher ending at 4,194 ringgit/mt
• Outside markets. Crude Oil +78c ; Gold +$3.40 ; Silver +34.1c ; US $ index -13 pts
US Gulf off 1 to +70
Brazil Paranagua off 10 to +230x
Cedar Rapids, IA up 10 to -20x
Mankato, MN steady -30x
Decatur, IL steady -10x
Claypool, IN steady opt price x
Columbus, OH steady -10x